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 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. 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 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.
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:
- 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.
- 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.
- 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.
- 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.)
- 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.
- 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.
- 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.
Conclusion
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.
We do not have a wage inequality problem, nor do we have a debt problem. Bear with me for a second.
People will accept any work, no matter how backbreaking or humiliating, as long as through that work they can acquire food, shelter, and some form of entertainment/distraction. We have already made the transition to cheaply produced foodstuffs, shelter for all, and recycled entertainments. So yes, you do need to keep the payment system functioning as such, but the amount of wages or inequality is not indicative of short term collapse, but merely of long term structural decline.
We don’t have a debt problem because debt is merely a fiat accounting entry. There is no real collateral backing it, nor does there need to be. Any government can, through the digital printing press, create enough currency units to generate inflation. It’s just a question of how much inflation, and distributed over how much time. Currently, it seems to be around 1-2% inflation, sometimes higher, sometimes lower, depending on what’s measured, spread over roughly the next 15-30 years. Although, we will almost definitely have major currency events in that time frame.
So if we don’t have a wage inequality problem, and we don’t have a debt problem, what problem do we have? We have a problem of too many people chasing a declining quantity of real wealth. You deal with this through war and rationing of healthcare. No man, no problem.
Please read my article https://ourfiniteworld.com/2016/03/17/our-economic-growth-system-is-reaching-limits-in-a-strange-way/
Debt is not simply an accounting entry–we need it to get fossil fuels out of the ground. It is like the opposite side of a coin. It isn’t something that goes away by itself. I talk about the issue in many posts, including https://ourfiniteworld.com/2012/12/12/why-malthus-got-his-forecast-wrong/
Our economy is held together by our financial system. It is what sets prices and our priorities in general. I am afraid this is not easy to understand.
Gail, bellow in the link you find a good short overview of the past, present and future in terms of the debt and priorities..
The system you describe is no longer valid, after the sovereign bonds monetization, there are also junk bonds, equities, .. to be mopped up and never to be seen again. This has been already all announced, and “the markets” apparently dig it, some obviously even front load it. Perhaps at some future crossroad the finite world issues might clash with these can kicking attempts, but we can’t predict the future. The history is full of examples how to stretch/bend “unwelcome” reality for centuries and decades, the latter is likely the case for now.
http://www.zerohedge.com/news/2016-03-30/european-peripheral-corporate-bond-yields-tumble-record-lows-ahead-draghis-monetizat
The chinese are also doing some mopping:
http://www.zerohedge.com/news/2016-03-31/buttonwood-spv-striking-details-how-chinas-central-bank-directly-buying-stocks
Worldofhanuman is speaking about decades before SHTF. I find it hard to believe. The CB’s can mop up the dirt in the financial markets but the evil spiral of rising unemployment and decreasing revenues of companies will be harder to mop up. I fear that the modern society would never be able to manage a deep depression.
I agree that that is a very good article. What the article says is,
What goes wrong is the mandate to keep monetizing the debt. The Eurozone collapses. Banks collapse. International trade collapses. There are too many problems with lack of liquidity.
Well, Gail, we may disagree on some aspects of economics but you are spot on here.
“We do not have a wage inequality problem, nor do we have a debt problem.”
This one time your off base, dolph.
http://www.motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph
Gail and others, that link has some really good wage inequality graphs. The top .01% average over 23 million a year. Wow!
It also has some links at the bottom to more data.
http://www.visualcapitalist.com/charting-automation-potential-of-u-s-jobs/
Guess I should have addressed the above to Stufeun. Thats what I get for posting before reading. 🙂
Thanks Pintada, Nice link.
But not sure it was for me, as I didn’t talk about automation in this thread.
Interesting! There are an awfully lot of people in the $10 to $20 per hour wage range, and an awfully lot of those jobs have automation potential.
The automation idea is an interesting one, but there is still a line drawn between what a human and a machine can do. For example, a robotic machine can be automated to spot weld a car frame together in a certain timed and located sequence. However, when it comes to hauling brush, tree trimming, landscaping, prepping and setting tiles, electrician, beautician, plumbing repair, essentially anything in which a body has to move and make different decisions in different settings at irregular times will not be conducive to robotics. It’s easy to think in terms of predictable circumstances that a robot could follow, but life isn’t like that very often. Usually we run into exceptions – this doesn’t fit, or something breaks off and has to be removed with a special tool, etc. If every time a situation arises that the robot has to stop, then it’s most likely more economical to just have a person do it.
We would lose all of our jobs, if this weren’t the case. Of course, what happens is that we move increasingly to a “disposable” society. If something doesn’t work, instead of fixing it (with human labor), you buy a new one and plug it in.
FE has already quoted David Korowicz, I’d like to paste another excerpt that echoes Gail’s answers, rather listed strategies, to “solve wage inequality problem”.
Korowicz takes a global point of view:
“The only possible thing we can do globally to provide investment energy and resources for the poor is to take it from the richer world of real resource use, not the piles of paper and electronic promises. And those resources are used in our food, clothing, healthcare, sanitation, cars and holidays, electronic devices, books, light and heating. Behind these personal goods and services are complex infrastructures, factories upon factories, shipping and airports, schools and civil administration etc, all across the world. To significantly lift the real poverty of the global bottom third would require that at least the global 25% would have to undertake a massive drop in consumption, which would affect even people on social welfare across Europe and in an interdependent world cause disruption across the globe, even for poor people. However, I mentioned that our complex socio-economic system is growth and scale adaptive. That means that a withdrawal of consumption of such scale would most likely cause a largely uncontrollable and systemic collapse of the globalised economy. Energy and resource use would collapse (80, 90%??) and so to would the system integration in the globalised economy, but this is what would be needed to manufacture and deploy poverty alleviation measures for the global poor, which would now include everybody!”.
This The only possible thing we can do globally to provide investment energy and resources for the poor is to take it from the richer world of real resource use, not the piles of paper and electronic promises. And those resources are used in our food, clothing, healthcare, sanitation, cars and holidays, electronic devices, books, light and heating. Behind these personal goods and services are complex infrastructures, factories upon factories, shipping and airports, schools and civil administration etc, all across the world. To significantly lift the real poverty of the global bottom third would require that at least the global 25% would have to undertake a massive drop in consumption, which would affect even people on social welfare across Europe and in an interdependent world cause disruption across the globe, even for poor people. However, I mentioned that our complex socio-economic system is growth and scale adaptive. That means that a withdrawal of consumption of such scale would most likely cause a largely uncontrollable and systemic collapse of the globalised economy. Energy and resource use would collapse (80, 90%??) and so to would the system integration in the globalised economy, but this is what would be needed to manufacture and deploy poverty alleviation measures for the global poor, which would now include everybody!”.
This is from http://www.feasta.org/2014/03/24/anger-complicity-in-a-time-of-limits/
which is the 2nd part of an interview; here’s the excellent 1st part:
http://www.feasta.org/2014/03/17/how-to-be-trapped/
(already linked here before, worth reading twice!)
Another good one from the same article:
(he refers to that we’re members of the richest 15% and we blame the 1% and tend to forget the 85% poorest)
“We are the global haute-bourgeoisie railing against the global aristocracy while claiming the mantle of the global proletariat. It allows us to feel righteous while skirting the issues that make us complicit.”
“(he refers to that we’re members of the richest 15% and we blame the 1% and tend to forget the 85% poorest)”
Ah, so true, Stefeun! We don’t see the sweat shops putting together shoes, shirts and other products at tiny wages living with 16 other people in a small room. We don’t see the children in India chipping mortar off bricks to reuse them for pennies a day. Out of sight, out of mind while we jostle for position amongst the richest 15%.
Very true: in a comparative sense, we all live like the owners of roman villas, having nice dinner parties on comfortable couches, looked down upon by portraits of our ancestors, while the slave-master beats the slaves out of sight in the slave-quarters, and the corpses of the dead ones are thrown on a dung heap.
Then again, just as a super-high-net-worth person does indeed get depressed at the loss of a few million, which do not affect his way of life one bit, so the mass of people in the advanced (decay) economies are bound to feel aggrieved even though they are among the lucky: fed, clothed, housed, except for very few, even when without work. Constant advertising promoting the consumer ideal does not help the acquistion of a sense of perspective.
I find that keeping a sense of global perspective eliminates all self-pity: I’ve lost 60% of my income since 2008, and another big jolt down is underway, but boy do I know how very fortunate I am – I might even look back on these as the Golden Years: I’m not an Asian textile worker forced to go into a creaking and unsafe building in order to avoid certain starvation or prostitution.
Good perspective and healthy attitude, congrats! We have to husband what we have and don’t self-pity the drop of “living comforts/standards”, people from semi/core are still comparatively very rich. Imagine to be an urbanite Asian, aggressively toiling people bellow him for decades and the result? now acquiring rentals in high rises and staring at fat bank account. This could turn into zero value in an instant, while let say French villager has got real abundance all around.
Yes, Worldof,
but we’re hard-wired to look for heights, for reaching the skies, for MORE. (Hi Norman!)
Don Stewart talks about neurotransmitters ? getting fired up–and not money per se–as being what motivates people. Living with”less” in a more stylish, imaginative, and aesthetically rich way can perhaps compensate for lost money…up to a point. The artist has a role to play.
Another chart showing the decline in conventional oil since 2005 (with Deepwater as part of conventional?). Natural Gas Liquids seems be some 15 million barrels per day of global production.
https://aleklett.files.wordpress.com/2016/01/world-energy-outlook-2015-nep.jpg
The simplistic faction of narrow viewpoint peakoilers basically claimed around mid 2000s the future is only the dark green color, i.e. fast collapse as per your WEO2015 graph. However, even if we strip down completely the light green color bars of yet to be found/developed category, we are somehow at bumpy plateau or gently sloping towards 2040, thanks to the yellow bars. This is due to relatively abundant natural gas and derivatives.
National crash program to convert the core of the machine fleet to natgas (delivery trucks, tractors, locomotives, ..) is nothing extraordinary, given what we know about past gov crash programs in times of real pressing crisis.
Hence, the future is likely bleak, you will be chipped, under omnipresent digital surveillance 24/7/365 authority, not using physical cash, have no access to cash out your “pension funds”, most likely not allowed to drive personal car as we understand it today, but on the other hand not starving-hungry either for the semi/core countries. There are decades left inside such dystopian future, yet this is clearly not reality of “collapse proper” to speak about.
… of particular note is the section called “Yet to be Found” which in this chart is equal to 10M barrels per day by 2040.
Well … 10M barrels per day is equivalent to another elephant field.(Saudi Arabia’s total daily production)
Since the 1960’s, an elephant field has not been found despite trillions invested in exploration worldwide.
The chart would look a lot different if that “Yet to be found” section were reduced by say… 50%
Also….
As a thought exercise, remove the yellow sections. Cars, Trains, Planes, and Ships (for the most part) cannot run on “Natural gas liquids”. IMHO this should not be counted in the “Oil Complex”.
Then reduce the “Yet to be developed” bars by about 25% because of all the projects now cancelled or delayed. (Will all of them come back on stream? will current wages and finances allow it ?)
The chart looks VERY different when that line of reasoning is applied.
Also note…
(The chart also counts in the Orinoco Tar deposits in Venezuela. What are the chances of that coming on stream in time help the situation? The country is in chaos and the finances have totally collapsed)
Natural gas liquids is a combination of different liquids, including ethane, propane, butane, isobutane, pentane, and “pentanes plus.” https://www.eia.gov/todayinenergy/detail.cfm?id=5930
Ethane and propane will never end up in gasoline, but the others can end up there (according to the EIA link), especially in the winter, when evaporation is not as much of a problem.
