Why we have a wage inequality problem

Wage inequality is a topic in elections around the world. What can be done to provide more income for those without jobs, and those with low wages?

Wage inequality is really a sign of a deeper problem; basically it reflects an economic system that is not growing rapidly enough to satisfy everyone. In a finite world, it is easy for an economy to grow rapidly at first. In the early days, there are enough resources, such as land, fresh water, and metals, for each person to get a reasonable-sized amount. Each would-be farmer can obtain as much land as he thinks he can work with; fresh water is readily available virtually for free; and goods made with metals, such as cars, are not expensive. There are many jobs available, and wages for most people are fairly similar.

As population grows, and as resources degrade, the situation changes. It is still possible to grow enough food, but it takes large farms, with expensive equipment (but very few actual workers) to produce that food. It is possible to produce enough water, but it takes high-tech equipment and a handful of workers who know how to use the high-tech equipment. Metals suddenly need to be lighter and stronger and have other characteristics for the high tech industry, thus requiring more advanced products. International trade becomes more important to be able to get the correct mix of materials for the advanced products needed to operate the high-tech economy.

With these changes, the economic system that previously provided many jobs for those with limited training (often providing on-the-job training, if necessary) gradually became a system that provides a relatively small number of high-paying jobs, together with many low-paying jobs. In the United States, the change started happening in 1981, and has gotten worse recently.

Figure 1. Chart comparing income gains by the top 10% to income gains by the bottom 90% by economist Emmanuel Saez. Based on an analysis IRS data, published in Forbes.

Figure 1. Chart comparing income gains by the top 10% to those of the bottom 90%, by economist Emmanuel Saez. Based on an analysis of IRS data; published in Forbes.

What Happens When an Economy Doesn’t Grow Rapidly Enough?

If an economy is growing rapidly enough, it is easy for everyone to get close to an adequate amount. The way I think of the problem is that as economic growth slows, the “overhead” grows disproportionately, taking an ever-larger share of the goods and services the economy produces. The ordinary worker (non-supervisory worker, without advanced degrees) tends to get left out. Figure 2 is my representation of the problem, if the current pattern continues into the future.

Figure 2. Authors' depiction of changes to workers share of output of economy, as costs keep rising for other portions of the economy keep rising.

Figure 2. Author’s depiction of changes to workers’ share of output of economy, if costs keep rising for other portions of the economy. (Chart is only intended to illustrate the problem; it is not based on a study of the relative amounts involved.)

The reason for the workers’ declining share of the total is that we live in a finite world. We are using renewable resources faster than they replenish and continue to use non-renewable resources. The workarounds to fix these problems take an increasing share of the total output of the economy, leaving less for what I have called “ordinary workers.” The problems we encounter include the following:

  • Pollution control. Pollution sinks are already full. Continuing to use non-renewable resources (including burning fossil fuels) adds increased pollution. Workarounds have costs, and these take an increasing share of the output of the economy.
  • Energy used in energy production. When we started extracting energy products, the cheapest, easiest-to-extract energy products were chosen first. The energy products that are left are higher-cost to extract, and thus require a larger share of the goods the economy produces for extraction.
  • Water, metals, and soil workarounds. These suffer from deteriorating quantity and quality, leading to the need for workarounds such as desalination plants, deeper mines, and more irrigated land. All of these take an increasingly large share of the output of the economy.
  • Interest and dividends. Capital goods tend to be purchased through debt or sales of stock. Either way, interest payments and dividends must be made, leaving less for workers.
  • Increasing hierarchy. Companies need to be larger in size to purchase and manage all of the capital goods needed to work around shortages. High pay for supervisors reduces funds available to pay lower-ranking employees.
  • Government funding and pensions. Government programs grow in size in good times, but are hard to cut back in hard times. Pensions, both government and private, are a particular problem because the number of elderly people tends to grow.

It should be no surprise that this type of continuing pattern of eroding wages for ordinary workers leads to great instability. If nothing else, workers become increasingly disillusioned and want to change or overthrow the government.

It might be noted that globalization also plays a role in this shift toward lower wages for ordinary workers. Part of the reason for globalization is simply to work around the problems listed above. For example, if pollution becomes more of a problem, globalization allows pollution to be shifted to countries that do not try to mitigate the problem. Globalization also allows businesses to work around the rising cost of oil production; production can be shifted to countries that instead emphasized coal in their energy mix, with much lower energy used in energy production. With increased globalization, people who are primarily selling the value of their own labor find that wages do not keep up with the rising cost of living.

Studies of Previous Economies that Experienced Declining Wages of Ordinary Workers

Researchers Peter Turchin and Surgey Nefedov analyzed eight civilizations that collapsed in detail, and recorded their findings in the book Secular Cycles. According to them, the typical economic growth pattern of civilizations that collapsed was similar to Figure 3, below. Before the civilizations began to collapse (Crisis Stage), they hit a period of Stagflation. During that period of Stagflation, wages of ordinary workers tended to fall. Eventually these lower wages led to the downfall of the system.

Figure 3. Shape of typical Secular Cycle, based on work of Peter Turkin and Sergey Nefedov in Secular Cycles.

Figure 3. Shape of typical Secular Cycle, based on work of Peter Turchin and Sergey Nefedov in Secular Cycles. Chart by Gail Tverberg.

In many instances, a growth cycle started when a group of individuals discovered a way that they could grow more food for their group. Perhaps they cleared trees from a large plot of land so that they could grow more food, or they found a way to irrigate an area that was dry, again leading to sufficient food for more people. A modern analogy would be discovering how to use fossil fuels to grow more food, thus allowing population to rise.

At first, population grew rapidly, and incomes tended to grow as  well, as the size of the group expanded to the carrying capacity of the improved land. Once the economy got close to the carrying capacity of the land, a period of Stagflation took place. There no longer was room for more farmers, unless plots of land were subdivided. Would-be farmers were forced to take lower-paying service jobs, or to become farmers’ helpers. In this changing world, debt levels rose, and food prices spiked.

To try to solve the many issues that arose, there was a need for more elite workers–what we today would call managers and high-level government officials. In some cases, a decision would be made to expand the army, in order to try to invade other countries to obtain more land to solve the problem of inadequate resources for a growing population. All of these changes led to a higher needed tax level and more high-level managers.

What tended to bring the system down was the growing wage inequality and the resulting low wages for ordinary workers. Governments needed ever-higher taxes to pay for their expanding services, but they had difficulty collecting sufficient tax revenue. If they raised taxes to an adequate level, workers found themselves without sufficient money for food. In their weakened state, workers became subject to epidemics. Governments with inadequate tax revenue tended to collapse.

Sometimes, rather than collapse, wars were fought. If the wars were successful, the resource shortage that ultimately led to low wages of workers could be addressed. If not, the end of the group might come through military defeat.

Today’s Fundamental Problem: The World Economy Can No Longer Grow Quickly

Because of our depleted resources and because of the world’s growing population, the only way that the world economy can now grow is in a strange way that assigns more and more output to various parts of “overhead” (Figure 2), leaving less for workers and for unemployed individuals who want to be workers.

Automation looks like it would be a solution since it can produce a large amount of goods, cheaply. It doesn’t really work, however, because it doesn’t provide enough employees who can purchase the output of the manufacturing system, so that demand and supply can stay in balance. In theory, companies that automate their operations could be taxed at a very high rate, so that governments could pay would-be workers, but this doesn’t work either. Companies have a choice regarding which country they operate in. If a tax is added, companies can simply move to a lower-tax rate jurisdiction, where no tax is required for automation.

The world is, in effect, reaching the end of the Stagflation period on Figure 3, and approaching the Crisis period on Figure 3. The catch is that the Crisis period is likely to be shorter and steeper than illustrated on Figure 3, because we live in a much more interconnected world, with more dependence on debt and world trade than in the past. Once the interconnected world economic system starts to fail, we are likely to see a rapid drop in the total amount of goods and services produced, worldwide. This will produce an even worse distribution problem–how does everyone get enough?

The low oil, natural gas, and coal prices we are now seeing may very well be the catalyst that brings the economy to the “Crisis Period” or collapse. Unless there is a rapid increase in prices, companies will cut back on fossil fuel production, as soon as 2016. With less fossil fuel production, the total quantity of goods and services (in other words, GDP) will drop. Most economists do not understand that there is a physics reason for this problem. The quantity of energy consumed needs to keep rising, or world GDP will decline. Technology gains and energy efficiency improvements provide some uplift to GDP growth, but this generally averages less than 1% per year.

Figure 4. World GDP growth compared to world energy consumption growth for selected time periods since 1820. World real GDP trends for 1975 to present are based on USDA real GDP data in 2010$ for 1975 and subsequent. (Estimated by author for 2015.) GDP estimates for prior to 1975 are based on Maddison project updates as of 2013. Growth in the use of energy products is based on a combination of data from Appendix A data from Vaclav Smil's Energy Transitions: History, Requirements and Prospects together with BP Statistical Review of World Energy 2015 for 1965 and subsequent.

Figure 4. World GDP growth compared to world energy consumption growth for selected time periods since 1820. World real GDP trends for 1975 to present are based on USDA real GDP data in 2010$ for 1975 and subsequent. (Estimated by author for 2015.) GDP estimates for prior to 1975 are based on Maddison project updates as of 2013. Growth in the use of energy products is based on a combination of data from Appendix A data from Vaclav Smil’s Energy Transitions: History, Requirements and Prospects together with BP Statistical Review of World Energy 2015 for 1965 and subsequent.

Are There Political Strategies to Solve Today’s Wage Inequality Problem?

Unfortunately, the answer is probably, “No.” While some strategies look like they might have promise, they risk the possibility of pushing the economy further toward financial collapse, or toward war, or toward a major reduction in international trade. Any of these outcomes could eventually bring down the system. There also doesn’t seem to be much time left.

Our basic problem is that the world economy is growing so slowly that the ordinary workers at the bottom of Figure 2 find themselves with less than an adequate quantity of goods and services. This problem seems to be getting worse rather than better, over time, making the problem a political issue.

