2017: The Year When the World Economy Starts Coming Apart

Some people would argue that 2016 was the year that the world economy started to come apart, with the passage of Brexit and the election of Donald Trump. Whether or not the “coming apart” process started in 2016, in my opinion we are going to see many more steps in this direction in 2017. Let me explain a few of the things I see.

[1] Many economies have collapsed in the past. The world economy is very close to the turning point where collapse starts in earnest.  

Figure 1

Figure 1

The history of previous civilizations rising and eventually collapsing is well documented.(See, for example, Secular Cycles.)

To start a new cycle, a group of people would find a new way of doing things that allowed more food and energy production (for instance, they might add irrigation, or cut down trees for more land for agriculture). For a while, the economy would expand, but eventually a mismatch would arise between resources and population. Either resources would fall too low (perhaps because of erosion or salt deposits in the soil), or population would rise too high relative to resources, or both.

Even as resources per capita began falling, economies would continue to have overhead expenses, such as the need to pay high-level officials and to fund armies. These overhead costs could not easily be reduced, and might, in fact, grow as the government attempted to work around problems. Collapse occurred because, as resources per capita fell (for example, farms shrank in size), the earnings of workers tended to fall. At the same time, the need for taxes to cover what I am calling overhead expenses tended to grow. Tax rates became too high for workers to earn an adequate living, net of taxes. In some cases, workers succumbed to epidemics because of poor diets. Or governments would collapse, from lack of adequate tax revenue to support them.

Our current economy seems to be following a similar pattern. We first used fossil fuels to allow the population to expand, starting about 1800. Things went fairly well until the 1970s, when oil prices started to spike. Several workarounds (globalization, lower interest rates, and more use of debt) allowed the economy to continue to grow. The period since 1970 might be considered a period of “stagflation.” Now the world economy is growing especially slowly. At the same time, we find ourselves with “overhead” that continues to grow (for example, payments to retirees, and repayment of debt with interest). The pattern of past civilizations suggests that our civilization could also collapse.

Historically, economies have taken many years to collapse; I show a range of 20 to 50 years in Figure 1. We really don’t know if collapse would take that long now. Today, we are dependent on an international financial system, an international trade system, electricity, and the availability of oil to make our vehicles operate. It would seem as if this time collapse could come much more quickly.

With the world economy this close to collapse, some individual countries are even closer to collapse. This is why we can expect to see sharp downturns in the fortunes of some countries. If contagion is not too much of a problem, other countries may continue to do fairly well, even as individual small countries fail.

[2] Figures to be released in 2017 and future years are likely to show that the peak in world coal consumption occurred in 2014. This is important, because it means that countries that depend heavily on coal, such as China and India, can expect to see much slower economic growth, and more financial difficulties.

While reports of international coal production for 2016 are not yet available, news articles and individual country data strongly suggest that world coal production is past its peak. The IEA also reports a substantial drop in coal production for 2016.

Figure 2. World coal consumption. Information through 2015 based on BP 2016 Statistical Review of World Energy data. Estimates for China, US, and India are based on partial year data and news reports. 2016 amount for "other" estimated based on recent trends.

Figure 2. World coal consumption. Information through 2015 based on BP 2016 Statistical Review of World Energy data. Estimates for China, US, and India are based on partial year data and news reports. 2016 amount for “other” estimated based on recent trends.

The reason why coal production is dropping is because of low prices, low profitability for producers, and gluts indicating oversupply. Also, comparisons of coal prices with natural gas prices are inducing switching from coal to natural gas. The problem, as we will see later, is that natural gas prices are also artificially low, compared to the cost of production, So the switch is being made to a different type of fossil fuel, also with an unsustainably low price.

Prices for coal in China have recently risen again, thanks to the closing of a large number of unprofitable coal mines, and a mandatory reduction in hours for other coal mines. Even though prices have risen, production may not rise to match the new prices. One article reports:

. . . coal companies are reportedly reluctant to increase output as a majority of the country’s mines are still losing money and it will take time to recoup losses incurred in recent years.

Also, a person can imagine that it might be difficult to obtain financing, if coal prices have only “sort of” recovered.

I wrote last year about the possibility that coal production was peaking. This is one chart I showed, with data through 2015. Coal is the second most utilized fuel in the world. If its production begins declining, it will be difficult to offset the loss of its use with increased use of other types of fuels.

Figure 3. World per capita energy consumption by fuel, based on BP 2016 SRWE.

Figure 3. World per capita energy consumption by fuel, based on BP 2016 SRWE.

[3] If we assume that coal supplies will continue to shrink, and other production will grow moderately, we can expect total energy consumption to be approximately flat in 2017. 

Figure 5. World energy consumption forecast, based on BP Statistical Review of World Energy data through 2015, and author's estimates for 2016 and 2017.

Figure 4. World energy consumption forecast, based on BP Statistical Review of World Energy data through 2015, and author’s estimates for 2016 and 2017.

In a way, this is an optimistic assessment, because we know that efforts are underway to reduce oil production, in order to prop up prices. We are, in effect, assuming either that (a) oil prices won’t really rise, so that oil consumption will grow at a rate similar to that in the recent past or (b) while oil prices will rise significantly to help producers, consumers won’t cut back on their consumption in response to the higher prices.

[4] Because world population is rising, the forecast in Figure 4 suggests that per capita energy consumption is likely to shrink. Shrinking energy consumption per capita puts the world (or individual countries in the world) at the risk of recession.

Figure 5 shows indicated per capita energy consumption, based on Figure 4. It is clear that energy consumption per capita has already started shrinking, and is expected to shrink further. The last time that happened was in the Great Recession of 2007-2009.

Figure 5. World energy consumption per capita based on energy consumption estimates in Figure 4 and UN 2015 Medium Population Growth Forecast.

Figure 5. World energy consumption per capita based on energy consumption estimates in Figure 4 and UN 2015 Medium Population Growth Forecast.

There tends to be a strong correlation between world economic growth and world energy consumption, because energy is required to transform materials into new forms, and to transport goods from one place to another.