The price for the mixture of liquids in NGL has dropped greatly, because of overproduction. It was only $3.69 per million Btu in January. https://www.eia.gov/dnav/ng/hist/ngm_epg0_plc_nus_dmmbtum.htm Much of it must be selling as an alternative to natural gas, for burning. The Henry Hub natural gas spot price was 2.28 per million Btus in January. https://www.eia.gov/dnav/ng/hist/rngwhhdm.htm
Your claim that Trains, Ships, Tractors, Buses/Carz can’t run on various propane-butane mixes from NGL (liquid-to-gaseous) is preposterous. It has been done for decades, and only in our street there are several such machines operational.., my point was gov crash program can easily convert more of these on the truck/tractor/train fleet side as well..
Look what I found!!!
This is what collapse will look like when it gets underway…. it will of course get far worse this time — because the power ain’t coming back on …
Enjoy:
“.get out live life a little…”
Fast Eddy travels the world and sees and does more than most people. End of the World Tour.
Dear Finite Worlders
Consider three different scenarios:
First, this post by Gail. Essentially, nothing can be done.
Second, the response to Gail and other commenters by BW Hill:
“In my view, a major reason why fossil fuel prices are now low is because of the low wages of “ordinary workers.”
Response:
‘Another cart before the horse economic approach! If wages went up a hundred fold the ratio of FF prices to wages would not change. For oil, the end consumer, is now paying the lowest price per BTU that they have since 1973. The producers, on the other hand, are going broke; having seen their total revenue fall by $5 trillion per year in the last 22 months.
The total energy pie is shrinking as a result of depletion. The entropy production that is mandated by physics has now overcome the ability to compensate by increasing production. Higher wages are not going to mitigate this situation. FF prices are at their lows because FFs are losing their ability to power the economy. Tinkering around with some outdated economic hypothesis is not going to alter the laws of physics. It will only serve to move hypothetical currency from one hypothetical pile to another.
Until the world begins to face its energy problem for what it is, an energy problem; economies will continue on their downward deflationary spiral. Printing piles of currency with no intrinsic value, or increasing wages are just exercises in futility. They are processes that will have an effect similar to what moving the deck chairs around did on the Titanic!’
Back to me.
Both Gail and Hill are, each in their own way, doomers. Now consider the third scenario. In Miraculous Abundance, the two French farmers tell us a couple of facts. On the farm, industrial agriculture spends about 2 calories for every calorie of food produced. From farm field to plate, the industrial food system spends about 10 calories per calorie eaten. On page 139 of the English language book:
‘To maintain a constant level of production in a system based on an abuse of natural resources, inputs must be injected in increasing quantities, until the resources are depleted and the system collapses. At a certain point, the operating costs of procuring the resource are such that the system ceases to be economically viable. Since 1945, in the United States, pesticide use has increased by 3,300 percent, but pest-related crop losses have not diminished. North American agriculture must now invest $2.70 of petroleum-based inputs to produce $4.00 worth of crops.’
The logic and the numbers are very similar to the Etp model for oil. That is, the system no longer makes thermodynamic sense.
If things are so desperate, why does Gene Logsdon say ‘I don’t know when I have been more encouraged about the future’? (Gene has been farming in Ohio for more years than most of us have been alive.) I can think of at least six reasons Gene might be optimistic:
*The scientific study of the thousand square meter plot shows that the entropic decay of the industrial food system has advanced to the point where a radically different method is now actually feasible economically.
*The radically new method does not require ‘official’ blessing. Governments and universities could, theoretically, assist the transition from the current destructive system to an entirely better system, but we don’t need to hold our breath waiting for them to experience enlightenment. Anybody can do it. Even people who are ‘patio farming’.
*The chapter The Forest Garden lays out a very different conception of agriculture than the Steppe agriculture which has dominated European societies. The authors point out that the next step beyond the Steppe is desertification. A forest maintains itself and improves its environment indefinitely into the future.
*The chapter Agriculture of the Sun describes how we transition from fossil fuels to solar.
*The chapter Working by Hand describes how human hands and brains and community knowledge can produce more than machines ever could.
*The chapter To Be Small describes how working by hand means the end of globalized food, and the re-emergence of a rewarding local economy, including kitchen gardens.
*The authors are describing a very good way to live.
As an antidote to despair, I strongly encourage everyone who gives a damn to read Miraculous Abundance. Gene Logsdon is right…’the right book for right now’.
My final comment. Don’t get hung up on ‘saving 7.3 billion’. While the methods outlined in the book CAN feed 9 billion, many, many people would rather die than do what the book describes. Neither you nor I can save them. Nor will all the debts be paid.
Don Stewart
‘Another cart before the horse economic approach! If wages went up a hundred fold the ratio of FF prices to wages would not change’
++++++
“‘Another cart before the horse economic approach! If wages went up a hundred fold the ratio of FF prices to wages would not change’”
Except that temporarily, workers would be able to pay off their debts, thus enabling a new cycle of credit expansion. For a short time, workers would have more money to spend on oil products, since they would be ahead of their liabilities and fixed costs. Then of course their desire for more material goods and services, travel and entertainment, novelty and hormone triggers would lead them back into debt and declining consumption.
If wages went up a hundred fold, hyperinflation would ensue.
Stilgar Wilcox
I don’t know what Hill had in mind with the statement. My guess is that he is saying that a country can revalue its currency (redeem all the dollars and reissue ‘new dollars’) and nothing physical would change.
He might also be talking about a general inflation or deflation where all the boats tend to rise or fall simultaneously.
Don Stewart
Right.
Let’s see if this works. Google translated version of “Maraîchage&biologique&permaculturel&
et&performance&économique& Rapport!final!de!l’étude!”
Split in two parts to get past 1 MB limit on Google Translate and posted on pastebin:
Study Vegetable growing organic permaculturel Part 1
http://pastebin.com/5ppnBWtJ
Study Vegetable growing organic permaculturel Part 2
http://pastebin.com/MMgevdXU
For some reason every word is in quotes. Maybe I’ll remove those later. I did not see any copyright that says not to do this, but if anyone notices it let me know and I’ll remove it.
I saw Trump on the teevee last night for the first time (couldn’t sleep after a late night shinny game) —- he is of course utterly ridiculous — but that does not matter… what matters is that no mater what absurdity he utters people will support him … it’s a symptom of a dying system… as is the Jerry Springer show….
Take a look at this ….
https://www.youtube.com/watch?v=1_f1ZkwD_ww
And this
https://www.youtube.com/watch?v=Ah_6w2BVLHM
And this
https://www.youtube.com/watch?v=_dIBL4tYQPI
Imagine all that energy directed in the wrong direction ….
Do you think the end will be televised, and will I still be able to buy popcorn for it?
https://usatftw.files.wordpress.com/2015/06/dkjhx9l.gif?w=660&h=495
It is sometimes argued that there is a huge amount of oil in deposits such as the Canadian tar sands. The questions this claim raises are “When will it be on-stream?”, “At what rate can oil be made available?”, “What is the net energy return?” and “Can society afford the cost of extraction?” If less available net energy from oil were to make us very much poorer, we could afford to pay even less.
Eventually, production would no longer be viable as economies could no longer afford the marginal cost of a barrel.
In a similar vein, our seas contain huge reserves of gold but it is so dispersed that the energetic and financial cost of refining it would far outweigh any benefits (Irish territorial waters contain about 30 tons).
http://fleeingvesuvius.org/2011/10/08/on-the-cusp-of-collapse-complexity-energy-and-the-globalised-economy/
Nice analogy….
Collapse dynamics
The oscillating decline model does not account properly for some of the embedded structures of the global economy which, while relatively obvious, have been obscured by the fact that they were adaptive in a growing economy. If oil production declines, and we cannot fill the gap between the energy required for growth and what can be produced, as we saw in the oscillating decline model, this limits the availability of other types of energy, then the global economy must continue to contract. In short, humanity is at, or has exceeded, the limits to growth.
Embedded structures that fail to contract in an orderly manner will break down. The structures that will break down include monetary and financial system, critical infrastructure, global economies of scale, and food production.
As argued earlier, these structures are deeply inter-dependent. As a result, they will reinforce each other’s collapse. Their collapse undermines the whole operational fabric and the functioning of the global economy and all it supports.
It has been argued so far that our civilisation is a single, complex adaptive system. Complex adaptive systems, and the sub-systems of which they are comprised, are a feature of open thermodynamic systems.
And while they show great diversity, from markets to ecosystems to crowd behaviour, their dynamic properties have common features. For most of the time complex adaptive systems are stable, but many of them have critical thresholds called tipping points, when the system shifts abruptly from one state to another.
Tipping points have been studied in many systems including market crashes, abrupt climate change, fisheries collapse and asthma attacks. Despite the complexity and number of parameters within such systems, the meta-state of the system may often be dependent on just one or two key state variables. [22]
Recent research has indicated that as systems approach a tipping point they begin to share common behavioural features, irrespective of the particular type of system. [23] This unity between the dynamics of disparate systems gives us a formalism through which to describe the dynamic state of globalised civilisation, via its proxy measure of Gross World Product (GWP) and its major state variable, energy flow.
Catastrophic bifurcation is the name given to a type of transition where once the tipping point has been passed, a series of positive feedbacks drives the system to a contrasting state. For example, as the climate warms, it increases methane emissions from the Arctic tundra, which drives further climate change, which leads to a further growth in emissions.
This could trigger other tipping points such as a forest die-off in the Amazon Basin, itself driving further emissions. These positive feedbacks could mean that whatever humanity does would no longer matter as its impact would be swamped by the acceleration of much larger-scale processes.
http://fleeingvesuvius.org/2011/10/08/on-the-cusp-of-collapse-complexity-energy-and-the-globalised-economy/
Like it or not….. collapse will be fast… and contrary to popular opinion — collapse has not even started yet…
We are here:
http://joshuafinley.org/wp-content/uploads/2015/11/under-pressure.jpg
Yes, collapse has not started. Things can get progressively worse for quite some time. This is true of the past 2 years. So, the idea that you have to collapse right away as things get worse is false. I think this can continue for another 5 years or so,
Agree.
But as Korowicz suggests — at some point a tipping point is reached.
One day you are waking up and turning the coffee machine on — and the next — you are fighting for your life.
That day will come.
Hopefully later than sooner.
I wouldn’t be surprised if we are having this conversation 15-20 years from now.
Collapse started in 1971. I note Gail agrees. In 15-20 years time we [those still here] will be discussing what we didn’t do but should have done.
Ok. I get it… maybe… sort of. A total global collapse, the power grid comes down and nuclear plants start to melt, mass starvation and death.
Today it’s still possible to go to Greece on vacation, enjoy booze and hookers. Since the economic “collapse” in Greece and the following poverty, young women in mass has been forced into prostitution, which has pushed the price down to 5 dollars an hour to use a woman’s body. Market economy is still working with supply and demand determining the price. The situation is awful but it’s not a total collapse.
Good points, it could be argued Greece has become a laboratory rat for some of the near future governance approaches applied to more core situated countries as well (Spain, Italy, ..) Greece has been propped up by central banksters action plan to keep the overall rent exploitation system running a bit longer, as not to trigger some domino effects. Unless you see German and Austria banks, which are in global scheme just a cog wheel, going under, nothing serious happened yet. The global system is still robust, debts and deflation can go much deeper, and the most pressing collapse prone entities of the day could be easily saved by various equity and bond purchase/mop up programs as evidenced openly by the central banksters own words and actions.
