Will China Bring an Energy-Debt Crisis?

It is easy for those of us in the West to overlook how important China has become to the world economy, and also the limits it is reaching. The two big areas in which China seems to be reaching limits are energy production and debt. Reaching either of these limits could eventually cause a collapse.

China is reaching energy production limits in a way few would have imagined. As long as coal and oil prices were rising, it made sense to keep drilling. Once fuel prices started dropping in 2014, it made sense to close unprofitable coal mines and oil wells. The thing that is striking is that the drop in prices corresponds to a slowdown in the wage growth of Chinese urban workers. Perhaps rapidly rising Chinese wages have been playing a significant role in maintaining high world “demand” (and thus prices) for energy products. Low Chinese wage growth thus seems to depress energy prices.

(Shown as Figure 5, below). China’s percentage growth in average urban wages. Values for 1999 based on China Statistical Yearbook data regarding the number of urban workers and their total wages. The percentage increase for 2016 was based on a Bloomberg Survey.

The debt situation has arisen because feedback loops in China are quite different from in the US. The economic system is set up in a way that tends to push the economy toward ever more growth in apartment buildings, energy installations, and factories. Feedbacks do indeed come from the centrally planned government, but they are not as immediate as feedbacks in the Western economic system. Thus, there is a tendency for a bubble of over-investment to grow. This bubble could collapse if interest rates rise, or if China reins in growing debt.

China’s Oversized Influence in the World

China plays an oversized role in the world’s economy. It is the world’s largest energy consumer, and the world’s largest energy producer. Recently, it has become the world’s largest importer of both oil and of coal.

In some sense, China is the world’s largest economy. Usually we see China referred to as the world’s second largest economy, based on GDP converted to US dollars. Economists use an approach called GDP (PPP) (where PPP is Purchasing Power Parity) when computing world GDP growth. When this approach is used, China is the world’s largest economy. The United States is second largest, and India is third.

Figure 1. World’s largest economies, based on energy consumption and GDP based on Purchasing Power Parity. Energy Consumption is from BP Statistical Review of World Energy, 2017; GDP on PPP Basis is from the World Bank.

Besides being (in some sense) the world’s largest economy, China is also a country with a very significant amount of debt. The government of China has traditionally somewhat guaranteed the debt of Chinese debtors. There is even a practice of businesses guaranteeing each other’s debt. Thus, it is hard to compare China’s debt to the debt level elsewhere. Some analyses suggest that its debt level is extraordinarily high.

How China’s Growth Spurt Started

Figure 2. China’s energy consumption, based on data from BP Statistical Review of World Energy, 2017.

From Figure 2, it is clear that something very dramatic happened to China’s coal consumption about 2002. China joined the World Trade Organization in December 2001, and immediately afterward, its coal consumption soared.

Countries in the OECD, whether they had signed the 1997 Kyoto Protocol or not, suddenly became interested in reducing their own greenhouse gas emissions. If they could outsource manufacturing to China, they would be able to reduce their reported CO2 emissions.

Besides reducing reported CO2 emissions, outsourcing manufacturing to China had two other benefits:

  • The goods being manufactured in China would be cheaper, allowing Americans, Europeans, and Japanese to buy more goods. If more “stuff” makes people happy, citizens should be happier.
  • Businesses would suddenly have a new market in China. Perhaps the people of China would start buying goods made elsewhere.

Of course, a major downside of moving jobs to China and other Asian nations was the likelihood of fewer jobs elsewhere.

Figure 3. US Labor Force Participation Rate, as prepared by Federal Reserve Bank of St. Louis.

In the early 2000s, when China started competing actively for jobs, the share of people in the US workforce started shrinking. The drop-off in labor force participation did not level out until mid-2014. This is about when world oil prices began to fall, and, as we will see in the next section, when China’s growth in average wages began to fall.

Another downside to moving jobs to China was more CO2 emissions on a worldwide basis, even if emissions remained somewhat lower locally. CO2 emissions on imported goods were not “counted against” a country in its CO2 calculations.