These are a few strategies that have been mentioned on political sites for fixing the problem:

  1. Provide a basic income to all citizens. The intent of this strategy is to try to capture a larger share of the world’s goods and services by printing money (or borrowing money). This money would hopefully allow citizens to purchase a larger share of the goods and services available on the world market. If the pool of goods and services is pretty much fixed in total, more goods and services purchased by one country would mean fewer goods and services purchased by other citizens of other countries. I would expect that this strategy would not really work, because of changing currency relativities: the level of the currency of the country issuing the checks would tend to fall relative to the currencies of other countries. The basic problem is that it is possible to print currency, but not goods and services. There is also a possibility that printing checks for everyone will encourage less work on the part of citizens. If citizens do less work, the country as a whole will produce less. Such a change would leave the country worse off than before.
  2. Lower interest rates, even negative interest rates. With lower interest rates, the interest portion of the Interest and Dividend sector shown on Figure 2 can theoretically mostly disappear, leaving more money for wages on Figure 2 and thus tending to “fix” the wage problem this way. Low interest rates also tend to reduce dividends, because companies will choose to buy back part of their stock and issue very low interest rate debt instead. If interest rates become negative, the sector can completely disappear. The ultra-low interest rates will have negative ramifications elsewhere. Banks are likely to have a hard time earning an adequate income. Pension funds will find it impossible to pay people the pensions they have been promised, creating a different problem.
  3. Get jobs back from foreign countries through the use of tariffs. Some jobs might be easier to get back from foreign countries than others. For example, programming, call center operations, and computer tech support are all “service type” jobs that can be done from anywhere, and thus could be transferred back easily. In situations where new factories need to be built, and materials sourced from around the world, the transfer would be more difficult. Businesses will tend to automate operations, rather than hire locally. The countries that we try to get the business from may retaliate by refusing to sell needed devices (for example, computers) and needed raw materials (such as rare earth minerals). Or a collapse may occur in a country we try to get jobs back from, so fewer goods and services are produced worldwide.
  4. Keep out immigrants. The theory is, “If there aren’t enough jobs to go around, why give them to immigrants?” In a world with sagging GDP, job growth will be slow or may not occur at all. There may be a particular point in keeping out well-educated immigrants, if there aren’t enough jobs for college-educated people who already live in a country. Of course, Europe has been doing the opposite–taking in more immigrants, in the hope that they will provide young workers for countries that are rapidly aging. (Another approach to finding more workers would be to raise the retirement age–but such an approach is not politically popular.)
  5. Medicare for all. Medicare is the US healthcare plan for those over 65 or having a disability. It pays a substantial share of healthcare costs. The concern I have with “Medicare for all” is that because of the way the economy now functions, the total amount of goods and services that we can choose to purchase, for all kinds of goods and services in total, is almost a fixed sum. (Some people might say we are dealing with a zero-sum game.) If we make a choice to spend more on medical treatment, we are simultaneously making a choice that citizens will be less able to afford other things that might be worthwhile, such as apartments and transportation. The US healthcare system is already the most expensive in the world, as a percentage of GDP. We need to fix the overall system, not simply add more people to a system that is incredibly expensive.
  6. Free college education for all. As the situation stands today, 45% of recent college graduates are in jobs that do not require a college degree. This suggests that we are already producing far more college graduates than there are jobs for college graduates. If we provide “free college education for all,” this offer needs to be made in the context of entrance exams for a limited number of spaces available (reduced from current enrollment). Otherwise, we sink a huge share of our resources into our education system, to no great benefit for either the students or the overall system. We are back to the zero-sum game problem. If we spend a large share of our resources on college educations that don’t really lead to jobs that pay well, more people of all ages will find themselves unable to afford apartments and cars because of the higher tax levels required to fund the program.
  7. Renewables to replace fossil fuels. Despite the popularity of the idea, I don’t think that adding renewables provides any significant benefit, given the scenario we are facing. Renewables are made using fossil fuels, and they tend to have pollution problems of their own. They don’t extend the life of the electric grid, if we are facing collapse. At most, they might be helpful for a few people living off grid, if the electrical grid is no longer operating. If the economic system is on the edge of collapse already, fossil fuel use will drop quickly, with or without the use of renewables.


It would be really nice to “roll back” the world economy to a date back before population rose to its current high level, resources became as depleted as they are, and pollution became as big a problem as it is. Unfortunately, we can’t really do this.

We are now faced with the question of whether we can do anything to mitigate what may be a near-term crisis. At this point, it may be too late to make any changes at all, before the downward slide into collapse begins. The current low prices of fossil fuels make the current situation particularly worrisome, because the low prices could lead to lower fossil fuel production, and hence reduce world GDP because of the connection between energy consumption and GDP growth. Low oil prices could also push the world economy downward, due to increasing defaults on energy sector loans and adverse impacts on economies of oil exporters.

In my view, a major reason why fossil fuel prices are now low is because of the low wages of “ordinary workers.” If these wages were higher, workers around the globe could be buying more houses and cars, and indirectly raising demand for fossil fuels. Thus, low fossil fuel prices may be a sign that collapse is near.

One policy that might be helpful at this late date is increased focus on contraception. In fact, an argument could be made for more permissive abortion policies. Our problem is too little resources per capita–keeping the population count in the denominator as low as possible would be helpful.

On a temporary basis, it is also possible that new programs that lead to rising debt–whether or not these programs buy anything worthwhile–may be helpful in keeping the world economy from collapsing. This occurs because the economy is funded by a combination of wages and by growing debt. A shortfall in wages can be hidden by more debt, at least for a short time. Of course, this is not a long-term solution. It simply leads to a larger amount of debt that cannot be repaid when collapse does occur.





About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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1,299 Responses to Why we have a wage inequality problem

  1. Stefeun says:

    Thomas Jefferson’s birthday
    Chosen quotes by ZH. Many of them relevant, actually.

    “On this day, 273 year ago, one of America’s most visionary founding fathers – Thomas Jefferson – was born. To celebrate his birthday, we are sharing a small sample of some of his most prophetic quotes which are perhaps more relevant today than they have ever been in the history of the United States.”

  2. MEAT says:

    Rob Kirby says two-three weeks

    • Rodster says:

      I seriously doubt Kirby will get the timing right. Jim Willie, Jim Sinclair, Peter Schiff etc have all been saying “the end is nigh, get ready because it’s any day now” for the last several years.

  3. Fast Eddy says:

    China Ocean Freight Index Collapses to Record Low

    But there are some real reasons for the collapse in freight rates from China to destinations around the world: China’s exports have plunged. For the January through March period – to iron out the monthly volatility associated with the Lunar New Year holiday – exports are down 9.6% year-over year. Specifically:

    To the US -8.8%
    To Hong Kong -6.5%
    To Japan -5.5%
    To South Korea -11.2%
    To Taiwan -3.7%
    To the countries in the ASEAN -13.7%
    To the EU -6.9%
    To South Africa -29.6% (!)
    To Brazil -47.2% (!!)
    To Australia -1.9%
    To New Zealand -12.4%.



  4. dolph911 says:

    Well as far as timing I’ve made my position relatively clear, I think it will take decades from the starting point of 2008. So by the late 2030s we will see the end of our system.

    That’s not that far from now. We are the same distance from that time as we are from the early 1990s. That is a very fast collapse no matter how you look at it.

    • Yep, as I related above, and as per Howe&Strauss, it’s now about the 2008-2030 window, the window of similar impact as world war, civil war, etc.. Can kickers would like to push it under the rug as long as possible, so the 2020-35 time frame seems most probable..

  5. Stefeun says:

    I don’t follow MSM very closely, but it seems to me that there has been very little coverage of that, in France.
    Around a thousand refugees have been there for months, underneath the elevated metro, because they have nowhere else to go. They live in dire conditions (no toilets, etc..) but they want to stay there, in relatively central Paris, for security reasons. The police have already attempted to evacuate this camp, unsuccessfully. This time, though, they’ll probably reach their goal, and the refugees will be wandering all around in worst conditions and with even less control.
    Once dispersed, NGOs have much harder time to bring them support and resource, but these people still have basic needs, such as food and a minimum hygiene and shelter.

    As if the authorities imagined they just vanished once evacuated ; hard to understand.
    We had similar strange behaviour in north of France with those who want to reach UK; their camps are regularly destroyed, but the situation gets back to the same a few months later, because nothing is solved, only made worse and without any perspective. The situation is difficult also for residents, who are required not to help them.
    Bare in mind that here, for the Paris Stalingrad-metro case, we’re talking of one thousand people only…

    • Fast Eddy says:

      Epic hypocrisy.

      We pillage them and bomb them back to the stone age without a second thought.

      Why don’t we just round them up and ship them back to where they came from?

      And if we want to soothe our consciences why not stop pillaging them and bombing them back to the stone ages?

      Oh right == that would mean we don’t get to live as large.

      In that case – let’s bomb and pillage them and throw stones at them when they come to us for help. At least that is consistent.

      • “And if we want to soothe our consciences why not stop pillaging them and bombing them back to the stone ages?”

        The problem is that they are allied with the other guys that want to consume, Russia etc. So they foolishly are blocking the flow of resources to the West. It would be so much easier if everyone would just submit to our side, so they wouldn’t need to be bombed.

        • Fast Eddy says:

          If they were to submit then we’d install a puppet dictator who would give us their resources… leaving them in dire poverty… and then they’d turn to terrorism

          Pick yer poison

          • Stefeun says:

            Compétition between USA and USSR during cold war generated some advantages for the people in both sides of the wall, especially US wanted to keep leadership with lifestyle.
            No compétition = no need to look good = ..?

      • Rodster says:

        There’s another factor/take at play here. As crazed neocon Bill Crystal likes to say, “what good are nuclear weapons if you can’t use them”? So in order to continue funding the military industrial complex you have to blow stuff up so it makes it appear they are serving the nation when in actuality, it’s the nation that’s serving the MIC.

        • Stefeun says:

          “what good are nuclear weapons if you can’t use them”?

          Fantastic stupidity, really ; but the apparent ‘logic’ of this simple formula, seemingly stating the obvious, can unfortunately impress the weak or lazy minds. Very efficient rhetorical technique of propaganda, very dangerous.

    • The face expression of Holland says it all, every single time..

      The french elite kicked the can for so many decades and generations, they are now paralyzed to act rationally, I doubt even military coup is possible, there is simply nobody qualitatively (and also not enough quantitatively present) to do it anyways, the country is just juiced out, dead pulse, end of the road, nothing..

      Most likely it will end up as low intensity civil war, few last Gauls carving out some regions of relative sanity, and the rest (most) of the place falling into North African conditions.