Sorry folks, we have to see the reality for what it is, not for what we would like to dry run our otherwise academic logic arguments, the system post 2008/9 threshold is operating on a very different foundation. Not indefinitely but it can continue humming for a long time from a single human lifespan perspective.
I looked up the oil consumption in Greece. It seems that what the Troika did in practice was to cut down the oil consumption in Greece.
http://crudeoilpeak.info/wp-content/uploads/2015/08/Greece_oil_consumption_vs_dwelling-price.jpg
War and destruction of oil consuming nation not needed in the global economic network like Afghanistan, Syria and Yemen perhaps is in the cards to keep the core warm and snug a bit longer.
Every country that is experiencing economic contraction seems to experience a decline in oil consumption and in energy consumption in general. Greece uses a lot of oil (tourism, also for some of its oil because of the many islands). This is a chart I made a while ago showing all of the PIIGS oil consumption.
“collapse has not even started yet”
Yeah, I can still get my chicken doodles from the supermarket 🙂
Fleeing Vesuvius: Overcoming the risks of economic and environmental collapse
Good to see even David Korowicz is in on selling some hope. I notice his contribution is the beginning, explaining the inevitability of collapse.
Apparently, in my view, this wage inequality was primarily one of intentional public policy enaction rather than “not enough”, considering it began primarily under the Republican administrations starting with Ronald Reagan. They promoted the mantra taxes are not desirable with the intent of drasticly lowering the tax rate of the wealthy class, ratching up huge deficit spending with the intent to dismantle the social support net as something as unaffordable. Naturally, this public spending largely benefited the investor class of defense industries (ie Halliburton, Dick Cheney.
Recommended reading of the tactics used of the PTB the book by Naomi Klein , The Shock Doctrine,
The Shock Doctrine, Klein asserts that only in the late twentieth century did it become programmatic among a cadre of power brokers—libertarian intellectuals, corporate executives, and political elites— intent on inducing economic transformation on a global scale. Milton Friedman, the late University of Chicago professor who is commonly called the most influential economist of the last fifty years, was the inspiration. Friedman laid out his theory in the 1982 preface to his signature treatise, Capitalism and Freedom, originally published in 1962: “Only a crisis—actual or perceived––produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. . . . Our basic function [is] to develop alternatives to existing policies, to keep them alive and available until the politically impossible”—by which he meant enacting radical deregulation, privatization of national industries and public-sector programs, and deep cuts to the welfare state— “becomes the politically inevitable.”
Yes, the next crisis is already baked in the cake and as Gail pointed out there will winners and losers….the winners stacking the odds overwhelmingly in the favor.
Analysis: The U.S. economy has stalled, again
http://www.msn.com/en-us/money/markets/analysis-the-us-economy-has-stalled-again/ar-BBr7aOf?ocid=spartanntp
The economy has been stalled since 2001 and certainly since 2008. Hence the creation of the virtual economy.
Thanks! It is beginning to look like the US economy is close to stall speed. The US is still doing better than quite a bit of the rest of the world.
Dear Finite Worlders
Here is the PDF (in French) of the study which determined that a small farm working with hand tools and 1000 square meters in Normandy can be financially successful:
http://www.fermedubec.com/inra/Rapport-étude-2011-2015-Bec-Hellouin_30112015-2.pdf
I tried to get it translated into English, but I received a message that it is too big. Someone more skilled than I am may be able to get a translation.
Don Stewart
Some interesting nuggets in the news today:
“Easy money, expansionary monetary policies globally and significant government leveraging has resulted in global debt surging to $153 trillion as of 3Q15 according to data provided by BIS. The important point to note here is that $153 trillion in debt represents non-financial sector debt…
“Clearly, the world is in a bigger mess than it was in 2007, and this implies that the next crisis is likely to be bigger than the last one.”
[http://seekingalpha.com/article/3961869-setting-stage-next-crisis-world-debt-153-trillion]
“Data over the last week shows that U.S. corporate profits are struggling big time. And it isn’t just energy companies.
“Late last week, the Department of Commerce said corporate profits before taxes fell 11.5%, by nearly $160 billion, from a year ago. For the year, profits decreased $64 billion, compared to an increase of $35 billion in 2014 from the year before.”
[http://fortune.com/2016/03/29/recession-corporate-profits/]
“Corporate debt has had a terrible start to the year. According to S&P Capital IQ’s High Yield Bond blog, the rate of defaults for corporate debt year to date has reached levels not seen since the recession in 2009.”
[http://uk.businessinsider.com/corporate-debt-defaults-march-2016-2016-3?r=US&IR=T]
“As of Monday, a paltry 53 high-yield bond deals were marketed so far this quarter in the U.S., according to financial services data firm Dealogic, amounting to just $33.5 billion worth of issuance.
“With the exception of one period — the third quarter of 2011, when 51 high-yield deals were marketed — it’s the worst single quarter on record since the global financial crisis. It’s the third straight quarter the number of marketed high-yield deals fell below 60, a first since the crisis.
Worse still for Wall Street, U.S. banks’ share of revenue on leveraged lending, which fell to 55 percent at the end of last week, is the lowest year-to-date share on record, according to Dealogic. U.S. banks’ average share of the market here has been 63 percent over the last decade.”
[http://www.cnbc.com/2016/03/29/energy-woes-crush-lending-pipeline.html]
And re that last article, tomorrow is March 31st – banks will be reviewing the credit lines of commodity extraction businesses…
Thanks for al of the links. We are in big trouble, when debt stops growing. That is exactly what happens when debt default levels start rising and “leveraged lending” (sort of like subprime bonds, only issued by banks) cuts back as well.
The minimum wage seems to be getting more attention:
http://www.nytimes.com/2016/03/29/business/economy/15-hour-minimum-wage-in-california-plan-has-some-worried.html?_r=2
IMO< we began at the confluence of two[at least] events. According to some we crossed over into planetary unsustainability in about 1970 and then in August 1971 we went off the gold standard, which ushered in fiat money and endless credit. The decline since then has been relentless, only masked by the debt overhang robbing the future for our current needs and wants. It's a Wile-e- Coyote moment just before he looks down after running over the cliff.
“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.”
It’s amazing how low oil prices have been and for the length of time without much in the way of growth to use that cheap stuff. Obviously your point Gail about workers wages is the culprit. I overheard a conversation in a Home Depot the other day, in which one of the workers said, “I really need to get a 4th job to pay all of our bills.” It was sort of a joke, because he didn’t have time available to take on another job but also a commentary on how much things have changed since just a few decades ago.
The longer oil prices remain low like they are now, the more detrimental damage it does to the companies that provide the energy to move the global economy. The clock is ticking on how long prices can remain this low and the business of providing all that energy remains viable. What if oil supply drops from a peak while oil price remains low. It could conceivably trend down together until things really fall apart. As far as collapse goes, i.e. when it may occur, the stat I watch more than anything else is oil price, because as oil price goes, so goes our energy. Below the producers floor price too long and that support system for the economy will no longer work and economic contraction will ensue.
I agree. The clock is ticking on how long oil prices remain suppressed. If oil producers cannot make a profit at the current oil price then, they will cutback on exploration. Right now we are in a lull and we are at the mercy of depletion. There are no new projects coming online. There have been no giant oil field discoveries in many years either. So any new projects will not really produce much new oil as the super giants of the past. Production is dropping off and will continue to do so at an increasing rate. That is the ticking time bomb with respect to energy. At some point it will be impossible to stem the tide of depletion regardless of oil price. It would take months to restart production, a lot of new drilling and a lot of costs and time to bring the oil online. During this spin up time depletion will continue to accelerate and shortages will become worse. Oil shortages in our globalized economy (in the shaky condition it is already in) will certainly lead to chaos and economic collapse. That will take the price of oil with it and oil production in general will decline forever after that.
The world’s biggest oil companies are draining their petroleum reserves faster than they are replacing them.
In 2015, the seven biggest publicly traded Western energy companies, including Exxon Mobil Corp. and Royal Dutch Shell PLC, replaced just 75% of the oil and natural gas they pumped, on average, according to a Wall Street Journal analysis of company data. It was the biggest combined drop in inventory that companies have reported in at least a decade.
For Exxon, 2015 marked the first time in more than two decades it didn’t fully replace production with new reserves, according to the company. It reported replacing 67% of its 2015 output.
In the past, shrinking reserves could send investors and executives into a panic over a company’s future prospects.
These days, with ultralow oil prices, “it becomes less important” to replenish stockpiles, said Luca Bertelli, chief exploration officer at Italian oil producer Eni SpA. Eni has shifted spending away from high-risk, high-reward projects in favor of squeezing more out of fields that are already producing, he said.
That shift shows how producers are responding to low prices by pulling back on new exploration in favor of maximizing profits. The risk is that cutting back on new projects now, when prices are low, could lead to shortages and price spikes in the future.
Historically, energy companies spent heavily in the present to find resources for the future—new wells that would replace the barrels they pump every day. When they decide they can extract the oil and gas economically, firms book those resources as proved reserves, untapped inventories to be exploited at a profit down the road.
That is in contrast to the past decade, when high prices led energy firms to explore in far-flung regions. They spent billions of dollars on so-called megaprojects, in part to keep their inventories brimming for decades
Some of the reserves companies added are too expensive to extract profitably at today’s prices. That has forced some companies to remove barrels from their books, and in some cases to write down the value of those assets.
http://www.wsj.com/articles/oil-firms-slow-exploration-to-weather-low-price-era-1459118907
I think that the world economy will not be ending just yet another lehman moment followed by bail=ins, helicopter money and nirp will be the order of the day
At some point, all of the fixes won’t work, or will themselves have catastrophic consequences.
http://www.zerohedge.com/news/2016-03-29/made-out-sand-dramatic-look-inside-newly-built-chinese-apartment
There’s a video at the above link that shows a guy in a high rise apartment in China lightly poking at an interior wall, which causes it to dissolve into the only thing holding it together – sand.
Not very promising if there are many built like this! Collapses will be next!
You list some proposed (straw men) strategies to “fix the problem”. Then proceed to show why each one of them will not fix the problem, or maybe even make it worse. This is correct, but I think it is the wrong way to frame our dilemma. There are a bazillion different ways to collapse. Some involve less pain and suffering than others. Our job is to select those strategies which together yield the minimum of pain and suffering. It is an optimization problem. I suspect those strategies will involve some combination of lowered birth rates, lower consumption rates, more subsistence farming, less motorized travel, wealth redistribution, etc., etc. Are we smart enough to frame the challenge in this way, and select leaders who see it in this way, or will it just be everyone for his or her self, family, tribe, nation, etc. By the way don’t answer this, I think I know the answer.
Until the collapse starts, the masses will not accept that it is coming. Therefore, it seems that other than rich people doing their own prep, and maybe military and other such organizations doing preparation out of the limelight, there can be no mainstream preparation. At least, that is how I see it.
vegeholic
Lowered birth rates – I agree, I absolutely agree! But voluntarily? Some religions will under no circumstances discuss this item. For instance Egypt now approx 80 million people on a tiny piece of arable land (the Nile) the rest desert. Are they willing to talk about the problem or are they allowed to?
Nope.
Your suggestions would result in a deflationary collapse.
Imagine what would happen if people reduced consumption.