In the recent past, the growth in GDP has tended to be a little higher than the growth in the use of energy products. One reason why GDP growth has been a percentage point or two higher than energy consumption growth is because, as economies become richer, citizens can afford to add more services to the mix of goods and services that they purchase (fancier hair cuts and more piano lessons, for example). Production of services tends to use proportionately less energy than creating goods does; as a result, a shift toward a heavier mix of services tends to lead to GDP growth rates that are somewhat higher than the growth in energy consumption.

A second reason why GDP growth has tended to be a little higher than growth in energy consumption is because devices (such as cars, trucks, air conditioners, furnaces, factory machinery) are becoming more efficient. Growth in efficiency occurs if consumers replace old inefficient devices with new more efficient devices. If consumers become less wealthy, they are likely to replace devices less frequently, leading to slower growth in efficiency. Also, as we will discuss later in this  post, recently there has been a tendency for fossil fuel prices to remain artificially low. With low prices, there is little financial incentive to replace an old inefficient device with a new, more efficient device. As a result, new purchases may be bigger, offsetting the benefit of efficiency gains (purchasing an SUV to replace a car, for example).

Thus, we cannot expect that the past pattern of GDP growing a little faster than energy consumption will continue. In fact, it is even possible that the leveraging effect will start working the “wrong” way, as low fossil fuel prices induce more fuel use, not less. Perhaps the safest assumption we can make is that GDP growth and energy consumption growth will be equal. In other words, if world energy consumption growth is 0% (as in Figure 4), world GDP growth will also be 0%. This is not something that world leaders would like at all.

The situation we are encountering today seems to be very similar to the falling resources per capita problem that seemed to push early economies toward collapse in [1]. Figure 5 above suggests that, on average, the paychecks of workers in 2017 will tend to purchase fewer goods and services than they did in 2016 and 2015. If governments need higher taxes to fund rising retiree costs and rising subsidies for “renewables,” the loss in the after-tax purchasing power of workers will be even greater than Figure 5 suggests.

[5] Because many countries are in this precarious position of falling resources per capita, we should expect to see a rise in protectionism, and the addition of new tariffs.

Clearly, governments do not want the problem of falling wages (or rather, falling goods that wages can buy) impacting their countries. So the new game becomes, “Push the problem elsewhere.”

In economic language, the world economy is becoming a “Zero-sum” game. Any gain in the production of goods and services by one country is a loss to another country. Thus, it is in each country’s interest to look out for itself. This is a major change from the shift toward globalization we have experienced in recent years. China, as a major exporter of goods, can expect to be especially affected by this changing view.

[6] China can no longer be expected to pull the world economy forward.

China’s economic growth rate is likely to be lower, for many reasons. One reason is the financial problems of coal mines, and the tendency of coal production to continue to shrink, once it starts shrinking. This happens for many reasons, one of them being the difficulty in obtaining loans for expansion, when prices still seem to be somewhat low, and the outlook for the further increases does not appear to be very good.

Another reason why China’s economic growth rate can be expected to fall is the current overbuilt situation with respect to apartment buildings, shopping malls, factories, and coal mines. As a result, there seems to be little need for new buildings and operations of these types. Another reason for slower economic growth is the growing protectionist stance of trade partners. A fourth reason is the fact that many potential buyers of the goods that China is producing are not doing very well economically (with the US being a major exception). These buyers cannot afford to increase their purchases of imports from China.

With these growing headwinds, it is quite possible that China’s total energy consumption in 2017 will shrink. If this happens, there will be downward pressure on world fossil fuel prices. Oil prices may fall, despite production cuts by OPEC and other countries.

China’s slowing economic growth is likely to make its debt problem harder to solve. We should not be too surprised if debt defaults become a more significant problem, or if the yuan falls relative to other currencies.

India, with its recent recall of high denomination currency, as well as its problems with low coal demand, is not likely to be a great deal of help aiding the world economy to grow, either. India is also a much smaller economy than China.

[7] While Item [2] talked about peak coal, there is a very significant chance that we will be hitting peak oil and peak natural gas in 2017 or 2018, as well.  

If we look at historical prices, we see that the prices of oil, coal and natural gas tend to rise and fall together.

Figure 6. Prices of oil, call and natural gas tend to rise and fall together. Prices based on 2016 Statistical Review of World Energy data.

Figure 6. Prices of oil, coal and natural gas tend to rise and fall together. Prices based on 2016 Statistical Review of World Energy data.

The reason that fossil fuel prices tend to rise and fall together is because these prices are tied to “demand” for goods and services in general, such as for new homes, cars, and factories. If wages are rising rapidly, and debt is rising rapidly, it becomes easier for consumers to buy goods such as homes and cars. When this happens, there is more “demand” for the commodities used to make and operate homes and cars. Prices for commodities of many types, including fossil fuels, tend to rise, to enable more production of these items.

Of course, the reverse happens as well. If workers become poorer, or debt levels shrink, it becomes harder to buy homes and cars. In this case, commodity prices, including fossil fuel prices, tend to fall.  Thus, the problem we saw above in [2] for coal would be likely to happen for oil and natural gas, as well, because the prices of all of the fossil fuels tend to move together. In fact, we know that current oil prices are too low for oil producers. This is the reason why OPEC and other oil producers have cut back on production. Thus, the problem with overproduction for oil seems to be similar to the overproduction problem for coal, just a bit delayed in timing.

In fact, we also know that US natural gas prices have been very low for several years, suggesting another similar problem. The United States is the single largest producer of natural gas in the world. Its natural gas production hit a peak in mid 2015, and production has since begun to decline. The decline comes as a response to chronically low prices, which make it unprofitable to extract natural gas. This response sounds similar to China’s attempted solution to low coal prices.

Figure 7. US Natural Gas production based on EIA data.

Figure 7. US Natural Gas production based on EIA data.

The problem is fundamentally the fact that consumers cannot afford goods made using fossil fuels of any type, if prices actually rise to the level producers need, which tends to be at least five times the 1999 price level. (Note peak price levels compared to 1999 level on Figure 6.) Wages have not risen by a factor of five since 1999, so paying the prices that fossil fuel producers need for profitability and growing production is out of the question. No amount of added debt can hide this problem. (While this reference is to 1999 prices, the issue really goes back much farther, to prices before the price spikes of the 1970s.)