  6. Kurt says:

    Gail is essentially correct by referencing Tainter and complex systems. However, complex systems could also be adaptive. Humans can lose an arm or even their eyes and still adapt and function. Hence, collapse is not the only option. As I have stated previously, adaption is more likely – and we are seeing it. Africa hasn’t been mentioned in years, Greece, Portugal, and Venezuela are gone. Brazil is on the ropes and Italy isn’t far behind. According to Gail’s static structure model this should all be causing collapse. But, the system is adapting even as it jettisons these countries. I think India is next. However, as long as food and oil can make it to the market, there are no real problems for the USA, Russia, China, France, and Germany. This will continue for at least the next five years.

    Kurt (keeping the Xmas turkey chilled)

    • Rodster says:

      It could actually take longer than 5 years. The question is, how long can the central banks keep the can moving down the road and what other tricks do they have up their sleeves? One trick already being discussed is going cashless. That would provide further control over the iSheep and eCONomies.

    • Fast Eddy says:

      Losing non-key countries like Venezuela would be like losing a finger… or an arm …. but losing one of the big boys e.g. Japan …. that’s like a high cal bullet through the heart…

    • Ed says:

      Kurt, yes, not any critical spare parts coming from the nations you mention. We can live without them.

    • One face of the adaption process is also the generational cycle shifts.

      As per fourth turning (~2008-2030) the mass of Gen-Xers would demolish the current status quo, not as a mission per se, the unbalanced system would be too fragile to cope with their sheer head on assault. This will be (not closely) followed by some type of next “kumbaya” coop generation, sharing the bits and pieces ala “posh favela” style.

      But how it will look on the streets is a bit hazy to imagine.
      My angle of view is a disruptive event first around the peak of the fourth turning, followed by drop in living standards and lower complexity level, which the “share generation” would somehow find ways to cope for a moment, but only by preserving some of few last pillars before their kids and grandkids finish it off beyond recognition ~2050-2070, i.e. perhaps all techno civilization clusters died out beyond repair (incl. Asia), reversal to quite simplistic living arrangements (parallel die-off trend).

      • Published 1997, written-researched mid 1990s,
        At that time 4th turning prediction: 2005 -> late 2020.
        Spot on trend foreknowledge..

        Recent interviews, looking back at it as the clear cut border distinction 2008,
        identifying this turning as 2008-2030 period, lasting ~22yrs.
        Tons of interviews with Howe on the net..

        My comment, frankly, the vision of millennials picking up the pieces after GenX and Boomers, doesn’t inspire me very much, it could likely resemble some sort of neo-totalitarian, quasi egalitarian swamp, and which is not working robustly at that, anyway, lolz.

  7. Artleads says:

    DENVER POST 4/17

    Page 2D – Editorial
    by Bryce Gray, High Country News

    Oil money runs Alaska. Resident don’t pay sales tax and the state income tax was abolished in 1980, after the completion of the Trans-Alaska Pipeline. Each year, Alaskans receive a check based on earned interest from the Alaska Permanent Fund, which invests pooled oil and mineral royalties. (Last year’s disbursement was a record high of $2,072 per person.) It’s a formula that has served the state well for many years, but with oil prices tanking, the state is now grappling with a multibillion-dollar deficit in its budget, prompting calls for sweeping changes in how the government is funded. Petroleum revenues plunged to a 21.3% share of the state general fund in the last fiscal year — down from 48.0% just one year prior, and 59.6% the year before that. The general fund itself has dwindled over the same interval, falling from $10.3 billion in 2013 to just under $4.9 billion in 2015. Alaska’s plight is not unique. Western states — particularly Alaska, North Dakota and Wyoming — are among those most reliant on extractive industries, and are thus the hardest hit by recent crashed in the price of oil, coal and natural gas. In Wyoming, for instance, extractive industries accounted for over a third of the state’s GDP in 2013 — the highest proportion in the nation. That dependence on boom-and-bust industries makes for a lot of economic uncertainty. A Pew analysis showed that Alaska, North Dakota and Wyoming have three of the four highest levels of tax revenue volatility in the nation. Other Western states like California, Colorado (at No. 12), Arizona and New Mexico hold many of the top spots, due to a variety of factors not limited to severance taxes.

    • Exactly. States get a lot of tax revenue from oil and gas. The federal government gets some as well.

      Oil and gas companies are ones that keep their domicile in the US. Other businesses find a way to relocate for tax purposes in a low taw haven offshore. So oil and gas companies pay a disproportionate share of business taxes.

  8. I’ve noticed that although I check the feedback boxes after I’ve commented, the links no longer show up in my email inbox
    Does anyone else have this problem?

  9. Don Stewart says:

    Dear Finite Worlders
    Kurt Cobb has a very interesting post today concerning, broadly, how change comes about when a demanding minority meets an apathetic majority (inspired by Taleb’s forthcoming book), examining the case of GMO labeling in particular.


    Don Stewart

    • Stefeun says:

      Thanks Don,

      From the future book by Taleb, linked in Cobb’s article:
      “The main idea behind complex systems is that the ensemble behaves in way not predicted by the components. The interactions matter more than the nature of the units.”

      Such a -universal- statement, if applied to human societies, questions quite a lot of individualistic / rationalistic / selfish / freewillistic(?) views.

      • Don Stewart says:

        The phenomenon Taleb mentions is responsible, I think, for some of the paradoxes we think we see. A population of critters in the soil can appear to be entirely selfish at one level of analysis, but cooperative at a different level of analysis. Adam Smith’s ‘invisible hand’ followed the same line of reasoning.

        The stability of the Edo, Japan’s population for over 200 years, when there was no central authority enforcing any population controls, is another example?

        Ugo Bardi mentions Edo’s mastery of metallurgy, yet, in contrast to Europe, they rebuilt their forests simultaneously. How did that happen, and why?

        Don Stewart

        • Stefeun says:

          At same period Edo was regenerating their forests by a sort of bottom-up process, we in France were implementing that top-down.

          See e.g. Colbert (Finance minister of Louis XIV, Roi Soleil(!!)) and management of the Forêt de Tronçais, aiming to supply a strong marine industry (maybe serve the people too, but indirectly…)

  10. Stefeun says:

    Short article, but plenty of concerning info, with links:

    “What In The World Is Happening? Fed’s Are Panicking and Holding Multiple Emergency Meetings—It’s Coming!”


    • Yep, the most probable explanation for the activity, is how to creatively massage the economic drop of Q1-Q2 2016 (and previous months), i.e. the official announcement of recession that has just started. Perhaps they will make it public before the election, perhaps not, but it’s going to happen eventually, since the global growth is simply not there anymore. The IMF is now calling for another round of easing/QE asap, so their internal numbers must be flashing..

      There is an hour plus ytube video from a recent panel of D.C. “experts” on the EU/Brexit, the takeaway message: it is going to be very bad (for the globalists) in either case, e.g. even shallow margin for the stay put inside camp, would be considered as weak position and instability into near term anyway; Russia’s happy; Germany and France tasked from that point on to consolidate aka command directly the rest of member countries even more, etc.

      It’s all falling apart now, but that doesn’t mean attempts for creative plateauing for awhile.

    • I know I have reading about this elsewhere too. Also the Doha meeting that didn’t go well–no surprise. Getting agreement to hold down oil production is problem.

      By the way, I was hoping to get a post about debt up tomorrow, but it looks like it will be Tuesday instead (got interrupted today). Comments will probably be cut off for a day or so.

  11. Yoshua says:

    Trump is one notch better than Satan.

    “If Satan had the lead on him and was one delegate away from being nominated as our candidate, and Donald Trump was the alternative, I might vote for Donald Trump”, said Craig Dunn, a local GOP leader who is running to represent Indiana’s 4th Congressional District at the national convention in Cleveland.

    Indiana Awards 57 Delegates Before Primary Vote, Only 1 to Trump

    Thank god America is not a democracy but a republic.

    • Prediction says:

      These primaries are a complete faux show. Have you ever been to one? A complete pretense that anyone who is not someone gets to decide. My prediction. Trump meets his end in in Endiana. Not because of the will of the Indianaians (say it three times fast) but TPTB. It will be Cruz VS Hillary and Hillary will win. Hillary is the chosen.

      “Thank god America is not a democracy but a republic.”

      I assume you mean the USA? I am pretty sure god disavows all association at this point. Its certainly neither a democracy or a republic at this point. Just what it is is pretty undefined to me at this point. I dislike the term “America” . I am certainly fond of many of the people and culture that reside in that particular piece of dirt. Is that “America”. Then there is the government of the USA. Why I dislike the term “America” is it lumps those two things together. What the government does is totally removed from the will of the people. Not that it would be any better if it was ruled by the will of the people. What the government does is none of my business. I disavow all association with them. Oh yes I pay my taxes. I pay my protection $. And I stay clear far from there power as I can lest I be squashed like a bug. Not my government. Not my wars. I was born here. Some of this dirt is mine. The rest is BS.

      • Fast Eddy says:

        I have to laugh when I read this…

        I could tear this commentary limb by limb to shreds… much as an angry elephant might rip apart and trample an infant ….

        But let’s just focus on tearing the head off…

        ‘Not my wars’

        I trust you are aware that pretty much all wars are fought over the control of resources?

        I trust you are aware of this:

        In 2012, world total primary energy consumption was about 529 quadrillion British thermal units (Btu). Primary energy consumption in the United States was about 95 quadrillion Btu, equal to 18% of world total primary energy consumption.

        Why do you think that your standard of living is so high?

        It is because your leaders live in Realitystan – and you live in Delusistan.

        They understand that resources are a zero sum game — that there are not enough to go around — that they are becoming scarcer by the minute…. and that if your tribe is not willing to fight for as much as possible … you end up like Somalia.

        Because others will – and you will get kicked in the teeth and trampled

        It’s kinda like taking 50 vicious dogs — all alpha males — putting them in a cage — and every 3 days tossing enough food into the cage for 20 dogs….. seriously – it is NO different.

