In Part 1 of this series, I talked about why cheap fuels act to create economic growth. In this post, we will look at some supporting data showing how this connection works. The data is over a very long time period–some of it going back to the Year 1 C. E.
We know that there is a close connection between energy use (and in fact oil use) and economic growth in recent years.
Figure 1. Comparison of three-year average growth in world real GDP (based on USDA values in 2005$), oil supply and energy supply. Oil and energy supply are from BP Statistical Review of World Energy, 2014.
In this post, we will see how close the connection has been, going back to the Year 1 CE. We will also see that economies that can leverage their human energy with inexpensive supplemental energy gain an advantage over other economies. If this energy becomes high cost, we will see that countries lose their advantage over other countries, and their economic growth rate slows.
A brief summary of my view discussed in Part 1 regarding how inexpensive energy acts to create economic growth is as follows:
The economy is a networked system. With cheap fuels, it is possible to leverage the expensive energy that humans can create from eating foods (examples: ability to dig ditches, do math problems), so as to produce more goods and services with the same number of workers. Workers find that their wages go farther, allowing them to buy more goods, in addition to the ones that they otherwise would have purchased.
The growth in the economy comes from what I would call increasing affordability of goods. Economists would refer to this increasing affordability as increasing demand. The situation might also be considered increasing productivity of workers, because the normal abilities of workers are leveraged through the additional tools made possible by cheap energy products.
Thus, if we want to keep the economy functioning, we need an ever-rising supply of cheap energy products of the appropriate types for our built infrastructure. The problem we are encountering now is that this isn’t happening–more energy supply may be available, but it is expensive-to-produce supply. Our networked economy sends back strange signals–namely inadequate demand and low prices–when the cost of energy products is too high relative to wages. These low prices are also a signal that we are reaching other limits of a networked economy, such as too much debt and taxes that are too high for workers to pay.
Looking at very old data – Year 1 C. E. onward
Some very old data is available. The British Economist Angus Maddison made GDP and population estimates for a number of dates between 1 C. E. and 2008, for selected countries and the world in total. Canadian Energy Researcher Vaclav Smil gives historical energy consumption estimates back to 1800 in his book Energy Transitions – History, Requirements and Prospects.
If we look at the average annual increase in GDP going back to the Year 1 C. E., it appears that the annual growth rate in inflation-adjusted GDP peaked in the 1940 to 1970 period, and has been falling ever since. So the long-term downward trend in world GDP growth has lasted at least 44 years at this point.
Figure 2. Average annual increase in inflation-adjusted GDP, based on work of Angus Maddison through 2000; USDA population/real GDP figures used for 2000 to 2014.
A brief synopsis of what happened in the above periods is as follows:
- 1 to 1000 – Collapse of several major civilizations, including the Roman Empire. Metal was made using charcoal from wood, but this led to deforestation and soil erosion. Egypt and the Middle East had extensive irrigation of crops using river water. Some trade by ship. Most of the population were farmers.
- 1000 to 1500 – Early use of peat moss for heat energy for industrialization, particularly in Netherlands, leading to increased trade. Continued use of wood in cold countries, with deforestation issues.
- 1500 to 1820 – European empire expansion to the New World and to colonies in Africa, allowing world population to grow. Britain began using coal. Netherlands added wind turbines beside greater use of peat moss.
- 1820 to 1900 – Coal allowed metals to be made cheaply. Parts of farm work could be transferred to horses with greater use of metal tools. Coal allowed many types of new technology including hydroelectric dams, trains, and steam powered boats.
- 1900 to 1940 – Expanded use of coal, with beginning use of oil as a transportation fuel. Depression was during this period.
- 1940 to 1970 – Post war rebuilding of Europe and Japan and US baby boom led to hugely expanded use of fossil fuels. Antibiotic use began; birth control pills became available. Food production greatly expanded with fertilizer, irrigation, pesticides.
- 1970 to 2000 – 1970 was the beginning of the great “oops,” when US oil production started to decline, and oil prices spiked. This set off a major push toward efficiency (smaller cars, better mileage) and shifts to other fuels, including nuclear.
- 2000 to 2014 – Another big “oops,” as oil prices spiked upward, when North Sea and Mexican oil began to decline. Much outsourcing of manufacturing to countries where production was cheaper. Huge financial problems in 2008, never completely fixed.
Growth in GDP in Figure 2 generally follows the pattern we would expect, if fossil fuels and earlier predecessor fuels raised GDP and the great “oopses” during the 1970-2000 and 2000-2014 periods reduced economic growth.
Population Growth vs Growth in Standard of Living
GDP growth is composed of two different types of growth: (1) population growth and (2) rise in the standard of living (or per capita GDP growth). We can look at these two kinds of growth separately, using Maddison’s data. My discussion earlier about cheap energy having a favorable impact on the amount of goods an economy could create relates primarily to the second kind of growth (rise in the standard of living). There would be a carry-over to population growth as well, because parents who have more adequate resources can afford more children.
If we compare the population growth pattern in Figure 3 with the total GDP growth pattern shown in Figure 2, we notice some differences. One such difference is the lower population growth rate in the 2000-2014 period. Compared to the period before fossil fuels (generally before 1820), the population growth rate is still exceedingly high.
Figure 3. Average annual increase in world population, based on work of Angus Maddison through 2000; USDA population figures used for 2000 to 2014.
If we look at world per capita GDP growth by time-period (Figure 4), we see practically no growth until the time of fossil fuels–in other words, 1820 and succeeding periods.
Figure 4. Average annual increase in GDP per capita, based on work of Angus Maddison through 2000; USDA population/real GDP figures used for 2000 to 2014.
In other words, in these early periods, civilizations were often able to build empires. Doing so seems to have allowed greater population and more building of cities, but it didn’t raise the standard of living of most of the population by very much. If we look at the earliest periods, (Years 1 to 1000; 1000 to 1500, and even most places in 1500 to 1820), the average per capita income seems to have been equivalent to about $1 or $2 per day, today.
I earlier showed how world per capita energy consumption has grown since 1820, based on the work of Vaclav Smil (Figure 5).
Figure 5. World Energy Consumption by Source, Based on Vaclav Smil estimates from Energy Transitions: History, Requirements and Prospects together with BP Statistical Data for 1965 and subsequent divided by population estimates by Angus Maddison.
It is clear from Figure 5 that the largest increase in energy consumption came in the 1940 to 1970 period. One thing that is striking is that world population took a sharp upward turn at the same time more fossil fuel use was added (Figure 6).
Figure 6. World population growth, based on data of Angus Maddison.
While this increase in population holds for the world in total, analyzing population growth by country or country grouping yields very erratic results. This is true all the way back to the Year 1. If we look at percentages of world population at various points in time for selected countries and country groups, we get the distribution shown in Figure 7. (The list of country groups shown is not exhaustive.)
Figure 7. Share of world population from Year 1 to 2014, based primarily on estimates of Angus Maddison.
Part of what happens is that economic collapses (or famines or epidemics) set population back by very significant amounts in local areas. For example, Maddison shows the population of Italy as 8,000,000 in the Year 1, but only 5,000,ooo in the Year 1000, hundreds of years after the fall of the Roman Empire.
Per capita GDP for Italy dropped by half over this period, from about double that of most other countries to about equivalent to that of other countries. Thus, wages might have dropped from the equivalent of $3.oo a day to the equivalent to $1.50 a day. None of the economies were at a very high level, so most workers, if they survived a collapse, could find work at their same occupation (generally farming), if they could find another group that would provide protection from attacks by outsiders.
If we look at the trend in population shown on Figure 7, we see that the semi-arid, temperate areas seemed to predominate in population in the Year 1. As peat moss and fossil fuels were added, population of some of the colder areas of the world could grow. These colder areas soon “maxed out” in population, so population growth had to slow down greatly or stop. The alternative to population growth was emigration, with the “New World” growing in its share of the world’s population and the “Old World” contracting.
Each part of the world has its own challenges, from Africa’s problems with tropical diseases to the Middle East’s challenges with water. To the extent that work-arounds can be found, population can expand. If the work-around is cheap (immunization for a tropical disease, for example), population may be able to expand with only a small amount of additional energy consumption.
One point that many people miss is that Japan’s low growth in GDP in recent years is to a significant extent the result of low population growth. In the published GDP figures we see, no distinction is made between the portion that is due to population growth and the portion that is due to rise in the standard of living (that is, rise in GDP per capita).
Growth in Per Capita GDP in the “Advanced Economies”
As noted above, the big increase in per capita energy use shown in Figure 5 came in the 1940 to 1970 period. No breakdown by country is available, but this period includes rebuilding period after World War II for Europe and Japan, and the period with a huge increase in consumer debt in the United States. Thus, we would expect those three country/groups would benefit disproportionally. In fact, we see very large increases in per capita GDP for these countries, as fossil fuels were added, particularly oil.
Figure 8. Average increase in per capita GDP for the United States, Western Europe, and Japan, based on work of Angus Maddison for 2000 and prior, and USDA real GDP and population data subsequent to that date.
These three economies (Western Europe, USA, and Japan) are all fairly high users of oil. If we look at long-term world oil production versus price (Figure 9), we see that growth in consumption was rising rapidly until about 1970.
Figure 9. World oil consumption vs. price based on BP Review of World Energy data after 1965, and Vaclav Smil data prior to 1965.
In fact, if we calculate average annual increase in oil consumption for the periods of our analysis, we find that they are
- 1900 to 1940 – 6.9% per year
- 1940 to 1970 – 7.6% per year
- 1970 to 2000 – 1.5% per year
- 2000 to 2013 – 1.1% per year
Growth in oil production “hit a wall” in 1970, when US oil production unexpectedly stopped growing and started declining. (Actually, this pattern had been predicted by M. King Hubbert and others). Oil prices spiked shortly thereafter. The situation was more or less resolved by making a number of changes to the economy (switching electricity production from oil to other fuels wherever possible; building smaller, more fuel efficient vehicles), as well as ramping up oil production in places such as the North Sea, Alaska, and Mexico.
Oil prices were brought down, but not to the $20 per barrel level that had been available prior to 1970. Most of the infrastructure (roads, pipelines, electrical transmission lines, schools) in the USA, Europe, and Japan had been built with oil at a $20 per barrel level. Changing to a higher price level is very difficult, because repair costs are much higher and because an economy that uses very much high-priced oil in its energy mix is not competitive with countries using a cheaper fuel mix.
Figure 10. Percentage of energy consumption from oil, for selected countries/groups, based on BP Statistical Review of World Energy 2014 data.
In the 2007-2008 period, oil prices spiked again, leading to a major recession, especially among the countries that used very much oil in their energy mix. With these higher prices, the leveraging impact of oil in bringing down the cost of human energy was disappearing. All of the “PIIGS” (countries with especially bad financial problems in the 2008 crisis) had very high oil concentrations, up near Greece on the chart above. Japan’s oil consumption was very high as well, as a percentage of its energy use. When we looked at the impact of the recession, the countries with the highest percentage of oil consumption in 2004 had the worst economic growth rates in the period 2005 to 2011.
Figure 11. Average percent growth in real GDP between 2005 and 2011 for selected groups, based on USDA GDP data in 2005 US$.
Getting back to Figure 9, after the financial crisis in 2008, oil prices stayed low until the United States began its program of Quantitative Easing (QE), helping keep interest rates extra low and providing extra liquidity. Oil prices immediately began rising again, getting to the $100 per barrel level and remaining about at that level until 2014. The combination of low interest rates and high prices encouraged oil production from shale formations, helping to keep world oil production rising, despite a drop in oil production in the North Sea, Alaska and Mexico. Thus, for a while, the conflict between high prices and the ability of economies to pay for these high prices was resolved in favor of high prices.
The high oil prices–around $100 per barrel–continued until United States QE was tapered down and stopped in 2014. About the same time, China made changes that made debt more difficult to obtain. Both of these factors, as well as the long-term adverse impact of $100 per barrel oil prices on the economy, brought oil price down to its current level, which is around $50 per barrel (Figure 10). The $50 per barrel price is still very high relative to the cost of oil when our infrastructure was built, but low relative to the current cost of oil production.
Figure 12. World Oil Supply (production including biofuels, natural gas liquids) and Brent monthly average spot prices, based on EIA data.
If a person looks back at Figure 9, it is clear that high oil prices brought oil consumption down in the early 1980s, and again for a very brief period in late 2008-early 2009. But since 2009, oil consumption has continued to rise, thanks to high prices and the additional oil from US shale.
The low prices we are now encountering are a message from our networked economy, saying, “No, the economy cannot really afford oil at this high a price level. It looked like it could for a while, thanks to all of the financial manipulation, but this is not really the case.” Meanwhile, we see in Figure 8 that for the combination of the EU, USA, and Japan, growth in per capita GDP has been very low in the period since 2000, reflecting the influence of high oil prices on these economies.
Growth in Per Capita GDP for Selected Other Economies
In recent years, per capita GPD growth has shifted dramatically. Figure 13 below shows increases in GDP per capita for selected other areas of the world.
Figure 13. Average growth in per-capita GDP for selected economies, based on work of Angus Maddison for Year 1 to 2000, and based on USDA real GDP figures in 2010 US$ for 2000 to 2014.
The “stand out” economy in recent growth in GDP per capita is China. China was added to the World Trade Organization in December 2001. Since then, its coal use, and energy use in general, has soared.
Figure 14. China’s energy consumption by source, based on BP Statistical Review of World Energy data.
If we calculate the growth in China’s energy consumption for the periods we are looking at, we find the following growth rates:
- 1970 to 2000 – 5.4% per year
- 2000 to 2013 – 8.6% per year
A major concern now is that China’s growth rate is slowing, in part due to debt controls. Other factors in the slowdown include the impact pollution is having on the Chinese people, the slowdown in the European and Japanese economies, and the fact that the Chinese market for condominiums and factories is rapidly becoming “saturated”.
There have been recent reports that the factory portion of the Chinese economy may now be contracting. Also, there are reports that Chinese coal consumption decreased in 2014. This is a chart by one analyst showing the apparent recent decrease in coal consumption.
Figure 15. Chart by Lauri Myllyvirta showing a preliminary estimate of 2014 coal consumption in China.
Where Does the World Economy Go From Here?
In Part 1, I described the world’s economy as one that is based on energy. The design of the system is such that the economy can only grow; shrinkage tends to cause collapse. If my view of the situation is correct, then we need an ever-rising amount of inexpensive energy to keep the system going. We have gone from trying to grow the world economy on oil, to trying to grow the world economy on coal. Both of these approaches have “hit walls”. There are other low-income countries that might increase industrial production, such as in Africa, but they are lacking coal or other cheap fuels to fuel their production.
Now we have practically nowhere to go. Natural gas cannot be scaled up quickly enough, or to large enough quantities. If such a large scale up were done, natural gas would be expensive as well. Part of the high cost is the cost of the change-over in infrastructure, including huge amounts of new natural gas pipeline and new natural gas powered vehicles.
New renewables, such as wind and solar photovoltaic panels, aren’t solutions either. They tend to be high cost when indirect costs, such as the cost of long distance transmission and the cost of mitigating intermittency, are considered. It is hard to create large enough quantities of new renewables: China has been rapidly adding wind capacity, but the impact of these additions can barely can be seen at the top of Figure 14. Without supporting systems, such as roads and electricity transmission lines (which depend on oil), we cannot operate the electric systems that these devices are part of for the long term, either.
We truly live in interesting times.
@garand555: Good points. I fully expect that the Fed (TBTE banks) will print many trillions more in the years ahead at ZIRP to buy overtly US Treasuries, SS “Trust Fund” obligations, bank and insurer stocks, equity index futures, munis, subprime auto and student loans, commercial real estate loans, energy sector bank C&I loans, and who knows what else.
Now, if they would only credit my bank account with $100,000-$150,000 each year indexed to the rate of increase of the Fed’s balance sheet, I’d be an unapologetic booster of the Fed and the Fed’s TBTE bankster owners.
The world we live in: “Decadent”, “Pain”, and our “delicate male parts” to the proverbial wall:
https://www.youtube.com/watch?v=pLtwWsLgaz8
https://www.youtube.com/watch?v=cvpQMkYY5mY
Box: Oil and debt (February 2015)
http://www.bis.org/statistics/gli/glibox_feb15.htm
This box contains initial findings of a BIS analysis of the oil-debt nexus. The full study is forthcoming in the March, 2015 issue of the BIS Quarterly Review.
Love the conclusion “we need to study it more”.
Thanks! Very interesting. Even the February report has some interesting charts in it.
The High Priest has spoken:
http://www.bbc.com/news/business-31249907
The former head of the US central bank, Alan Greenspan, has predicted that Greece will have to leave the eurozone.
He told the BBC he could not see who would be willing to put up more loans to bolster Greece’s struggling economy.
Greece wants to re-negotiate its bailout, but Mr Greenspan said “I don’t think it will be resolved without Greece leaving the eurozone”.
The Big Show goes onward….