US natural gas producers also have plans to export natural gas to Europe and elsewhere, as liquefied natural gas (LNG). The hope, of course, is that a large amount of exports will raise US natural gas prices. Also, the hope is that Europeans will be able to afford the high-priced natural gas shipped to them. Unless someone can raise the wages of both Europeans and Americans, I would not count on LNG prices actually rising to the level needed for profitability, and staying at such a high level. Instead, they are likely to bounce up, and quickly drop back again.

[8] Unless oil prices rise very substantially, oil exporters will find themselves exhausting their financial reserves in a very short time (perhaps a year or two). Unfortunately, oil importers cannot withstand higher prices, without going into recession. 

We have a no win situation, no matter what happens. This is true with all fossil fuels, but especially with oil, because of its high cost and thus necessarily high price. If oil prices stay at the same level or go down, oil exporters cannot get enough tax revenue, and oil companies in general cannot obtain enough funds to finance the development of new wells and payment of dividends to shareholders. If oil prices do rise by a very large amount for very long, we are likely headed into another major recession, with many debt defaults.

[9] US interest rates are likely to rise in the next year or two, whether or not this result is intended by the Federal reserve.

This issue here is somewhat obscure. The issue has to do with whether the United States can find foreign buyers for its debt, often called US Treasuries, and the interest rates that the US needs to pay on this debt. If buyers are very plentiful, the interest rates paid by he US government can be quite low; if few buyers are available, interest rates must be higher.

Back when Saudi Arabia and other oil exporters were doing well financially, they often bought US Treasuries, as a way to retain the benefit of their new-found wealth, which they did not want to spend immediately. Similarly, when China was doing well as an exporter, it often bought US Treasuries, as a way retaining the wealth it gained from exports, but didn’t yet need for purchases.

When these countries bought US Treasuries, there were several beneficial results:

  • Interest rates on US Treasuries tended to stay artificially low, because there was a ready market for its debt.
  • The US could afford to import high-priced oil, because the additional debt needed to buy the oil could easily be sold (to Saudi Arabia and other oil producing nations, no less).
  • The US dollar tended to stay lower relative to other currencies, making oil more affordable to other countries than it otherwise might be.
  • Investment in countries outside the US was encouraged, because debt issued by these other countries tended to bear higher interest rates than US debt. Also, relatively low oil prices in these countries (because of the low level of the dollar) tended to make investment profitable in these countries.

The effect of these changes was somewhat similar to the US having its own special Quantitative Easing (QE) program, paid for by some of the counties with trade surpluses, instead of by its central bank. This QE substitute tended to encourage world economic growth, for the reasons mentioned above.

Once the fortunes of the countries that used to buy US Treasuries changes, the pattern of buying of US Treasuries tends to change to selling of US Treasuries. Even not purchasing the same quantity of US Treasuries as in the past becomes an adverse change, if the US has a need to keep issuing US Treasuries as in the past, or if it wants to keep rates low.

Unfortunately, losing this QE substitute tends to reverse the favorable effects noted above. One effect is that the dollar tends to ride higher relative to other currencies, making the US look richer, and other countries poorer. The “catch” is that as the other countries become poorer, it becomes harder for them to repay the debt that they took out earlier, which was denominated in US dollars.

Another problem, as this strange type of QE disappears, is that the interest rates that the US government needs to pay in order to issue new debt start rising. These higher rates tend to affect other rates as well, such as mortgage rates. These higher interest rates act as a drag on the economy, tending to push it toward recession.

Higher interest rates also tend to decrease the value of assets, such as homes, farms, outstanding bonds, and shares of stock. This occurs because fewer buyers can afford to buy these goods, with the new higher interest rates. As a result, stock prices can be expected to fall. Prices of homes and of commercial buildings can also be expected to fall. The value of bonds held by insurance companies and banks becomes lower, if they choose to sell these securities before maturity.

Of course, as interest rates fell after 1981, we received the benefit of falling interest rates, in the form of rising asset prices. No one ever stopped to think about how much of the gains in share prices and property values came from falling interest rates.

Figure 8. Ten year treasury interest rates, based on St. Louis Fed data.

Figure 8. Ten year treasury interest rates, based on St. Louis Fed data.

Now, as interest rates rise, we can expect asset prices of many types to start falling, because of lower affordability when monthly payments are based on higher interest rates. This situation presents another “drag” on the economy.

In Conclusion

The situation is indeed very concerning. Many things could set off a crisis:

  • Rising energy prices of any kind (hurting energy importers), or energy prices that don’t rise (leading to financial problems or collapse of exporters)
  • Rising interest rates.
  • Defaulting debt, indirectly the result of slow/negative economic growth and rising interest rates.
  • International organizations with less and less influence, or that fall apart completely.
  • Fast changes in relativities of currencies, leading to defaults on derivatives.
  • Collapsing banks, as debt defaults rise.
  • Falling asset prices (homes, farms, commercial buildings, stocks and bonds) as interest rates rise, leading to many debt defaults.

Things don’t look too bad right now, but the underlying problems are sufficiently severe that we seem to be headed for a crisis far worse than 2008. The timing is not clear. Things could start falling apart badly in 2017, or alternatively, major problems may be delayed until 2018 or 2019. I hope political leaders can find ways to keep problems away as long as possible, perhaps with more rounds of QE. Our fundamental problem is the fact that neither high nor low energy prices are now able to keep the world economy operating as we would like it to operate. Increased debt can’t seem to fix the problem either.

The laws of physics seem to be behind economic growth. From a physics point of view, our economy is a dissipative structure. Such structures form in “open systems.” In such systems, flows of energy allow structures to temporarily self-organize and grow. Other examples of dissipative structures include ecosystems, all plants and animals, stars, and hurricanes. All of these structures constantly “dissipate” energy. They have finite life spans, before they eventually collapse. Often, new dissipative systems form, to replace previous ones that have collapsed.

The one thing that gives me hope is the fact that there seems to be some type of a guiding supernatural force behind the whole system that allows so much growth. Some would say that this supernatural force is “only” the laws of physics (and biology and chemistry). To me, the fact that so many structures can self-organize and grow is miraculous, and perhaps evidence of a guiding force behind the whole universe.

I don’t know precisely what is next, but it seems quite possible that there is a longer-term plan for humans that we are not aware of. Some of the religions of the world may have insights on what this plan might be. It is even possible that there may be divine intervention of some type that allows a change in the path that we seem to be on today.