Companies would lay off workers — which would reduce consumption even further — leading to more layoffs…
At some point you’d be one of the people laid off… and you’d be fighting for jobs that don’t exist with millions of others…
Still think that’s a viable path for us to take?
I agree. There is no throttling back. If that was an option, we would see something to that effect already. But, that is not the case at all. It is quite the opposite. Drill baby drill and print baby print is all that is being offered to mitigate collapse.
I agree with vegeholic — deflationary collapse (i.e. a drastic reduction of material wealth) is inevitable. You essentially argue the same point yourself!
So to keep using the “path” metaphor, ALL viable paths at this point involve a deflationary collapse. Vegeholic is saying we don’t get to take any path that is not as you describe. But s/he is also saying that we still have a choice of paths available — at the extremes, we can collapse into Mad Max dystopian horror on one hand, or garden agriculture/appropriate technology/recycle car alternators into wind turbines path on the other.
This is a pretty reasonable perspective, I think. Most of the energy that goes into making plasma TVs is fossil fuels; without fossil fuels we cannot make these TVs. But we do not need them, and the amount of human input that goes into making them can then be diverted to, say, growing food. So maybe we can end up with a world where people don’t have plasma TVs or internal combustion engines, but they usually do have shelter and enough to eat.
The only catch is security. People need to form more localized and self-sufficient communities, and the self-sufficiency has to include security through credible threat of violence. This means more people owning and knowing how to safely use firearms.
Doesn’t production of firearms at the scale you mean involve significant fossil fuel and other relatively high technology? Is the village smithy going to be able to produce AK-47s and ammo for them?
Homemade guns produced by local gunsmiths in the West Bank are driving an increase in the use of firearms in attacks by Palestinians on Israelis.
If this guy still has the use of his arms he should get some of those weapons and get some payback
Deflationary collapse is cooked in the books. Our choice is not between maintaining current consumption versus reducing consumption. Our choice is what level of reduced consumption yields a minimum of pain and suffering for all of us. We should just get on with the business of making these difficult choices.
Dear vegeholic;
“Our job is to select those strategies …”
No, dear. Our job is to watch what happens. Unless you are a billionaire and have some politicians in your pocket, you have absolutely zero influence on what happens in the future. To imagine that you “need” to do something, you are just giving yourself a bunch of stress for nothing.
Sincerely,
Pintada
What a sad sack you are. “All we can do is watch TV until our
betterssuperiorsrightful lords and masters tell us what to do!”I am not a billionaire, and I cannot afford a politician, but everything I do affects the future. If I start a garden, then the future has more food. If I start a useful business, then the future has more jobs. If I mentor someone younger than myself, then the future has more wisdom.
If you want to die in a ditch, then I won’t stop you — if you really believe what you say here and act accordingly, then you’re more use as compost anyway. But stop trying to drag others down with you.
My preference is to avoid die lying in a corner starving to death when the hungry hordes steal all the food in my garden …. so I have stored diesel to make sure that I have fuel to run my 4 bah 4 into a rock cut when life is no longer worth living …
Lying down in a ditch? Only losers do that….
What if the hordes steal your vehicle before your final ride? You need at least one backup.
Behaviour is the result of circumstances.
Unless you control the context, you do what it dictates you to do.
Or what your lord, who is subject to this same process himself, tells you to do.
It is my understanding that the world now runs on fiat currencies. Money is created by loaning it into existence by a bank. These loans must be paid back with interest. In order to pay the interest, the economy must have growth. The world is finite in resources. Capitalism must collapse because we cannot support sustained growth.
The era of Capitalism ended when we left the Gold Standard in 1971.
Thanks for this attempt to clarify the issue. And it might require ending money too!
As long as the debt buys a lot of cheap energy, we actually can have the economic growth we need to keep the game of musical chairs going. Once the cost of extraction rises too much, somehow the system must stop. It is looking like this will come through collapses of producers, because of low prices. Of course, they are some of the ones who cannot repay debt with interest.
Low oil prices. What they do to US shale oil production
30/3/2016
US shale oil peak in 2015
http://crudeoilpeak.info/us-shale-oil-peak-in-2015
I think there is a lag to cutting back on capex and the production. So, I think the USA is heading into a period where shale oil production will decrease faster and faster each month as oil prices stay down. To reverse that trend will also take time and another period of lag. So, shortages my happen if prices don’t go back up. Logically it seems to me there is a critical time period here we are dealing with as to how long prices stay too low before shortages and chaos ensue.
One of the issues is how badly damaged the companies are. Have they laid off so many employees that they really can’t restart? that could be a problem.
Thanks! Nice charts!
Does anyone keep track of shale NGLs, or doesn’t that make sense? NGLs started rising about the same time as crude from shale. We see a fair amount of information on crude increases and decreases, but not as much on NGLs.
Further to Don Stewart’s discussion on the French Market Gardeners….
Here in Canada we have a similar example.
Jean-Martin Fortier runs a 1.5 acre non mechanized farm in Quebec which distributes food to 200 families. The farm averages over $135,000 per year in sales and net profits easily provide for his family. More info here….
http://www.motherearthnews.com/organic-gardening/six-figure-farming-with-jean-martin-fortier-zbcz1501.aspx
This appeals to me on a personal level, however adopting this worldwide and fast enough just seems impossible.
This could be a solution if only the planet did not have so many food consumption machines (Humans). I fear that we are way past the point of changing the system. Especially with conglomerate food lobby directing government decisions regarding food production.
I am happy to say that there is a strong movement in Canada towards local grown food and a noticeable growth in micro-farming. This is a path I would like to take regardless of the big picture outcome.
Veggie
Jean Martin Fortier visited the farm in France a couple of years ago. He was also here in North Carolina last winter. A very impressive young man.
I was visiting with Peter Bane, a veteran permaculturist, and told him how Fortier placed his building on his property so that workers would spend as little time as possible walking to the toilet. Bane replied ‘that kind of thinking is why he is making money’.
Don Stewart
Different subject completely, but one touching on something that could at least be looked into but won’t be due to the operating system of our civilization.
Nuclear Waste
\”Artists think spatially, even if they think about that space in very limited terms. They could think in broader terms, but they are constrained in their thinking by a cultural system based on limiting and limited imagination, especially visual imagination. Various kinds of spatial thinking could be applied to nuclear waste. Land use planning is a case in point. But here’s another. What would happen if nuclear waste were buried six feet deep in sturdy pipes running linearly for thousands of miles?
I heard somewhere that nuclear waste is being stored (or had been stored) for a significant period of time in metal drums left outside at Los Alamos Labs. Maybe that waste is of a low grade, but I don’t know. Maybe only low grades nuclear waste could be “safely” buried linearly as I suggested, but I don’t know that either. Like nearly everyone in the lay public, I know so little about nuclear waste–and that has happened by the design of our civilization itself–that it would not compute to those few who are well informed on the issue.
Conducting nuclear waste along thousands of channelized miles could allow for universal education on the subject of nuclear technology, but that is not how our civilization works. It is designed for suppression of thought. It is designed, in an extraordinarily crude and insensitive way, to benefit powerful interests who value and profit from the ignorance of the many.”
Gail are you one of these people who is facing a smaller share of the wage and so you write these articles to try to justify your situation? It is a finite resources planet aside from oil that renews itself and soon fusion, but it has nothing to do with population size or resource size. Just a few elites in the world who own 90% of the claims to these resources. Thats where inequality comes from!
“It is a finite resources planet aside from oil that renews itself ”
Are you claiming that oil spontaneously regenerates at a rate that is always equal to or greater than the rate of extraction?
So, we we pumped out 200 million barrels per day, the Earth would generate 200 million barrels per day?
Baaaahahahahah. Hahahahaha. If anyone actually believes that oil regenerates itself as we pump it out then there is no hope to educate them. It is all faith based. The truth doesn’t matter.
You are more than a little mixed up. Oil doesn’t renew itself.
Ant renewal rate of oil is enormously slower than we extract and use it and fusion has been 10 or 20 years away for longer than the 55 years I have been on this planet. What is your point exactly?
Dear Uh … Somebody (it could be VanKent, or maybe Stilgar, I don’t remember, and am too lazy to look up the conversation right now – sorry);
You were wondering how on earth the Military Industrial Complex in general and the modern US leadership in general could be so stupid. You pointed out several of the really stupid things they have done.
I tried to point out (and failed – my fault not yours) what our friend Mr. Orlov said here:
http://cluborlov.blogspot.de/2016/03/always-attack-wrong-country.html#more
You see, the policies were completely effective … just not what you or I would consider.
Sincerely,
Pintada
Dear Finite Worlders
An interesting observation at Peak Oil:
‘Saudi consumption has been increasing by 2.4% per year. Almost exactly what the Etp Model says it must. As their fields peak out their ability to export will go down, and they are probably at that point already.’
The Etp model attempts to forecast the oil which is needed to produce oil. If the Saudis (or anyone else) can no longer increase the volume, then the requirement for increased oil consumption just to produce oil means that the oil available to the rest of the economy (or for export) must shrink.
Don Stewart
Don,
I think you just described the “Export Land Model”.
https://en.wikipedia.org/wiki/Export_Land_Model
As fields decline, (and/or the domestic usage increases), there will be less to export.
Veggie
I don’t think the Export Land Model explicitly considers the increasing energy cost of producing oil. The ELM model, as I understand it, simply extrapolates the domestic consumption of energy into the future. The answers might be similar, but I think that if one understands what is happening with the energy cost of production, it adds some texture. For example, I believe it is Bloomberg which currently has a story on the stresses in the Saudi economy. While the stresses undoubtedly are mostly a result of the fall in revenue from oil sales, it is also instructive to consider that the Saudis cannot increase production (at least many people think they cannot) and they are using more oil to produce oil, and there is less physical volume to support their non-oil GDP.
Don Stewart
Don,
Good point. I think you are right. The energy and wage cost of production are additional to the ELM model.
that would be the EROEI predicament
“that would be the EROEI predicament”
Ah, man. Here we go again with EROEI vs ETP vs CAGR vs whatever as different means of measuring the cost of extracting oil … round and round we go. Please, save us all the hassle and go read everything ever written by the Hills Group.
The tide has actually been RISING for the past 40 years, not FALLING as Gail claims (productivity per worker & GDP). So why is it that only the YACHTS have been lifted?
Did you read the article?
First, the claim is that the economy has not been growing fast enough, not that it has not been growing.
There are a bunch of parts to it that I can see. One is globalization. If someone in China is willing to do an unskilled job for a quarter as much as an unskilled American, who gets the job?
Next is automation – why pay an American $12 per hour or a Chinese worker $3 per hour, if you can buy a robot that works for $0.25 per hour?
I think even if the economy was growing 8 percent per year and oil was infinitely available at $20 per barrel, these two issues would still be causing problems for the more developed nations. Then you stack on oil limits, raw commodity limits, arable land limits, demographics, pollution, taxes and regulation, etc.
So,how many widgets can these robots buy when they are paid $0.25 per hour?
“So,how many widgets can these robots buy when they are paid $0.25 per hour?”
Exactly, that is why real wages for all but the top tier workers have stagnated in the West, and things are starting to look pretty rough even in China.
This is the closed minded thinking of CEO’s and share holders. They assume they are the only ones clever enough to think of this and every other company will loose out to their innovative ideas. Problem is, every company has and is automating even more. Once every company does this, no one is left with a job to buy the trinkets being produced.