Yes. And a person wonders what will be the next country to be in trouble to kick out. And what the direct and indirect effects of dropping Greece will be.
Yes, and an underhanded way to undermine the Euro as an international currency and keep the Dollar as God Almighty!
Poor souls that are swept in the eye of the storm.
Life is not fair or just.
After the Gold Rush:
https://www.youtube.com/watch?v=1e3m_T-NMOs
Yes we were warned a long, long time ago in many different ways.
Did we listen, stop and heed our actions?
No, and we will do the same here on this “forum”…much talk….
Remember Niel Young parents were part of the whole Laurel Canyon operation.
Remember Neil wrote, produced, directed and acted in the eco-thriller movie,
Human Highway”, with none other than Dennis Hopper, Dean Stockwell!
$96 in VHS format from Amazon.
Director’s Cut re-release coming soon:
http://www.billboard.com/articles/news/6251239/neil-young-human-highway-directors-cut-interview?utm_source=twitter
Thank you the link, very good article and comments by Young.
I have a DVD of “Human Highway” and copies are floating around for about $20.
The highlight of the film is an outtake music video of Neil singing with his hippies and Natives Americans on what appears to be an Indian Reservation.
Neil and Daryl Hanna are a couple now. Hanna is a well known actist that was arrested in front of the White House against the Keystone XL Pipeline.
Perhaps they will team up in a movie!
Great article Gail, it’s all moving according to reality. You still wouldn’t think that reading the FT
http://www.ft.com/intl/cms/s/2/98d1646c-ad45-11e4-bfcf-00144feab7de.html?utm_content=buffer80cb2&utm_medium=social&utm_source=linkedin.com&utm_campaign=buffer#axzz3R4jS9kk4
“Some analysts point to the natural gas example, where US rig counts started to fall in 2009 but production failed to decline as much. With drilling technology continuing to advance leading to more production efficiency, output may not fall as much as the headline rig count suggests. In fact, Citigroup forecasts that without a “sizeable” cut in rig counts at the leading shale regions, Bakken, Eagle Ford and Permian, production could still continue to rise.”
They’re still holding on to the dream even as the whole fracking bubble bursts.
No one can admit there is a problem, until it is on top of them.
Add this to the growing list of problems. Now we know why Ukraine is becoming the proxy battle ground between Washington & Moscow.
“Moscow & Cairo to drop USD, use national currencies in bilateral trade – Putin”
http://rt.com/business/230447-russia-egypt-trade-dollar-drop/?utm_content=buffer4c51a&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer
I am willing to bet that they are using their individual currency $USD valuations to set the Russian/Egyptian currency ratios. This still implicitly recognizes the USD reserve currency status
Or they can use gold or oil or wheat to gauge the relative value of their currencies. Nothing special about dollars.
Thanks!
Gail, when you have time check out this article by Dr. Gal Luft (I know him) an energy expert. He’s co-director of the Institute for the Analysis of Global Security, Senior Adviser to the US Energy Security Council. Co-chairman of the Global Forum on Energy Security in Beijing.
“Strategic Implications of Chinese Energy Policy”
http://www.the-american-interest.com/2015/02/03/strategic-implications-of-chinese-energy-policy/
He goes through a hugely detailed piece of analysis Asia focussed but it’s his concluding remarks that are of most interest.
I quote:-
“A Pan-Asian “energy club” could also address the deeply destabilizing disputes in the South and East China Seas. Under the current international legal framework based on the United Nations Convention on the Law of the Sea, one country can claim all the resources in its economic waters while its neighbors receive nothing. This all-or-nothing approach lends itself to perpetual conflict, perhaps even regional war. But if a mechanism for joint multinational investment and shared development of the region’s resources were created, enhanced exploration activity would enlarge the regional energy pie, with all parties enjoying increased supply and lower prices.
Since the United States maintains close relations with most Asian countries, it is the ideal midwife for such a regional initiative. Instead of focusing on further militarizing the Asia-Pacific region, a policy the Obama Administration calls the “pivot to Asia”, the U.S. government should assume the role of “community organizer”, a job President Obama knows something about.
China would welcome such an American involvement in recreating the region’s energy security architecture.”
His final comment, “China would welcome such an American involvement in recreating the region’s energy security architecture” to my mind is one hell of a far fetched assumption that I find quite far fetched. Would the United States tolerate Russia, China recreating regional energy security architecture in the Americas?
Really interested to hear everyone’s thoughts on this piece of analysis, especially Gail!
Dan
I think it is pretty far fetched to think that China would welcome the US as an advisor in recreating the region’s energy security architecture. I think he also doesn’t understand what a big problem low oil (and coal and gas and commodity in general) prices are right now. China is trying its best to keep itself going, even if the rest of the world collapses in terms of both finances and energy. I don’t know if it will have any success in this area. It certainly has diverse manufacturing capability, and a lot of its energy needs (coal) are sourced at home.
Don’t mind any lefty scum trying to subvert my name, they will all die at the first opportunity, You know who I am,
Dear Gail and All
I have a suggestion for those thinking about either fast collapse or steadily shrinking standards of living in the developed countries. Go to see the Belgian movie Two Days, One Night, written and directed by the Dardennes brothers.
The Dardennes frequently focus on lower class or working class people, dealing with the problems they encounter in Belgium.
The first of these movies that I saw was Rosetta, a young woman living with her alcoholic mother in a trailer. She walks through some woods to get to town, and sets traps for fish, which she collects on the way home to eat for dinner. Among other things, she works in a food stall making waffles.
This movie, playing now, is about a mother of two who has been out of work for 4 months, suffering from depression. The mother has been notified that she is being terminated. The other employees were told that the company could not afford to both pay them a 1000 euro bonus and also keep the mother on the payroll. The employees voted to terminate her, and collect their bonuses. The mother and her husband are barely making ends meet, and are afraid that they will be forced back into public housing.
The plot involves the young woman trying to convince fellow workers that they should forgo their bonus so that she may keep her job and keep her apartment and their reasonably comfortable lifestyle and her self-respect.
You will find many things to think about, as you analyze the movie:
*Compared to most people in equatorial Africa, these people are living well. Nice cars, comfortable apartments, central heating, nice clothing, shops to buy food in, safe water to drink, etc. Very far above Rosetta. Yet almost all of them are financially insecure. Why?
*Research in China has shown that those from the southern, rice growing country, are more communitarian than those from the individualistic, wheat growing area in the north. Rice requires community cooperation to manage irrigation. Wheat does not require community cooperation. Do you see the conflict between the humanistic values and the corporate values? How hard would it be for those with individualistic, corporate values to adapt to enforced communality after a collapse?
*It seems to be very hard for people to downscale, or adopt simple living. Why?
*Do you get any clues as to why depression is now the number 1 chronic disease around the world?
*How do the events impact the marriages and other family relationships portrayed?
*Do you see much food prepared at home?
*Is it easier to think about sudden collapse than steadily eroding standards of living?
Not to reveal too much, but the movie ends upbeat, but probably not the way you think it might.
Don Stewart
Thanks Don. My current girlfriend/almost wife is a relatively recent Honduran emigre. Although I didn’t choose her based on that fact (as a matter of fact, she chose me, and I’m most definitely neither wealthy, nor attractive!), she has most definitely had a positive effect on my worldview. I’m retired US military, so I already had extensive experience with our “third world” neighbors, so none of this caught me by total surprise, but nonetheless…
We Americans have so much to learn and rediscover about our own basic humanity! We have embraced an economic “cancer of the soul” philosophy that is about to be our terminal undoing, and yet it’s so utterly pervasive and disingenuously persuasive that no one can seem to grasp it and describe its evils well enough to stop it. Unfortunately for us all and contrary to the movie, I can’t imagine our current predicament ending at all well.
Chris Martenson posted his podcast with Arthur Berman: “Why Today’s Shale Era Is The Retirement Party For Oil Production”
http://www.peakprosperity.com/podcast/91722/arthur-berman-why-todays-shale-era-retirement-party-oil-production
We look for a solution and see none. If one group decided to unilaterally lower the world population through bio-weapons they could export the brunt of the pain onto others. Island nations are natural candidates Japan, Australia, South America, North America. Nuclear war serves no one it is too unfocused. The sooner action is taken the less damage is done to the planet.
One could view a failure to act as an immoral harm done to future generations of humans and the planet.
Good and ominous points! Not sure bio is necessarily more precise than nuclear, but that’s arguable either way. But that last sentence is a doozy, as it’s basically a restatement of the Bush II justification for the Iraq invasion.
One could view a failure to act as an immoral harm done to future generations of humans and the planet.
Write that one down! I can easily imagine that one being trotted out in any number of situations sometime soon to justify any number of unspeakable horrors!
Sorry, the very second likely targets of genetic-tweaked bioweapons (russians, chinese, indians) learn about such attempt in action, they will unleash their nuclear dogs of war in response. It would be very foolish for the western elite faction to pull out such stupidity, should it be technically even possible in the first place. Besides, the western elite is no longer the single driver of the world events, TPTB are perhaps still skewed towards similar profile but certainly no longer as coherent monolithic group as in past 250-300yrs.
World, you make a good point about the nuclear power. Basically the elites hold guns to each others head limiting their actions. A good thing for us the little people.
“Sorry, the very second likely targets of genetic-tweaked bioweapons (russians, chinese, indians) learn about such attempt in action, they will unleash their nuclear dogs of war in response. ”
“Basically the elites hold guns to each others head limiting their actions.”
Which is why such an attack would be launched by “terrorists” and not a federal government.
The “White Plague” by Frank Herbert. Started by dropping a vial off the roof of Butler library at Columbia University.
Fig 14 is all about coal. Very striking if 80 percent of future coal must be left in the ground.
But also the reason it won’t be left in the ground, because to do so = massive economic collapse.
My bet is that desperation to avoid that collapse scenario will rapidly bring on growing support for the nuclear power industry – whether we like it or not, and no matter the cost. Boasting new reactor designs and a salve for climate change, decision makers and the general public will be increasingly persuaded to go down the nuclear path.
The time will weigh against it somewhat, new approvals and build time being measured in decades. But perhaps more saliently is the significant amounts of fossil fuelled energy that would be needed at the front end, just when divestment campaign are in full swing.
Our civilisation seems to be check mated whichever way we look.
I think it depends on whether we can keep the financial system and governments “together”. If we start having major collapses of both systems, it doesn’t matter what folks want, most of the coal and uranium will be left in the ground. The only coal that will be burned will be some that can be easily mined (perhaps by hand) near where it is used. Anything that requires the system to hang together is a problem.
This is the adverts in Transformers 1 so I will be brief.
We masterfully explored the dialectical movement between competition and cooperation. And what was that other one again?
OK, I present you with the ultimate (?) dialectical shocker, the unity of good and evil.
No full essay just now, but a first statement. (High on port wine is which is always a good start.) Evil is the source of all good. (Hint, evolution.) Death the source of all life, certainly of all selection.
Evil is the precondition of all good. And good the precondition of all evil?
Love as the source of all hate. Hate the condition of all love? The preference that is inherent to every motion of the will.
OK film back on, come and argue with me.
Dialectical truth lies in a drunken swagger between the two po-larities, an ecstatic bouncing up and down. (I would never post this sober so make the most of it now.)
Ode to sensimelia. Where is Wordsworth when you need him? Yes my people!
Straight to the head of the dirty f Babylon (never when sober). What have I got in MY POCKET?
(Edited) no comment.
https://www.youtube.com/watch?v=Fe4bKAE5dC0
We don’t care about your money, just legalise the _herbs and then we will talk with you.
I think this is, as usual, a brilliant analysis, profound in its implications, and presented with deceptive simplicity. What I like about Gail’s analyses is that, unlike the media “economist stars” like Krugman, Samuelson, Mankiw and their ilk, Gail doesn’t do “economics in a box” (by analogy to “physics in a box” which disregards real world effects such as friction and wind). The input of the economists who ignore that economics, particularly in our day and age, does not exist in An Infinite World, can be completely disregarded. Krugman, for example, goes on and on about “money supply” and government spending as if a little rejiggering of economic factors under the control of the Federal Reserve and Congress could solve everything. This is worse than useless. When I read Gail, I realize why that magical period in America between 1948 and 1970 felt the way it did as I was growing up. I entered the University of California at Berkeley in the fall of 1966, when there was no tuition for in-state students and the “Reg Fee” was $81 per quarter. A student could easily attend Berkeley for $1,000 per year, as I did for 4 years. This ultra-cheapness was a sign of great national wealth; students did not emerge from college life as indentured servants with nondischargeable debt in the 6 figures. You could drive a VW Beetle, which you could buy new for $1,600, from San Francisco to Los Angeles for less than 20 bucks. Those times are long gone. I would note that I have never found Gail a “global warming” denier. I think what she has said is that she thinks a collapse in petroleum, coal and other fossil fuel usage will occur before we can reach the IPCC “tipping points,” and this viewpoint may be correct if the so-called “slug theory” is correct. That theory postulates that it isn’t the rate at which CO2 is injected into the atmosphere so much as the final parts per million figure that is reached. In turn, the slug theory depends on the “methane trigger” hypothesis. So – who knows?
Thanks for the magical trip down memory lane Harry. I’m just a few years behind you (born in ’57), but yeah, I remember that whole time so very well too. Felt like there was magic in the air growing up. Too late for the worst of all the Red Scare nonsense, but even with Vietnam and Watergate coming later, it felt like we were invincible and the world was pretty much bending to our will at every turn. And then you grow up and realize it was all just an illusion – or worse. Although, I must say, the illusions for today’s youth are exponentially more powerful and more delusional. The idea of nearly free renewable energy forever and “pixels for everyone” for 7B+ people and growing is going to be the cruelest of lies for those late in apprehending it, which will apparently be quite a few of us.
I get this feeling that by 2050 capitalism will be the junior partner to whatever system dominates. They call it the collaborative commons these days, the sharing economy.
Makes sense.
Hi Gail
I brought up the Degrowth as a possible concious choice on delivering a ‘steady state economy’ (and before anyone says it not possible, I see no signs that our current system is even remotely going in that direction apart for its discussion).
I don’t know if you’ve read (Geoffrey West professor at the Santa Fe Institute) but he presents some interesting research on the scale of life and cities. He also gives a reason for humanities fundamental problem, reluctantly, he regards himself as a neo-matlthusian.
I don’t know how his research would tie in with your ideas, but it may be interesting for you.
https://www.youtube.com/watch?v=qM5q-73t0WE
In one of his talks he states governments need more scientists and fewer economists!
Excellent link and talk, but West does Malthus a disservice IMO in his closing statements where he states Malthus’ contention that we would collapse due to exponential growth has been (rightly) refuted in the past due to the fact that we’ve innovated our way out of it. Yes, we innovated, but all such innovation has ridden on the back of new oil discoveries and every cheaper energy, not to mention western military use to ensure continued access to the same. Take away the oil and nearly all of the truly significant innovations never happen or don’t see widespread adoption if they do. And of course the more ominous truth about Malthus and his long term forecasts is simply that the long term simply hasn’t played out yet due to those same factors.
As for a no-growth economy, even if we could somehow change our thinking and find our way to that magical sweet spot, it would involve very painful deleveraging of the current economy (which will likely happen anyway, albeit quite a bit more painfully) and a huge population reduction over the course of only a handful of generations, with most of the pain for both borne by the usual suspects, the poorest among us. And even if we managed to find our way through all that (and assuming AGW didn’t rear its ugly head to make overall conditions much worse), we’d have to find a way to distribute whatever was left in some sort of remotely equitable way and quell the urge to start the rush toward overaccumulation and growth all over again. Tall order all of that, and I’m not sure we’ve evolved enough as a species yet to make those leaps. Recent events seem to indicate that we’re little more sophisticated in understanding our basic urges than we were 100 years ago at the beginning of the oil age.
Thank you for this very good link.
I agree with James, and would like to add that despite a very good (and huge!) work in analysis, he almost totally misses the energy question.
Maybe I’m wrong, but I saw Energy is plotted only in one graph, for metabolism of mammals, and Entropy is only considered as an equivalent of “waste”.
Yet, it seems to me that if one considers the energy metrics in any of his presented studies, one would immediately see that the end of the road is very close. Next step of the evolution should be robots, but I can’t see where they could get the energy they need from.
That will not happen: “Humans Need Not Apply” (15 min)
http://youtu.be/7Pq-S557XQU
I listened to a little bit of Geoffrey West’s discussion. I don’t think he understands the timing and nature of our energy problem.
It always amazes me the lack of physical economic understanding that financial economic analysis understands. If every financial “expert”/economist understood basic mass balance analysis (inputs = outputs) and they performed their economic analysis as a mass balance equation. They wouldn’t be so surprised to learn that in a complete (all costs) financial analysis (an exceedingly rare thing) that energy is the always driving factor – in financial economics.