About Gail Tverberg

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

1,607 Responses to 2017: The Year When the World Economy Starts Coming Apart

  1. Rice Farmer says:

    Divine intervention? Be careful what you wish for! The purpose of the intervention might be to wipe the slate clean and start over.

  2. kwklein says:

    People “eat” oil. There are more and more people (~ 250,000 more each day) and less and less oil.

    There is not a damn thing people will do about this.

    Big, big predicament. Not a problem though, problems have solutions. Predicaments only have outcomes.

    • Right! I think people lose sight of the fact that coal is as important as oil, and natural gas is almost as important. All of the focus on oil has in some ways kept people from seeing the full picture.

  3. Darwinian intervention is more likely

    • Mike Roberts says:

      Indeed, far more likely than deity intervention, which would completely destroy all of the scientific knowledge we’ve built up about how the universe functions.

      • Perhaps the outcome is outside the Universe that we have been studying.

        • Duncan Idaho says:

          Or has Smolin has speculated, Laws themselves evolve.

          • Ed says:

            A reference to Lee Smolin holy cow I am impressed this is a bright group.

          • A couple of references to Lee Smolin:



            Excerpts from an interview in the second reference:

            When you know the history of physics you are painfully aware of how much each era overestimates the scope of its understanding. Science progresses well, but at each stage, we embrace metaphysical fantasies that seem motivated by the science but come to look silly when people come to know more in the future. As Brian Eno once said, “Nothing so dates an era as its conception of the future.”

            . . .

            Nor has much changed with the sociological issues. What I’ve understood since the book was published is that these infect many fields of research and scholarship from economics to computer science to education to medicine, just to mention a few. I received many communications from experts in these and other fields who got in touch to say that their fields were troubled by the same sociological issues I addressed in my book.

            The problems are rooted in the way the career and funding structures of the academy reward me-too science, lack of courage, entrenchment of failed research programs, legacy building, empire building, narrowness, defensive strategies and groupthink. These should be of concern to anyone in a position to craft incentives for academics, such as officers of funding agencies and foundations, university leaders and administrators, private donors.

            . . .

            One way to reconcile evolving laws with falsifiability is by paying attention to large hierarchies of time scales. The evolution of laws can be slow in present conditions, or only occur during extreme conditions that are infrequent. On much shorter time scales and far from extreme conditions, the laws can be assumed to be unchanging.

            As Roberto Mangabeira Unger and I argue in our new book The Singular Universe, the most important discovery cosmologists have made is that the universe has a history. We argue this has to be extended to the laws themselves. Biology became science when the question switched from listing the species to the dynamical question of how species evolve. Fundamental physics and cosmology have to transform themselves from a search for timeless laws and symmetries to the investigation of hypotheses about how laws evolve.

        • Mike Roberts says:

          If the outcome is outside the Universe that we have been studying (the one we live in, with the physical laws it has), then there is no other outcome for us, since anything happening outside of this universe can’t affect this universe.

  4. adonis says:

    thanks for a great article gail and i do think our only hope is Divine Intervention but that may only be possible once all of humanity is totally repentant and honestly praying for salvation GOD or The Cosmic Force wont come to our rescue unless we deserve it

    • I am not convinced about “deserving Devine intervention.” Repentant implies that our ways have been wrong or bad. When there is surplus energy, sharing with others is optimal, and many of the religions of the world teach that. Those who do not, I suppose, could be viewed as errant, and needing repentance. I will leave that up to God, or the force behind all of the universe’s energy flows.

    • Tango Oscar says:

      This is funny; you appear to assume that humans are in some way superior to other life forms and therefore much more deserving of “salvation.” Just because we’ve developed farming, language, fire, and have thumbs does not make us any more worthy of “being saved” than the other millions of species that have gone extinct before us. So you would also be assuming that this divine force has only chosen homo sapiens as “the species” and that everything else of his/her creation can simply be permitted to burn. I don’t think so.

      You have your belief precisely backwards but cannot see the truth. Of all of the species that have ever existed on Earth, to our knowledge, homo sapiens are the most UNDESERVING of “being saved” since we are the ones directly influencing the destruction of all the others and the biosphere. In fact, a divine entity, if one did exist, would likely want nothing more than our species to just quickly exit stage right immediately. We are not deserving or worthy of anything but extinction, for a species that willingly knows its crapping in its own home deserves to go extinct. The removal of natural selection was one of our biggest flaws and our desperate attempts at keeping everyone alive has led us to believe we can play god. Sad, comical, and futile.

      • the simple truth remains, that we are not the dominant species on earth.

        this is the reality godbotherers cant live with

        Microbial life has been around for 2 bn years, humankind has been around for 1 Mn or so. if they weren’t here, we would be dead in days.
        If we suddenly bumped ourselves off—they wouldn’t be aware of it—so which is the dominant life form?

        we have been at war with microbial life, and we think we’ve won.
        what’s really happened is that they have gone away to regroup and evolve into new lifeforms ready for when our hydrocarbon defences come down during the coming decade

        pity evolution isn’t a myth

        • Tango Oscar says:

          Don’t worry Norman, Trump will save us; right after he’s done being urinated on by some call girls.

          • Joebanana says:

            May I remind you that getting urinated on is not illegal! In fact, they say its good for the skin.

            • Tango Oscar says:

              I suppose it’s not illegal to remind all of the viewers during the middle of the Republican debates of your genital size on national television either. Legality of issues in our perverted society is not really a good ethics measuring stick.

            • I agree that this is pretty tacky too. A sign of the changed view we are seeing.

              I also understand Trump’s religious view is the Prosperity Gospel, or the “God will make us rich” view. Clearly, historically the need for gods has been tied to a need for good weather, good crops, health, etc. besides an explanation of what is happening, and more recently, the idea of looking out for each other. With less to share, the emphasis seems to go back to the old emphases. Thus, religion also seems to change to meet the needs of the day.

            • Tango Oscar says:

              “Thus, religion also seems to change to meet the needs of the day.” See scientology for example. Talk about ridiculous.

            • gerryhiles says:

              Can I remind, or inform everyone that the urination “news” is FAKE. It never happened and, as a consequence, several media outlets are in deep doo doo.