        It always amuses me when the liberal do-gooders in America froth at the mouth when the country goes to war — when their comfy lifestyles depend on the resource pillage that comes with victory…


        • Fast Eddy says:

          The way the world works — and always will:

          – The luckiest, fittest, smartest, with the capability for ruthlessness survive – always have – always will

          – Resources are finite and therefore ownership is a zero sum game

          – The strong always take from the weak – if they do not then that is a sign of weakness and a competitor will take from the weak and will usurp the formerly strong dropping them into weakling status

          – Humans tend to group by clan or on a broader basis by nationality (strength in numbers bonded by culture) and they compete with others for resources

          – Competition always exist (I want it all!) but it becomes fiercer when resources are not sufficient to support competing clans or nations

          – Tribal societies understand these dynamics because they cannot go to the grocery store for their food – so they are intimately aware of the daily battle to feed themselves and the competition for scare land and resources

          – Modern affluent societies do not recognize this dynamic because for them resources are not scarce – they have more than enough.

          – One of the main reasons that resources are not scarce in affluent societies is because they won the battle of the fittest (I would argue that luck is the precursor to all other advantages – affluent societies did not get that way because they started out smarter — rather they were lucky – and they parlayed that luck into advances in technology… including better war machines)

          – As we have observed throughout history the strong always trample the weak. Always. History has always been a battle to take more in the zero sum game. The goal is to take all if possible (if you end up in the gutter eating grass the response has been – better you than me – because I know you’d do the same to me)

          – And history demonstrates that the weak – given the opportunity – would turn the tables on the strong in a heartbeat. If they could they would beat the strong into submission and leave them bleeding in the streets and starving. As we see empire after empire after empire gets overthrown and a new power takes over. Was the US happy to share with Russia and vice versa? What about France and England? Nope. They wanted it all.

          – Many of us (including me) in the cushy western world appear not to understand what a villager in Somalia does – that our cushy lives are only possible because our leaders have recognized that the world is not a fair place — Koobaya Syndrome has no place in this world — Koombaya will get you a bullet in the back — or a one way trip to the slum.

          – Religious movements have attempted to change the course of human nature — telling us to share and get along — they have failed 100% – as expected. By rights we should be living in communes — Jesus was a communist was he not? We all know that this would never work. Because we want more. We want it all.

          – But in spite of our hypocrisy, we still have this mythical belief that mankind is capable of good – that we make mistakes along the way (a few genocides here, a few there… in order to steal the resources of an entire content so we can live the lives we live) — ultimately we believe we are flawed but decent. We are not. Absolutely not.

          – But our leaders — who see through this matrix of bullshit — realize that our cushy lives are based on us getting as much of the zero sum game as possible. That if they gave in to this wishy washy Koombaya BS we would all be living like Somalians.

          – Of course they cannot tell us what I am explaining here — that we must act ruthlessly because if we don’t someone else will — and that will be the end of our cushy lives. Because we are ‘moral’ — we believe we are decent – that if we could all get along and share and sing Koombaya the world would be wonderful. We do not accept their evil premises.

          – So they must lie to us. They must use propaganda to get us onside when they commit their acts of ruthlessness.

          – They cannot say: we are going to invade Iraq to ensure their oil is available so as to keep BAU operating (BAU which is our platform for global domination). The masses would rise against that making things difficult for the PTB who are only trying their best to ensure the hypocrites have their cushy lives and 3 buck gas (and of course so that the PTB continue to be able to afford their caviar and champagne) …. Because they know if the hypocrites had to pay more or took at lifestyle hit – they’d be seriously pissed off (and nobody wants to be a Somalian)

          – Which raises the question — are we fools for attacking the PTB when they attempt to throw out Putin and put in a stooge who will be willing to screw the Russian people so that we can continue to live large? When we know full well that Putin would do the same to us — and if not him someone more ruthless would come along and we’d be Somalians.

          – Should we be protesting and making it more difficult for our leaders to make sure we get to continue to lead our cushy lives? Or should we be following the example of the Spartans https://www.youtube.com/watch?v=eZeYVIWz99I

          – In a nutshell are our interests as part of the western culture not completely in line with those of our leaders – i.e. if they fail we fail – if they succeed we succeed.

          – Lee Kuan Yew is famous for saying ‘yes I will eat very well but if I do so will you’ Why bite the hand that whips the weak to make sure you eat well…. If you bite it too hard it cannot whip the weak — making you the weak — meaning you get to feel the whip….

          – Nation… clan … individual…. The zero sum game plays out amongst nations first … but as resources become more scarce the battle comes closer to home with clans battling for what remains…. Eventually it is brother against brother ….

          – As the PTB run out of outsiders to whip and rob…. They turn on their own…. As we are seeing they have no problem with destroying the middle class because it means more for them… and when the weak rise against them they have no problem at all deploying the violent tactics that they have used against the weak across the world who have attempted to resist them

          – Eventually of course they will turn against each other…. Henry Kissinger and Maddy Albright bashing each other over the head with hammers fighting over a can of spam – how precious!

          Now just be thankful you are on the winning team!

        • Stefeun says:

          Haute Bourgeoisie

  12. The Goat. says:

    The April Emergency The Fed Doesn’t Want You To Know About – Mike Maloney
    Mike Maloney 131,237 views

  13. houtskool says:

    Ok. The only answer to a finite world with exponential growth is to shrink.

    A worldwide coordinated blow to growth. Eliminate all non necessary activities. Like Facebook. Like Hello Kitty. Like luxury cars, private jets, jewelry, pink coolers.

    Accept coolers in the color they come. That way you don’t have to waste recources on color, and transportation of sources.

    Accept labour without profit. Accept a lifestile without growth.

    On a finite world, there’s no room for profit.

    • Without profits, there are no businesses. This becomes a problem.

    • Fast Eddy says:

      I am involved with a few businesses… they employ people… i.e these people get to eat … as do I…

      Because the businesses generate profits.

      In case you hadn’t noticed… communism failed because entrepreneurs will not lift a finger without the opportunity to make a profit… and workers will not work unless they get paid ….

  14. interguru says:

    I am visiting my grand toddler ( no longer grandbaby ) in Los Angeles. Oh the glitz, Glitz, GLITZ !!!

    This brings to my mind a former post which is reposted below.

    This reminds of a passage I read in a recent ( highly recommended ) novel The Water Knife by Paolo Bacigalupi . It takes place in a very parched American Southwest, where states are fighting over water not only in the courts, but with militias, with a weakened US government unable to intervene. Some states have collapsed, such as Texas, sending millions of refugees to other states which have fortified their boundaries. The refugees are in camps supported by FEMA and the Chinese Red Cross. Here is a discussion of what they leave behind in their flight.

    “You can have any of the clothes the renters left. ….. There’s good stuff in them, high end designer and sh*t. … You can dress classy, Prada and Dolce and Gabbana, Michael Kors, Yan Yan.. I use it for rags mostly”

    • xabier says:

      After the Great Plague of the 14th century, the poor grabbed the clothes of the rich and danced around in them……

  15. Artleads says:

    Very cumbersome governance stuff. But does this seeming trend toward resiliency planning represent a sort of post-collapse thinking within BAU?


    Colorado Department of Local Affairs releases “Planning for Hazards: Land Use Solutions for Colorado,” a guide and website to help Colorado agencies prepare for natural disasters and reduce risks through resilience and hazard mitigation.
    The Colorado Department of Local Affairs (DOLA) Division of Local Government released a new Planning for Hazards: Land Use Solutions for Colorado guide and website designed to help Colorado counties and municipalities prepare for natural disasters and reduce risks through the integration of resilience and hazard mitigation.

    The guide and website provide a unique compilation of comprehensive materials, disaster recovery strategies, and lessons learned assembled over the years since the state’s devastating fires and floods in 2012/13. The guide includes information about creating a planning framework, hazard identification, and risk assessments to help communities implement resiliency strategies. The website provides users a variety of options to obtain specific information on targeted topics that will be supplemented over time with additional videos and links to new resources. The University of Colorado Denver, who participated in development, will manage and maintain the website.

  16. Yoshua says:

    A bit weird clip about why the GOP fears Trump… he has not been initiated into the secret society


    • merrifield says:

      Well, I think that just means he isn’t presently part of the Deep State, which doesn’t mean he wouldn’t be co-opted if he were elected. . .

    • Fast Eddy says:

      Or perhaps the minions of the Elders believe their masters are losing control of things… that they will no longer be able to hold up their side of the deal which stipulates we will make you rich but you must not oppose us…

      And Trump is the designated front man for the crew that is getting ready to go to war with the Elders.

      Or maybe not. Probably not. But maybe…..

      • Yoshua says:

        Trump’s mantra has been from the start: “We will take back this nation and make America great again !”

        Take it back from who ? The globalists ? The lobby groups and vested interest groups ? The corrupted politicians ? The secret societies ?

        American politics are becoming stranger by the year. Is he just a don Quijote fighting windmills ? Or is there a secret cabal behind the scenes ? A power that is creating all these supranational entities like the UN, IMF, NATO, NAFTA, EU, TPP, TTIP and TISA ? He has attacked most of these organizations. Does he really believe that he can take that power down ?

        And who are we ? All his political advisers so far seems to have a military career behind them, people who have a lot of classified information on domestic and foreign affairs…

        • xabier says:

          It’s all Primitive Politics, the Balkan/Italian/Arab/Turkish paranoid complex:

          ‘If things are wrong here, it’s all THEIR fault – the traitors, the crooks, the unbelievers, they’ve destroyed our Paradise!’

          ‘But we can take it back! And we have the Strong Man to do it! We can be Great Again!’

          It’s rather a bad sign: the USA turning -I do not mean to offend in any way – Balkan, turning 3rd World, in its modes of thought.

          Turning away from the assumptions of the European Enlightenment.

          People are calling it ‘fascism’, but that is quite wrong in many ways. Anyway, Trump is just a precursor, the first phase.

          • agreed Xabier
            Trump is the vision of future, even though he won’t get elected .
            The economy needs to seriously crash before things really get bad politically.

            When that happens, you’re going to get “super Cruz”, a real godnut, who will promise that prosperity will only come back if you pray hard enough….and will begin to create a theocracy to enforce it.
            And I do mean enforce

            Ridiculous? Not when 50+% of Americans believe the world is less than 10k years old. Fertile ground for godfreaks I’d say.

            When the economy finally tanks, there will be civil unrest. That will bring in the military, who will be working for a godbothering government. Crazy governments make sure their military are well fed, because they know they have to keep them on side (check out North Korea)—the ordinary soldier or his generals are locked into the same survival bargain, they have no option, whether they believe it or not,
            So they help to prop up the (temporary) move to a theocratic regime to “save” democracy, It doing so, democracy is wiped out of course.