Figure 4. World carbon dioxide emissions, split between China and Rest of the World, based on BP Statistical Review of World Energy, 2017.

At some point, we should not be surprised if countries elsewhere start pushing back against the globalization that allowed China’s rapid growth. In some sense, China has lived in an artificial growth bubble for many years. When this artificial growth bubble ends, it will be much harder for China’s debtors to repay debt with interest.

China’s Rapid Wage Growth Stopped in 2014

Rising wages are important for making China’s growth possible. With rising wages, workers can increasingly afford the apartments that are being built for them. They can also increasingly afford consumer goods of many kinds, and they can easily repay debts taken out earlier. The catch, however, is that wage growth cannot get ahead of productivity growth, or the price of goods will become too expensive on the world market. If this happens, China will have difficulty selling its goods to others.

China’s wage growth seems to have slowed remarkably, starting in 2014.

Figure 5. China’s percent growth in average urban wages. Values for 1999 based on China Statistical Yearbook data regarding the number of urban workers and their total wages. The percentage increase for 2016 was estimated based on a Bloomberg Survey.

This is when China discovered that its high wage increases were making it uncompetitive with the outside world. Wage growth needed to be reined in. Its growth in productivity was no longer sufficient to support such large wage increases.

China’s Growth in Energy Consumption Also Slowed About 2014 

If we look at the annual growth in total energy consumption and electricity consumption, we see that by 2014 to 2016, their growth had slowed remarkably (Figure 6). Their growth pattern was starting to resemble the slow growth pattern of much of the rest of the world. Energy growth allows an economy to increasingly leverage the labor of its workforce with more energy-powered “tools.” With low energy growth, it should not be surprising if productivity growth lags. With low productivity growth, we can expect low wage growth.

Figure 6. China’s growth in consumption of total energy and of electricity based on data from BP Statistical Review of World Energy, 2017.

It is possible that the increased rate of electricity consumption in 2016 is related to China’s program of housing migrant workers in unsalable apartments that took place at that time. The fact that these apartments were otherwise unsalable was no doubt influenced by the slowing growth in wages.

This decrease in energy consumption most likely occurred because the price of China’s energy mix was becoming increasingly expensive. For one thing, the mix included a growing share of oil, and oil was expensive. The proportion of coal in the mix was falling, and the replacements were more expensive than coal. There was also the issue of the general increase in fossil fuel prices.

Lower Wage Growth in China Likely Affected Fossil Fuel Prices

Affordability is the big issue with respect to how high fossil fuel prices can rise. The issue is not just buying the oil or coal or natural gas itself; it is also being able to afford the goods made with these fuels, such as food, clothing, appliances, and apartments. If wages were depressed in the developed countries because of moving production to China, then rising wages in China (and other similar countries, such as India and the Philippines) must somehow offset this problem, if fossil fuel prices are to remain high enough for extraction to continue.

Figures 7 and 8 (below) show that oil, natural gas, and coal prices all started to slide, right about the time China’s urban wages growth began shrinking (shown in Figure 5).

Figure 7. Oil and natural gas prices, based on BP Statistical Review of World Energy data.

Figure 8. Coal prices between 2000 and 2016 from BP Statistical Review of World Energy. Chinese coal is China Qinhuangdao spot price and Japanese coal is Japan Steam import cif price, both per ton.

The lower recent increases made China’s urban wage growth look more like that of the US and Europe. Thus, in 2014 and later, Chinese urban wages present much less of a “push” on the growth of the world economy than they had previously. Without this push of rising wages, it becomes much harder for the world economy to grow very rapidly, and for it to have a very high inflation rate. There is simply not enough buying power to push prices very high.

It might be noted that the average Chinese urban wage increases shown previously in Figure 5 are not inflation adjusted. Thus, in some sense, they include whatever margin is available for inflation in prices as well as the margin that is available for a greater quantity of purchased goods. Because of this, these low wage increases may help explain the recent lack of inflation in much of the world.