            • now dont laugh doomsters
              i was just watching a historical documentary about Venice on uktv

              Anybody in UK can do catchup and watch it on BBC1

              The courtesans in 15th/16thc Venice used to wash their hair in urine to give in a orange-red lustre

            • Joebanana says:

              I was kidding man.

            • I wish all of the call girl stuff would disappear from the news. If Trump and his wife think these activities are OK, I don’t really want to hear about them. Powerful leaders have historically had a lot of women at their disposal, in one way or another. I don’t think that this changes now.

        • Mike Roberts says:

          There are many species of microbes, though. Only one species of Homo sapiens.

          • thats how we are outgunned

          • We cheated. We did the naming of species.

            • Mike Roberts says:

              Well, yes, we named the species but that’s just naming. However, there are reasons for the differentiation into species (distinctly different DNA sequences being one reason). The claim that microbes or bacteria or insects or molds are more succesful than humans is also defined by … humans! But that would be wrong because it’s not comparing apples with apples (one particular species of bacteria may or may not be more successful than humans, depending on a human decided measurement of success, but that is not the claim).

            • hkeithhenson says:

              One thing separates humans from the rest of the species. We, or possibly our mechanical offspring, are the only ones who can get off the planet and therefore affect the spread of lift to other places in the universe.

              Maybe. The jury is still out on this.

            • Mike Roberts says:

              Every/most species have some unique ability that could separate them from other species if they decide that’s some important ability. Getting off the planet, doesn’t seem to be an important ability and is only an ability very few members of this species have and only with the help of other species from the far past (that created fossil fuels, an essential element in building up the ability of those few people who have the ability to get off the planet). Humans are also special in looking towards other planets before figuring out how to live sustainably on this one. Again, not much of an ability.

            • our power to overcome gravity hasnt changed since chinese fireworks or the wright brothers.

              until we come up with something different we are going nowhere

            • Stefeun says:

              We aren’t even able to go where we are,
              We’re losing against the Red Queen.

            • hkeithhenson says:

              I can’t agree with you. But what characteristics do you think we need for “something different?”

            • well if you dont agree with me—offer the alternative.

              Chinese fireworks, the Wright brothers and the Apollo moon landings utilised the power of exploding chemicals to deliver reactive forces.

              What else is there in any meaningful context?

      • Yorchichan says:

        Your post is awesome, Tango Oscar. Way too much anthropocentrism on display by many. We are not special and nobody is coming to save us.

        • Tango Oscar says:

          I think the idea that humans need to be saved is born of fear too.

          • Stefeun says:

            There were already too many people congratulating you for your comment (me too). So just one point:
            “Being saved” means “not die”?
            Since death is necessary to biological evolution, I conclude that “being saved” is a refusal to evolve, which is totally unsustanable in an environment that is changing as quickly as ours.
            We cannot adjust the environment to our desires, it’s the other way round, we must constantly adapt to new conditions. And therefore accept death, which ironically becomes the only way to “be saved”.

            • Tango Oscar says:

              To me, the idea behind salvation is not simply staying alive here, it’s the idea that we are “chosen” and have souls that can live forever in a mythical land paved with streets of gold. No one wants to starve and go to hell, hence salvation. The myth of sins reinforces this notion. Be good, or else!

              If salvation means a refusal to evolve biologically it’s by accident. The intent of people seeking salvation is to live here on Earth and be prosperous as well as immediately teleport to heaven upon death. It’s the whole package, although some religious do take up vows of poverty, depending on which of the 30,000 versions of Christianity they were exposed to.

              We can temporarily alter this environment to our desires but it will boomerang back with negative or unintended repercussions. Death here is inevitable. These bodies were never intended to last more than 70-80 years anyway. Salvation is sort of an idea construct; it’s not real outside of the individual mind.

              Upon death, energy changes forms; at the very least the elements in our bodies will be returned to the soil. Weather someone personally believes their consciousness endures on after that point is irrelevant to me. If you or anyone else cares to get stuck in a realm where you permanently bow to a giant bearded man who spanks you for dropping “F” bombs then more power to ya. I choose to not impose limitations on myself.

            • Stefeun says:

              I agree with you, and would like to precise a small detail, which is that IMHO it all boils down to the nature of consciousness.

              I see religions as made of 2 distinct aspects, that everyone tends to blur all the time:
              – one is the collective part, which establishes the rules (of the moment) and tells people how they should behave (with threat of punishment). That part requires a god, that usually is better than the neighbor’s one.
              – and the other is the spirituality, the personal part they call the soul, the spirit, etc…(the ones that the rules initially reserved to the white men, then extended to the women, the non-white humans, and then stopped).

              The latter came first, inspired by unanswered questions such as afterlife (btw, what about before-life?) and all kinds of fears coming from the unknown things.
              Such questions and fears were enabled by the possibilities of our brains to produce abstractions and speculations about the future, all of which is the result of the organization of our memories by an operating system, aka the consciousness.

              Such a system should also have a purpose. No-one told us what it was, so we had to invent some final goal and the narratives that go along with it. It nevertheless remains pure invention. Who said there should be any goal? It would be the ultimate reward after a race of which the rules are based on nothing and re-written at convenience? It also helps people in bad situations to be convinced that tomorrow will be brighter than today, and their rulers to tell them keep going.
              Nothingness is inconceivable (even naming it is a nonsense).

              I understand that bringing up biology in my comment was a bit provocative, because of the distinction alive Vs dead, but not so much (still IMHO) since what they call the soul, what I call the consciousness, is no more than an additional layer of complexity that allows us to dissipate energy in an always more efficient ways (until it doesn’t, in our finite world).
              So for me the spirit, soul, you name it, is part of our physical body, NOT an external entity that would survive after death (and pre-exist before birth?).
              The reason why upper layers of consciousness only could escape death is beyond me.

              I don’t say that nothing exists, some force behind the laws of physics, I say that this discussion is moot because we don’t have any possibility to check anything. Also, that some are (still!!) talking “in the name of god” is utterly ridiculous, and very dangerous (which is why they succeeded so far, btw).
              Hope this comment won’t revive polemics about this topic in this thread… I have already understood that I don’t understand anything in that matter.