While I might take issue with the precision of the data used in Gail’s / Maddison’s population population growth rate and GDP data estimates (which vary widely – http://news.nationalgeographic.com/news/2014/09/140918-population-global-united-nations-2100-boom-africa/#) – the basic assumption that human economic stability and or growth is and will always will be dependent upon not just cheap energy, but ever cheaper energy and larger sources – is a mathematical absolute. Couple an economy (especially food production costs) dependent on ever cheaper energy and a global population that continues to grow significantly – while critical resources that support that population shrink and become divided in smaller and smaller allotments per person – well, you would have to be an brain dead not understand the outcome and where we are headed.
Ever rising cheap energy supply is necessary but clearly not sufficient.
Reblogged this on Stephen Hinton Consulting and commented:
One phrase from this blog struck me; Now we have practically nowhere to go. To all the people working with disaster mitigation I implore you to scenario-study what a sudden fall in oil and gas supply would mean for the society you are charged with protecting. There are ways of handling this apart from the sort of mass-death that a several million city in minus 20 degrees C might find itself.
Likely that the world’s upper managerial and technical/engineering classes already get all the points made on this blog, although many also believe the disaster scenarios are greatly greatly overstated here. The elite and executive and political classes? Not so much, since any proposed fix to our current problems is going to involve them forsaking their “elite” status and sharing most of that wealth they’re greedily piling up for themselves for the good of humanity. That’s simply never going to happen. Ever. As I’m sure most of them would tell you to your face if you asked them; they’d rather go down with the ship than share the wealth they’ve “worked so hard” to accumulate.
Most of their wealth will disappear, as will most of all of our wealth. How much is a condominium worth, if no running water is available, and no food is available near by? How much are shares of stock worth, if the company has closed? How much is our education worth, if what we have learned is for an internet age, not an age of do-it-yourself?
The internet age is great for those who understand that society is going to drastically change. It allows us to see how some of those DIY skills of old work without seeking out experts.
Most of their wealth will disappear, as will most of all of our wealth.
True that, but that’s knowledge likely only fully appreciated in hindsight. The myth of eternal progress is still strong in such people. As Greer says, it’s nothing less than their secular religion.
Yes definitely, we have a strong secular religion. Alan Greenspan was the high priest, and then Ben Bernanke, and now Janet Yellen. He who dies with the most toys wins. Eternal progress gives more toys.
and our local priests are Lawyers. financial advisors and the like
I guess we should make a clear and important distinction between “wealth will disappear” and “will be transformed” . Indeed, many internet billionaire might wake up the next morning pennyless, while oil barrons with colonel friends in the army, might secure feudal/warlordy dynastic powers for several centuries, understandably on different footprint as we go along through the collapse, but the origins of future wealth is very real now for them.
I don’t think the army will have money to pay its staff. I am not convinced there will be very many who can survive because of wealth. They (plus their staff) will need to grow their own food, and be subject to all of the problems that brings. I expect overthrow of the person in charge is a real possibility. In fact, he will probably not be offering a whole lot of help to the process.
“I am not convinced there will be very many who can survive because of wealth. They (plus their staff) will need to grow their own food, and be subject to all of the problems that brings.”
And yet, a peasant has a positive ERoEI. 🙂
That is where fiefdoms come in. The Lord of the Manor lets the peasants farm his land, for which he extracts a sizeable share, typically 2/3rds.
And did I mention that The Lord of the Manor can generate enough extra this way to feed soldiers, as well?
Jan, we could say the raw physical difference between a banknote and a gun is: the former can provide just a couple of watts of heat, while the second can eliminate many hundreds of 100W continuously emmiting bodies
if problem today is financial . then is that why they will crash debt system all together and introduce new financial system? . it seems we are already due for major financial crash. but will crash be on developed economies and probably not as bad as in developing world?
Yep, evidently TPTB are reshuffling for new global power sharing deal (incl. energy consumption) structured via IMF/BIS. In wide oversimplification, imagine from now on the american middle class going down 35-70% in wealth status, while the more populous asians growing by 15-30%, and some of their specific regions/enclaves doing that in much higher rate (e.g. Chinese coastal cities), like several 100% upgrade of wealth command..
Some clues could be found in that philosophyofmetrics blog and elsewhere..
Is the process going to be smooth, or is it going to take war of major powers and or “new governing model” based on premanufactured crisis, I don’t have the vantage point to deliberate on these details.
Correct, the only form of Gov’t that has yet to be tried is a one world govt. I read an article today that backs that statement up. TPTB probably think the only way you can save the current financial mess is to consolidate into one, like how some companies buy out another in financial trouble. IMO, it won’t work either but we are so far into this Ponzi scheme and they want to keep it all together that they are willing to consolidate their Power over the “plebs”.
“UN Climate Chief: We Are Remaking The World Economy”
http://dailycaller.com/2015/02/05/climate-chief-world-economy/
I don’t really care if that is what tbtb want. They will fail. It takes physical resources to control whatever land you supposedly govern if not everybody is very loyal, and those physical resources are going to become scarce.
Perhaps you better care on your personal level as well, because should they gorilla tape it now in some sort of over arching totalitarian system (be it under the umbrella of climate change or need for ongoing civilization project) as a reaction to current unstability it will certainly mean less freedoms on all fronts. So they will prop it up for few years or decades in some lowered consumption model (for the sheeple while uber elite withdrawing resources for control mechanism) and at the next junction it will just all fall apart as house of cards with desperate hungry sheeple literary runing into hills. I’d rather spent rest of my days on this planet in some productive fashion even at disorderly collapse now scenario ala Gail’s (unlikely in my view before say 2025-30), not slaving up for the system, well it’s not meant to be, they have apparently the maniacal urge to drive it to the last second though.
It takes material supplies that they won’t be able to extract to do that. My point is that I don’t care what they want because they will not be able to achieve it. Any would be dictator/oligarch/mafioso has a few flaws: They have to eat, drink, crap and sleep just like the rest of us. They are subject to the laws of physics, just like the rest of us. They can be wrong, just like the rest of us. A bullet in their faces leaves them dead, just like the rest of us. I don’t doubt that there are people who would like to control the world, but they aren’t some magical rainbow farting unicorns who can control chaos. Much of the evil that you see in today’s world is simply people trying to maintain the status quo. They will fail.
When just looking at the US alone, $60 trillion in total debt plus the physical inability increase key resource extraction by any appreciable amount, plus a banking system that is exposed to ~$239 trillion in OTC derivatives, many of which are parked in FDIC insured deposit taking subsidiaries of some TBTF banks, does not bode well for the near future. Those are only a few of the problems.
“It takes material supplies that they won’t be able to extract to do that. ”
There is millions if not billions of tons of materials to extract from suburbia, and at a tenth or less the energy cost to mine it from the earth. Many millions of old cars to recycle.
“When just looking at the US alone, $60 trillion in total debt plus the physical inability increase key resource extraction by any appreciable amount,”
If we wake up one morning to a totalitarian state that is trying to survive declining energy, I don’t think the debts will matter. Whether outright default, or hyperinflation, or creating a new currency and letting the old dollars become worthless compared to the new ones so the old debts are easily paid. Once you switch from this system to that, growth is no longer needed, and energy consumption can fall 50 percent overnight.
North Korea is an example of just how far things can go, some will argue that North Korea is still plugged into the rest of the system, but North Korea has little or no energy resources themselves. North America following a North Korea model could probably run on 2 million barrels per day for a long time.
If energy consumption/production falls 50% overnight, there will be no government in the aftermath of that. The government, the bankers, other corporate CEOs, etc… depend on the supplies and infrastructure that the energy builds, maintains and runs just as we do. This is a problem for any would be dictator. It takes energy to run the equipment that would be used to enforce dictatorial rules. It takes energy to make guns, MRAPs, Bearcats, kevlar, ammunition, etc… Without that energy, which, BTW, also provides the poor and the rich alike with food, somebody in DC is going to have a very hard time ordering somebody in California around.
The problem isn’t that it would be physically impossible for the US to run on less oil, the problem is that all of the infrastructure and all of the necessities in the US are built around perpetual cheap and plentiful oil with no alternatives in place. Most people lack the knowledge to survive in a truly local economy, which going to 2mbpd would necessitate. That kind of collapse would take the government down with it.
“If energy consumption/production falls 50% overnight, there will be no government in the aftermath of that.”
I think you underestimate or misunderstand your fellow human beings. If there was a sudden crises, I think a lot of people would be calling for martial law, filming their neighbours’ misdeeds and turning them in to the government for rewards, and forming local armed patrols under government control. You don’t need MRAPs running around all day, as long as the amount of agitators is small and enough of the local populace supports the government.
Look how little energy North Korea maintains an absolute totalitarian state on. They use 10 percent as much energy per capita, and they live in a fairly northern climate.
North Korea also has a very different infrastructure, culture, is much, much smaller and it doesn’t have 300,000,000 private firearms floating around. Their infrastructure is set up so that they can put an enormous chunk of their economic output towards their military and police state. If the US tried to do that, the flow of goods, including food and clothing, would stop. Our economy and our supply chains are much more complex than North Korea’s, and we have not allowed alternates to spring up.
” the only form of Gov’t that has yet to be tried is a one world govt.”
Uhm, I think it’s here already.
In essence, trade agreements have given us a corporate world oligarchy.
You want to save the endangered purple-crested snail-eater by stopping a huge shopping centre from being developed in the last snail-eater habitat? Sorry, trade agreements won’t let you. You want to ensure food sovereignty by starting a “buy local” promotion? Sorry, trade agreements won’t let you. You want to restrict exports of raw logs so that you can create employment by adding value and selling wood products, instead? Sorry, trade agreements won’t let you.
Gail seems to fear government breakdown. I say, it’s long overdue — bring it on! What we’ll lose in services we’ll just have to make up by re-learning how to live locally — without corporate hands in our pockets.
I’m with you on that Jan, but it must be acknowledged that the transition period will be a frightening and dangerous period. We could voluntarily do this, but we aren’t, so the system will break, people will go without basic necessities and it will be a miserable time for most.
I think that you might want to look into Joseph Tainter’s work for an answer to that. We have built up a very complex set of institutions, rules and infrastructure to maintain our way of life. Maintaining that complexity has costs, many of which can be measured in joules. As those joules, measured in dollar costs, get more expensive, the less the complexity benefits us.
A crash that does not render the complexities of our society useless or a crash that gives us time to scale those complexities back will be worse for the developing world. A crash that brings those complexities to a grinding halt will be worse for the developed world. Imagine if the US lost its ability to import oil overnight. The sudden loss of employment and the sudden loss of the ability to ship goods, including clothing and food, would send shockwaves through our society and would likely to lead to the kind of instability that would go down in history with the fall of the Roman empire.
Most people in developed nations flat out do not know how to live without a modern economic system and they do not know how to live without oil and everything that oil makes possible. Think about all the people who would sit and starve if food stopped getting shipped just waiting for the government to save them. Unless somebody told them “You know, you could rip up your lawn and at least grow something,” the idea would not occur to them. We are that disconnected from our food supplies as a society. Steaks grow on trees in the back of the supermarket already wrapped in plastic and Styrofoam, you know.
“I think that you might want to look into Joseph Tainter’s work for an answer to that. We have built up a very complex set of institutions, rules and infrastructure to maintain our way of life.”
I am on this blog at this moment because I’m procrastinating the soul-sucking $25/hr job I picked up to support my nasty habit of farming. I’m doing research for an underprivileged group, funded by a government agency, to summarize what happened to the funding for an employment program for that underprivileged group, run by a different government agency.
Hmmm… I could procrastinate much longer if I spent the rest of the day on YouselessTube, searching for a clip of Joseph Tainter rolling his eyes or palm-smacking his forehead… but it’s back to work for me. Got goat feed and seeds to buy.
I promise to include the Joseph Tainter video clip when I find it. 🙂
Thanks, but I don’t see the part where he rolls his eyes or smacks his forehead?
I was thinking of something more like this: https://www.youtube.com/watch?v=KVSPKzi-7YE
I think it’s more nuanced problem.
Look at Roman Empire it went down in series of fluctuating waves, it was complex sequenced act of contraction and collapse. Even if we acknowledge the speed of light global communication factor of today and high vertical integration of everything, simply the world can’t be crushed over night unless ET event (asteroid, EM pulse), full scale nuclear war etc.
Instead you can have several decades more of semi-industrial future, canibalizing existing infrustructure, plus reviving some older simpler technology stuff, where the coal is the king, 20-30% of population pushed back into agriculture etc. That’s where we are heading is my guess anyway. And again as always mostly psychopats will be at the steering wheel for this ride. Enjoy!
It’s not just the speed of light communications that will speed things along. It is the complexity of our supply chains combined with the lack of knowledge regarding how to live without those big, energy hungry supply chains. If you look up the supply chain interactions that were/are used for producing Swedish Ketchup (yes, somebody actually did a study on that,) your mind will be boggled by how many countries were involved in bringing a simple condiment to market. Throw a sabot into the gears of the logistics of our food system, and it is so complex that food production or simply food transport could come to a grinding halt. The problem is that we’ve been using oil to expand our agricultural lands available to people in big cities, and we have not developed or allowed an alternative system. If you want corn or corn products, they probably come from the Midwest, but processed products are likely processed elsewhere before being mixed, packaged and delivered to the grocery store shelf.
All of that only works in today’s system, so long as we can keep on growing our economy. What we are doing is setting us up for a classic seneca cliff.
All over the world, financial systems have crashed over time, and new ones have been introduced.
The issue we have now is worse though. It makes it really hard to introduce a new financial system, because the amount of goods we are producing is going down. This makes it hard to promise to pay in the future. We have to have payment after the fact, which is debt. I will need to explain this in a post.
“The issue we have now is worse though. It makes it really hard to introduce a new financial system, because the amount of goods we are producing is going down.”
This time is different for various reasons. We over globalized the financial and economic system. It’s been made overly complex on purpose to steal wealth from the plebs and hard workers. The system that’s been built has boxed/domesticated mankind in general by the controlled networked system that has been setup to provide basic necessities such as food, water, electricity and sanitation. All this has been made possible by CHEAP OIL.
There is always going to be somebody who wants to control things and/or skim off of everybody else. What cheap oil has done is made it possible for them to think globally instead of locally or nationally.
There are several options before us, it’s hard to acurately pinpoint the sequencing order and/or exact probabilities of these near/mid term future scenarios..
Please consider the option of semi autarky, or block arrangements, where global trade, debt settlement and all the other aspects are somewhat inclusive and separated into block paterns. I think it’s quite visible on the actions of China, Russia,.. at least since 2008-9. Mind you this might serve as intentional brake before further regionalization/collapse takes place, basically a call for circling the wagons in desperate attempt to preserve some key functions of complex societies.
Dear Gail and All
Today I was in a Farming and Climate Change Conference. (Bear with me on the Climate Change—don’t tune out yet).
We have the knowledge to sequester 1.7 tons of carbon per acre per year on 3.5 billion acres of cropland.
We have the knowledge to sequester 1.1 tons of carbon per acre per year on 9 billion acres of pasture.
In total we can sequester 58 Gt of carbon dioxide, while current emissions are 52 Gt. Poor soils can sequester carbon more rapidly than good soils. Joel Salatin has, for 50 years, sequestered 2 tons of carbon per year on pasture.
By sequestering the carbon, we have only positive effects on our food environment:
The program does not REQUIRE any legal mandates to reduce fossil fuels consumption…but it probably does require a government agricultural policy change to favor carbon sequestration over industrial farming. (In order to keep food production up, it may also require that we discontinue ethanol mandates).
Therefore, there is no reduction in GDP FROM THIS PROGRAM.
Whatever limits are imposed by Peak Finance or Peak Oil or other Peaks is, of course, another matter.
Don Stewart
PS Data from Peter Bane, mostly quoting a Rodale study.
You mean having healthy soil with a lot of organic matter in it sequesters carbon? Who wouldda thunk it!
Seriously though, there are a lot of benefits to having healthy soil instead of using synthetic npk fertilizer. Those benefits do not translate to high throughput for just a few people doing the work though.
Thanks Gail. Your graphs tell a lot.
Though I disagree with your statement “…There would be a carry-over to population growth as well, because parents who have more adequate resources can afford more children.” It has been proved that the opposite is true – people have less children as they become more secure. Birth rate is only half of the story.
In the UK, people weren’t having more babies in the period from 1940-1970, than they were from 1900-1940. The population was increasing because people were living longer, and this would no doubt be the result of the availability of cheap oil as your graphs suggest. In the UK in 1912, the average age was 25. The mortality rate for under 5’s was high, which meant less of the population survived to have children themselves. In 2012 the average age was 40, so there has been a massive increase in the number of child-bearing adults, although actually they have less children each.
I think people forget that the population decline that is starting to emerge is that people are not going to live so long. Without the money or oil to keep the expensive medical system going less lives will be extended.
I also noticed that you didn’t mention that the vast increase in energy consumption in China is producing products for the West. Our energy consumption has been decreasing because we no longer make our goods ourselves, but if you included what is in essence our portion of China’s energy consumption it may change the overall view. There is a graph here http://www.chinafaqs.org/files/chinainfo/lbnl_energy_consumption_1980-2007.pdf that shows that over 70% of the energy consumption in China in 2007 was from industry.