I tried to explain in the post. Try reading it again. THere are a few winners, and lots of losers, in the current system.
the rising tide lifts all yachts
if you only have a leaky dinghy, not so much
Part of the problem being that the rate of return on Capital has far exceeded the return on Labor, in large part because the relaxation of restrictions on Capital flows over the last 30+ years has enabled the International/multinational/transnational corporations and banks to break the balance of power between Labor and Capital. Not for the first time, but it seems that we fail to look at historical trends and corrections to see where the inflection points are. The TBTF banks and businesses of today, the Robber Barons of the late 19th century, the failure to consider that the strength of a society is as much determined by the health of the roots as by the size of the entity. Economics divorced from Political Economy is a false science. Rational Markets-with human participants is a non sequitur. And GDP is not necessarily the best indicator of economic health. Ten people making a million dollars a year and 90 making a thousand dollars a year is not the same as a hundred people making 50,000 a year, even though one is a ten million dollar economy and the other only half that
“Robber Barons of the late 19th century,”
At least they left behind steel mills, railroads, refineries, etc, Today’s robber barons leave in their wake worthless paper and homeless people.
Yes so much of what seems to have value today will be worthless junk. In addition, the poor overall quality of workmanship in the infrastructure of today will mean most of it will be gone in 30 years time. All those power tools will be mostly junk without electricity.
Good points, Juan!
A lot of highly intelligent people understand that we have a problem, but their understanding of the problem seems to be of politico economic nature.
A Nobel prize winner like Paul Krugman seems to view the problem of inequality not as a resource problem, but as a distribution problem. He seems to believe that Keynesian economics will snap us out this depression. He views the Euro crisis as a flawed monetary policy. The problem in his mind seems to be of abstract nature and not of material nature. He makes a good case on each problem, but he seems to entirely ignore that our economy is fueled by a finite resource.
Marxists will of course see this as the end of Capitalism and as the beginning of a Communist paradise. Everybody seems to see what they want to see. In a strange way this is turning into a very interesting time, although I see the death and destruction that has started.
I believe that the collapse has already started with Greece, Spain, Portugal, Ukraine, Syria, Yemen…
I think Ukraine and Syria are more proxy wars over controlling the flow of hydrocarbons, rather than States collapsing. More to do with external interference than overshoot and decline on their own.
Triage seems to be the way of it – like putting tourniquets on your limbs to save your head and torso, the outer, less important states collapse first, in the less important regions. Looks like Latin America and Europe are going down first, North America and East Asia last.
How they collapse isn’t perhaps the prime question… the under laying cause is the global depletion of resources. We could perhaps add Afghanistan, Iraq, Libya, Sudan and Somalia to the list as well ?
Not many understand that our problems are connected with living in a finite world, and the problems of reaching its limits. Instead, they assume that there is some other problem.
Inform Krugman. I doubt that he would inform the public if he saw the problem with your eyes.
There are of course other problems as well. The Euro isn’t an optimal currency… and then he would return to his models.
Venezuela, Afghanistan, Somalia …
Instant and total collapse?
Not yet.
We have never seen a total collapse — because aid agencies would rush in to maintain a country facing complete collapse….
I am not aware of any country that is completely disconnected from BAU.
Even North Korea has electricity and petrol and trades with other nations.
… and a lot of Volvo 240s.
When everything else is gone those Volvos will still be rolling. Driven by rats and cochroaches.
Yeah those places were barely treading water anyway.
Agreed. Well said.
Paul Krugman understands the problem.
The reason he is pedal to the medal with his support of stimulus is because he understands that growth is over.
Of course he knows the policies that he is the front man for will blow up the economy —- just as the central bankers know this….
But around 2002 when the cheap oil began to run out the Elders were faced with two options:
1. Stand back and watch the world collapse.
2. Throw everything including the kitchen sink at this and squeeze out as many years as possible.
Obviously they chose door number two — thank the lord for that.
“Obviously they chose door number two — thank the lord for that”
The other creatures who dwell on this planet will be thankful for this also, those that survive…………………………………
The industrial blight upon this planet can’t go away fast enough for he rest of life on it……………..
Brought to you by the monstrosity otherwise known as humanity – the sooner we are wiped off the planet the better:
http://www.occupyforanimals.net/uploads/7/7/3/5/7735203/9927902_orig.jpg
This culture has no sympathy, no caring & no connection to anything outside humanities own sphere of illusions of its own superiority.
It dwells in the sick fantasies of shopping centres, high rise units & street level coffee shops, all the while oblivious to the callousness of this sick culture, the lies it exports & the indoctrination it embraces.
The sooner this Ship of Fools goes under the better…………………………..
humane
hjʊˈmeɪn/
adjective
adjective: humane; comparative adjective: humaner; superlative adjective: humanest
1. having or showing compassion or benevolence.
“regulations ensuring the humane treatment of animals”
synonyms: compassionate, kind, kindly, kind-hearted, considerate, understanding, sympathetic, tolerant, civilized, good, good-natured, gentle; More
lenient, forbearing, forgiving, merciful, mild, tender, clement, benign, humanitarian, benevolent, charitable, generous, magnanimous;
approachable, accessible;
rarebenignant
“regulations ensuring the humane treatment of animals”
antonyms: cruel, inhumane
inflicting the minimum of pain.
“humane methods of killing”
2. formal
(of a branch of learning) intended to have a civilizing effect on people.
“the humane education of literary study”
Quite possibly the sickest joke ever.
Misanthropy – https://en.wikipedia.org/wiki/Misanthropy
Misanthropy is the general hatred, distrust or contempt of the human species or human nature.
That would be me…. I’d like to add the word disgust to that definition though
I agree 100%.
To be called misanthropic doesn’t endear oneself to the zombies & never has but I know you don’t care & nor do I………………………
We live in a culture of sickness, delusion & alienation & if I knew how to bring this to a halt quickly
I would but I see no other way other than the total dissolution of this screwed up culture as it dives into oblivion & I hope it comes quick.
The other creatures who’ve been caught up in humanities sick notions of grandeur will be so relieved when this psychologically deluded sick culture fades into obscurity…………………………
Ted tried….
http://40.media.tumblr.com/41ba4e083975757da6b50f8516cbddc5/tumblr_o1khyiYAeE1qd3k9xo1_1280.jpg
Excellent work and chart, Gail, as always–the “shrinking pie” analogy explains the situation aptly, As I have noted in my own work on automation, the other problem with Guaranteed Income for All funded by taxes on the owners of robots is that automation = commoditization, which means all your competitors can buy the same robots and software, which means there is no scarcity value in the output (with rare exceptions based on marketing/design like Apple). So profits will collapse as automation commoditizes goods and services.
That is a good point. Lots of very cheap goods produced at commodity prices, but very few have jobs to afford them.
“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.”
Contraceptive and legal-abortion availability seems to be issue of the moment. Cases are pending in the SCOTUS.
http://www.theguardian.com/law/2016/feb/16/us-supreme-court-cases-antonin-scalia-death-impact-abortion-voting-rights
Contraception
“Zubik v Burwell: This case deals with the application of the supreme court’s decision holding that requiring employers who raise a religious objection to provide contraception to women as part of employer-provided health insurance violated the Religious Freedom Restoration Act. The federal government has attempted to compromise by arranging coverage independently if an employer sends a letter stating its religious objection. Some employers have held that even having to write that letter violates their religious freedom. It is possible that chief justice Roberts and/or justice Kennedy will find the government’s accommodation reasonable and provide a fifth vote to uphold it. If they do not, most but not all lower courts have found the accommodation acceptable. Likely outcome: messy, but probably at least a partial liberal win.”
It seems a reasonable expectation for public opinion to weigh on the side of having another woman appointed to the court (to replace recently departed Scalia). If that were to happen, It might not hurt the chances for contraceptive and abortion rights rollbacks to be reversed on a more permanent basis.
Yes, having another woman on the Supreme court might help.
If people are into activism of any sort, I would suggest putting a women’s movement to secure contraception/abortion rights at the very top- of the agenda. Counter intuitively (if one votes) major support should go to Sanders. That will at least lead to a crisis which can drive a pro choice movement. Even if one supports Clinton, pushing her “left” in an extreme way can only help forward such a movement. She should not have an easy time of it.
We can not trust economists, as they have a skewed view of the reality and, based on that, their projections are not reliable: the chief economist of the Ministry of Finance of the Slovak Republic has probably drowned in the Danube river while canooing
http://spectator.sme.sk/c/20126987/well-known-economist-is-missing.html
“Filko probably was not wearing a life jacket, as the rescuers say that if he had one, he would probably be able to swim to the bank, the public-service broadcaster RTVS reported.”
How can we believe such persons?
As my time in the epicentre of disgust winds down…
I noticed on the Tee Vee (which for some reason MUST constantly be droning on in homes in North America 24/7…) that one movie star decided not to accept Brad Pitt’s generous offer of a sample of semen for artificial insemination (or perhaps it was an offer of a direct deposit…)
The starlet subsequently had a kid who is now a young adult and was bemoaning – in jest – i hope — the fact that mother did not accept the offer — because he wouldn’t mind a some Pitt genes
Anyway — it got me to thinking … this is such a sick and twisted society obsessed with appearance and addicted to the famous …
As tribute to this filthy cesspool Fast would like to decide the business idea to end all business ideas….
It takes the form of a dotcom…. tentative name is http://www.superstarstudfarm.com
Fast will create pools of semen donors from various groups of people …. one might be NBA players (sub pools of centres – forwards – guards) …. another would be handsome hollywood stars… another could be soccer stars… and so on ….
The stars are giving half of the $100,000 fee each time their semen is used to impregnate a woman (Fast gets the other half)
Celebrity obsessed women and their husbands would go online and choose to purchase semen from their preferred group… then they are artificially inseminated …
Of course the identity of the donor is not revealed — you’d only be able to see all the names of the super stars in the pool you chose — Fast will guarantee that the semen came from one of those men.
Tee Vee spot: Husband and wife chatting about how they really want a famous rich NBA star for a son — they recognize that ‘Bob’ just doesn’t have what it takes – he admits ‘yes I am inferior – we can do better than this’… so they call up Superstar Stud Farm and their dreams are realized… the mother is depicted giving birth to a 15lb healthy baby boy….
Crazy eh?
The thing is…
I guarantee you if someone were to do this —– the men chosen for the pools would exhausted trying to keep up with the orders….
And if you can’t get current stars to participate — you find the down and out retired ones who need the bucks….
Where do I send the money ?
Dear Finite Worlders
Regarding the discussion of Edo Japan and the use of manure in the preceding post. The following passage from Miraculous Abundance: One Quarter Acre, Two French Farmers, and Enough Food to Feed the World may interest you:
‘In their effort to feed the city with vegetables produced locally twelve months of the year, Parisian market gardeners demonstrated admirable inventiveness, They used manure resources, super-abundant, to generate heat in addition to fertility, through the hotbed system. All year, the cart that left seven days a week in the middle of the night to deliver vegetables brought a load of manure back to the growing area. In the fall, the market gardeners began creating their hotbeds, mixing fresh manure with manure that had already heated up from the natural composting process in their well-managed manure heaps. They carefully stacked the layers of manure in trenches or on the ground in raised beds. Glass frames or cloches—each gardener possessed significant numbers—were then placed on top of the heated manure. The seedlings were planted in the nursery and then transplanted usually twice, to optimize space. Heat from the decomposing manure allowed vegetation to grow even in the heart of winter…’
Shawn Jadrnicek, the manager of the Clemson University Student Organic Farm, uses methods which employ many of the same principles as the Parisian gardeners. Shawn has recently published a book, which describes his meticulous efforts to make every single thing on the farm perform multiple duties.