            • Tango Oscar says:

              I disagree somewhat and believe the consciousness to be separate from our physical bodies. That doesn’t mean I would use the loaded phrase “soul,” or any of the baggage that term has. There is no beginning or end that I’m aware of, just constant transformation of energy in different directions.

              If we could remember anything from before this physical lifetime, what would be the point? Hence why people just make a bunch of stuff up in order to keep things interesting. There doesn’t have to be a goal with an experiment, does there? Sometimes things are worth doing purely for the experience. Such is life.

            • Stefeun says:

              I sensed that we’d disagree about nature of consciousness, that’s actually why I made this comment.
              Fully agree about “the travel” being the only interesting thing. We are designed (have evolved) to live in the present, after all.

            • Tango Oscar says:

              I was a skeptic too for quite a long time but being open minded I gave everything an equal opportunity to satiate my curiosity and prove itself. Eventually I stumbled upon a number of things that pushed me more into the agnostic camp. Then I started having regular experiences that just went totally into the unexplainable category. And that was enough “proof” for me.

            • hkeithhenson says:

              Evolutionary psychology makes the case that every common psychological trait is the result of either direct selection (such as capture-bonding) or a side effect (addiction is a side effect of plant chemicals that activated the evolved reward pathway).

              In your opinion, which is the common psychological trait of religions? Were humans directly selected for religiosity? Or do you think the human capacity for religions is a side effect of something else that was selected?

            • Stefeun says:

              I like “side-effect”.
              I think religiosity comes from a certain perception of the future. The future is an abstraction designed to anticipate situations and be more efficient, at hunting for example. Consciousness is necessary to operate that and elaborate strategies.
              So IMHO religiosity is clearly a side-effect of an evolutionary development (consciousness).

            • It would seem that religions can be explained within humankind that we appear to be the only species with an awareness of the past, and a sense of the future.

              Religion seems to pivot around these concepts, so we bury our dead alongside our forebears (or we used to in old churchyards), in the hope of a ‘future’ afterlife (with them and whatever diety is currently in the ascendant)
              Charlatans make promises of a ‘better future’ if only we endure the privations of the present, they also explain unpleasantness as the will of some diety inflicting displeasure in the form of disease or infirmity (the will of god)
              Religions provide the fuel for conflict—(death to the infidel) and rewards for same (70 virgins etc)

              ‘God is on our side’ has been the battle cry since gods were thought up.

            • Stefeun says:

              Proto-religions seem to exist in the animal world, albeit at a low level (corresponding to the level of communication I presume).


              Note that nothing allows to establish any co-development between morality and proto-religion.
              It could even be the opposite, ie religion would tend to promote warfare.

            • hkeithhenson says:

              I didn’t ask about what religions are. The question is what is it about the trait that promoted survival for human genes that give us the capacity to “have” religions back on the stone age?

              It’s clear that religions are memes. Religions are particularly xenophobic memes, at least in their origin. You are correct to note the connection to killing others.

              Why did humans evolved this capacity? Since it is very widespread in human groups, it must have been very important for genetic survival for a long time, but because our closest relatives don’t have this capacity, it arose since our line split from theirs.

              How did the capacity for religions contribute to human genetic survival?

            • Stefeun says:

              How did the capacity for religions contribute to human genetic survival?
              By helping put people in line to acheive group strategies. By enlarging the boundaries of people cooperating for same goals, eg to take over smaller groups.

              Religion is considered here as a tool, helping dissipate the energy in a more efficient way. Available energy is necessary, but the tool could be something else than religion (that revealed particularly efficient, though).

            • yup

              my god is better than your god—and to prove it I am prepared to kill you, take your land and cattle and make off with your womenfolk

              if on the other hand, your god is stronger than mine, he will strike down my warriors with fire and pestilence, and keep you safe from harm

            • Stefeun says:

              In your example, God is just a flag, a label. It could very well be another banner. In fact it represents the rate of energy flow (hence the importance of having as many people as possible worshipping the same one).

              Morality doesn’t need any religion, spirituality doesn’t need any god.
              It’s just the easy way out (for both the rulers and the ruled).

            • i agree

              if my army has 10000 soldiers, and your army has 1000 soldiers then my energy availability is 10x yours

              if on the other hand your 1000 soldiers have machine guns, and mine have spears, then the energy balance swings the opposite way and my army gets wiped out

            • Stefeun says:

              To push one step ahead (that’ll be my last) on the end of my previous comment:
              One could speculate that, not only religion and god haven’t any obvious relationship with morality and spirituality, they could -at least in advanced forms- constitute their end-point.

              In effect, bringing (or forcing to ingest) pre-cooked top-down answers to justified questions, is like telling people “Stop thinking, follow our rules”.
              Of course, there’s a big narrative around that to sweeten things a bit.

            • Right.

              For women, especially it is helpful, because meeting people in places like bars is not helpful at all–too many chances of predatory behavior by men. Women need a neutral place to meet and interact with other women, and a source of teachings about how to best cooperate with each others, for help in raising children. A lot of young adults people drop out of church, but come back when they have small children.

              Life expectancies tend to be longer for those who attend church, but I expect that this is partly a “selection” issue. Drunks and drug addicts are not known for the amount of time they spend in church.

              Having reasonable strategies for dealing with life’s problems, and having a chance to meet with others who have successfully handled problems similar to one’s own, can be helpful, whether or not a person believes much of the teachings of the church.

            • It is very hard for a leader to claim a high level of authority, if he or she doesn’t have someone “higher up” to back him/her. This is also helpful in dispute mediation.

              At the same time, it was very clear that there was something somewhat miraculous going on, allowing the system to go on. There were many aspects to the system: (1)people being born, growing up, and eventually dying, (2) day and night following each other, and planets and stars staying the same, (3)food of various kinds becoming available at various times of year, in various places. It was very easy to postulate that there was some force behind this whole system.

              Each group found a need to give thanks for bountiful harvests (or I suppose adequate catches of animals, and adequate resources to start fire, and adequate plant food), and a need to implore the gods for continued success. Natural variability created a situation where day to day and year to year harvests varied significantly. It made sense to try to manipulate the gods, with offerings of some share of the bounty, and with other approaches–rain dances to bring on rain, for example.