What I am trying to say is looking at global figures through history shows the trend and how we can now expect to be on the downward side of the slope. But looking at individual nations shows that some countries have far less distance to fall. The Chinese are just starting on the road to excess and have barely had a generation of car ownership. Whereas our grandparents owned cars – there is very little living memory of life without cars, fridges, TVs and cheap energy. And a long way down…….
Judy,
Thanks for the graph–I hadn’t seen it.
The population situation gets to be complicated. The short sentence I chose didn’t really describe the situation well–I had discussed the topic to some extent in a previous post. Without fossil fuels, there are a lot more babies, but fewer live to maturity. When people get the benefit of fossil fuels, more live to maturity, and growth rates slow. The carrying capacity of the world is a lot higher, so many people don’t recognize the high population as a problem. Education indirectly requires a fairly high energy consumption, because it requires work to be transferred something other than humans (tractors, or at least horses), so that fewer farm workers are needed, allowing more people to go to school. Contraceptives also require fairly high energy use–really a whole pyramid of infrastructure and education. When these disappear, people will have more babies again, but fewer will live to maturity.
Yes, I think you are right. Only………..maybe that is the end stage and there are other stages in between.
For instance there could be an increase in deaths of middle aged or young people due to healthcare cuts (this would have a bigger affect on population than someone dying at 75 rather than 80), but we wouldn’t know until a few years later once the data has been released. Even once we know, at what point would it change family size?
“but we wouldn’t know until a few years later once the data has been released”
We’ll never know, because collecting, collating, analyzing, and distributing data is going to be one of the first things to go!
Don’t get me wrong — I love data. But it is a luxury of high-energy life, one that we probably cannot afford after the bottleneck event.
Great points!
Jan makes a great point and the “data element” is in fact one of the 4 Horsemen of the Apocalypse generating the “Perfect Storm”
1. Globalization disaster / collapse
2. Bursting of the debt bubble (the greatest debt bubble in our specie’s history)
3. The massaging of data to the point whereby economic trends are now completely obscured (the political elite are lying, they will resort to greater manipulation and lying)
4. The rapidly approaching energy returns cliff edge we’re about to nosedive off if we haven’t already.
An economics professor and one of his graduate students were out for a walk on campus. After sidestepping a pile of dog poop, the professor said to the grad student, “If you eat some of that dog poop, I will give you $10,000.” The grad student hesitated, but then decided he would do so. After all he was a poor grad student and $10,000 is nothing to sniff at. He dutifully ate some of the dog poop and the professor whipped out his checkbook and gave him a check for $10,000.
Further on, the grad student felt a little ill and decided to get the professor to share in his misery. When they came to another pile of dog poop, he said to the professor, “If you eat some of that dog poop, I will give you your check back for $10,000.” The professor did not hesitate even for a second and ate some dog poop. The grad student gave him back his check and they walked on.
A little later, the grad student asked the professor, “Why did we do that? We both feel ill and neither of us has any more money than we did before?”
The economics professor quickly replied, “But my boy, we increased the GDP by $20,000!”
This is what GDP is really all about.
“An economics professor and one of his graduate students were out for a walk on campus.”
I think it was that same professor who encountered a stadium full of 40,000 destitute, unemployed people come to hear a talk by Bill Gates, and said, “Isn’t this wonderful! A stadium full of millionaires, on average!”
Reminds me of the Twilight Zone Episode: “The Rip Van Winkle Caper”
————————————————————————————————–
To escape the law after stealing $1 million worth of gold bricks from a train on its way from Fort Knox to Los Angeles, a band of four gold thieves, led by foreign-accented scientist-mastermind Farwell (Oscar Beregi, Jr.), hide in a secret cave in Death Valley, California. Farwell has designed suspended animation chambers and set them for approximately 100 years, figuring that by 2061, no one will remember the robbery, and the gang will be in the clear.
When they wake up, things begin to go awry. All that remains of Erbie is his skeleton, his suspended animation chamber having been breached by a falling rock. Greed soon begins consuming the others. Brooks demands that DeCruz drive the getaway car. DeCruz kills Brooks by running him over with the getaway truck, but then finds that the brakes no longer work and barely escapes before the vehicle crashes into a ravine. Now Farwell and DeCruz must walk through the desert in the summer heat, carrying as much gold as they can on their backs.
Farwell, who is older and heavier, loses his canteen, and DeCruz offers him a sip of water from his canteen, for the price of one gold bar. When the fee goes up to two bars, Farwell strikes DeCruz with the gold bricks, killing him. Farwell then continues to a highway, lugging the gold that he refuses to abandon. Finally, weak and dehydrated, he collapses. Farwell offers his last gold bar to a man from a futuristic car that has driven up, in exchange for water and a ride to the nearest town; but he dies a few moments later.
As the man, named George, gets back into his car to report Farwell’s death to the police, he quizzically remarks to his wife, “Can you imagine that? He offered this to me as if it was really worth something.” The wife vaguely recalls that gold had indeed been valuable at some time in the distant past. The husband replies, “Sure, about a hundred years or so ago, before they found a way of manufacturing it,” and tosses the gold bar away.
Suing your neighbor acts equally well. Adding real value takes leveraging human labor with cheap fuels, though.
Yes, you are right. The point of the story is that GDP is a false concept. As another example, Iowa corn farmers growing corn for ethanol leaves the net energy unchanged. This is because the EROI is 1.1 to 1 (Murphy and Hall estimates range from .8 to 1.4). So what all the commotion of planting, harvesting, trucking, marketing, and consumption is to leave the net energy unchanged while money flows through the system. GDP should be re-branded GDMF (gross domestic money flow).
Another point to my story is that economics professors are leading us down the path of eating dog poop just to improve a false set of numbers.
I’m skeptical that the eroei on corn to ethanol is even 1. Build an economy that runs 100% on corn ethanol and see how quickly it falls apart.
If you want to know what corn->ethanol for fuel is about, the answer is simple. Corn farmers want to make more money, and senators and representatives get reelected when the farmers make more money.
The corn-ethanol debacle has some good intentions behind it. Most years farmers lose money growing corn. The government set up price supports to make it profitable. Corn made into ethanol is diverted from the food supply raising prices ranchers have to pay to feed their livestock. This supposedly lowered the need for subsidies. Of course most of the subsidy money goes to corporate farms and with accounting tricks they still qualified for support even with $8 corn.
Gail,
I’m going to rehash an old argument here, the argument of financial collapse vs. supply collapse. I am starting to lean back on the supply side due to the following reason.
Finance can be manipulated, reinvented etc. A supply of a finite resource cannot. It is what it is and will always be until it is gone (or nearly exhausted). I think that as long as there is a reasonable flow rate of oil coming out of the ground, we will manipulate finance (as we have been) to keep it going. I think that once the flow rate reaches a certain low-end level, then the financial trickery will become impossible to maintain as the reach of that flow will be too small.
So I am thinking from that perspective, that it is a resource limit first, that will cause a financial failure. Can you elaborate on that? Sorry if we are covering well treaded ground here.
Primary question: What is the minimal flow rate (bbpd) of which the financial system can continue to operate sufficiently enough to keep the production (or the financial trickery) operating?
Thinking on this further, it appears that it would be an adaptive process whereby (which appears to be at play currently) the economy and demand (or affordability) shrinks and the price lessens. This degenerative process would continue until the flow rate is so small as to not support any economy of scale large enough to allow for a continued profitability matrix for oil.
Slowly people would become poorer and poorer, nations would collapse, centralized governments would decentralize, etc.
I guess in that case, it would really be pointless to determine what minimum rate of flow would be the undoing.
The financial system has to grow. It has to have oil companies that are making profits, so that they can pay back their debt with interest. It has to have Chinese homeowners making enough money that they can pay for their expensive condominiums. I am afraid that we are already quite a bit below the level at which the financial system can keep operating. It is only by trickery that we can kid ourselves that things are sort of all right.
HI Gail
“The financial system has to grow. It has to have oil companies that are making profits, so that they can pay back their debt with interest. ”
Again, here’s where I have to disagree. You are still thinking too much like a Capitalist.
Governments, especially powerful governments, will not stand by and do nothing. As the say goes, economics will trump ideology (and Democracy).
Insolvent banks? No problem–> bailouts
Insolvent homebuilders? No problem–> retroactive tax cuts
Insolvent financial non-bank institutions (AIG, GM, et al)? No problem–> more bailouts.
Corporate bond rates too high? No problem–> back corporate debt with gov. guarantees.
What will they do this time? Can’t say, but lots of ideas that seem outlandish or unthinkable today will become logical solutions in a crisis. Reduce/eliminate environmental laws? Tax abatements? Retroactive tax credits? Free leases on public lands? Could they take on fossil fuel corporate debt, or bail out banks at risk of losses on the debt? Nationalize industries? Provide gov. subsidized labor– maybe even military personnel– in some sort of public works program? Prison labor?
Many of the above are already being done, albeit piecemeal.
If an industry is deemed critical, it will be supported even at a loss, even if it means cutbacks elsewhere in the economy– this is exactly what happened during the last crisis with the banking system and auto industry, as well as the airlines after 9/11. Such policy has long been part of Communist economic theory (and practice), for example. Long-term solution or not, governments will spare no effort or expense to keep the fossil fuels flowing as long as they are able.
Yes, there are limits to money-printing, but private debt deflation will dampen inflationary pressures– see current public debt int. rates at multi-century lows– at least for a time.
In the long-run, they will worsen the outcome, of course, but very few politicians will vote for the future over the present. The U.S. system, in particular, does not select for, nor even really allow, such type of person to attain powerful positions.
I enjoy Ugo Bardi’s posts as much as anyone, and your financial version is an interesting take on his work, but the Seneca Cliff doesn’t apply as neatly here. We know there’s much, much more carbon in the ground, even if it is difficult, dangerous, and expensive to obtain, not to mention delusional. We’ll try to get it, by any means necessary. The U.S. has already demonstrated it’s political will to do anything, regardless of ethics, morals, or long-term consequences.
Lastly, I know it’s popular to talk about “The Government” as some inept– at best–even impotent entity, but it remains the most powerful human force on the planet, and they will not stand idly by as their power fades away. And we have not even discussed the corporate powers behind the throne, who will definitely not accept contraction without a fight.
The Empire will thrash far more madly than I think most people currently–or perhaps even can imagine.
Gail?
All true, but all ultimately futile as well. At some point the bag of financial and political tricks will come up empty, and war(s) will be the most likely result. I think we’re pretty much at that point now.
It is the governments that crash, because they are overextended, and cannot raise either taxes or debt enough. I will need to explain this in a post. This is what we see in past collapses, and this is what we should expect in the future, because governments overcommit themselves relative to what they can really afford.
The reason that governments took over oil companies in the past was because they were a great source of tax revenue. With prices low, oil companies need subsidies instead. This becomes a huge problem–interferes with takeovers.
Gail, note below that real gov’t spending per capita is at the levels of 2001 and 1991, but the change rate is set to accelerate from negative in the coming months/quarters/years:
http://research.stlouisfed.org/fred2/graph/fredgraph.png?g=ZZG
http://research.stlouisfed.org/fred2/graph/fredgraph.png?g=ZZH
http://research.stlouisfed.org/fred2/graph/fredgraph.png?g=ZZJ
Then note below the implication for what the fiscal deficit is likely to be during the next recession, i.e., doubling or more of the deficit (not counting another bailout of banks C&I loans for energy sector debt, subprime auto loans, student loans, muni bonds, increasing imperial war spending, etc.), which is closer than most realize:
http://research.stlouisfed.org/fred2/graph/fredgraph.png?g=ZZN
One of the primary inferences is that the Fed will NOT raise the Fed funds rate but will instead maintain ZIRP indefinitely and resume QEternity at some point in 2015, perhaps as soon as Q2-Q3.
I can’t imagine how the Fed could raise the Funds rate, regardless of how much employment seems to rise. Higher interest rates have just too much bad effects on a whole rate of players. In fact, without QE eternity, we are in tough shape (and maybe even with QE eternity_.
Of those charts, I like the first one best, because it is simplest. Taking the government’s foot off the gas, when we are still in bad shape, doesn’t really work.
“I can’t imagine how the Fed could raise the Funds rate, regardless of how much employment seems to rise.”
Gail,
If you were watching a sky scraper and saw somebody jump off of the roof, it would seem to be an irrational action on that person’s part. But, if you examined the skyscraper and noted that that person would have had to run through 10 flaming floors and likely died from smoke inhalation or severe burns to come down to the ground floor by what would be considered more conventional means (stairs,) you might not think that his actions aren’t so irrational, even if you cannot understand them on a visceral level. There is very little that the Fed could do that would surprise me. Maybe they’ll raise rates, maybe not, but they’re on the roof of a flaming skyscraper, and what seems irrational to you may seem rational, even if fatal, to them. You must remember that they’re damned if they do and they’re damned if they don’t. Any option is fatal for them, though some may drag things out longer than others.
You are right. They are in a “Damned if you do, damned of you don’t situation.”
“It is a little late now” – Gail
I think we need a Gail quote page
Your analysis is based on a common, but erroneous, assumption: that energy-supplying commodities are the root of economic growth. No. The fundamental requisite for growth is work, not energy. It is a fact that work requires energy but it is not the case that there is a fixed relationship between the two. This is critical because it is entirely possible to do more work with the same, or even a reduced amount of commodity-based energy. This is demonstrated by the relationship between technological advance and economic growth. Doing more work with less energy is not only possible, it is now ubiquitous around the globe. This process is now advancing dramatically because of the rapid growth of information technology.
I commend you Gail, for putting forward your ideas but I must ask you to carefully reconsider your fundamental assumption.
Dear Brad, work? The energy is inevitable for leveraging human work. Try to saw the wood using a hand saw and a chainsaw: you will see the difference immediately…
“The fundamental requisite for growth is work, not energy. It is a fact that work requires energy but it is not the case that there is a fixed relationship between the two. This is critical because it is entirely possible to do more work with the same, or even a reduced amount of commodity-based energy.”
By this, I assume you mean “efficiency?”
There are hard limits to efficiency. One cannot exceed 100% efficiency without re-writing the Laws of Thermodynamics.
But wait, it gets worse: the approach to 100% efficiency is asymptotic, a hyperbolic function. As you become more and more efficient, it takes more and more emergy, or embedded energy. Theoretically, it takes an infinite amount of resource to achieve 100% efficiency!
This means there is a “sweet spot” on the efficiency curve, where an optimal amount of embedded resource enables an appropriate level of efficiency. (HT Odum referred to this as the “maximum empower point.”) For some processes, this can quite a low number: for example, 3,500,000,000 years of evolution has only been able to achieve about 8% conversion of sunlight, and that with only a handful of species — most basic productivity takes place with only a percent or two of conversion efficiency.
“Yea, but we have solar cells that achieve 20% efficiency!” Yea, but they were built on the back of a spike of fossil sunlight, and it is totally unclear that we can keep making 20% solar cells (or any solar cells, for that matter) as fossil sunlight goes away.
“Doing more work with less energy is not only possible, it is now ubiquitous around the globe.”
HT Odum (et. al.) have done “emergy accounting auditing” for a number of tekkie things, and found them all wanting in terms of their “transformity ratio,” the amount of embedded energy required to produce an amount of “work,” as you call it.
I think you’ll find that Gail’s position is carefully thought-out, with the help of many others, and I invite you to “carefully reconsider your fundamental assumption” that information technology (with its millions of high-emergy components, sucking up perhaps as much as 10% of our current electricity supply) will save the day.
“HT Odum (et. al.) have done “emergy accounting auditing” for a number of tekkie things, and found them all wanting in terms of their “transformity ratio,” the amount of embedded energy required to produce an amount of “work,” as you call it.”
I suspect a huge part is that the primary focus of technology has been towards maximizing through-put, rather than optimizing for efficiency. Why use 1 unit of energy to do 1 unit of work, when you can use 25 units of energy to do 10? Why not use 500 units of energy to do 100 units of work instead?
I think it is more that businesses sell you things cheaply, that you have to or want to replace often. Cheap is necessary to be competitive.
I am sure you are aware of Ayers and Warr’s work in this area. This is a link to their 2002 paper, Accounting for Growth: The Role of Physical Work. I believe that they have studied other economies as well, including Japan’s. The link to GDP growth still holds on a physical work basis.
I hold that what is important is the final outcome. The wages of workers need to be increasing, in terms of the goods and services they can buy (and need to buy). It is of little importance that they can search the web cheaply, if what they need is food, water, and transportation to work. Everything we can see recently says that workers are doing poorly in this regard, despite the dramatic progress you claim. If workers could eat pixels, we would be in great shape!
Love it! A new take on a classic line: “Let them eat pixels!” And if Hillary ends up in the White House, I can certainly imagine her saying it.
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Year 1 to 1000- Collapse of the Western Roman Empire. The Eastern Empire survived until 1453 when it was overthrown by the Ottomans.