            The side effect of this will be the Disunited States of America

            How long—10-20 years at most

            • Hm, general agreement perhaps, but where we part ways, it’s on the issue not mere side effect but instead being the core element of the story, so that one thing is theocracy/autocracy/general ideology on the ascent trajectory, while it takes completely different meaning on the overall descent phase of “civilization”. Basically, the former is a creative building force of sorts, while the latter is sectarian isolationist opt out as temporary shield from chaos.

              I’d think the situation post 2008 should be clear enough for most of us here, the dominant western globalist model survived the non usury alternative model by mere few decades (1991 or ~1985). They papered it over “digitally” somehow up to this point since 2008, now we are approaching the inevitable violent fragmentation phase, semi-peripheries and semi-cores are already ricocheting away like Greece and Japan, today we have the “Tory civil war” with the likely-hood of Brexit (and its effects) due starting in few months time etc. In that light just silly linear trends extrapolation into next 2-3decades might be a predictor of quite nastier future on many fronts, not talking about the window ~2050-2100, which some of us might yet to observe in person, chilling vision indeed.

              But for the moment the switch still brings light and heating, shelves and freezers are overflowing with food, overall strange calm sense before the storm..

            • Ed says:

              Norman, the U.S. is not a monolith. Yes, the bible belt could go for a super Cruz but that would not sell in the northeast (educated), the west coast south (money and military), the west coast north (eco and tech both independent), Texas (?, good Catholic from Mexico with no need of new Pope). As to the empty space east of the Rockies and west of the Mississippi who cares.

              The south was correct in 1860 we would all be happier separate. There are six nations between Mexico and Canada. Only one might go in the direction you fear.

            • Ed
              My thinking about the USA as a viable nation hangs of the availability of energy to hold it together.
              when there isn’t any—or there’s too little to use in that respect–transport, road/rail/aircraft maintenance etc, then as i see it, the nation cannot hold itself together,
              any more than the EU can, or China, or Russia for that matter.
              This where conflict is likely to come from, as leaders hang on to their denial mode, and try to hold on to what is falling apart

              (don’t know if this comment will appear in the right sequence re this discussion)

          • Ed says:

            xabier, the U.S. has always been a strong cooperation between business and government, corporatism as Mussolini put it. This will continue uninterrupted regardless of who is elected president. Trump seem to fit in just fine.

          • Artleads says:

            I doubt that atheist secularism has much of a chance where we’re heading.

  17. Don Stewart says:

    Dear Finite Worlders
    This next clip isn’t exactly evidence, but it may be suggestive:
    ‘Rob Fenton emphasises that the value for a farm is when he markets his produce not when he grows it. In this clip he talks about the margin he can get per egg which is about $.40 compared to the market going price on average which is $.01-$.02’

    So wholesaling an egg may make you a penny or two, but selling it yourself can get you 40 cents (of course, you also have the cost of selling and the time involved).

    When some of the thermodynamic models for oil are run, they give results not unlike the egg business. That is, the cost of extraction is not the whole story by far. Processing the oil and retailing the products also account for a lot of the total cost. Quite a few people who read Peak Oil blogs are resistant to that message.

    If you look at the cost of a cracker in a shrink wrapped package and compare that price with the cost of raw materials, the raw materials tend to fade into insignificance. If you look at this article which is about eating well on a food stamp budget:

    you will find that omitting processed foods and especially drinks are very high on her list. The cost of the water and syrup to produce a cola have to be minuscule compared to the price. As compared to a slice of lemon in water, the cola drink is astronomically more expensive.

    Don Stewart

    • Artleads says:

      How do you counter those who say that the shrink wrap and the marketing represent the economic web whose demise would spell immediate doom?

      • Don Stewart says:

        The legend says that when the Buddha achieved enlightenment, Mara (the devil) challenged him: ‘How do you know you aren’t deluded?’s\. Supposedly Buddha reached down and touched the soil, and said ‘Earth is my witness’.

        I haven’t gotten within a country mile of enlightenment, but I figure if touching the soil was good enough for Buddha, it’s good enough for me. So I go out and work in my garden.

        And all that babbling seems to just fade away.

        Don Stewart

      • Artleads says:

        I don’t particularly need shrink wrap. But my fridge is extremely useful. So if I got food in the form presented at, say, a farmers market, I’d be fine.

        The old car I have is very welcome and appreciated. It’s new enough to be one of those computerized deals that I couldn’t fix myself. But I couldn’t fix it myself even if it were as simple as Lego toys. I’m very glad that the repair shop I go to is not that bad or out of reach financially.

        I’d say we need a high level of cardboard box production. From middle school up, every kid would have a utility knife and a supply of duct tape. There should be an exceedingly high level of water-tank production, since every yard should have one or more water tank. PVC pipes are extremely convenient. Silver-lined beverage containers are a great gift, and can be reused indefinitely for outdoor purposes.

        A huge new industry could be geared to excavating landfills and making new products from the fill. Degrading large swathes of land with landfill which build up methane is not more economically helpful than digging up what’s there now and reusing it.

        My point in all this is that I wonder why not stepped-up production of useful things while getting rid of the less useful stuff. I’m not sure why this can’t be done under industrial civilization.

        • because whatever is got rid of requires someone to order it to happen–ie, someone has to say what is useful, and what is not. That means a “committee” who will never agree on anything–or some kind of commissar who will issue diktats.
          and that will create an uproar in the segment of society affected by whatever ”change” is brought about., jobs lost etc.
          Not sure if your comment about excavating landfills is made “tongue in cheek” or not—forgive me if it is.
          Anything that goes into landfill starts to degrade immediately. A prime example might be a tin can you find at the bottom of your garden—all thats left usually is the top and bottom rings–the rest has rusted away
          Most of the other stuff in landfill in viable quantities are glass and plastic
          Anything got out of landfill requires heat to excavate it and heat to reprocess it.
          If you want to get an idea of what excavating landfill looks like, take a look at kids doing it in India and Africa.
          Not a pleasant sight, toxic and highly dangerous.
          Use machines?—But then you’re back into fuelburning again, to separate out all the minute quantities of stuff in there. Almost certainly it would require more energy to extract stuff than the value of whatever was obtained.
          trying to reverse entropy doesn’t seem to work

          • Stefeun says:

            “trying to reverse entropy doesn’t seem to work”

            Yes it does! It’s actually the whole thing about dissipative structures and so on.
            The point is from where you look at things: when you lower entropy locally, there’s more of it generated globally.
            The latter is generally disregarded, until it reaches unmanageable levels. That’s where we are now.
            In the end of the day, and globally speaking, your statement is true, of course. You can’t get rid of the 2nd law.

            • I guess the point I was trying to make was, that to give the appearance of entropy reversal, you have to keep pumping more and more energy into the system.
              ! swim a couple of miles every week–to stave off the inevitable—but—
              In the short term that works, but in the long term, as you say, entropy wins every time.
              Hope it doesn’t catch up with me just yet

          • Artleads says:

            “That means a “committee” who will never agree on anything–or some kind of commissar who will issue diktats.
            and that will create an uproar in the segment of society affected by whatever ‘change’ is brought about., jobs lost etc.”

            I’m not so much talking of what I expect people to do; it’s more about what they COULD do if they were rational.

            “Not sure if your comment about excavating landfills is made ‘tongue in cheek’ or not—forgive me if it is.”

            Apologies for wasting people’s time with stuff I don’t know. I read a long time ago about dumped phone books which still could be read after decades in landfills. I will be cautioned by what you say, but won’t totally change my views until I learn a lot more about the subject. (Caveat: I probably won’t learn a lot more about it, and it’s not only up to me to do so. I often intuit things, only later to see that others closer to the issue are doing tangible things about them.)

            But back to rationality: We don’t just have to dig stuff up from landfills; we can instead stop dumping things into it. There is a LOT of manual work to be done stuffing cardboard boxes with not-too-toxic materials otherwise slated for landfill. Lots of cardboard, paper and plastic, even tin. The stuffed boxes then constitute a “industrial detritus” strawbale that can be plastered over with mud, creating a well insulated building material that uses less FF energy than landfill dumping, creates work, and sequesters waste for a long time.

          • Fast Eddy says:

            Smokey Mountain is a very cool place to visit… how often do you get a chance to visit hell on earth.


          • Artleads says:

            “If you want to get an idea of what excavating landfill looks like, take a look at kids doing it in India and Africa.
            Not a pleasant sight, toxic and highly dangerous.
            Use machines?—But then you’re back into fuelburning again, to separate out all the minute quantities of stuff in there.”

            I’m acquainted with dump programs in the US where artists are given grants to take what they need to create a public art project at the dump. From what I saw, that small program was not dangerous. And the piles of junk out in the sun from the link above look like what millions of people have been searching through for a long time. They take metal, wire, wood, broken furniture, toys, and make use of them. This activity doesn’t seem exceptionally toxic. As to energy use–I’m thinking in terms of reusing discard at the local level to substitute for materials taken from the ends of the earth and transported/manufactured at great energy/environmental cost for the global economy.
            All of this can be done rationally, humanely, and respectfully. Of course, that isn’t how the global economy works now.

            • ejhr2015 says:

              Simon Michaud says we will be soon mining landfill dumps, as they have more minerals than many mines do even today. This video has appeared here before, but it’s an important one;

  18. Don Stewart says:

    Dear Finite Worlders
    I have written about David Levitin, Sherry Turkle, and the senior at Duke playing Brahms and the human need to sometimes concentrate and sometimes think broadly, and the dangers of being distracted too much of the time.

    Here is another take on the subject:

    The author recommends spending some time doing nothing. Or maybe meditating. At any rate…not subjecting oneself to the distractions of the modern world. Near the end of his article, note that he teaches at Google on occasion.

    Now it is strange to me how Google can both present someone who recommends ‘getting away from distractions’ while simultaneously making their living by promoting distractions.

    At any rate, I will tell one story to perhaps illustrate the point the author is making. A former neighbor had been a United States Official in some of the Pacific territories shortly after WWII. Life was never very hard for these people, but it got easier when the US started supplying food. Since they didn’t perceive that they needed very much, and the government was giving them food, they did nothing. My neighbor would get furious describing how the men would just sit and look out to sea all day. After all, he spent his days pushing paper…didn’t they have some forms to fill out and letters to reply to? Well…no, apparently they saw little use in forms and letters. (At that time.)