              The same approach could be used to pass on wisdom that the population had learned. For example, cooperation has a better long-run outcome than always fighting over resources, when there is enough to go around. (War works, when there is not enough to go around.) Also, when there is a high death rate of children, women need to have quite a children. It is better for children if couples to stay together for the long term. Wealthy men can afford more wives than poor men; the religion may limit the number of wives a man can have as an indirect form of birth control, and to keep wealth disparity from playing too great a role in reproduction. Medicine men might pass on rules regarding letting the less strong of two twins to die, to protect the health of the mother, and to help natural selection.

            • hkeithhenson says:

              ” “higher up” to back him/her.”

              That’s certainly true in old historical times. Pope Urban II (or his propagandists) used “God wills it” in kicking off the first crusade. (Worth reading the Wikipedia article.)

              But I suspect that in recent times, say 1900 on, that irrational trumps religion (sorry about that) as an attractive feature in leaders for populations under stress. Hitler, for example, was not considered a religious person. If you count communism as a religion, I suppose Pol Pot could be considered a religious figure. It’s a subject and a point of view I have not considered deeply enough to have formed a strong opinion.

            • ejhr2015 says:

              Maybe it’s GAIA? James Lovelock proposed it to account for the Earth’s tendency to order itself, that organisms co evolve synergistically with the inorganic base. etc.

            • Right–GAIA is very closely related to nature of earth and its biosphere as a dissipative structure.

            • Perhaps there are some things that are not from this universe, that we don’t understand, that are going on as well.

            • Stefeun says:

              Yes of course, Gail,
              But between what you say and “The Official Truth”, I think there’s quite a long way to go. Many have no hesitation.

            • Stefeun says:

              Oh, by the way, Gail,
              Many Thanks for letting this kind of discussions going on here, especially as we all know that you don’t necessarily agree with the conclusions of one or the other commenter.
              That one was constructive -Thanks to other commenters- and helped me have a clearer point of view on the -delicate- topic.

            • DJ says:

              “How did the capacity for religions contribute to human genetic survival?”

              Those who through their religion team up and eliminate other religions or non-religious are at advantage.

              Also nationalists, and perhaps racists, have an advantage.

              Peaceful anarchists are a genetic mutation.

            • hkeithhenson says:

              “Those who through their religion team up”

              That’s close. Remember the context in which this got started was not a lot more complicated than a chimpanzee band. Those bands do engage in something we are likely to describe as war. But unlike humans, chimps are in war mode all the time. They constantly raid into other groups territory and kill other chimps they find. Like humans, chimps don’t have a lot of predators, largely because they live up in trees much of the time.

              In any case, humans are not at war with other humans all the time, just part of the time. The spread of xenophobic memes, beliefs that dehumanize the others so the warriors can kill them, are part of what switches humans from peace mode to war mode.

              This still isn’t enough to explain why going to war with others and the mental mechanisms that facilitate going to war would be selected. On average human groups tended to be well matched so the chances of being killed while attacking others was high, on average about 50%. What hard to understand is that while the results of going into fights of this type hold no advantage to the warriors, a quirk in the way male primates relate to female primates, namely taking the young women as booty, gives a substantial advantage (in some circumstances) to the warriors _genes_ if they fight. Why? Because from the viewpoint of the genes, war leaves more copies of the genes than the alternative, if the alternative is (statistically) half of the tribe members starving.

              I don’t expect many of you to understand this, you have to be up on not only evolutionary psychology, but concepts like Hamilton’s inclusive fitness, relatedness and genetic modeling. But if you do understand it, it will give you an appreciation of the origin of the human psychological trait that enables religions. Perhaps “appreciation” is too weak a word here, “terrified appreciation” would better describe how I feel about the origin of this psychological trait and the organizations (such as Scientology) that it enables.

            • It makes good sense to me. Also, it makes a difference whether young men or young women are killed off. Young men are a lot more dispensable, when it comes to the next generation, because it doesn’t take very many men to be fathers to a large number of children. The fathers can also be older, if this works better. If the young men succeed in obtaining more resources, it is all to the good. Starvation for all would not have been helpful to men or women.

      • I will have to admit that is a reasonable argument.

  5. ejhr2015 says:

    A few comments; There are moves afoot, perhaps beginning in Finland to pay its citizens a stipend every month. I assume it is supposed to be a living wage equivalent, because it needs to be. I firmly believe the economy is progressing in a direction that will make such payments mandatory. There are those who believe it is unaffordable and would cut the incentive to get a job. This is not true as long as the stipend – it is not a pension – is paid to everyone tax free and regardless of being in work or wealthy or not. So the incentive to work is not lost just the desperation behind poverty is lost.

    The trend is for less and less employment opportunities becoming available over time, due to the fact that workers are just not needed for the economy to grow, so being out of work becomes endemic. A stipend would save these unemployed from penury and worse.

    As economies get closer and closer to collapse the government will empower itself to ration food and essentials but the stipend will continue so people can buy their rations. It will become a war economy. After that? Who knows, but it will be bad. It is ordained now.

    • A major purpose of energy is to provide jobs. Lack of jobs is evidence of lack of energy. So Finland is already affected by the problems I am talking about.

      I talk about world output of goods and services remaining flat, for the world as a whole. The question is, “Can Finland capture a larger share of the world’s supply of goods and services, using the strategy of paying citizens a stipend each month.” I suspect that it cannot; instead, the Finnish currency will “float” relatively lower, keeping the total amount of goods and services that Finland can appropriate at something like the same share. If Finland doesn’t really have goods it can sell on the world market, its share may be going down.

      What the stipend each month primarily does is reallocate Finland’s share of total goods and services differently, with the wealthy getting less and the poor getting more. Actually, the wealthy don’t really spend all of their income currently, so this process will tend to increase “demand” from the less wealthy. This may increase inflation, because we are not actually talking about more goods being available.

      If this procedure does increase inflation, it could induce the Finnish people to, for example, plant more of their own food, and sell it locally. (The falling currency would make it harder to buy imported food.) I am doubtful that this would actually work to increase Finnish output, but it might.


      • Harry Gibbs says:

        Gail, having multiple, floating currencies seems to be a major vulnerability for the global economy. I know that some commentators have suggested that the IMF might need to step in at some point with its SDR’s, in effect creating a one-world currency. Is there any way that you can see this buying us some time?