The Eastern empire did. The Western portion died around the time Alarac sacked Rome.
Sorry, it’s late. Perhaps I should stop responding when my reading comprehension is not up to snuff;)
Thanks for the correction. Italy was in the Western Roman Empire.
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“but it didn’t raise the standard of living of most of the population by very much”
Indeed, it may not have raised the standard of living of most of the population at all. Per capita figures only give us an average over the whole population. The distribution of living standard improvements may be skewed to the wealthy, or not.
I think I’ll leave it there. You seem to be making a lot of general assumptions that aren’t backed up by the data you’re showing, though I get the general drift.
We know that the wealthy came out very well, based on archaeological evidence. If the average was double, it stands to reason that most of the population experienced quite a bit less than double the increase.
Actually, one can’t infer that from an average. It all depends on the distribution. Most of the population might have done better than average but less than half doing much worse than average. I’ve no idea which it is, but one can’t infer that sort of information from an average, and I’m not sure it’s reasonable to make that assumption.
Sorry, just commenting as I read.
Figure 2 is a bit arbitrary, with periods of 1000, 500, 320, 80, 40, 30, 30 and, finally, 14 years. Later you talk about this pattern being “what we would expect” but the pattern is an artifact of the periods you’ve chosen to show. You say that the downward trend has lasted 44 years so far, but that assumes that 1970 growth was the top growth year. Was it? The “trend” could be up to 74 years and could be as low as 30 years, if growth started to increase again in 2001. I’m not saying any of this happened, but I don’t think you can infer anything you’ve written about the long term trends in growth, from Figure 2. Is there a continuous line graph you could show for the last 2,014 years? That would give us a better idea. And referring to estimates as data is probably not quite right.
Just saying.
The periods I have chosen to show is an artifact of (1) where data was available on older years, and (2) my knowing that “things changed” in 1970 (with the fall of US oil supply), and about 2000 (with the sudden shift from declining oil prices to rising oil prices–also rising prices of metals). I probably should have highlighted these issues. There were year by year estimates for recent years available.
I also knew from looking at the data previously that World War II marked another “bend” in the data, with a huge surge in fossil fuel use. The data wasn’t finely enough available that I could do a break precisely at World War II, so I picked 1940.
1820 was the closest point I could get that was close to the beginning of widespread use of coal.
The only perhaps arbitrary point I used was 1900. I wanted to see how things were changing between 1820 and 1940, and it seemed like as good a choice as any. Other choices that could have been made, with perhaps more data points by Maddison, were 1870 and 1913.
All data are to some extent estimates, even when, say, population is from a census or GDP is published by a government. The points in these charts probably have wider “error bands” around them than most, because some analysts, given the same information, would see things differently.
Yes, but with periods ranging from a millennium, through several centuries to barely more than a decade, some periods might have had fast rising GDP for several decades, without this being seen in the graph, due to averaging. So the periods chosen are arbitrary in the sense that they seem to be chosen to provide backup for what you tried to argue. A continuous line would have been better, with certain periods highlighted. With the graph as presented, I’ve no idea whether your analysis of the changing GDP makes sense. And, as I mentioned, it’s impossible to say that it’s 44 years since peak GDP growth. It’s only 44 years since the end of the chosen period that appears to have the highest GDP average growth.
On the recent years, where more recent data is available, it probably would be better to look at year-by-year data. Jean-Marc Jancovici, who writes on the site Manicore, shows this chart of the trend in GDP per capita, since 1960.
We know the population growth trend is down as well, so total world GDP has been falling for quite some time.
“Paul Hughes Says:
February 5th, 2015 at 2:13 pm e
Øyvind,
I want to commend you for bringing up the coral reef as living proof of sustainable complexity. It is completely possible to build a complex, fully regenerative, ecologically harmonious, decentralized, collectively intelligent, global “reef” civilization that is rich in play, novelty and fun for everyone, using a sufficiently savvy design science. Bucky Fuller demonstrated this in 1965. We have the means now. The current capitalist crap based on artificial scarcity through an enclosure of resources as a source of rents, not to mention forced obsolescence, is depleting the planet and killing life. But a post scarcity society geared around open sourced abundance and regeneration is scientifically possible and completely feasible. Doomers like Tverberg saying it isn’t, is not only disingenuous, it’s irresponsible to our generation most charged with building it!
To me this is an open and shut case. Kevin Carson already won this debate with Greer. The real debate is will society maintain cohesion long enough to develop the requisite systems. So it’s not a matter of if it’s possible – it is. It’s a matter of can we build it in time? This isn’t at its core a resource issue, as Tverberg claims, this is a structural issue based on the current powers deliberately suppressing the very things necessary to create the successor society. One piece of good news here – the tools of abundance are now multiplying faster than they can be expropriated.
I wish I had more time to discuss this with you here. This is why I choose instead to focus on one or two points at a time to see if they stand up to scrutiny. The continued talking point amongst doomers that phosphorus is running out in the next 50-100 years is simply not true. I haven’t determined if this meme is based on ignorance or politically motivated disinformation. It’s not even running out in 300 years. Next point, solar energy can and will have the capacity to power civilization far more complex than our own. This is so easily proven, that I’m shocked and amazed otherwise educated people like Tverberg are arguing otherwise. As an ex-physicist I’m perfectly aware of energy flux density. Although that’s important in terms of how much space a solar panel takes up based on its efficiency, it’s a non issue in terms of us having enough space to capturing enough to do the job. At 12-15% efficiencies a smallish section of the upper Sahara would be enough. New panels now have double those efficiencies, thus cutting the necessary area in half. Super cheap organic solar cells are coming, yet already solar is reaching fossil fuel parity. Batteries are closing in on oil’s energy density. I will happily debate both Tverberg and Greer publicly on solar having the capacity to power human civilization. What is more arguable is will be able to replace fossil fuels with solar electric equivalents in time? That’s a good question, and the jury is out.
Regeneration is not an energy intensive issue, it’s about the deliberate creation of super durable but fully reusable, regenerative, and/or compostable materials from the get go! Duh! For example, stronger C-N nanomaterials will obsolete most need for metals anyway, not to mention the deliberate creation of modular reusable tool sets designed not to break, therefor no replacement cost and new materials needed.
Where Tverberg may be correct is will we experience an economic domino like collapse before alternative financial instruments can take over? She says no, and I can’t say she’s right or wrong. Several years ago, I would have more easily agreed with her. Now, and despite Bitcoin’s flaws, we have at least one. Other efforts at decentralized financial instruments are making headway.
We need to start separating out more meaningfully the differences between the many types of growth, complexity, novelty, change, stability, etc. Having over simplified black and white conceptions of each, results in the conflation of one with the another, resulting in what looks like serious one sided framing from both Greer and Tverberg.”
http://blog.p2pfoundation.net/gail-tverberg-vs-john-michael-greer/2015/02/03#comment-1082066
Many analysts have looked at renewables and I don’t think any could show that they could power even this system, never mind a more complex one. But for only solar, it’s a highly polluting process, may have limiting resource requirements and divert solar energy from its current task. Even without EROEI and its diffuse and intermittent characteristics, it is optimistic in the extreme to think that our society can become even more complex on solar. And the mere thought of what that would, if it were possible, do to our only known habitat doesn’t bear thinking about.
So, where is Paul Hughes going to get the materials to build all of those solar panels? Hmmmmmm?
The Pollyannas remain irrepressible!
I will try to write more posts explaining exactly what the issues are in developing a new society. Basically, we have to start over either completely, or with bits and pieces of our current system that can somehow survive. This is far different from back in the days of the Roman Empire and other early collapses, where farmers could simply move their location from one place to another. We are instead faced with some number of survivors from the current civilization, each with skills that are not very useful in the new civilization. Instead of knowing how to use a computer on the Internet, people will need to figure out how to get along without grid electricity and our current paved roads. Your ideas of modular reusable tool sets seem “pie in the sky” to me. We haven’t figured out today how to get rid of friction; I doubt we will without grid electricity. Rocks are reusable tools that can be easily replaced. Perhaps we need to think about them.
“Rocks are reusable tools that can be easily replaced. Perhaps we need to think about them.”
I’ve decided to learn flint knapping. I’ll say this, it ain’t easy. Even finding the right kind of rock can be a challenge if you’re a modern human. Those cave men back in the day were a lot smarter than modern man gives them credit for. While their minds would be boggled by the technology of today, they knew their technology much better than the average person understands how modern technology works today.
I look forward to that! Personally I hope to influence my governments to store huge amounts of metal tools in caves in the mountains, like durable hoes and shovels, saws and axes. And to replant the huge oak forests that covered southern Norway, but that was destroyed by the Danish king during our union time. Now the remnants of the oak forests are destroyed by plantations of spruce. A pity, as oak is the most durable wood here to replace metal tools and so on.
This to make life a little easier for the survivors of the collapse.
By the way, Helgøya in Lake Mjøsa by here I live is the northernmost place in the whole world where oak can reproduce naturally from acorns.
https://commons.wikimedia.org/wiki/File:P%C3%A5_tur_p%C3%A5_Helg%C3%B8ya.jpg
West Norwegian greenstone ax, younger stone age: https://commons.wikimedia.org/wiki/File:West_Norwegian_greenstone_ax_younger_stoneage_IMG_0834_Hellemyra_Lista.JPG
Your arguments are typical of those of the “abundance” crowd. They always have things in common.
1. There is a enemy. Someone is keeping us from abundance.
2. Resource depletion and population issues not addressed.
3 Flowery examples mixed with non pertainable science.
4 Emotional component that refuses to accept that humans are predatory, our species kills anything necessary to live, including other humans, the environment,other species- anything.
I have tried to discuss issues with the “abundance” mindset many times. When asked about the basis of their science they grow perturbed. When confronted with the real issues they grow angry. Their beliefs are cultivated to create a emotional condition they find desirable.
Interesting first graph, implying that the energy intensity of the economy is the same as it was 40 years ago. Though maybe it doesn’t; I suppose that a graph of absolute amounts of energy used and absolute economic value would be needed to show that. We probably can’t get a reliable enough figure for economies to do that though. I would suspect that a true GDP curve and an energy use curve would be identical in form but maybe diverge slightly from time to time as the odd efficiency is made. Every real economic activity requires energy, after all. The oil curve would probably also be very similar.
Mike,
hopefully you will find some of the graphs here: http://www.manicore.com/anglais/documentation_a/energy.html
Those are great graphs! I understand the author’s name is Jean-Marc Jancovici.
Thanks, Stefeun. However, the closest graph is one of GDP against energy. The slope isn’t steep enough, I don’t think. It kind of shows a 2 to 1 relationship – a 200% increase in GDP requires a 100% increase in energy use, from a rough reading. Intuitively, that seems way out of kilter but perhaps shows that GDP figures, at least, are all smoke and mirrors.
Actually, the growth rates in energy and oil both tend to be lower than the growth rates of GDP, but in the same direction, so it doesn’t prove that the energy of the economy is the same as the energy intensity was 40 years ago. But it does illustrate that the big change that took place was during the 1978 to 1984 period, and also around 2009. During the 1978-1984 period, a lot of the “low hanging fruit” in terms of efficiency were “picked”–for example, converting home heating from not-too-efficient oil systems to more efficient natural gas systems. We also changed a lot of oil fired electricity generation to nuclear–something that was much more efficient, and started adopting smaller, more fuel efficient cars. Otherwise, the two have tended to move together.
Yeah, low hanging fruit might briefly cause the two to diverge. In general, though, I would expect a 100% increase in actual economic activity would take a 100% increase in energy use, since, very roughly, everything is doubled. Obviously, it wouldn’t be exact, because of efficiencies of scale, in some cases, but I wouldn’t expect it to be too far out, most of the time, when low hanging fruit is not being picked.
Adding services (lots of health care, financial services, and education, for example) doesn’t directly add a lot of energy use. So that is part of the effect we are seeing. There is also efficiency gains of something like 1% per year.
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Gail,
Another great post. I would like you address sometime how some actions can accelerate or interfere with larger trends/and/or facts. Our “eyes wide open” restricting of ANWAR as an example. Or restricting off shore drilling as another. Another situation regarding wind power is the economic relationship between standby capacity or reserves or safety factor and the % of wind power within a particular node or segment of a grid assuming lack of viable wind power storage mechanism.
I’ve seen various numbers for the proven reserves in ANWR. 5.7 billion bbls to 16 billion bbls. Sounds like a lot, right? Not really. First, let us assume that we could extract that oil as fast as we like, i.e. we could rely on those reserves as our sole source of oil. The US consumes 18-19 million bbls per day. That means that the most optimistic estimate, with 16 billion in proven reserves and the US restricting its oil use to 18 million bbls used per day puts the total amount coming from ANWR at just under 2 years and 6 months worth for the US.
We are not, however, going to be able to extract it that fast, and it would, at best, be able to take up some of the slack for when the frackers really stop drilling. Those wells deplete at anywhere from about 33% to near 70% over the first year, with most being closer to the upper end of the depletion range. That is going to be a lot of slack to take up. In order to take that slack up, the equipment would have to be hauled up there, the infrastructure for shipping the oil and housing the workers would have to be built, and all of that would have to occur in the Arctic. That’s not going to be the cheapest oil strike in the world.
The problem is that people hear that some oil field has 10 billion barrels and they think that is a lot. In the grand scheme of things, it is not a lot. A trillion barrels is a lot. We use that much oil, and that’s just the US.
How can there be “proven” reserves in ANWR? http://www.gasandoil.com/news/n_america/3b38b087544a39c7dad052b6e7fd8d7f
A bunch of geologists do some surveys, come up with an estimate of what is down there, then call that proven reserves. It doesn’t mean that they’re proven in the sense that most people would think. Just look at what happened to the proven reserves at the Monterrey shale formation.
And I just read more up on it. Not technically proven yet, just estimated.
Right! The big issue is always whether the reserves that seem to be available are natural gas or oil. If they are natural gas, they are much less valuable and much harder to ship. They usually end up staying in place, because the value of the natural gas is not high enough to justify the expense of extraction and shipping.
Part of the ANWAR issue is the TAPS pipeline issue. TAPS brings the oil that is currently being produced in Northern Alaska down to the southern end of Alaska. TAPS has a minimum operating level, because the oil that goes into the pipeline starts out hot, and gradually gets colder. If it gets too cold, it doesn’t flow. If enough oil keeps coming in, the additional oil tends to keep the ratio of the surface area to the amount of flowing oil down, so that the oil doesn’t cool down too fast.
The problem now in Alaska is that current oil is depleting to such an extent that it is getting close to TAPS’ minimum operating level. A way around this problem is to find some other oil–perhaps from ANWAR–to add to the pipeline, so that we don’t lose the oil that would otherwise be available from existing fields. The other option would be to heat the pipeline, but this becomes too expensive unless the price of oil is truly astronomical. So the issue with ANWAR is more about keeping existing supplies, than it is about adding new supplies.
There are indirect effects as well. I read recently that 80% of state revenues come from oil. Without oil revenues, taxes would have to greatly increase. Alaska’s population will drop greatly, if it loses its oil production and also has to institute major new taxes, such as an income tax.
Without oil revenues and the ready availability of affordable oil products, most of Alaska’s population would have neither the means or a reason to live there anyway.
Thanks for the ideas. The problem we always have is that any action we take has indirect effects, some good and some bad. In a finite world, if we use more resources to fix Problem A, we have fewer resources to use to fix Problems B, C, and D. If we cut off oil supply, we tend to make collapse quicker. Our current economy is very much dependent on grid electricity, whether we like it or not.
An excellent article by Chris Martenson titled “Greece Exposes The Global Economy’s Achilles Heel”
http://www.peakprosperity.com/blog/91704/greece-exposes-global-economys-achilles-heel
Excerpt:
“And as Greece proves you can’t get blood from a stone, other countries will similarly demonstrate their debts cannot be repaid in full, either. And losses will eventually — inevitably — have to be taken. And when that happens, watch out.
In Part 2: The Approaching Great Unraveling – Are You Prepared? we detail out how, in today’s over-indebted, over-leveraged, and intensely interconnected global economy, the losses created by sovereign insolvencies will spark a cascade of mortal shocks across the world’s financial system. Some countries will fall into deflationary depressions while others will experience roaring inflation. Massive failures will ripple across industries and vast amounts of wealth will be transferred from the hands of the many into the few well-positioned in advance.”
“and intensely interconnected global economy”
– A Gail quote ! 🙂
ECB to Greece: Come on take a bigger loan kick the can down the road 12 months.
Greece: No we want to tell the truth.
I love those naive young idealists. I fear the bankers assassins are booking their flights to Greece.
Funny you should mention that. 😉
PCR Interviewed by King World News — Could the New Greek Government Be Assassinated?
http://www.paulcraigroberts.org/2015/02/04/pcr-interviewed-king-world-news-new-greek-government-assassinated/
Never say never.
The name “Extend and Pretend” has been used for the hiding of old debt with new debt. Or perhaps “extend and pretend” is without taking on additional debt. The tendency is always this direction–to put off the day of reckoning for as long as possible.