The well-known Milwaukee urban farmer Will Allen puts compost heaps inside his greenhouses to provide heat in the arctic cold of mid-winter Milwaukee. (I don’t know if he has access to manure.)
In Paris, a horse not only pulled a trolley or a cart, but also left manure which was useful to grow lettuce in January.
The Herve-Gruyers remark that the thrifty practices of the Parisian gardeners were all but forgotten with industrial agriculture and fossil fuels. But with the prospect of the end of fossil fuels, and the imminent relocalization of food, the attention to detail will soon be necessary to avoid starvation.
Edo Japan had very few animals providing traction, and so could not marshall much in the way of manure resources. Consequently, they used the humanure that they did have.
Don Stewart
Yes you can use it — that is not the issue
As I have pointed out — people who have used human shit for manure frequently were sickened and died. Even in glorious Edo Japan…. where they scraped the parasite eggs from their anuses with chopsticks….
I suppose that once the 7.4 billion people kill and eat every single animal on the planet (as well as a good number of humans — with babies being prized) — and the only shit available comes from the remaining humans — you will do it…. because there will be nothing else.
Like I said — stock up on chopsticks.
Enjoy post BAU – it sounds like a real blast!
We must all ardently pray for two things:
1/ That BAU keeps limping along for a few more decades.
2/ That FE does not find a photo of worm+chopstick……
“2/ That FE does not find a photo of worm+chopstick……”
Agreed.
Can’t find that but for those intending to farm with their feces it is important to note the technique…
https://upload.wikimedia.org/wikipedia/commons/a/aa/Chopsticks_usage.png
http://www.farmingwithfeces.com
I always make a point to brag to my Korean friend about how few flys there are in the room, thanks to my considerable skill with chopsticks!
He usually retorts that I might note there are so few mosquitos in his home…..
LOL!
People who use humanure may occasionally get sick from it, if they do not handle, wash, or prepare their food correctly.
Which makes it no different from essentially any other technology.
Incidentally, people in Edo Japan seemed to believe that life was worth living even if it involved parasites.
During a compost reaction there are many phases. At some point temperatures rise to 50-60°C. When the high tempreture phase is over the compost is “safe”. Even if its humanure.
It is a bit counterintuitive, but the higher temperatures are only reached if the compost has good air circulation and a moisture context of at least 65%. If moisture is below 50% the compost reaction drops to “half speed”.
If trouble jumpstarting a compost reaction, just pour in hot water. The warmth will stay inside the compost and if you have a proper compost, the excess liquid will be clear and without odour and drain out in to surrounding soil.
Dear Van Kent;
When it was -30F here for a week this past winter, I think the temperature of my compost fell to about -30F. It is just beginning to thaw. Maybe somewhere one might farm with humanure, but not here. ( A cold climate has other advantages. I’m not complaining.)
Dear Pintada,
If the compost is made of small particles, they have oxygen (air circulation), moisture content of 75-65% (add hot water) and a right C / N ratio (add wood chips or such to make it more airated and more C). Then the compost will work even during the winter. But certainly, if the compost is not big enough it will freeze in -30F. Now pour in hot water and it will jumpstart the process again.
It’s not only a question of temperature, it’s also a question of time. One year composting should be enough eventhough temp is not getting hot. Pathogens is not very competitive in a compost. I recomend reading the book “Humanure handbook”. I think the author of that book lives in a cold winter climate.
Gail’s excellent essay led me to ponder the following…
If humans were able to break through their evolved denial of reality and understand their predicament, then we might avoid wars and violence associated with blaming others for our misfortune.
However, if the majority understood our predicament the system would likely collapse immediately because it is elevated today in large part by faith and belief.
Given that collapse is imminent regardless of what we believe, I’m thinking I’d prefer a world where people understood what is going on and worked together to make the best of a bad situation rather than seeking scapegoats.
But since life at its core is replicating chemical reactions competing for finite resources, we should expect the worst and be very grateful for anything better.
Yes, “Expect the worse and be very grateful for anything better.”
Is that Seneca the Younger?
Oh, and I think I can see the Regan Revolution in your first graph.
Here in ukay the main causes of inequality appear to be different.
Namely the main “smart way to make money” has in recent decades been in owning propery to rent out to others at a profit. Thereby those who could afford to “get on the property” ladder get increasingly rich from the rental income and values increase, while those renting get ever poorer due to having to pay that rent.
PLUS. Tony B-Liar’s deceitful policies to enforce a huge level of immigration to the ukay with the predictable consequence that rents and property prices go up, and wages go down. The property owners then make huge unearned profits from rising values under the increasing housing demand, while the poorer natives now find that even renting is too expensive especially as the jobs are now driven down by the huge immigrated population.
Note I didn’t need to mention peak anything in the above (not that I’m discounting that by the way).
I should also have mentioned Nato helpfully destabilising the “regimes” in Iraq, Libya, Syria, and Ukraine with the result of huge numbers of people thereby losing their bonds to their homelands and becoming food for the property-owning greedists. A high proportion of the controlling caste in the uk are multi-property owners getting huge unearned profits from these war crimes they and they B-Liar pal organised.
Thanks for your thoughts on the UK problems.
I think your thoughts go along with the globalization and immigration issues I mentioned. It is not just sending the work out; it is also getting the inexpensive workers to come to the UK.
If you have a minute tell me how would an earned profit be calculated? How should a proper rent be determined?
Robin, a little bit harsh! I am self-employed and over the years have invested in a flat that I rent out. it will be my pension. I mean, that’s it; there is no company pension for me. I am not “getting increasingly rich from the rental income”.
Here is a right-on critique of the Democratic Party’s hypocritical, ineffective response to inequality.
http://www.theamericanconservative.com/articles/the-blue-state-model/
Quote from the article:
We no longer have either party dedicated to helping the common man. That went out the door years ago.
Dear Gail
I suggest that you try to find time to take a look at a new translation from the French: Miraculous Abundance: One Quarter Acre, Two French Farmers, and Enough Food to Feed the World. The authors are Perrine and Charles Herve-Gruyer. To summarize: the couple have been farming 1,000 sq. meters intensively (as part of a larger farm), with the study area being meticulously documented. The thousand square meters produced 54,800 euros (59,497 dollars) of produce with 2400 hours of work, or about 25 dollars per hour of work. Only hand tools were used.
Now for a little texture. The couple decided in middle-age to start an organic farm. They secured some property in Normandy. They made all the usual mistakes, and by 2008 they were tired and broke. Then in October 2008, a friend sent them an article about permaculture. They began to intensively research the methods that humans have developed to efficiently produce food, fiber, and fuel in small, intensively managed spaces. While they describe their overall approach as ‘permaculture’, it is truly their own blend of ideas from traditional cultures, John Jeavons’ Biointensive gardening, Eliot Coleman’s methods which are adaptations of the Parisian market gardeners methods, the Forest Garden methods of Martin Crawford in England which were inspired by traditional tropical forest gardens, and the terracing practiced by Sepp Holzer in Austria, and other pioneers. Beginning almost immediately in early 2009, they substantially rebuilt their infrastructure, stopped using animal traction to plow, and have obviously achieved a real turnaround. Their advice to anyone who wants to follow in their footsteps is to start small and learn to produce a lot with only a little land. They are quite proud of the fact that, today, they are growing food on two parcels of land which were deemed ‘impossible’.
The good news is that the world really does not need industrial agriculture in order to feed itself…and the destruction and pollution that industrial agriculture generates. The bad news, I suppose, is that 25 dollars an hour is probably near an upper limit. One will never get filthy rich by market gardening!
The authors state:
‘Bountiful production on a small plot, while creating jobs, enriching the environment, increasing soil fertility, storing carbon, and conserving biodiversity? That might seem to good to be true, and is the exact opposite of what humanity is currently achieving. People today continually drift farther and farther away from nature, replacing life with technology in pursuit of a consumerist dream that is made possible by the senseless waste, in just three or four generations, of energy that took millions of years to form.
In these unprecedented times of ecological and social crisis, as we enter a period of declining energy that will shake the very foundations of our civilization, permaculture helps us imagine a future rich with an abundance of essential goods—simply because it is inspired by nature, which has always been able to generate overflowing ecosystem vitality, even in resource-poor settings.
If we want to live sustainably on this planet, a growing number of people will have to reconnect to the land and produce food for themselves or the community…The farmers of tomorrow will be the guardians of life. Their farms will be places of healing, of beauty, and of harmony.’
Blurbs contributed by Joel Salatin, Novella Carpenter, John Jeavons, Eric Toensmeier, Joan Gussow, Carol Deppe, Gene Logsdon, Martin Crawford, Caroline Aitken, and Larry Korn. Logsdon says ‘Miraculous Abundance is absolutely the right book for right now. I don’t know when I have been more encouraged about the future.’
This book is an overview. The authors will publish a more technical book in the near future.
Don Stewart
Thanks! This is an Amazon link. It seems to be published by Chelsea Green and is available for $17.
Thanks Don, as you have documented, the cat is out of the bag, the knowledge is here, and above all it works, this is the way of the future.
The only question remains the speed and path of adoption, I’m afraid the old system will leave only in the same way it entered the stage, by screaming, kicking and marauding..
There is very little exploitable leverage in these systems of distributed full employment via bio dynamic farming, homestead living. However, given “human nature” for the next decades and centuries we would probably have to realistically stick with some mixed or coexisting systems including certain level of hierarchy, taxes/rents, ..
Drum roll, p!ease…now what does Fast Eddy have to say about Perrine and Charles in France…..ready, aim, fire…blast them out of the water Fast Eddy
https://m.youtube.com/watch?v=fcQ-LQhzBsM
Climate change will do us in….
Dear Prince;
Re AGW: Yup.
As for the agroutopian BS – the money that they made (if any) came from publishing a book.
Sincerely,
Pintada
Hi Don,
That looks great. I looked up the video as well. One thing, though — I mistranslation — 1000 m squared = 4 acres, not 1/4 acre. Cheers, Lizzy
Lizzy
It is 1000 sq meters, not 1000 meters squared. I am sorry if I misspoke.
Don Stewart
PS Also, they are measuring actual bed sizes…not including paths or barns of ponds or houses or other land not actually in production.
Don Stewart
1000 M^2 is 10763.91 square feet. An Acre is 43560 square feet. Therefore, 1000 M^2 is roughly 1/4 acre.
http://www.metric-conversions.org/area/square-meters-to-square-feet.htm
http://www.metric-conversions.org/area/acres-to-square-feet.htm
Wait are you confusing 1000 square meters with 1000 meters squared? 1000 meters times 1000 meters is 100 hectares, or about 247 acres.
Malthus ghost is here again. Too many people and not enough resources.
Trump will lead us to war. First we demonize our enemy and then the slaughter can begin.
No real need even to demonize the enemy. There’s that wonderful trick of rhetoric where you say:
‘We are not at war with you, but only your government, so we’ll blow you to pieces until you get around to changing it. No ill feelings, nothing personal, this is just higher politics and the defence of Civilization….’
You are right–we are back to the “too many people and not enough resources” problem of Malthus. It just looks different this time.
Unless we come up with some new abundant energy source, it seems so.
Even if we found a “new abundant energy source”, some other limiting factor would spring up as a result of perpetual growth and bring the house of cards down. Entropy must have it’s way in the end…
“Even if we found a “new abundant energy source”, some other limiting factor would spring up as a result of perpetual growth and bring the house of cards down.”