    Don Stewart

  19. Yoshua says:

    Commodity slump pushes Africa back into IMF’s embrace


  20. Don Stewart says:

    Dear Finite Worlders
    I have recently been quoting David Levitin, author of The Organized Mind. One of the enemies he identifies is distraction. I have also connected Levitin’s work to that of Sherry Turkle. I have linked both to the distractive qualities of social media.

    Here is an excellent article outlining the strategies being pursued in the social media companies:

    You will find some suggestions you may not have thought of. For example, why is Google interested in self-driving cars?…….

    Answer: to free up more time for you to watch ads.

    Don Stewart

    • Don Stewart says:

      PS Gail needs to add ‘The Crisis in Limits to Ad Watching Time’ to her least of things leading to Collapse. 🙂
      Don Stewart

    • xabier says:

      The ‘human’ being (I use that term relatively) desired by our system and its masters is incapable of doing anything, but is prey to infinite and unquenchable desires – to be satisfied by pressing a button.

      Physically weak, mentally highly suggestible, immersed in a culture of lies and delusion.

      It’s astonishing that this is what we have come to.

      I’m inclined to think fondly of the wild barbarian from the steppes: set on murder, rape and theft, ( ‘To kill your enemy, to take his horses and treasure, to take his wife and daughters, is his not the good life?!’ as the Mongol famously said), but at least capable of: assessing reality, formulating plans, executing them, managing a horse and weapons in the real world, and…..eventually….becoming civilized.

      Note, when a barbarian said he was going to kill you and take what you have and bed your wife, he spoke the truth and was not lying.

      • Stefeun says:

        Isn’t it striking that most of what we describe as humane are feelings and behaviours that are shared by all animal species (albeit at various degrees),
        and what we describe as inhumane is mostly the fact of H.Sapiens only?

        NB: my cat likes to play with mice before killing them, but he’s not capable of empathy.
        We are. We have no excuse.

  21. psile says:

    Circling the drain now peeps. BRICS are getting crushed… 😛

    Brazil: Economic collapse worse than feared

    Amid political chaos, Brazil’s economic collapse is worse than its government once believed.
    In the midst of rising calls to impeach President Dilma Rousseff, Brazil’s central bank announced Thursday that it now expects the country’s economy to shrink 3.5% this year.
    That’s worse than the central bank’s previous estimate for a 1.9% contraction. The darker forecast matches what the International Monetary Fund projected for Brazil — Latin America’s largest country — and what many independent economists have suspected.

    Elsewhere in South America…

    Venezuela is on the brink of complete economic collapse

    The only question now is whether Venezuela’s government or economy will completely collapse first.
    The key word there is “completely.” Both are well into their death throes. Indeed, Venezuela’s ruling party just lost congressional elections that gave the opposition a veto-proof majority, and it’s hard to see that getting any better for them any time soon — or ever.
    Incumbents, after all, don’t tend to do too well when, according to the International Monetary Fund, their economy shrinks 10 percent one year, an additional 6 percent the next, and inflation explodes to 720 percent. It’s no wonder, then, that markets expect Venezuela to default on its debt in the very near future. The country is basically bankrupt.

    Now, back to watching “Dancing With The Tarts!”

  22. Fast Eddy says:

    For those who can’t wait for collapse — have a watch of what is happening in Venezuela … and keep in mind – Venezuela has not collapsed… there is electricity and fuel….


    You might also pull up some documentaries on what life was like in various communist countries under the USSR….

    Again – nowhere near collapse….

    • psile says:

      Exactly, as long as the Queen bee survives (Banking cartel) there can be no genuine collapse.

    • I’m not sure there is a direct collapse relation in that, plus comparing Venezuela with the industrialized ring around USSR block is quite amusing idea anyway..

      The USSR block clearly underwent tremendous expansionary cycle: factories, housing, powerplants, schools, sciences, hospitals, .. The difference from the up cycle in the west was the timing/duration and the prioritization of segments which were propped up directively. So specifically, the 1970s were still expansionary in the East (increasing relative per capita wealth), while the west was already resting on different stagnation subcycle etc.

      The most important aspect of the USSR block falling apart was simply the west was willing, able to borrow and create more credit fraudulently in upfront fashion, so the appearances of relative success (plus different priorities on consumables-trinkets among other aspects) basically made that strong visible contrast of the mid-late 1980s, as if clear cut winner-looser comparison. The USSR was quite aware of it, that’s why the attempted turn around mid 1980s with Gorbi to steer it into some form of mixed economy, however this was badly prepared maneuver and managed (herculean task anyway) into disaster. And it only rushed the early capitulation in the race, i.e. “oops, from now lets be all fraudulent credit capitalists”..

      But we can witness as of now/recently, there is again divergence taking place, propensity to insular and regional trade cooperative strategies.

    • collapse is averted only so long as there is a means of shifting energy in one form or another as a way of maintaining some kind of commerce—ie profit.
      China is putting (cheap) energy into goods (both as fuel and muscle power), and shipping them out to places where energy is expensive (USA-Europe)
      It may look different, but the motive is exactly the same as driving a full tank of petrol over the Bolivian border and selling it at a more expensive price.
      Think of it as rebalancing. When the economies of China and the USA are no longer able to effect this exchange, collapse will be inevitable

      • Basically, you claim that China won’t be able to “create” their backup export market aka the “silkway project” – well I do agree it’s doubtful in term of scale and capacity 1:1 replacement, but the bottom line is we don’t now yet the future. So, it seems to me like around ~300AD announcing it’s evidently ALL going downhill, while completely rejecting the ~1000yrs future for the Byzantine offshoot stemming from the dying original western core. Perhaps we are into something of quasi analogue situation ahead now..

        • xabier says:

          I highly recommend ‘The Accursed Mountains. Journeys in Albania’ by Robert Carver, for ample material on Communism, what came after, and the resurgence of tribalism and blood-feuds. Extremely entertaining and instructive.

      • Good point!

  23. Stefeun says:

    If only for the superb medieval representation of Turchin and Nefedov’s cycle,
    here’s a translation of the latest post by François Roddier:


    90 – Economic cycles

    April 15, 2016 General
    The second law of thermodynamics, also called “principle of Carnot,” says that one can not sustainably produce mechanical energy other than by transformation cycles extracting heat from a hot source and driving some of it towards a cold source.

    By nature, a dissipative structure continuously produces mechanical energy in order to dissipate it. This implies that it must perform transformations cycles. So to dissipate solar energy, the Earth’s atmosphere produces cyclones and anticyclones, but also cycles as the water cycle. The chemical elements are constantly recycled through cycles such as carbon, nitrogen or phosphorus. Finally life itself exists only through cycles in which the plants are eaten by small animals which in turn are eaten by larger animals, which waste feed bacteria and produces fertilizers to plants.

    Among all dissipative structures on Earth, those that dissipate the most energy are by far the human societies. The science that studies how human societies dissipate energy is called economics. Is generally attributed to a French, Clément Juglar, the first evidence of economic cycles to which he attributed a period of about 8 years. In the early twentieth century, Kondratiev has highlighted longer cycles of the order of half a century.

    In this blog, I’m myself talking about the four seasons of the economy (articles # 72 and 73), each season would be about a generation. It then leads to cycles having a period of about a century. In their book entitled “Secular cycles (1)” Turchin and Nefedov highlight historical cycles of even longer periods, about 400 years (see the list of these cycles the bottom of this post). For each of them, Turchin and Nefedov clearly identify four phases to which they give folowing names: the expansion phase, stagflation, crisis and depression.


    The Secular Cycles by Turchin and Nefedov

    It appears natural to identify economic cycles to cycles of dissipative structures.The Danish physicist Per Bak has shown that they oscillate around a critical point. The different parts of the same structure oscillate at different frequencies. It is therefore all an oscillation spectrum whose magnitude is even greater, as they are spread over a longer period of time.

    In my presentation at the Shift Project (2), I identified the economic cycles to Carnot cycles described by the traditional variables P, V, T, but for which P represents the Gibbs-potential I called economic potential, measuring what economists usually call the “demand”. The variable V represents the “volume” of production (quantity of manufactured goods). Finally, the T measurement variable that I called the “temperature” of the economy (see article # 49), and that we can identify with what economists call “supply”.

    At any given time, the state of an economic unit may be represented by a point in space (P, V, T). In my previous post, I showed that all the points lie on a surface described by an equation of state of the economy. I showed the analogy between this equation of state and the condensable fluids. I deduced that, as a fluid, an economy can be condensed into two distinct phases that I have identified as an economy for rich people, and another economy for poor people. I have shown that the two economies are dissociated from each other within a certain area shown in dark in the figure.

    The figure below is the same as the one in previous post, but rotated 90 ° clockwise. The three coordinate axes are still P, T, V now referred to their economic appellation of demand, supply and production. Economic production is an extensive quantity, it is now reported on a vertical axis according to two variables that are intensive supply (backwards) and demand (to the left). The curves called “isothermal” are the lines along which the offer remains constant.


    Economic output, according to supply and demand (Falaise de Sénèque = Seneca Cliff)

    The circuit is an arbitrary economic cycle around the critical point C. Projected into the production design / application, its area represents the energy dissipated during a cycle. Thereof being positive, the rotation necessarily takes place in the direction of clockwise. By analogy with the fluid, the part of the cycle part of the dark area was represented by a ‘cool “condensation, here a vertical line segment.

    This dark area is in a vertical plane. It seems natural to identify it to a collapsing zone economy, zone called “Seneca Cliff” by Ugo Bardi (3). In this zone of instability, production collapses vertically, regardless of the offer (temperature) and regardless of demand (pressure). We have seen (previous post) that, within this area, the economy separates into two phases, one for poor people and another one for rich people, with no interactions between them. The collapse of output is then interpreted by the fact that poor people can not buy what is produced by rich people. Gradually the whole population gets impoverished.

    The economic cycle of the figure can be followed and performed as follows. If one starts from the foot of the cliff, economic output starts to go through a minimum. This part of the cycle is characterized by a shortage of material goods and a growing demand. It is clearly identifiable to the depression phase of Turchin and Nefedov.

    Then arrive on the left side of the cycle during which economic output starts rising. This part is characterized by low wealth inequalities and an almost total absence of unemployment. The offer aims to meet the demand and the production increases. Peace and well-being extend, so that the population tends to grow. This is the so-called expansion phase of Turchin and Nefedov.