        Personally, I can’t even begin to imagine the political discord that such a project would incite, as a universal currency would surely serve to highlight the inequality in pay around the world. And as for the practical issue of printing and distributing this currency and working out exchange rates and exchange mechanisms for the expired currencies… The mind boggles!

        • @ Harry
          very few pick up the direct and specific link between energy availability/use and employment
          remaining convinced that its possible to get rich by taking in each others washing

          • Harry Gibbs says:

            Yes, indeed. Ultimately energetic constraints will impose themselves on us. I was just idly wondering if a one-world currency might somehow allow us to squeeze a little more life out of the system, as there would be no other currencies against which it would lose value when manipulated. But I’m sure the practicalities make it pie in the sky.

            • they tried that with the euro

              the work ethic is different in different countries, (Finland vs Greece for instance.)
              so it never matched up to expectations

            • Harry Gibbs says:

              But, Norman, the Euro still has to compete with other currencies globally against which it can lose value. A one-world currency would obviate this possibility. That is my point. Regardless, it is for other reasons, a pretty absurd notion.

            • We need something that would allow more debt. I am afraid we would lose debt we have, when we try to change other currencies to the new currency.

        • common phenomenon says:

          Finland uses the euro, incidentally. One size has to fit all when you have a currency union, and this is rarely ideal.

        • You are right about the mess with implementation. Think about the mess in India when it tried to call in two of its high-ranking denominations. Imagine doing something worse than this, worldwide!

          The IMF gets its funding from member countries, I imagine. If they have a problem, the IMF would be out of business, I expect.

          I wonder what happens to derivatives, when the many currencies go away.

      • Ed says:

        Planting ones own food is more about grabbing a larger share of the zero sum pie from others.

        • wysinwygymmv says:

          Not necessarily. Disrupting someone else’s food production by taking over their land is self-defeating — it would be better to allow (or even help) them to produce a surplus, as the surplus can then be eaten by the would-be invader. In fact, invaders allowing agriculturalists to continue producing food surpluses seems to be the pattern underlying all of civilization — ancient Sumeria’s words for its food commodities were loan words from an even earlier extinct language, presumably that of the people who learned to cultivate the date palm and other staple crops of Mesopotamian society.

          What I’m getting at there is that food production is not zero sum. For a bad farmer, it’s a better move to give some or all of your land to a good farmer for some claim to the food they produce than it is to try to farm it with poor techniques.

          Also, through cooperation, marginal or non-arable land can be made arable. Again, these practices date back to the beginnings of civilization in Sumeria. It’s not worthwhile to seize land from someone else if you need their help to build infrastructure or engage in agriculture. It’s better to find a way to make yourself useful to them. Non-zero sum.

          • I suppose if your farming skills are equal to the ones of the people you defeat, you would want to kill off as many as possible of the population of the country, so it would be your population, and not the other group, who lives there.

        • That could be. Growing and storing a person’s own food is generally not a very productive use of a person’s time. Unless people work many more hours, or those not currently in the work force start working on this, working on producing ones own food tends to make the county’s total production of goods and services go down, rather than up. It would only somewhat increase output, if stay-at-home wives (and husbands), the disabled, and elderly started putting in great effort at this. Or people gave up weekend fun activities to work on food growing/storage. The storage can be as big a problem as the initial growing.

  6. Stefeun says:

    Thanks Gail for the new post.
    The guiding force behind all that?
    “Burn Baby Burn!”, and then “After me the Deluge”.
    Just kidding, of course (but maybe not so much)

    • According to answers.yahoo.com, Apres moi le deluge” (Fr.), after me the deluge (attributed to Louis XV)

      Louis XV (February 15, 1710 – May 10, 1774), ruled as King of France and Navarre from 1715 until his death. Unexpectedly surviving the death of his entire family, he enjoyed a favourable reputation at the beginning of his reign. However, in time, his inability to reform the French monarchy, his lack of morals, and his foreign policy on the European stage lost him the support of his people, and he died as one of the most unpopular kings of France….

      Ultimately, Louis XV failed to overcome [serious] fiscal problems, mainly because he was incapable of putting together conflicting parties and interests in his entourage. At Versailles, the king and the nobility surrounding him showed signs of boredom, signalling a monarchy in steady decline. Worse, Louis seemed to be aware of the forces of anti-monarchism threatening his family’s rule and yet failed to do anything to stop them. Popular legend holds that Louis predicted, “After me, the deluge” (“Après moi, le déluge”). In fact this quotation is more precisely attributed to Madame de Pompadour, although it is not certain that even she ever said it.

      In other words, after me, who cares what happens to France?
      Why should I bother with the burdens of rulership? If the place goes to hell after I’m gone, so be it.

      The French Revolution began in 1789, a mere 15 years after his death.

      Burn, Baby Burn was written after the Watts riots of 1965. Clearly, there was not a concern about the future of Watts, either.

      I will have to admit the whole sustainability story has gotten sillier and sillier, as I have figured out more about our predicament. The existence of the view has allowed people to think, “Of course we can change things! Of course, we can prevent bad things from happening!” Unfortunately, it simply isn’t true. Infinite growth isn’t possible in a finite world. In fact, it isn’t even growth that is the problem, once a species is in overshoot mode. Just obtaining enough resources for daily living is too much.

      But I am not as negative about the situation as these two references would suggest. There is, however, a definite futility with respect to trying to fix the situation.

    • common phenomenon says:

  7. John Galt says:

    Thanks for the new post

  8. Duncan Idaho says:

    I’m not counting on the Psychotic Sky Daddy to save us.

    • Ed says:

      I see religion as more about the world of meaning. An area that science and technology have nothing to say about.

  9. Lastcall says:

    Thanks again for your insightful work.
    It is interesting that the writings of the sages/mystics of the past is almost indistinguishable from that of the Physicists of the present. I can’t recall the book, but I do remember reading something comparing the writings of both, and much alignment was obvious.
    It is interesting that the presence of a ‘God-particle’ is required by the Cern physicists, and its existence can be proven in a roundabout way through its actions, but it can’t be isolated. Sounds familiar doesn’t it?

  10. Lastcall says:

    PS: I am tending towards the ‘Mother Nature’, red in tooth and claw type finish I am afraid.

Comments are closed.