Eventually. In the meantime, if the energy was cheap enough and abundant enough, we could mine asteroids, build space colonies, reclaim deserts, double our population one or two more times.
“Eventually. In the meantime, if the energy was cheap enough and abundant enough, we could mine asteroids, build space colonies, reclaim deserts, double our population one or two more times.”
Actually MK, you would be surprised (…or maybe not ) how many people I talk to believe that is actually the case. That we will finally crack cold fusion, or that “they” will find a solution to “the problem”. That somehow technology will save the day.
And because they believe this so wholeheartedly, they have no worries or stress. FOR NOW.
I suppose ignorance is bliss in this case. 🙂
Who’s to say that someone won’t miraculously save us and kick the can with a new energy source? The biggest hurdle is that we are reaching limits now, and need rapid rollout. Also, our system of finance / employment is breaking down before we are limiting out on current energy production, which is rather concerning.
Personally, I’m betting on Lockheed Martin, because their promotional material has lots of wub wubs:
https://www.youtube.com/watch?v=UlYClniDFkM
Dubstep = legit science!
I like the part in the video when he says, “Every time we test we learn something.” And the idea is because they are working small and can do a test every month it will succeed. That’s presumptuous. But, those defense contractors get a lot of R&D money handed to them to play around with, so who knows. Meanwhile the clock is ticking.
Here’s the thing though; if that somehow did succeed and they did roll it out in time to stop the impending collapse, and the power was cheap enough to generate growth like it did when oil had a higher EROEI, the population of the planet would then shift into a higher gear. We’d be looking at 10-15 billion population and then say goodbye to what’s left of the wild kingdom. It would then probably be economical to develop vertical agriculture, then most of the land mass of the planet could be covered in high rise building’s. Conceivably the population could get up to 15-25 billion.
This is about as likely as a week with two Tuesdays…
Did you know that Delusistan has 2 Tuesdays… 🙂
I don’t think that is what she is saying at all Realist3….maybe you should re-read…..the problem I have with conclusions is that Gail thinks we operate in a transparent world in which her charts have meaning…what we see and what the PTB see are totally different…We do not operate in a fair transparent world…..debt is scooped up and burnt in furnaces never to be heard from again and the band plays on….until it can’t.
Gail, when you are talking about a rapid drop in the amount of goods being produced, are you implying a time period of scarcity and possibly a drop in complexity ala Tainter’s model on collapse of civilisation, or are you implying an overnight collapse of civilisation itself?
I don’t know how the drop in goods being produced will be distributed around the world. My guess is that some areas will “collapse first,” and find themselves short on the distribution early on, while others will wait until later to collapse.
As I recall, the major model of reduced complexity that Tainter gave was the civilization that got rid of its army, to reduce its tax load and complexity. That approach put off collapse, as I recall. It didn’t prevent it all together. (I could be wrong on this, though.)
With our current interconnected system, I have a hard time seeing the civilization collapse down to a lower level, and still be able to exist. For example, if we lose grid electricity, we likely lose too much to continue in any reasonable form. There may be a few groups (or even hundreds of groups) in various parts of the world that will be able to develop some form of subsistence group of one time or another. If the groups can actually learn to live on the resources of the area (probably mostly wood for energy), then perhaps the beginnings of new civilizations can be formed. The new civilizations will tend to have the same overshoot and collapse characteristics as our current civilization.
Thanks for the detailed response, I appreciate that. I also agree that we may also see new groups try to set up new civilisations, kind of similar to what is going on in Syria presently with many groups fighting one-another. I guess that’s kind of a signal of what things will look like in the future, but perhaps with large swathes of land uninhabitable (due to spent fuel rods).
‘The new civilizations will tend to have the same overshoot and collapse characteristics as our current civilization’
They’ll without a doubt finish off the forests in short order.trying to rekindle the flame of civilization.. and that will be all she wrote.
I think another blogger has the same perspective as you, that society (I don’t know if he was referring to our one or some other one that will arise) will continue to cannibalise the planet till there’s nothing left.
So your answer to “less money for workers” is “more money for government programs” (medicare for all, basic income, free college, etc. all are big government programs)
Seriously? More government = less left over for workers.
I take it math is not your strongest suit.
How does funneling more money to a big government (more money for cronies) help out the worker? It doesn’t.
Your idea for more government will only guarantee cronies get enriched and workers get even LESS.
realist3
Read again and understand!
I wasn’t trying to give my answers. I was using proposed solutions I found on political websites. “Medicare for all” and “Free College” are from Bernie Sanders.
Cycles times seem to be speeding up as technology chops away at communication times.
I wonder if that “Stagflation Period” of 50-60 years in Fig.3 may in fact happen at a faster pace.??
I agree. And it is not clear exactly when it started–perhaps 1968 or 1970.
I took a look at a forum rant over on RE’s site. This person says Trump is popular because people want change and only an Authoritarian can do that. The ranter compares Trump to previous Authoritarians, Hitler and Stalin.
If we can’t elect an Authoritarian how can we force change? Business as usual is exactly that, money and corporations run the world. What makes the most money is what governments do.
I’m always fascinated and amazed by humans needing to be led thereby giving up their individual freedoms and put in place individuals who rule over them and rulers who look out only for their own self interests.
Maybe it is the reverse side of the coin that sometimes exceptional men and women have emerged who have indeed done the best for their people, and so we are predisposed to hope for the best?
It seems that in hunter-gatherer groups, and primitive tribal warrior societies, individuals can rise to a kind of -restricted- leadership role for a time, because of personal qualities.
They don’t dictate (and again, dictatorship is different to tyranny), the society is too basic for that to mean anything, but everyone just sees that they know what to do.
It’s curious that the term ‘tyrant’ is hardly ever used now, but was a commonplace of political philosophy until the 19th century. Napoleon was condemned for being a tyrant by his enemies.
‘Dictator’ is the term of abuse now (Assad, Putin): wrongly as dictatorship is an instrument, quite a neutral term. As the Romans understood.
I’m reminded of the saying: “Power tends to corrupt, and absolute power corrupts absolutely. Liberty is not a means to a higher political end. It is itself the highest political end.”
Individuals in power even the most Nobel of individuals really look out for the collective and not the individual(s). That’s the goal of centralized power even if it means suffering of many at the hands of the few in power. So it’s no surprise to hear comments from high ranking US Officials say that a 1 million + dead Iraqis was necessary for the goal of the US Govt. Which was to destabilize the MENA region.
In other words, put ANYONE in power and we are just their pawns.
There is at least some truth to the view that only an Authoritarian can make a big change. Unfortunately, not even an authoritarian can create cheap energy or create a new economic world order overnight.
“…not even an authoritarian can create cheap energy or create a new economic world order overnight.”
I really get a big kick out of watching the political landscape these days as we can readily see people are desperate for a new way of doing things that is better, and people can get back to expanding their families and assets like the good old days. Most people are so uninformed they think the only thing in our way is finding the right leadership, so they look to Trump or Sanders for a so called revolution, when in reality it’s a net energy problem.
My personal opinion is the people for Trump are the ‘It’s their fault’ group and the Sanders followers are the ‘We just need someone on our side’ group. Neither strategy will work to stop what is coming. At the end of ‘The Terminator’ the gas station attendant says, “There’s a storm coming” to whit Sarah Connor says, “I know.” Oh yeah, there’s a big storm coming all right, and people getting desperate enough to seek messiahs is a huge sign things are not good. But those people haven’t seen anything yet.
Good analysis.
What does Mr. Trump possess? Debt?
“What does Mr. Trump possess? Debt?”
A bunch of real estate it seems:
http://www.businessinsider.com/donald-trump-net-worth-2015-6
It is simple trick.
First, state that income inequality happens only during economy slowdown. This is not true.
Second, list of “solutions” that are not solutions and all.
Third, with glory declare that non of them works.
Why all such posts happens? Well, capitalists just hope that you believe that everything will collapse very soon. Why you are waiting for this, they will live happy and perfect life. Just do not act, wait for collapse.
As for Gail, she is very active helper for real collapse to happen, as she want to help capitalists to save their system and prevent people to use real solution.
So you don’t agree with me. Some of this is sort of difficult. You may need to read it though a second time to understand it.
Gail, you got me wrong.
All I stated is that huge inequality not only in wages, but in many other things are native property of capitalism.
And all “solutions” proposed can not be called solutions.
Like proposal to feed sheep better and provide her better medicine so she’ll have better meat and before slaughter will work harder for noble wolf.
With such posts you want to buy some time for ruling class. So some members of opposite class instead of action will sit and wait for very near collapse.
You have a tangential point that the Internets might have amplified the access towards doomer areas of discussion, but the cornucopia white noise in media these days is way larger still and in orders of magnitude, it’s a wash.
You also knocked the pin on the head in the sense, at least certain faction of the owner’s class would from a certain point proactively engage in not holding the current system anymore, but seek early advantage in pre-positioning themselves for the next cycle, so dragging and steering the fall. This could take form of some temporary autocracy, preludes of relaunching neofeudalism etc.
In fact some are evidently nurturing this as fallback plan for ever. For instance, do you think the “British nobility” would have insolvable problems to weather at least the first decade of chaos, given both the local community and national level security apparatus loyalties ? On the other hand, other places might become crazy overnight before various bubbly processes settling down, e.g. France.
What does the ‘owner’s class’ actually possess? Debt?
Max
You might -with all respect as I know many are thinking this way at the moment above all many of the young in Europe (my family are all radical Left!) – perhaps try stepping out of the ‘capitalists are to blame for everything that’s bad’ mind-set.
It’s comforting, and of course they are putting out lots of propaganda at the moment (‘all we have to do is liberalise labour markets, improve productivity, cut back on entitlement, deal with the spoiled Baby Boomers, etc, all the IMF/ECB crap) but it is far too narrow a view.
Get rid of Capitalism, and we still have Finite World issues staring at us right in the face.
A CEO receives a golden handshake worth 100 million dollars. He builds a new house, buys some extra Cadillacs and a bucket full of fancy things for his young, beautiful mistress. But alas, there are still 50 millions to spend. He buys shares in debt burdened entities, and he also invests in treasures from indebted countries (the all are) to be on the safe side. Oh yes, he is a very wealthy man. Let us shoot him and take over his debt.
Ecology 101
Take a few yeast cells in a bowl of water. They will just float around. Now put a cup of sugar in. Suddenly the yeast have an energy source, and they multiply many times over. Finally the sugar runs out, and the bowl is contaminated with their waste products ( alcohol in this case ). The yeast population crashes.
Now take a few hundred million humans. Introduce a new energy source — fossil fuels. Suddenly our population multiplies and their waste products accumulate. …. need I say more?
[repost]
Exactly! Our politicians and political figures do not want to understand this, however.
Not only that, introduce unlimited (debt) cash which this colony can also use to grow out of control…
Then the debt availability runs out along with the fossil fuels. A double headed problem !
‘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’
I interpret that as …. things will continue to continue as they have for 8 years now…. then suddenly…..
Everything will stop — or in other words — civilization will kuh-laps….
collapse
[kuh-laps]
verb (used without object), collapsed, collapsing.