    Once satisfied, the demand tends to decline but, due to investments, the offer continues. We arrive in the hot zone of the luxury economy. This area follows laws that are close to those of perfect gases. The offer there holds the request in the same way that the temperature maintains the pressure in a boiler. Rich people are becoming more numerous, but gradually the production stagnates and unemployment rises. This is Turchin and Nefedov’s stagflation phase.

    Then we arrive at the edge of the Seneca cliff top where economic output collapses. Companies go bankrupt, populations are rising and governments are overthrown. This is the Turchin and Nefedov crisis phase.

    Similar to Sisyphus, civilizations bear the burden of production along their economic ascension to the top of the cliff, from where they see the fruits of their labor crumble. At the foot of the cliff, new civilizations take over.

    (1) P. Turchin, S. Nefedov, Secular cycles, Princeton (2009).
    (2) See the video of the article # 75 and the text published in Res-Systemica, vol. 14, Article 01 (September 2015).
    See: http://www.theoildrum.com/node/8317 (Bardi’s Seneca Cliff)

    For information, here is the list of the cycles described in the book of Turchin and Nefedov with the related period:

    The Plantagenet cycle (1150-1485)
    The Tudor-Stuart cycle (1485-1730)
    The capétien cycle (1150-1450)
    The Valois cycle (1450-1660)
    Rome: The cycle of the republic (350-30 BC.)
    Rome: The cycle of the principate (30 av JC-285.)
    Russia: Moscow cycle (1460-1620)
    Russia: The Romanov cycle (1620-1922)

    • Isn’t in interesting that most of the official gov Russian communication uses the specific phrase “energy carriers” – very seldom you hear about some magical over arching concepts of “energy” as is used in the west. This to me reveals different conceptual thinking and culture. Now for the next step where to look for some practical application of the above claim? Well, they are building the second undersea gas interconnect to Germany, they chipped Austria out to participate with them on their “south stream” pipeline as well, and lastly there is this citadel project of Syria to block any gulfies attempts on exporting to Eurasia via pipe system. Apart from that there is whole another subject of domestic gen3+/4 nuclear industries incl. fuel chain, ..

      Simply, the west has been increasingly outsourcing the energy question (importance placed only on renewables in electricity), while others take it more closely to the chest, and it’s definitely not only diverse export-import strategy thing.

    • MM says:

      Therea is an interesting book about that by Edward R Dewy, it’s called “cycles – the science of prediction”. It contains plenty of data of different industries and verifies that there exist cycles.
      I am afraid though that these models do not really apply in our world where central banks spent billions and manipulate the market and it also does not include the dreivatives markets where derivatives are the levers to maintain equilibrium in an unstable situation (in theory). I think the economy today alters itself so fast that it is impossible to make predictions based on these cycles. The only thing we know for shure is that energy is key to all. The energy cycle thus was never detected as the energy has been increasing for all time of human civilisation. If you look at an oscilation as the image of a cycling process, you can also have a dampening effect and the sine wave degrades to zero after some swings. For the main energy system to our society, as far as we know today, there will be no upswing again after the first downswing. Except we manage fusion or some other miracle of very large scale what seems very unlikely.

      • Stefeun says:

        I tend to agree: cycles may exist, but I’m not sure they apply to our fast-changeing and entirely new situation.

    • “Is generally attributed to a French, Clément Juglar, the first evidence of economic cycles to which he attributed a period of about 8 years. In the early twentieth century, Kondratiev has highlighted longer cycles of the order of half a century.”

      This sounds more like they simply re-discovered the 7 and 50-year cycles of ancient Israel from ~3500 years ago, which in turn may have already been discovered by the Sumerians ~6000 years ago.

    • Stefeun says:

      The medieval illustration is from Turchin and Nefedov’s book.
      It’s really 800 years old and its title is “The Wheel of Fortune”
      They found it in “The Garden of Delights” (among lots of other pictures)

    • I am not sure I understood 100% of this.

      Clearly, the idea a person often hears, “We pay each other’s wages,” only works if wages are relatively equal. If we have doctors making 20 times what poor workers are making (plus the cost of lots of support staff and equipment), even mandating that poor people buy health insurance does no good. The poor cannot afford to pay the wages of the rich, even if an insurance policy spreads the high cost equally. It is still way too high. The system has to collapse. Growing disparity in wages takes place as the economy becomes relatively more complex, as it tries to fight resource shortages. I see the resource shortages (not enough more energy to dissipate) as bringing the system down.

      On the other hand, when little supplemental energy is used by the economy, and everyone is trying to obtain the simplest living as a farmer or merchant, there are plenty of jobs for everyone (assuming that there are enough resources for everyone to have land to farm, and water for that land). Wages are relatively equal. It is the availability of resources (including land to farm, and the sun’s energy) that makes growth possible.

      • Stefeun says:

        I won’t pretend I fully understood how an equation of state, akin to that of ideal gases, applies to the economy, either.

        You say: ” I see the resource shortages (not enough more energy to dissipate) as bringing the system down.” That was my opinion too, but I had to change my mind a little bit. It’s a matter of fact that without sufficient energy supply growth the economy collapses. But during the stall phase (ie energy supply not growing fast enough), it seems that other phenomena are taking place, mainly due to overcapacity: the outputs of the system can no longer be absorbed, and we’re suffocating under our overproduction and its wastes. At some point, adding more energy as input doesn’t have any effect, if the system is blocked at its other end.
        I’m afraid the issue is eventually more entropic than energetic.

        • Don Stewart says:

          Stefeun and Gail
          I don’t claim to understand it fully, either. However, let me throw in a couple of things to think about.

          Relative to the ‘stall speed’. Suppose, just for the sake of argument, that BW Hill’s model of the oil industry is correct. Since few people understand it, Wall Street will continue to pour money into the oil industry. But since one of the problems identified by Hill’s model is that people cannot earn enough money using oil products to pay for the cost of extracting, processing, and distributing the oil, the industry will suffer from overcapacity. In a ‘free’ economy, Wall Street would subsidize the oil companies and the consumers who are able to buy oil products below cost. Now Hill thinks that governments will intervene and strip other assets to keep the oil ball rolling. In either case, the wealthy will be subsidizing the guy driving a pickup truck. Wealth will be disappearing. It will disappear slowly during the stall phase, but rapidly if investors actually figure out what is going on.

          If we look at the preceding paragraph, we find that there are at least two important items:
          *Ignorance on the part of investors
          *Gross inequities in the distribution of wealth
          In an ideal gas, all the molecules are pretty much the same. They can have different temperatures, but things average out. Those sorts of assumptions don’t apply to the world in 2016.

          The second observation came from Bill Clinton about 2 or 3 years ago. He was talking a little off the cuff about energy. He said that ‘the rich countries can afford to simply buy all the farmland in the poor countries to grow biodiesel crops to keep their cars running and let the people in the poor countries starve’. His scenario has subsequently played out in several poor countries. This phenomenon is, again, facilitated by the gross inequities in distribution of wealth.

          Clinton said that if Obama asked his advice, he would tell him to ‘close all the dumps’. If people can’t generate trash, then they have to fundamentally change their way of living. I found that a fascinating comment, and marveled at his willingness to state such a thing out loud while his wife was getting ready to run for President. But nobody followed up with any questions, so I am not sure exactly what he had in mind.

          So, the ability to continue dumping trash is another key element in the ‘stall speed phase’.

          Don Stewart

      • “If we have doctors making 20 times what poor workers are making plus lots of support staff, even mandating that poor people buy health insurance does no good. The poor cannot afford to pay the wages of the rich, even if an insurance policy spreads the high cost equally.”

        The good news is, the robots will help level that out, too. The experiences of hundreds of doctors can be shared with a vast number of robots, and anything new they learn is shared amongst them as well.

        Just a matter of figuring out how to keep people employed – as subsistence farmers / emergency services & military reserves / lifelong students / consumers, while the robots do most of the work. And figuring out how to get the currency units from the producers to the consumers so they can buy stuff, without the producers becoming discouraged and quit.

        Maybe everyone will become living advertisements, and spend a portion of the day watching ads, in order to get paid by the corporations who are competing for market share, so the people can buy the stuff from the corporations.

  24. Artleads says:

    Good to see there is thinking of how to better use median-strips, etc., within the US’s 4 million miles of “public roadway.” Re Irrigation: They overlook the fact that swales alone could bring on a notable increase of vegetation. And are they considering sewage from neighboring places? I’ve seen where forest-like growth emerges from sewage ponds. And sequestering carbon is just one of many uses for the vegetation. There could be firewood, along with more, even food.


    • Artleads says:

      It’s been hinted at here on FW that some changes which could soften the impact of collapse are quite doable and consistent with BAU pre collapse. Using median strips to grow trees seems like one of them. So if the “excuse” is to comply with the Paris accords (which I don’t take too seriously) that at least won’t do any harm to our air. And it could also be quite useful post collapse. The same kind of thing applies to creating dense pedestrian-oriented urban cores. Good economic strategy under BAU, and good post collapse strategy where walking will be mandated. The same goes for community building, etc..

      There is something disingenuous about this strategy, however. I believe that the post-collapse projects can’t keep pace with destruction by BAU as it cannibalizes more and more of its host environment. So projects like the median strip greening, which we might find ridiculous in itself are fueled by deluded people. But what’s the harm of getting a free ride from whatever it is they think they are doing?

  25. Rodster says:

    “The Fed Sends A Frightening Letter To JPMorgan, Corporate Media Yawns”

    Yesterday the Federal Reserve released a 19-page letter that it and the FDIC had issued to Jamie Dimon, the Chairman and CEO of JPMorgan Chase, on April 12 as a result of its failure to present a credible plan for winding itself down if the bank failed. The letter carried frightening passages and large blocks of redacted material in critical areas, instilling in any careful reader a sense of panic about the U.S. financial system.

    At the top of page 11, the Federal regulators reveal that they have “identified a deficiency” in JPMorgan’s wind-down plan which if not properly addressed could “pose serious adverse effects to the financial stability of the United States.” Why didn’t JPMorgan’s Board of Directors or its legions of lawyers catch this?

    It’s important to parse the phrasing of that sentence. The Federal regulators didn’t say JPMorgan could pose a threat to its shareholders or Wall Street or the markets. It said the potential threat was to “the financial stability of the United States.”