Rodster, I also noticed “intensely interconnected global economy”
Maybe this has already been discussed, but I’d like to highlight that our interconnection has evolved to interdependence.
In the past people lived on subsistence hunting-gathering, then farming, with very few left for trading. These trades aimed to get stuff (capital) that increased comfort (at large, inculdes productivity, security, etc..). Then, once surpluses got bigger thanks to the use of fossil fuels, we’ve also seen a big increase in comfort, in parallel.
But on the other hand, we gradually externalized more and more of our consumption and of our capabilities. First it was for purely discretionary expenses, and then we had to rely on others for production of our tools, our houses, our food. Today we have created lots of new “needs”, in sectors such as healthcare, transports, communications, clothing, leisure, … that we must purchase from specialized suppliers.
We’re obviously depending on the networked economy for our most complex products, but this phenomenon is also extending to our primary needs. I mean: one can easily understand that there’s a huge infrastructure behind a smartphone or a computer, to produce it and to use it efficiently, but it’s not so obvious when same pattern comes “down” to everything else (medicines, cars, houses), until the food we’re eating and the water we’re drinking.
(they’re even beginning to evaluate and privatize/trade natural ecosystems and endangered species, see e.g. http://www.ecosystemmarketplace.com/)
All this complexity is supposed to make life easier for us (as long as there’s enough cheap energy input to insure it), but in parallel it also increases our dependance to the system. One could compare this evolution to that of a junkie with his drug: first it was just to feel better, and then we had to increase the doses until the point where our entire lives depend on this increasingly networked economy (and of course on the raising amounts of net energy necessary to fuel it).
I guess that this evolution is deeply connected with debt, which as an effect is preventing us from going backwards (unless a very strong determination, and only for some individuals).
Thank you Gail for this historical perspective and accurate description of the wall we’re hitting ; I’m looking forward to a part 3 that describes the role of debt (?).
PS: this topic of interdependance also raises the question of the control. Since the ownership of the means of production and financial power is getting concentrated in fewer and fewer hands, does it mean these “happy few” can control the situation?
Sure they can dramatically increase the level of surveillance and repression, but this is only a small part of the big Complex Adaptive System we live in.
Stefun–you raise good points. Our economies are terribly interlinked, for such basics as running water, food, and grid electricity.
I think that there are some differences by climate. As much as we would like to be independent, it is very difficult to be so in cold areas of the world–we need substantial houses, and a way of heating those houses. This requires interdependence, and heavy use of fossil fuels.
People in warm dry areas of the world can live in simple houses, and store up grains for the colder months of the year. Thus, the Middle East and the areas around the Mediterranean could prosper, early on, without huge fuel use, and with limited interdependency.
People in hot wet areas of the world can live in simple shacks built out of local materials. They can grow food year around, so they don’t have to bother with growing grains or storing food. Their big issue tends to be diseases. They don’t have to be interdependent, but get to be once someone convinces them that it is cheaper to buy imported food (or accept food in aid). Also, they fall prey to those wanting to extract their resources, and promising wealth in return.
I agree that there are differences over space (which tend to decrease along with the extension of globalization, however).
My point was rather about the evolution over time, though: our links (of dependence) to “the system” are in ever increasing numbers, and ever stronger.
Many urban people are now living in totally artificial worlds and don’t have a clue of where their food, water and electricity come from (reg. electricity, we all know the answer is “from the plug on the wall”).
Even most part of the farmers are now sort of prisoners of chemical pesticides and fertilizers, and debt.
We’ve all become industrialized. Myopic little creatures with barely a clue about anything other than our own extremely narrow vision of the world. All the easier to be controlled.
With respect to the great unraveling, Chris’ Part 2 story (which I haven’t read) likely tells only part of the story. I expect that governments will fail, and plans that supposedly provide retirement income and health care (retirement and otherwise) will disappear. The elderly will be hit especially hard. At some point, banks will fail. Jobs will disappear.
Maybe some of these effects will be sooner and others later, so perhaps both Chris Martenson and I can be right.
We were very lucky to get through the Cold War without nuclear exchange of some kind. I wonder how lucky we will be this time. Looking at it from a distance, it does seem that we in the West have deliberately taken NATO up to Russia’s borders in order to provoke some kind of response. The question in my mind is whether this is provide an excuse to launch a pre-emptive first-strike. No one is going to ask questions if they are on the winning side and no one is going to have the time to do so if they are on the losing one.
Perhaps I am being cynical, but in a situation where the side who fires first wins, there is enormous temptation to take the initiative. And as for treaty obligations, forget them. Space based warheads, you bet, no more than eight warheads per missile, forget it, loser! Anything that helps limit losses is fair in love and war, especially a nuclear one. We must not forget that the accuracy of the modern ICBM is such that it can reliably be directed at even the most hardened of nuclear bunker and expect to take it out half of the time. Aim two at the target and you have a 75% chance and so on. (We have more than enough of the things to increase the targeting even higher.)
One thing we can be sure of is that Gail will not be alone in making her analysis complete with its dead ends no matter which route is taken. Yes, the politicians are all bleating about growth, how can they do otherwise and hope to win an election? They have to live the lie they have failed to own up to for the last couple of decades or so.
I fear that if I had control over the nuclear button, I would be very tempted to choose a time which was most favourable regarding the weather conditions regarding nuclear fall-out, and more precisely when the other side’s spy satellites were in their best positions from my perspective. I would then press the button and quietly make my way to my well stocked nuclear bunker and wait to see how thing pan out. I would not take my wife with me so as to save on divorce costs.
As far as I am concerned, it is a ‘win win’ situation. Climate change gets knocked on the head thanks to ‘nuclear winter,’ over-population solved in a flash, so to speak. Cold War over and not to return for centuries, if ever. And if I have planned it right, enough people in my network to be able to form a government over a grateful populace who will believe all our explanations/lies that we had to attack because we had intelligence that they were going to attack us. We saved their lives. (They will have heard of the horrors the other side suffered and how busy the few survivors had been burying their dead before they themselves succumbed. So they will be doubly thankful.) And I must not forget, no nagging wife to contend with! Yep! ‘win win’ alright.
As Gail says “Interesting times!”
In the words of Gerald Celente: “Trade wars, currency wars, world wars. When all else fails they take you to war”
Fungle, I do not think the first to fire gains that much advantage. The non-aggressor can see the missiles coming and will let loose a full strength responsive attack. The subs along the coast will get their nukes on target before the first land based strikes from the aggressor arrive. It will be a loose-loose. Maybe with lots of luck the southern hemisphere will survive to some degree.
But to your point, the west is trying to provoke a war, I agree 100%. That is the way it looks to me. That is the avowed policy of the neocons. Destroy all who might someday have strength. For them the only choice is war now or war latter.
Anybody who thinks that’s how a full scale nuclear war would play out is incredibly naive. All interstate and global trade would be halted almost instantly, the missiles from one side would not reach the other side fast enough to prevent a full scale response, the infrastructure that everybody, including the government and the top 0.01% depends on would be either vaporized or otherwise disabled, those who survive would have to worry about crops absorbing radioisotopes, disease and starvation would run rampant, anything left of the government would be unable to get any real messages out to the populace, truth, propaganda or otherwise, etc…
The human race would survive, but a lot of people would find themselves wishing that they had been directly at ground zero. If there is somebody in our government who is actually pushing for war with Russia, that is one of the times that I would literally wish death upon somebody.
I think you’d better lower your expectations then. I’m reasonably sure there are a whole lot of people in our government pushing for exactly that.
It’s tough to tell what the people in our government think they are trying to achieve. They aren’t always exactly honest about their goals and motivations, which leaves us to fill in the gaps. Even if they aren’t pushing for war and are just pushing to have control over Russia’s resources, wars are often stumbled into.
At this point, I think they’re willing to go either way. Once you adopt the idea that nuclear war is winnable and survivable, and I know they have already done that, then the standard DC brinkmanship phrase “all options are on the table” begins to have some pretty ominous consequences.
“I think you’d better lower your expectations then. I’m reasonably sure there are a whole lot of people in our government pushing for exactly that.”
It’s called the “Wolfowitz Doctrine” and many neocons in Washington have bought into the premise that a nuclear first strike against Russia is winnable.
Damn FT! That last paragraph has you sounding like a full-fledged NORAD strategist. I hope you’re not speaking out of turn and giving us a preview of our near term future!
Regardless, the picture you paint is frighteningly possible – probably much more so than any of us mere mortals can possibly imagine. I’ve read up enough on game theory and been exposed to enough similar types in my 25 year AF career to appreciate that that is indeed how many of these hyper-intellectual morons think. God help us all!
I don’t know whether a nuclear war scenario is likely or not. As a practical matter, the chance of retaliation is very high, so I doubt the chance of the use of nuclear weapons is very high.
On the other hand, the death rate for humans has always been 100%. Unless there is some type of religious solution to our current predicament, the death rate will likely be very high for some period of time. People have all kinds of ideas as to how this might work out, from too little water, to too little food, to epidemics, to failing nuclear-electric power plants, to fighting with neighbors or distant countries. I am not sure that any particular way “worse,” unless there is great suffering prior to death.
Gail,
Living in NM, I’ve been around a lot of people who worked on nuclear weapons. Very few people know what they really do. Most of the people who built them and watched them go off are no longer among the living. Call it a morbid curiosity, but I would ask a lot of questions about them. According to all of the people that I have talked to who have watched the things go off, their power is incomprehensible to those who have not witnessed them firsthand. That, in itself, is scary, because the people who have control over them don’t really understand what they have control of. In times of desperation, it would be very easy for people to ignore the warnings of the apocalyptic consequences of nuclear war, and our government is going to become desperate when finances start to go pear shaped.
We are living in times where it is likely that the carrying capacity of the planet is going to be reduced by several billion. When that kind of strain is put on society, nothing is off the table in terms of human action. A lot of people are going to cling to the past, no matter how futile. The problem with nuclear war is that it will, at least temporarily, reduce the carrying capacity of the planet even further than just the disappearance of fossil fuels.
Good points. I think we’ve definitely lost our fear of nukes. And once they come out, the incentives almost immediately flip toward further and/or all out use. On the plus side, if you’re reasonably close to ground zero your end should come quick and relatively painlessly. Might even be worth moving toward the blast if possible if you knew it was coming anyway. Always wondered what it would feel like to be literally vaporized in an instant.
Thanks for this important issue. It is now being claimed that economies have decoupled their GDP growth from oil growth and energy growth in general. Could you find evidence for this? I suspect that energy growth in Western consumer countries is hidden, embedded in imports from China where energy growth has been mind boggling.
For Australia, I did this analysis on GDP and population:
9/6/2014
Australian GDP per capita growth slowed while oil prices went up (part 2 of budget 2014 series)
http://crudeoilpeak.info/australian-gdp-per-capita-growth-slowed-while-oil-prices-went-up-part-2
I expect that at least part of what is substituting for direct energy growth is imports, as you say. I think additional debt may be used to try to hide the problem as well. Supposedly more services are what is keeping up GDP–higher medical costs, more financial costs, more higher education spending. I can’t see these as being even slightly sustainable.
I live in north Florida. The two miles of road I drive out on to town is crossed by three different electric transmission lines, one of them huge with 150 ft high twin towers carrying 9 cables as big as your arm. The two smaller runs have had their capacity doubled in the last few months with extra poles and cables. This morning I drove north toward Jacksonville on what was several years ago a back road. I passed by new housing developments with row after row of 4 and 5 thousand sq ft homes. Out on I-95 construction crews are building 6 lane flyovers to funnel traffic from the interstate to these homes.
There is a 1200 MW coal fired plant eight miles from my house. The last I heard the county fathers had sworn to shut it down when it’s operating license expires. There is also a distillate fired peaking plant two miles from my house. Across from the peaking plant they are building a sub-station the size of a Walmart parking lot.
Someone is spending billions betting on future growth. Hopefully they also have a plan on how all this is going to be fueled.
.
Daddio, haven’t you heard we are the new Saudi Arabia. We are energy independent and building six nat gas condensation plants on the east coast so we can supply all of Europe to cut out those Russians. Why you worry man? Don’t listen to those doomers/financial analysts that say interest on the required capital can not be paid at these low prices. Get happy.
sarcasm is often lost in email the above is all sarcasm
There is an out of state developer planning on building a “community” for 80,000 people several miles north of I-40 in the Rio Puerco valley. The Rio Puerco won’t supply enough water, so they decided that they were going to tap into the deep aquifer that was left over from when this was a shallow sea. Yes, they want to build a housing development miles away from the nearest jobs where they have to pump the water up from 8,000 feet below the surface, then desalinate it. They’re probably thinking that the low gas prices are going to help them. When they go broke, I’m going to laugh. They still have the “but, but, but, housing can never go down!” mentality from 2006.
Thing is, as Gail points out so well in all her recent posts, they (well, someone anyway) really don’t have any choice but to go broke trying to grow. Not trying to grow, even if it means resorting to such silly means as this, is simply not an option.
Then they should take a very different route with their growth. They want some picturesque (by nouveau rich bling-bling standards) community that stretches the definition of suburb. This was tried by another developer about 10 or so miles NNE of this place (they had water though,) the developer ran into problems and all of the people who had signed up for properties got stuck with the bill and no utilities. If there is still an economy in a couple of years, you should be able to pick up what once was a million+ dollar home for pennies on the dollar. They should look at what some of the people on this board and others like them are doing. They should look at the Earth Ships up in Taos. They should look at ecology. Then they should design a community based on the principles that they learn, and try to market it, even if the only people who are interested are people who want to depend on the grid less. There is a market for this, and that market is going to become more prevalent out of necessity in the future. If I had the money, and wanted to get into community development, that is the direction I would be heading. They should be looking to the future, not the past, and they are looking at the perceived glory of the past.
Trouble is, all of these “green” development ideas are pricey, and more often than not, remote from work. That’s fine for the executive class, but for even the well-heeled managerial class, not so much. I live just up the road from Santa Fe, so I’m well versed in how the well-to-do live around here. Talk about a bifurcated society! Obscenely wealthy liberal fruits and nuts living in close proximity to, but nevertheless separate, gated, and apart from the dregs of society. It works for now because the population isn’t too dense up here and the economic pressure on the poor hasn’t quite reached a breaking point (no doubt in large part to the lucrative drug trade coming up from Old Mexico, along with the Federal largess coming from Los Alamos), but I could imagine that changing real quickly. I think Breaking Bad summed up the zeitgeist in this part of the country extremely well.
Well, I’m not talking about relying solely on “green” technofixes, but rather adjusting our way of life to match what the future is going to bring.
As for Santa Fe, yes, there is a huge divide between the rich and the poor. Was it the Cerrilos exit or the St. Francis exit that used to have that tent city that got ran off a few years ago? Either way… One of my cousins lived there until a few years ago. I went up for her going away party that was being thrown by somebody that she knew in one of the richer parts of Santa Fe. All of the realty signs in the neighborhood said “Sothebe’s” on them, to give you an idea of the price of the houses.
When I got there, I went in through the bottom gate. There was a house for the grounds keeper, to give you another idea of how rich these people were. The landscape was very carefully crafted to not get in the way while still looking wild. The creepy thing about this property was the dogs. They were a smaller Japanese breed (not Shiba Inu, I forgot what the breed is called) with curly tails, and they weren’t pets. They were part of the landscape. They would stand there, very stoic like as though they were statues. Then they would move. It was surreal.
Then I got up near the main house. The swimming pool was one of the first noticeable things. It had very intricate tile work, making mosaics of dolphins and whatnot. Very, very expensive. I looked inside the house and opted to not go in. Knocking something over would have a $10,000 “oops,” and I figured that was too rich for my blood. The husband looked like Laslo from Real Genius, which I found comical for some odd reason. He and his wife were nice, but stupid-rich and a bit strange, even by my standards.
There are a lot of those kinds of folks up there.
There are/were a lot of old families up in Santa Fe. They don’t have that kind of money, but those who do have been driving property values, and thus taxes up for years, driving a lot of those old families out. My dad tells me that Santa Fe used to be a much different place back when he was a kid. But hey, they didn’t have Cheek’s back then;)
Good stuff! It is indeed a strange place and I my experience is that the moneyed class here is definitely a little weirder than most. A lot of relocated and/or air commuter left coasters for whom the canyons of the LA basin weren’t quite far enough removed or high brow enough.
I suppose on of the thoughts is that we need jobs for folks now. Building big houses and all of the substations provides jobs. (If our population was drinking like Japan’s, there would be much less need for those things.) In some ways, we have to keep building things, or the “system” stops working–loans don’t get repaid, young people can’t find jobs. No one can even consider the possibility that things will be different.
Very interesting long time scale charts and “epochs break down”, thanks for that Gail
I had looked at the data before, but hadn’t thought about using it in this particular way until now.
Thank you very much for this fine collection of graphs, Gail.