1. to fall or cave in; crumble suddenly:
http://www.dictionary.com/browse/collapse
Sounds more like a slowdown becoming evident to the population to me. If we look at other countries like Venezuela and Greece, we see that the economic slowdown has already affected these areas. Venezuela to a greater extent than Greece, so the current economic cataclysm is likely to cause worsening conditions to spread outwards again, putting Greece and Venezuela in worse conditions, with conditions that were previously in these areas then affecting other areas that were once considered first world areas, for example, perhaps large parts of Middle (France, Poland), and Northern Europe (Ireland, Sweden), and maybe other parts of the world like Asia or the US, will inheret conditions that were once felt in Greece, while the centres of capital attempt a last stand to hold it together, for example, America might try to nationalise Fracking as best they can while Europe and everywhere else burns.
I kind of say this also to counter your statement that things have been going on as normal for the past eight years, when in fact they kind of haven’t been as large parts of the world have been getting worse due to worsening conditions, so we have been experiencing a collapse/decline, but it hasn’t been distributed equally. I’d say that locally, yes there will be a sudden collapse, and there are examples of this that have been caused by multiple issues, for example, the Arab Spring, but I am having a little bit of trouble understanding how the collapse would happen suddenly throughout the globe, unless there was something that I missed either from Gail’s posts (which from my reading don’t indicate any sort of collapse happening global in a single day, unless either Gail or somebody else can correct me on this).
So, I agree, there will come a day where society will completely collapse, but that day is unlikely to come as a result of our current economic issues. Personally, I’d say parts of the machine will break off and “the elders” will split apart and try to do their own thing (I can’t see Europe holding itself together, but America might since I don’t see evidence of a worsening Refugee crisis, unlike Europe, although California might be an exception).
I do welcome a counter argument with a source though, because I used to believe that we would collapse overnight, but I am sceptical from reading other sources and re-reading Gail’s blog, along with other doomers, neither of which seem to indicate an overnight collapse of civilisation.
“I do welcome a counter argument with a source though”
ECB:
Derivatives can amplify and contagion losses in times of stress,
https://www.ecb.europa.eu/events/pdf/conferences/mar_net/Heise_Kuehn_2012-01-31_latest_version.pdf?0d9291dc23aec8e0dd96f114cc217b11
IMF:
“The global derivatives markets in are unstable and they can bring about catastrophic failure.”
https://www.imf.org/external/pubs/ft/wp/2012/wp12282.pdf
Financial System Supply-Chain Cross-Contagion:
a study in global systemic collapse. By Faesta, David Korowicz
http://www.feasta.org/wp-content/uploads/2012/06/Trade-Off1.pdf
“We are locked into an unimaginably complex predicament and a system of dependency
whose future seems at growing risk. To avoid catastrophe we must prepare for failure.
We are entering a time of great challenge and uncertainty, when the systems, ideas and
stories that framed our lives in one world are torn apart, but before new stories and
dependencies have had time to evolve. Our challenge is to let go, and go forth.
Our immediate concern is crisis and shock planning. It should now be clear that this is far
more extensive than merely focussing on the financial system. It includes how we might
move forward if a reversion to current conditions proves impossible. That is we also need
transition planning and preparation. Even while subject to lock-in and the reflexivity trap,
this will be most effective if it works from bottom-up as well as top-down.
Finally, neither wealth nor geography is a protection. Our evolved co-dependencies mean
that we are all in this together.”
Thanks for the links. I think I was trying to include derivatives, but I am probably misinterpreting their effects.
liam,
What I find missing in the doomer blogs, is a through investigation how risk has been spead by derivatives to every bank everywhere. A fast collapse scenario would have to start with banks failing, derivatives spreading the contagion everywhere. Banks failing mean international trade comes to a halt and spare parts not coming in to maintenance from half a world away.
Even if we have fuel- petrol- energy to run a country for months or a year. What we don´t have are spare parts for maintenance for more than a few days or a week at the most.
We could avoid a SHTF collapse and move in to a slow decline if we had available resources on the shelf, ability to implement Martial Law and draconian rationing measures instantly, have extra spare parts and raw materials with machinery and machinists available to make some Ad Hoc makeshift solutions, that may not work like the original part, but keeps to machines working in some ragtag way.
But since governments keeps on insisting such a collapse is not possible, I find even a rudimentary preparedness to be out of reach for our global civilization.
Agreed, though I have to wonder if some governments, when the collapse hits, will attempt to bring about the manufacture of spare parts into their own countries, or if they might attempt to do something that might mitigate the problem when it actually arises. Perhaps Britain will attempt to colonise Ireland and take it’s resources again, or some form of colonialism will take hold or something like that.
liam,
If you mean that every government make themselves CPU factories, every spare part for every Apple, IBM, Toyota, Volvo, GE-Siemens-Windpower ever made. I´m afraid everybody would agree that to be impossible. We don´t have raw materials needed, I´m not sure even recycling would help with the missing Palladiums an such. But having some sort of crisis management, with some ability to make Ad Hoc makeshift solutions.. it should be possible to try..
Everyone has a different idea of what “suddenly” means. I doubt the collapse will take as long as 20 years, but there could definitely be different stages to it. We could have crises in several countries (Greece and Venezuela), for example, without the world system collapsing. Or we could have financial problems related to Japan’s liquidity, and then someone will figure out a way to prop the economy for a while longer. We don’t know how things will play out.
Smart money has been leaving the stock markets for weeks now. It is unclear what a NIRP or ZIRP will do to Company directors who get their bonuses on the value of their stock. Should it not make Company directors buy stock with ZIRP until the very end? And then there is CBs that will try to contain all problems, buying when necessary.
Before bond markets collapse, some kind of moves from WB, IMF, AIIB and BIS are to be expected. Growth simply has to continue, and all possible tools will be tried out before the end (I hope).
Things look bad, but some bullets still remain. And before this sucker goes down, I hope they will use all the bullets they have..
(My schedule still remains as SHTF collapse grid out early 2019)
What effect do the financial.problems have if you don’t mind me asking?
How the financial problems hit depend on which problems are affecting what.
In Venezuela, they recently shut down businesses for a week due to loss of electricity. As financial problems worsen, I can imagine them shutting off electricity pretty much permanently, and with it oil production. Their oil exports will be lost. Stores right now are pretty much empty of food. Things will get worse rather than better.
International trade is likely to be a casualty of financial problems. Right now, shipping of goods requires financial guarantees that goods that are ordered will actually be shipped. If these guarantees are missing, shipping may shut down.
Another issue with financial problems is the question whether banks will be allowed to fail or whether, instead, money will be taken out of depositors accounts. Last time, back in 2008, banks were bailed out but the problem is bigger this time around, and voters were unhappy about the large amounts of funds used for bailouts in the past. THe current plan is that instead of bailouts, this time there will be “bail-ins”. Money will be taken out of accounts and used to purchase shares of the failing bank instead. If it is your employer who loses the money in his account, he may not be able to pay you. If you lose the money in your account, you may not be able to pay your bills. If you thought you were saving for retirement, you lost whatever you thought that you had.
“We don’t know how things will play out.”
After following the topic of peak oil for 11 years, that’s my opinion too. Just too many variables. I think this also applies to ‘when’ collapse will occur. The fig. showing the period of crises is a declining line, but we don’t know exactly when the sharp part of the decline will begin for highly developed countries like the US. I’m actually amazed it’s still chugging along. Try driving through LA sometime down to San Diego. It’s so huge and there are so many packed 5-8 lane highways it’s astonishing. When all that goes even semi-quiet I’ll know collapse in the US has occurred.
I’m dreading the moment when the power goes off — and never comes back on.
The moment that I realize that it is never coming back on again — will be when this goes from a discussion on a web site – to something very real.
Very dangerous.
Very frightening.
Another great report – thanks, Gail.
In fig. 3 it shows a period of stagflation of 50-60 years.
The reference to fig. 1 is that wages began losing ground in 1981. If that marks the beginning of the stagflation period, then 50-60 of stagflation would end sometime between 2031-2041, marking the beginning of the crises period.
However, the overall gist of what is discussed on this site seems like collapse or a crises period is closer at hand. Gail, can you shed some light on whether you think these time periods are accurate or need to be modified?
I think the period probably starts in 1968 or 1970, when the growth period stops. 1968 + 50 = 1918.
Also, the “50 or 60 year” range is simply my calculation, given the numbers they show for the eight civilizations that they analyzed. It is only a very rough approximation.
Thanks for the article.
And yes I do agree we should start counting at least from the early-mid 1970s, which was both the end of one systemic chapter in the west as well as the peak of relative per capita comforts for the soviet block. Not coincidence, this intersection has been underpinned by the energy – credit/debt nexus as well..
“I think the period probably starts in 1968 or 1970, when the growth period stops. 1968 + 50 = 2018.”
Thanks for the clarification, Gail.
1968 + 50 = 2018, 2 years from now, plus or minus.
great post once again, Gail.
This is a fantastic post! After ruling out all the options that you list, what do you think about a global one child per woman policy? While it has huge roadblocks to execute, perhaps reducing populations organically would improve income per person.
Agreed – an outstanding post.
The problem is having 1 child is in conflict with growth. China which had a 1 child policy for decades has abandoned it because the generations born are not sufficient to maintain the trajectory of growth needed. Japan is running into the same problem even though they do not have a 1 child policy.
And please do not presume I am in favor of more than a 1 child policy – I’m not. I realize the predicament and understand the need for fewer people. I’m just pointing out it is in conflict with growth. And I am not an advocate of growth either, but understand the lending business is in part based on growth to repay loans and keep the whole Ponzi scheme going forward.
There is a real issue with taking care of older citizens. A growing economy has to have really big surpluses to support retirement at a reasonable income at age 65. If an economy is shrinking, there aren’t enough people to support much if a retirement system at all–perhaps work until a person is 80, or dies, and any retirement income is only sufficient to live in a group (not very fancy home) with other elderly.
A one child policy is eventually a 4 grandparents policy per working-age person.
If the person has a job, it has to be a high-waged one ; if the person has no job, then this family has a problem.
Right!
It may be too late for a “one child per woman” approach to make a difference. We should have headed in this direction shortly after World War II. We would’t be facing the limits we are now, if we had kept population down, and kept bringing it down to a level that could be sustained without fossil fuels.
Of course, with a shrinking population, it would be hard to encourage new investment.
One child per women = deflationary collapse
It is hard to pay off debt with one child per woman. No one will want to add new facilities either. It doesn’t really work. Even Japan’s level of non-growth doesn’t work.
The “Limits to Growth” Standard run shows the birth rate going up and also death rates after the peak. In fact they skyrocket!.
It make sit look like child mortality steps in again, which is very likely. I.e. we don’t have to do anything. And it’s too hard anyway It’ll be just one manifestation of collapse.
🙂
Gail,
Sadly your conclusion that it is probably too late seems to be where we are. Even the most progressive people don’t seem to want to grapple with the basic issues. Perhaps there never could be a rational “step down”, but it seems the future holds some horrible consequences. Thank you for this insightful piece.
Progressive people seem to be as unaware as anyone of the problems we are running into. There is a great deal of faith that the next proposed solution will save us. Not too many have figured out that we need energy to get things done.
There is only a psychological need to pay the senior or supervisors substantially more than the worker. I believe it is the structure of corporations with concentrated power and money that create many of the imbalances in the first place.
In the consulting firm I worked for, Administrative Leader was a rotating title that did not particularly indicate higher pay. In some universities, “chair” can be a rotating position.
My sister Lois recently wrote an article talking about how corruption can enter into the system:
Power and wealth seem to go together. In the many countries that have problems with corruption, the way the higher income comes is not through salary; it comes instead of bribes needed to get things done.