    That statement should strike fear into even the likes of presidential candidate Hillary Clinton who has been tilting at the shadows in shadow banks while buying into the Paul Krugman nonsense that “Dodd-Frank Financial Reform Is Working” when it comes to the behemoth banks on Wall Street.

  26. Vince the Prince says:

    Mainstream news outlets are already starting to use the phrase “economic collapse” to describe what is going on in some areas of our world right now.

    For many Americans this may seem a bit strange, but the truth is that the worldwide economic slowdown that began during the second half of last year is starting to get a lot worse.

    In this article, we are going to examine evidence of this from South America, Europe, Asia and North America. Once we are done, it should be obvious that there is absolutely no reason to be optimistic about the direction of the global economy right now. The warnings of so many prominent experts are now becoming a reality, and what we have witnessed so far are just the early chapters of a crushing economic crisis that will affect every man, woman and child in the entire world
    onomic chaos is erupting literally all over the planet, and global leaders are starting to panic.

    Economic chaos is erupting literally all over the planet, and global leaders are starting to panic
    Unfortunately, they have had seven years to try to fix things since the last global recession, and they didn’t get the job done. Anyone who believes that by some miracle they will be able to pull us out of the fire this time and that everything will somehow be OK is simply engaged in wishful thinking.

    • Veggie says:

      Fits in nicely with all the hastily arranged banking meetings around the world this week.
      Perhaps another “Lehman Moment” unfolding. ???

      • richard says:

        Hopefully, the thought that “It’s Only Money” is comforting.
        The next morning, everyone has a sore head, the place gets cleaned up, and for a year or two it is back to BAU.
        The coming money collapse, unfortunately, is our last chance to get things right before the stabilisers are taken off and the big problems have to be faced.

  27. Don Stewart says:

    Dear Finite Worlders

    Bingo! Some really interesting stuff this morning in The Organized Mind by Daniel Levitin. Page 287 and following in the English language paperback.

    ‘If the job requires adaptability and complex learning, independence and initiative, or high motivation, internals would be expected to perform better.’
    ‘When the job requires complacence and strict adherence to protocols, the externals would perform better.’

    Now, most of us probably think that the coming challenges are going to reward the internals, because of that ‘adaptability and complex learning’ part. So let’s look at the definitions and the science more closely.

    ‘But there is a critical point about differences between individuals that exerts arguably more influence on worker productivity than any other. The factor is locus of control, a fancy name for how people view their autonomy and agency in the world. People with an internal locus of control believe that they are responsible for (or at least can influence) their own fates and life outcomes. They may or may not feel they are leaders, but they feel that they are essentially in charge of their lives. Those with an external locus of control see themselves as relatively powerless pawns in some game played by others; they believe that other people, environmental forces, the weather, malevolent gods, the alignment of celestial bodies—basically any and all external events—exert more influence on their lives than they themselves do.

    Locus of control turns out to be a significant moderating variable in a trifecta of life expectancy, life satisfaction, and work productivity.

    Successful students tend to be internals. Women who are internals favor thin fashion models, while externals favor heavier models. Externals tend to believe gambling myths, and believe that if they need money, gambling can provide it.

    Locus of control appears to be a stable internal trait that is not significantly affected by experiences.’

    As evidence of the ‘stable trait’, some small businesses which were destroyed in a hurricane were studied. They were restudied three years later. Some of the businesses had re-opened and thrived, some had declined or vanished. Those owners who were internals and had succeeded had become even more strongly internal. Those owners who were internals and had not succeeded were still internal. Those owners who were externals and had succeeded still attributed their success to luck or God or something external. Those owners who were externals and whose businesses were failing were even more strongly external.

    The locus of control construct is measurable with standard psychological tests.’

    If internal locus of control is so great, why don’t all businesses hire these people? Because many businesses have many jobs which require that people just follow the rules. Putting an internally focused person in a ‘follow the rules’ job is asking for trouble. They will start trying to improve it…not what the management wants.

    In my opinion, the defining challenges of the next few decades are likely to include adapting to very different circumstances and require complex learning. Which means that if you are looking for your 150 Strong group, you need to look for some leadership which is characterized by internal locus of control. You still need some people who can follow directions…you don’t want 150 people, all of whom are following their own agenda. But you don’t want to become part of a group of 150 which is rudderless and waiting for some external event to save them all (Jim Jones clan? those expecting to be whisked up to heaven? anyone still waiting for the Mayan apocalypse?)

    As for personal advice (I don’t think that I can be sued for malpractice on this, since no jury could be convinced that I was of sound mind and body), it seems to me that if you are an external, you need to attach yourself to some group with good internal leadership. Realize that externals ‘experience more stress and are prone to depression.’

    If you are internal, you will need some followers and compatible internal colleagues and skill in managing differences of opinion between strong willed individuals.

    In all cases, I think, being able to grasp reality will be a plus, as well as all the other adaptive processes that Levitin describes in his book.

    Don Stewart

    • Stefeun says:

      It seems to me, intuitively, that a “good” group should comprise the whole set of psychological profiles, and in suitable proportions. It also depends on the group’s environment and its evolution along time, which tells what will be required from the group in real time.

      Having no idea of what it could resemble to, I googled “optimal distribution of psychological traits in a small group”, and got quite a lot of results, among which this Google Quest to Build the Perfect Team (by Charles Duhigg, Feb.25, 2016):


      It’s quite a big piece, that I didn’t read yet (but I will!), and also seems to be a good place to start from, as it provides lots of info. Albeit not Permaculture or Survivalist oriented, I’m afraid.

      • Don Stewart says:

        Decades ago I was in an exercise with the group I managed. It was about ‘valuing diversity’. We had a consultant come in and test people on several dimensions. They were more complicated than the internal vs. external, but the same sorts of ideas. Then the consultant divided people according to their traits…all the hard nosed leaders in one group…all the meek people waiting to be told what to do in another group, etc.

        All the groups were given the same challenging task. They had 20 minutes or so to come up with a solution. The meek group never got anything done, as you would expect. The hard nosed leaders almost got into a fist fight and had to be calmed down. They didn’t come up with anything either, but at least we prevented bloodshed.

        Then the consultant divided the people into balanced teams, with some leaders and some followers, etc. Another challenging problem to be addressed. Peace, harmony, and solutions were forthcoming!

        I think that the people who learned the most were the hard chargers. They learned that they needed followers. I think the followers always understood that they needed leaders.

        Don Stewart

        • richard says:

          Just on the subject of learning from a group, I’ll mention that I discovered that when given tasks everybody wants a margin – eg a wall that should take a week to build expands to a week and a day. The trouble with that is compound interest tends to apply, so the job of management here is to hunt down the margins and make sure they don’t overlap and that they are fair. Just sayin’

    • Artleads says:

      Thanks Don. This speaks to the challenge of the moment. I live in a place where the 300 strong are exceptionally independent–perhaps mostly internals. Getting them to pull together in the same direction is much like herding cats. But they like what they like and can come together in certain (disconnected) spheres simply by some mysterious convergence of interests and views. The founders some 40 years back did indeed sit, reflect and plan. Very well. And it has served satisfactorily up till now. But those founders are fading away…

      I’ll copy this post to a friend in town.

    • Stefeun says:

      Thanks Yoshua,
      Let me pick the very last sentence of the article:

      “Certainly with the monetary policies that we see, it makes sense to be watching how risks are moving around the financial system.”

      Everybody seems to know the music will stop soon. Now the game consists in holding the lowest possible level of RISK when it happens.
      What they didn’t factor in is the magnitude of the shock when SHTF…

    • I noticed this report as well: http://www.marketwatch.com/story/chinas-giant-bonfire-of-debt-needs-one-spark-to-become-an-inferno-2016-04-14

      It says, “Ponzi lending? In China, 45% of new company debt is raised to pay interest on existing debt”

      • Fast Eddy says:

        Thanks for the link….

        ‘Ponzi lending? In China, 45% of new company debt is raised to pay interest on existing debt’

        I was aware that this was happening — but on this scale…. this is incredible…

        I like the accompanying photo…


          • Fast Eddy says:

            This exposes David Copperfield as an amateur….

          • Yoshua says:

            The Peoples Bank of China is said to be switching from foreign “credit” reserves (U.S treasuries) to real reserves (gold), it seems that this is an indication that they are preparing for hyperinflation to clear off all debt.

            Those who own gold, the infrastructure, industries, real estate in populated cities and in the ghost cities and other tangible assets will be the winners after the coming wealth transfer… if there is future after this.

            • Rodster says:

              There will be NO winners in the coming reset, even China. If you are going to back a currency with gold then the economic system has to completely change from it’s current debt based growth model to just the opposite. Good luck feeding 7.2 humans because then fast Eddy’s scenario plays out.

              The US was taken off the gold standard because of it’s high debt levels but more so because we were trapped in an economic system that requires debt to continue growing and there wasn’t enough gold to fund that type of debt. The Chinese are great a copying others but fail miserably when it comes to thinking outside the box and more importantly, getting it right.

              When the mother of all resets occurs who knows what China will even look like on the map. 😉

            • Yoshua says:

              The gold might just be to protect the wealth during the hyperinflation. After the reset the central banks might return to gold standard for a short moment to install confidence and then return to fiat currency again after some time.

              They might of course try to continue to inflate the debt bubble until it pops in a unorderly manner.

            • Rodster says:

              Then if your scenario plays out then there is NO incentive for anyone especially China to give up it’s gold. Because as you stated and I have said many, many times before and History says it’s true……”that all gold backed currencies turn to Fiat currency and Fiat currency becomes worthless paper in the end”.

              Humans have a propensity for returning to it’s own vomit much like dogs. We keep doing the same stupid stuff expecting different results. This time is different because we are all in the same lifeboat and our environment is collapsing around us.

            • Yoshua says:

              That the best we can do ?

          • This is concerning. China is using an awfully lot of debt to produce its GDP.

            • Fast Eddy says:

              One can understand why so many wealthy Chinese are dropping money into foreign property and other assets…

              If I owned a company that was borrowing to pay interest on previous debts — I would be borrowing as much cash as was possible… and getting it out of the country any way possible.

              Of course what these people do not understand is that when China goes (or Japan or any other country that is a key participant in BAU) everything goes…

              Their over-priced properties in Vancouver, and London and Sydney and New York …. will be worth zero.

              There is not hedging this situation

      • Stilgar says:

        I’m in rome😎 Looks like China is pushing the last part of outside of the envelope


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