I have my own contribution. Growth of world population has not been exponential as is usually represented, but cyclical. Since world population is related to agricultural output, and agricultural output is related to climate, it is interesting to see that the same cycles of population correspond to cycles of Earth average temperatures. Cold periods correspond to agricultural failure, forced migration and civilisation collapse. These cycles occur about every 1,150 years on average and pretty much correspond to the known Bond events in Holocene climatology.
The main source for historical and prehistorical population data is “Essai sur l’évolution du nombre des hommes” (1979) de Jean-Noël Biraben (http://www.persee.fr/web/revues/home/prescript/article/pop_0032-4663_1979_num_34_1_18032.pdf)
I have incorporated his population data together with the data on China population from Michel Chartier into a paleoclimate temperature graph from GISP-2 Greenland ice cores from Humlum et al 2011 (Identifying natural contributions to late Holocene climate change) http://klimarealistene.com/web-content/11IdentifyingNaturalContributionsToLateHoloceneClimateChange HumlumEtAl GlobalAndPlanetaryChange 1012pdf.pdf
And this is the result. Food for thought.
http://s3-eu-west-1.amazonaws.com/rankia/images/valoraciones/0017/8431/Pop_Clim.png?1418391494
Thankfully another cold spell is not due yet in about 200 years, but the Holocene is clearly getting long in the tooth. The next cold cycle could very well throw us back into another glacial period for the next 80,000 years. If we are very lucky or burn a lot of fossil fuels we could get an overtime of another millenium before the end of the game. Sadly we don’t seem to have enough fossil fuels to burn for that.
According to Biraben, climate induced population cycles go back to the middle paleolithic and probably earlier. He seems to have population estimates all the way to the Magdalenian based on lithic industry.
http://s3-eu-west-1.amazonaws.com/rankia/images/valoraciones/0017/8433/DemographieEN.jpg?1418392410
Thanks! The last graph definitely does go back a long ways. I am sure climate plays a role in this. Cold temperatures especially seem to be a problem, at least so far.
To your bullet list, I’d add:
• 1916-1934: Decimation of the great American Chestnut by an imported fungus causes millions to flee Appalachia for big cities, driving up unemployment. The loss of 75% of the trees throughout Appalachia cause drought conditions in the Midwest, and the “Dust Bowl” force more productively self-employed people into cities, looking for work.
I’ve seen it said something like “11 of the last 12 recessions correspond with energy spikes.” They generally leave out the Great Depression. But I feel certain the Great Depression was caused by the elimination of the American Chestnut, which was the primary energy supply for perhaps a million Appalachian farmers at the time.
Remember, you heard it here, first, folks! Now to find some time to properly write it up… I have a half-dozen other “follow on” effects to document, as well.
I agree with you. Some members of my family tried to raise a few pigs this year and we were constantly driving around picking up organic food scraps with which to fatten them. It was hard work and involved a lot of driving in trucks. Before the chestnuts died farmers would turn their pigs out into the woods to fatten them.
Yes, loss of the American Chestnut was not good. I remember hearing about it before.
“There are other low-income countries that might increase industrial production, such as in Africa, but they are lacking coal or other cheap fuels to fuel their production.”
There may be quite a bit of coal in Africa, Zimbabwe claims to have 15 billion tons:
http://www.bloomberg.com/news/articles/2014-07-16/zimbabwe-s-biggest-coal-miner-plans-1-5-billion-power-plant
I know South Africa is a coal producer. I didn’t realize Zimbabwe was making big claims. Maybe our next big “salvation” is Africa. I think it is a little late, though.
Gail, people get bonuses for kicking the can 12 months down the road. Nobody thinks there is a solution.
A gigantic coal power plant, yikes !
Not good !
“Bulk shipping bankruptcies begin as BDI collapse continues”
http://www.zerohedge.com/news/2015-02-05/bulk-shipping-bankruptices-begin-baltic-dry-collapse-continues
I see the current level is below that after the crash in 2008. I think more capacity has been added since then, though.
Shipyard output is down https://www.bimco.org/Reports/Market_Analysis/2013/~/media/BB40ACD98F5A461C95037959025E9F0F.ashx?w=600&h=479&as=1
Lack of demand is the problem as evidenced by lower commodity prices
https://www.bimco.org/Reports/Market_Analysis/2013/~/media/BB40ACD98F5A461C95037959025E9F0F.ashx?w=600&h=479&as=1
I hadn’t seen the tonnage slide–that is a good one. It looks like exports by ship peaked in 2010. The person putting together the chart is an optimist, if they think it will increase in the future.
I think you accidentally linked the same slide twice.
How much of the drop in oil price is due to Saudi strategic production? With their hand on the spigot of the global oil market, it certainly seems they have the capability to keep prices low in order to drive out competition (e.g., US frackers), or is it to reignite demand? In either case, its a red herring that complicates insight into what is evolving.
Saudi Arabia is pretty much doing what they were doing before. In fact, their exports are down, and were down, before all of this began. There are fluctuations in other countries, including Libya and Iraq. We don’t get reports by month until months after the actual production, so it makes it hard to see what is happening. But Saudi Arabia itself’s production isn’t up at all in recent months.
The way that the market has been changed is with the big amount of oil the US is dumping on the market. Canada’s increase in production is to some extent involved as well. I can understand why Saudi Arabia would react negatively to reducing its production, when it wasn’t the country creating the problem in the first place.
On impact of US tight oil on market I have done these 4 posts:
27/1/2015
40% of US petroleum exports didn’t grow since 2011
http://crudeoilpeak.info/40-of-us-petroleum-product-exports-didnt-grow-since-2011
13/1/2015
Tight oil boom can explain only part of drop in US oil product imports
http://crudeoilpeak.info/tight-oil-boom-can-explain-only-part-of-drop-in-us-oil-product-imports
3/12/2014
US crude imports from Non-OPEC countries peaked 10 years before tight oil boom
http://crudeoilpeak.info/us-crude-imports-from-non-opec-countries-peaked-10-years-before-tight-oil-boom
6/11/2014
US oil dependency on Middle East has hardly changed since 2007
http://crudeoilpeak.info/us-oil-dependency-on-middle-east-has-hardly-changed-since-2007
I suppose part of the drop in crude oil imports reflects a trend to “add value” by lightly processing the crude, and selling it as products instead.
The flip side of this is countries such as Mexico, that cannot afford the kind of refinery equipment needed to produce low sulfur diesel needed by trucks crossing into the US. So they send us unprocessed crude, and we sell them refining services.
The Saudis didn’t cause this, and they have no control over it either. They have to pump flat out all the time to meet their bills, despite having a surplus of Forex reserves.
The cause is collapsing demand, because credit is not flowing to the end consumer to BUY the oil. Continuing to supply credit to the extraction end of the economy doesn’t make the money flow, and the lower the velocity of money, the greater the deflationary pressure.
RE
The article you reference at the end says solar and wind are 10x more expensive than oil, gas, coal power plants. So, my 8 cent/KWHr electric would be 80 cent/KWHr. Germany is now at 40 cent per KWHr so this seems about right. You should have heard the citizens complain last winter when the price went to 18 cent/KWHr due to nat gas manipulations by the F.I.R.E sector. Glad I am not on the PSC board. “Why am I paying $2000 per month for electric? I can not afford it.” says the rate payer.
I expect the ten times more expensive related to wholesale rates. There are a lot of distribution costs, and they shouldn’t go up quite as badly, but the point is there. The linked study didn’t look at costs like longer transmission lines, either.
Where we go from here is toward a lower per capita energy world with fewer people living on it. Did you happen to catch Tom Lewis’ article on Peak Food? One does have to remember that the amount of food being produced is directly proportional to the energy expended in that production.
Sadly of course, nobody in Goobermint ever addresses the truth about this, all we get is a Parade of Lies
http://www.doomsteaddiner.net/blog/2015/02/04/parade-of-lies/
RIP William Catton.
RE
Glad to see you Doomsteader.
Nice 2 C U 2 EP.
Sorry for being scarce here in the commentariat of OFW, but the Diner keeps me pretty busy.
RE
We complain that politicians lie, but those that tell the truth never get elected.
Very true. Quite the vicious cycle we’re in. To paraphrase ol’ Col Jessup” “We cant handle the truth!”
Count yourself LUCKY,/b> you’re not in Greece right now.
Yet another GREAT opportunity to GO BALLISTIC! More Greek Kabuki Theater.
GREEK DEBT CHICKEN GAME
Hopefully, this will explain to the unitiated the complexities of our monetary system and how it relates to Energy distribution and GDP growth or “degrowth”.
Of course, you gotta have a tolerance for my Gonzo to get the idea. LOL.
RE
“Without supporting systems, such as roads and electricity transmission lines (which depend on oil), we cannot operate the electric systems that these devices are part of for the long term, either.”
I’m always taken back to the illustration of a Ship Captain preparing to dock a ship. The preparation doesn’t start when you see the dock, rather preparation starts miles before the dock is even in view. Our globalized and highly complex and interconnected BAU economic system shares similarities. Getting the world to move in another direction wrt to energy doesn’t take a few years but rather a few decades of precise planning which our supposed leaders did not think ahead.
The problem is who in influence is going to present a new narrative which is degrowth?
Every leading politician is presenting growth as a solution. People aren’t ready to look ahead, you can blame politicians Rodster, but in my frequent conversations with people the techno-fix is standard solution and they are the ones who vote in their most dearly held belief systems.
The problem is, as Gail likes to say: “it’s backed into the cake” or something like that. The system that has been created doesn’t allow for for alternatives. It’s like a locomotive on rails. It really can’t veer in any direction or it goes off track.
Where I blame politicians is that those central planners either knew what the result might be or ignored all the flashing red signs that told them…DON’T-DO-IT !
The system has become more complex due to cheap energy where here in Florida it’s not uncommon to see citrus show up in the supermarkets from latin america. The politicians allowed for this ‘just in time delivery’ system to become a larger problem along with agri-business where local farmers have for most intent purposes, shut out from competition. So most food is controlled by MEGA agri corporations and distrubted around the country and world ALL made possible by cheap oil.
Surely politicians and central planners should have seen those warning signs because they were there for all to see into the future.
The politicians and central planners aren’t as smart as they would like you to believe. They all suffer from normalcy bias just like the rest of us. A buddy of mine was tasked with determining what the national security implications of expensive oil were back in 2005 or 2006. When he suggested that they use $100/bbl oil as a starting point for the study, government officials balked and claimed that oil would never get that high. He was being given the use of Lawrence Livermore resources to do this study, so it wasn’t some low level quacks he was dealing with either.
Also, what to do with all of the outstanding debt. Debt and de-growth don’t work together.
The only solution seems to be to cancel debt. Ebola-striken countries got some of their debt canceled by the IMF (http://www.theguardian.com/world/2015/feb/05/imf-ebola-debt-relief-sierra-leone-guinea-liberia). Greece is trying to get some debt canceled by the EU and ECB.
Cancellation of debt leads to distrust in the global economy, which would lead to higher interest-rates and less credit-growth. Even debt-cancellation could lead to collaps…
Let’s get rid of banks at the same time we cancel debt. It is sort of hard to get along without a financial system, unfortunately. For as complex system as we have, we cannot depend on a handshake, and a statement, “I will pay you back later,” to be sufficient.
“Let’s get rid of banks at the same time we cancel debt. It is sort of hard to get along without a financial system, unfortunately. ”
The next financial crisis, I think it would be worth it to nationalize checking accounts and the payment processing system, and run them nationally as full-reserve deposits with no interest, funded purely through usage fees.
Then, for mortgages and other loans, the private banks can still do that, but only with full-reserve of equal maturity; you want to invest in mortgages, the money is locked in for 25 years with the principle guaranteed by the government.
The bank simply manages the pool of savings and pool of mortgages and other loans, no more of this bundling and selling off securities or passing mortgages from bank to pension fund or insurance company.
At the same time, force a switch-over from complex to simple interest, and require loans to be in the same currency as the borrower’s primary income.
I don’t think that is a big enough change to fix anything, unfortunately. Our problems are much more “baked in the cake” than that.
That’s not what I meant to say, Gail.
A lot of debt will prove to be uncollectable. How will i.e. Petrobras (or the Brasilian governement) ever repay the $200 billion the borrowed for developing their deepwater oil-reserves?
Maybe in 5 or so years, the world will realize the bad investments for what they are and write the debts off. I hope by that time everyone will acknowledge bad investments and what are wise investments worthy to invest labour and energy in. Deep-water oil and tarsand are a waste of our resources and efforts.
The issue I am trying to point out is that bank balances are in some sense the flip side of debt. If go around canceling out debt, we have to be very careful, or we lose the banks that we depend on. Even canceling a small amount of debt can be a problem, if it adversely affects banks.
Matthew, if we followed your suggestions on banking, then in short order banking would revert to the boring, old predictable institution that it was for most of its history. Solid, stable, dependable places to keep your money safe, take out a mortgage, and have a little credit. Far from the casinos that they have become today. Imagine that.
cassandraclub,
I wouldn’t call those investments in marginal, non-conventional oil as bad investments. Without those “bad” investments, we would already probably be in the middle of a global financial and economic catastrophe. Instead those investments have kept the wolf from the door for a little bit longer. If the planetary climate is already well and truly destabilized, then a few more decades of FF use probably is the best we can hope for.
Why I seldom post.
Whenever I am thinking of posting, InAlaska says it first and says it better. Consider every one of his posts to be two postings.
It seems to me most voters think if the government mandates 100% pv and wind by year X it will magically happen. They have no concept of the scope and scale of the problem. The factor of ten in cost in the article Gail references is never in mind. No sane politician will EVER mention that factor of TEN! Look what happened to Jimmy Carter.
It is as Marshall McLuhan said we “We drive into the future using only our rear-view mirror.”
Which of course indicates that collapse is now inevitable. The time for discussion of all this was, as you imply, at least 20 years ago. Now our true predicament is exponentially worse than even we imagine it to be.
The other detail is that they only make electricity, and we need oil. Adding a huge number of electric cars would partially the problem, but they would only reduce the need for gasoline. The oil from shale being added to the market is mostly light–ie gasoline material. So we end up with excess gasoline and a shortage of diesel.
Gail, yes, that factor of ten is for electricity. If we add another step to make liquid fuels we add another factor maybe 3(? complete wild guess) so gas at $60 per gallon (3x10x$2). It can be done. How much useful value it will have in the economy is suspect.
Might compete with oil from algae. Doesn’t work, I agree.
“so gas at $60 per gallon (3x10x$2). It can be done. How much useful value it will have in the economy is suspect.”
At the small engines level, I would estimate that a gallon of gas would allow me to operate a gas powered hand tool for about 12 hours, and for those 12 hours, provide me with anywhere from 4 to 10 fold productivity multiplier versus doing the same task with a hand-powered tool. At the low end performance end, this means the gas costs about $2 per hour of work done.
At the commuting half an hour to work each way in a one ton steel box at 60 miles per hour scale, $60 gallon gasoline would result in drastic alterations in behavior.
There wouldn’t be any road repair at those prices either. Not sure that refineries could be operated for such small amounts. Keeping pipelines full enough to operate would be a problem. Pipelines would still need repairs from time to time, regardless of how little oil was used. How many new petroleum engineers would be educated?
Still waiting for the algae folks to start selling fuel.
I hate, hate, hate the Newzspeak term “Degrowth”.
There are antonyms already for “Growth”. Shrinkage or Contraction.
The economy doesn’t “degrow”. It SHRINKS!
RE
“The economy doesn’t “degrow”. It SHRINKS!”
The key difference is intent. When the economy shrinks, contracts or collapses, it is a negative, undesired thing. Degrowth is branding a planned scale-down of economic consumption, intentionally using less energy and resources, creating less waste and pollution intentionally.
Whether such a thing is actually possible, who knows, maybe we’ll find out.
Sort of like planning to pull out the sticks on the dome.
We know how well the carbon taxes have worked for Europe.
“Sort of like planning to pull out the sticks on the dome.”
The problem is, no one can see the whole dome!
If you could, you could plan to simplify and scale down the Leonardo Stick Dome by planning to remove 2 or 3 sticks and replace them with one, in iterations until the dome is half the starting size, but with identical geometry.
Except rather than a single actor with a single plan, there are ~7 Billion people with 7 billion plans, and each one has a different amount of influence on adding and removing sticks.
“If you could, you could plan to simplify and scale down the Leonardo Stick Dome by planning to remove 2 or 3 sticks and replace them with one, in iterations until the dome is half the starting size, but with identical geometry. ”
Appealing image.
I am not sure how we would scale down the Leonardo Sticks dome. This is one possible scenario:
We would have to start with doing away with the programs that take care of the sick and the aged–too expensive. Without pensions and healthcare, the population would drop fairly sizably, to a group that can support itself better. (There is the not-too-minor detail of the high death rate for the many who are kicked out of the system.) The new approach also leaves a whole lot of health care workers and people who run homes for the aged out of work. But it does sort of get the government budget back in line, and allows the wages of those who still have jobs to continue working to go a lot farther. As more people age and find themselves without support, the program will continue to provide additional “benefit.”
We next would pare back education to match what really seems to be needed for jobs, and no more. Educators would be expected to educate, not write endless papers that prove whatever those funding the grants would like them to prove. This would kick a whole lot of workers out of the education system, and a whole lot of students out as well. The problem with this type of change is that it just adds more unemployed to the system. The people in the system aren’t any more fit than previously (on average), so it doesn’t really do very much. But to the extent that these costs were previously covered by tax dollars, it does remove an unnecessary item of expenditure for the population.
Actually, other than kicking out the unproductive pieces, it is hard to see how one can in theory make the system work better. Getting rid of an army that isn’t paying its way would also work, but would again leave a lot more people out of work. If we had a lot of extra land that these people could be put to use doing something productive, that might help the situation. The problem is that cultivation with hand tools alone doesn’t yield very much, and is likely to lead to erosion.
I think debt is required regardless of the system. But if we decide not to support the elderly, a major purpose for this debt (pensions) goes away.
“But if we decide not to support the elderly, a major purpose for this debt (pensions) goes away.”
And the people go back to having large families to support themselves in their old age. People as a whole will always choose something unsustainable, it seems. Nature will always bring things back to balance, I guess.
“We would have to start with doing away with the programs that take care of the sick and the aged–too expensive. Without pensions and healthcare, the population would drop fairly sizably, to a group that can support itself better. ”
We have examples such as Britain, Cuba, Costa Rica, and Jordan which spend much less on health care and have longer average life spans. Britain spends about half of what we spend. The other three spend much much less. I leave the exact amount as an exercise for the reader.
Note to Gail: Comments such as this will make you radioactive and close many ears to your arguments.
Interguru, you can’t really compare Cuba and Britain in one sentence. The whole world spends substantially less than the US on healthcare and get better care for each dollar spent. Nobody other than the US has had so much money and energy to waste. That is not to say we aren’t wasting as much as we possibly can in the UK, as we try to keep up.
You may have failed to notice that the UK has been in austerity measures, so there have been substantial cuts to NHS funding. Waiting times have gone up, most services are functioning at a stretch, and everything that can be privatised has been, such as cleaning, catering, maintenance, accounts, ownership of the buildings and services…..
Are you familiar with ‘lean manufacturing’? In theory it is about cutting waste or ‘fat’ from the process. If the production line could operate with less staff during breaks, they can operate with less staff all the time and you cut out those staff. What ingredients can we skimp on before customers notice the difference was another angle. But for me the telling point was maintenance. You can cut out maintenance routines, but slowly the breakdowns increase. The line can still operate in ‘skinny’ mode for quite a while, because most engineers (especially in UK – we have been in skinny mode since WWII) can fix a breakdown or find a ‘bodge’ to get it going, but the breakdowns keep getting more serious. That is the point where you have to put extra resources back in or you end up with a skeleton. (Alternatively at that point the line is shut and production shipped to Eastern Europe/China/India.)
The NHS is not quite at that stage yet, but parts of the education system are. And the electricity system is – the key is to watch for the breakdowns (there were several this year including nuclear power plants), the patching up with cellotape (paying companies with backup generators to run them at peak load times) and the reduction in performance (more frequent short powercuts which we are seeing, leading to more substantial blackouts that are yet to come).
Gail didn’t say just the old people, she said the sick and the old. In the UK this winter there is already an increase in elderly deaths, which is quickly being blamed on flu. It is not a great sign, but the real telltale thing to look for is an increase in deaths for middle aged men. It is those heart attacks where the ambulance doesn’t get there in time, or when A & E is too over-stretched and waiting too long to be seen proves fatal.
My Great Grandad died at the age of 37 of a tooth abscess. Nothing as complicated as cancer or diabetes. You have to consider that the purpose of our medical system is to extend life. Now whether that life extension focuses on the simple cheap fixes like antibiotics or includes the provision of heart transplants is purely down to how much money/ energy or ‘fat’ there is. There are less wealthy countries where people still die from a tooth abscess, through lack of antibiotics. Is it really ethical that so much money is spent on heart-transplants when basic healthcare for the poor can benefit the lives of many more people? The further down the route of austerity measures or financial collapse we go, the more of these kind of decisions has to be made. The point is to aim for a life extension to maybe 50 or 60 years, instead of 80 or 90 years .(Some people will still naturally live a healthy life to 90) Is that really unreasonable? The alternative is privatisation which basically means the rich continue to get all the healthcare benefits, whilst the poor die of tooth abscesses. That is why we fight so hard against privatisation of the NHS in the UK. Cuba appears to be the perfect example of this sensible and fair, low cost healthcare system. Are you expecting the US to be able to turn things round and achieve that?
“Are you expecting the US to be able to turn things round and achieve that’.
Absolutely not, I just wanted to point out it is possible. For that matter, we in the US could save piles of money if we reduced the spending in all states to the level of Minnesota. I don’t think even that is politically possible.
I am pointing out how the system works. I was trying to subtly show I didn’t necessarily agree with the approach. Perhaps I was too subtle.
I agree that the US healthcare system is ridiculous in its costs. But I think that the same problem will exist, even where the system is not so ridiculous. I will need to write about this issue some more. We all get so used to the status quo, that we cannot understand what part of the status quo is unsustainable. In some sense, all of the status quo is unsustainable. In theory, if we could remove some parts that are disproportionate problems, we could go along for a while longer. We can’t in practice do this though. This is part of what causes collapse. We become so used to the current system, that we can’t recognize where the problem lies.
RE carbon taxes and Europe. I’d say that carbon taxes are a good idea. Adding government to the mix … is like mixing glycerine and nitric acid.
“Note to Gail: Comments such as this will make you radioactive and close many ears to your arguments.”
Quite possibly!
But some of us are stumped for alternatives, because we don’t know how money and debt work. So we can’t effectively suggest alternatives to her..
But among the many supposed “impossibilities” I could take issue with are:
– Food can’t be grown by hand effectively. Not if it’s being opposed by the petrochemical industry, the most powerful industry in history. Not if you disempower experts like John Jeavons of Ecology Action, or Geoff Lawton (permaculture world expert), John Liu, and a host of others by not allowing them the means (money is just one of many means) to teach people-powered food growing on a universal level.
– Roads can’t be repaired outside of BAU economy. Maybe they can if each local region takes on road repair as a matter of pride, local convenience, and some useful degree of remuneration (small stipends combined with volunteerism). Repair materials could include adobe and papercrete.
– Throw out the old and sick people to die (truly radioactive!) to save money for those who remain. A great many old people in retirement homes could do useful work, in the event that their abilities and needs were creatively catered for. (You can’t manufacture creativity, understanding or altruism, however–you either have it or you don’t.)
I need to write about how debt works. I also need to write about “quasi-debt”. Paying pensions and healthcare for the elderly is not “required” in some sense–hunter-gatherers just left the old and sick behind, when they moved on. But as society has grown and adapted to the level of energy supplies we have, we have created very real obligations to pay for the old and the sick. One problem we never thought through is what we could really afford–what is affordable depends on a growing amount of debt and several other things (cost of health care, how long people live, for example). Once this changes, what do we do? Many people think that all that needs to change is buying a new car less often, and going out to movies less often. I am not convinced we could fix the situation if we wanted to, but the kinds of changes we would need to be would be horribly radical–things people can’t even consider thinking about, they are so awful.
Employment for the elderly:
“http://jobs.aol.com/articles/2015/02/02/tips-for-older-job-seekers/?cps=gravity_1967_-6148935245170025609”
Most of the world is now tied to centralized government. Apparently, if pieces of the global community were to detach themselves and live off the grid, that would be an overall bad thing. But from my untutored perspective, decentralization and self-sufficiency (as a theoretical goal) seems sensible. It’s been assessed that two billion people could do quite well without industrial society.
Two billion people with a government and financial system that work, and the educational systems put into place that would support the new system, perhaps (????) might work. The issue is getting a new government and financial system to work, and an education system to support the new skills you need–and getting from Point A to Point B. It is like my dome of an economy falling down, and having to build a new one.
@ Judy. Great comment! Rationing health care by whatever sensible means we can come up with is the one thing that no one – especially here in the US – wants to face. Hate to say it, but it’s true: there’s simply way too many people being kept alive with extremely poor outcomes far beyond their natural expiration date. And that’s not good for anyone.
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“It’s been assessed that two billion people could do quite well without industrial society.”
This means they don’t depend on any of the normal perks of industrial society, and are able to sustain and govern themselves without significant help from outside. I got the figure from Guy McPherson, and, unfortunately, didn’t ask him how he came to this conclusion. People with their own land base, customs, clean water included, certainly.
Look at debt growth in the US since the Nixon Shock of 1971. Total debt, both public and private, only decreased once since then, and that was right after Lehman collapsed. It almost brought the system down. I don’t think that such a thing is possible from a practical standpoint.
Actually, US mortgage debt and credit card debt started decreasing earlier than the Lehman collapse. This is part of what collapsed oil prices in July 2008. Read my article, Oil Supply Limits and the Continuing Financial Crisis.
But the total debt did not start decreasing.
http://research.stlouisfed.org/fred2/graph/?id=TCMDO,
Our monetary system is a ponzi, and it almost collapsed in 2008. Debt must increase, or it collapses. If debt starts to decrease in one sector, another must make up for it. If that doesn’t happen, we must get QE, TARP and a whole other slew of destructive practices. If that doesn’t work, the system breaks. Growth, at all costs.
“Branding” is what this is really about.
You can plan for Shrinkage, just as you plan for Growth.
However, the WORD Shrink carries a Negative connotation, so nobody in the media, even the alternative media uses the term. They want to spin positive, so brand this as “degrowth”.
It’s an attempt to manage perception and thinking on the subject. Nobody can call a Spade a SPADE anymore. Its a Concave Dirt Extraction Tool.
People need to come to grips with the fact of life that the economy will NOT Grow, nor will it Degrow. It will SHRINK. Live with it.
RE
You are correct. And the media will never come to terms with any of those terms regardless, so the branding of it is irrelevant. Sadly, neither will the pols or most of the public, so planning for shrinkage will remain a purely academic pursuit. As Bush the Elder said a few years back, “The American way of life is not negotiable.” Our technological problems are a moot point at this point. Our attitude problem is what defines us.
RE having spent some time at IBM I like to call it “right sizing”. spin spin spin until your bonus gets paid out.
Yankee Doodle stuck a feather in his hate and called it macaroni. There’s some virtual reality for you.
HAT
Some posts back I forecast zero world growth for 2015 … it seem like a good number …
http://www.zerohedge.com/news/2015-02-05/3-things-56-lie-dividend-cuts-valuation
“Going by the number of publicly-traded companies that acted to cut their dividends in January 2015, the U.S. economy didn’t just experience recessionary conditions during the month. Instead, it outright contracted.”
And there seems to be a couple of actions ongoing for higher wages at choke points in the economy that will not help growth. (and also dee the Baltic Dry Index).
Thanks! Interesting and worrisome article.
RE, Ive thought about it for a few days, the economy doesn’t need to shrink it needs a new paradigm, degrowth is a much better term – etymomolgically its a better term too. If the human economy doesn’t alter it culture and all you get is shrinkage, the economic model of shrinkage leaves the world iin ‘Greece’ situation.
The Mad Max scenarios that seem to be so prevelant on here are based on the idea that intrinsically the present economic system is the only one of value and there is no viable alternative. While I don’t think Degrowth be taken up, the Shrink Economy is even more unlikely as a alternative.
ps Degrow doesn’t work you are quite right, but your the only one who I’ve read use this term.
I think you are overestimating the power of human agency here. As Gail stressed in Part 1, the system self-organizes according to thermodynamic principles. We don’t have the economic model we have because we have adjudged it to be of intrinsic value to us. We have it because at the aggregate level we will always favour more over less, easy over difficult and now over later, just as the majority of cars in traffic will always favour the shortest route to their destinations. Growth is what we do – until we no longer can, unfortunately.
reverseengineerer,
An economy contracts or expands on its own accord, and somewhat automatically, following the dictates of supply and demand among other things. I think that “Degrowth” would be an intentional, planned action in order to shrink the economy to meet the new conditions of supply and demand.
It is a little late now. Slower growth all along would have delayed the outcome, but wouldn’t change the inevitable in a finite world, I am afraid.
That is because thinking ahead only works if it is coupled with a profit motive. If something that requires planning years in advance doesn’t come with a substantial payout, it never happens.
A system’s negative-pressure self-gravitation is inversely proportional to the inverse square of its mean disgregation (the inverse-square law https://en.wikipedia.org/wiki/Inverse-square_law ).
But the system’s self-gravitational transition from disgregatedness to interconnectedness also releases positive-pressure binding energy, which initially delays the system’s self-gravitational implosion, but eventually makes the implosion more precipitous.
So, life is a race between gravitation and the concomitant release of binding energy. A system exists only while its self-gravitational interconnection accelerates. The Internet has stopped accelerating: http://www.newscientist.com/articleimages/mg20827923.800/1-2011-preview-the-internet-peak-comes-into-view.html
It is time to implode, folks!
Read more: http://2012wiki.com/index.php?title=Novelty_theory
That we were also in one of the most historically benign climate periods during the population run up should also not be ignored. We have truly been in a sweet spot.
Our run-up in population growth came as we got out of the last ice age. Based on “normal” gaps between ice ages, we are now at about the point where we would expect to go back into another ice age. Additional CO2 in the atmosphere may have changed this. Regardless, depending on climate stability for the long term is an error we tend to make.
Thanks for throwing the climate-change folks a bone, Gail.
I tend to agree with you that other issues are more critical, but acknowledging that climate change isn’t going to make our problems easier is helpful.
A bone now is it Jan? Elitist-patronizingly ignorant much?
Gail often stands accused in these comments of being a climate-change denier. A number of us have encouraged her to kiss and make up with the climate-change crowd.
So yes, I am appreciative that she chose to be inclusive of the climate-change folk in some small way.
Ok, I’m sorry then. I wasn’t aware of that. My perception is that while she doesn’t focus on it, she certainly doesn’t deny it. But at this point, I think it’s not so much a question of which calamity is worst and will get us first, but rather, which lethal combination of them all will do us in and how bad will it be. The economy does seem likely to be the first domino to fall, in large part because there are so many greedy SOBs out there manipulating it for their own selfish ends. But it has been amazingly resilient so far, long past the time frame in which many of us were sure it would collapse, so who in the heck really knows anymore? That said, I think if you have this same conversation with any of the millions who have already felt the brunt of the fallout and they will tell you a completely different story.
James,
I agree with you that, although the economy may be the first domino to fall, it is the lethal combination of factors that will be our complete undoing. Economy, Energy, Environment conspire to eliminate actionable solutions to our predicament.
It does appear that there’s a perfect storm on the horizon, doesn’t it? Sudden climate change due to the accumulated effects of industrialization, accumulated environmental impacts, depleted energy resources and of all other kinds as well, economic collapse, and the grand daddy of them all, population collapse, with wars breaking out everywhere thrown into the mix just for fun. Interesting times indeed!
Just checking out William R Catton’s Overshoot today on the recommendation of John Michael Greer over at The Archdruid Report. Definitely one of the more clear and concise accounts of how we got where we are today and why we’re not going to get out of it anytime soon without a whole lot of pain. We’ve got an historical bottleneck just ahead for all of humanity, which for me at least, does begin to explain some of the seemingly unrelated and random insanity we see now in the news everyday.
Anyway, great post once again Gail. I do believe you’re beginning to lasso this great raging beast we’re all trying to get our minds around. It’s not very comforting, but “it is what it is,” as the popular expression goes, and no possible amount of rationalization is going to change that fact.
Trying to bring the pieces together is hard, especially if a person wants to make the ending product at all readable. People’s attention span is about two minutes. It is easier to highlight one problem in a 600 word post.
You’re doing a great job. For us vets it’s perhaps a bit ponderous, but for people just hearing the news you have to spell it out in considerable detail just like you’re doing. Good work!
In late March, I will be teaching a class of folks who are not up to speed. It seemed like a good excuse to get some material together that serves multiple purposes.
Great work. Locations and availability to sit in?
I will be at the Petroleum University in Beijing, China. I am afraid that is not a very accessible location. I will be there for close to a month, but only two weeks will be spent teaching a class there.
Nope. Guess not.
When I read this it makes me feel that I am observing the human race from the perspective a Martian.
From that perspective it is obvious that an extinction event is underway.
As with other extinction events, individual members of the species that is about to disappear have not the slightest clue of what is about to happen.
The possibility that something bad could happen, and that governments would not warn people, is beyond people’s understanding.
It’s entirely arguable whether governments warning people, especially if they suspect the worst is coming, is even advisable.
If you were a council of government leaders, what possible motivation would be compelling enough to warn your populace of impending doom. That is an invitation to chaos and social collapse. Better to keep people happy and in the dark. When you start hearing pronouncements that things are great, the corner is turned, light at the end of the tunnel is here, things are on the upswing…be worried, be very worried.