Quite likely, there are other issues besides China’s urban wage growth affecting world (and local) energy prices, but this factor is probably more important than most people would expect.

Can low prices bring about “Peak Coal” and “Peak Oil”?

What does a producer do in response to suddenly lower market prices–prices that are too low to encourage more production?

This seems to vary, depending on the situation. In the case of coal production in China, a decision was made to close many of the coal plants that had suddenly become unprofitable, thanks to lower coal prices. No doubt pollution being caused by these plants entered into this decision, as well. So did the availability of other coal elsewhere (but probably at higher prices), if it is ever needed. The result of this voluntary closure of coal plants in response to low prices caused the drop in coal production shown in Figure 8, below.

Figure 8. China’s energy production, based on data from BP Statistical Review of World Energy, 2017.

It is my belief that this is precisely the way we should expect peak coal (or peak oil or peak natural gas) to take place. The issue is not that we “run out” of any of these fuels. It is that the coal mines and oil and gas wells become unprofitable because wages do not rise sufficiently to cover the fossil fuels’ higher cost of extraction.

We should note that China has also cut back on its oil production, in response to low prices. EIA data shows that China’s 2016 oil production dropped about 6.9% compared to 2015. The first seven months of 2017 seems to have dropped by another 4.2%. So China’s oil is also showing what we would consider to be a “peak oil” response. The price is too low to make production profitable, so it has decided that it is more cost-effective to import oil from elsewhere.

In the real world, this is the way energy limits are reached, as far as we can see. Economists have not figured out how the system works. They somehow believe that energy prices can rise ever higher, even if wages do not. The mismatch between prices and wages can be covered for a while by more government spending and by more debt, but eventually, energy prices must fall below the cost of production, at least for some producers. These producers voluntarily give up production; this is what causes “Peak Oil” or “Peak Coal” or “Peak Natural Gas.”

Why China’s Debt System Reaches Limits Differently Than Those in the West

Let me give you my understanding regarding how the Chinese system works. Basically, the system is gradually moving from (1) a system in which the government owns all land and most businesses to (2) a system with considerable individual ownership.

Back in the days when the government owned most businesses and all land, farmers farmed the land to which they were assigned. Businesses often provided housing as part of an individual’s “pay package.” These homes typically had a shared outhouse for a bathroom facility. They may or may not have had electricity. There was relatively little debt to the system, because there was little individual ownership.

In recent years, especially after joining the World Trade Organization in 2001, there has been a shift to more businesses of the types operated in the West, and to more individual home ownership, with mortgages.

The economy acts rather differently than in the West. While the economy is centrally planned in Beijing, quite a bit of the details are left to individual local governments. Local heads of state make decisions that seem to be best based on the issues they are facing. These may or may not match up with what Beijing central planning intended.

Historically, Five-Year Plans have provided GDP growth targets to the various lower-level heads of state. The pay and promotions of these local leaders have depended on their ability to meet (or exceed) their GDP goals. These goals did not have any debt limits attached, so local leaders could choose to use as much debt as they wanted.

A major consideration of these local leaders was that they also had responsibility for jobs for people in their area. This responsibility further pushed them to aim high in the amount of development they sought.

Another related issue is that sales of formerly agricultural land for apartments and other development are a major source of revenue for local governments. Local leaders did not generally have enough tax revenue for programs, without supplementing their tax revenue with funds obtained from selling land for development. This further pushed local leaders to add development, whether it was really needed or not.

The very great power of local heads of state and their administrators made these leaders tempting targets for bribery. Entrepreneur had a chance of getting projects approved for development, with a bribe to the right person. There has been a recent drive to eliminate this practice.

We have often heard the comment, “A rising tide raises all boats.” When the West decided to discourage local industrialization because of CO2 concerns, it gave a huge push to China’s economy. Almost any project could be successful. In such an environment, local rating agencies could be very generous in their ratings of proposed new bond offerings, because practically any project would be likely to succeed.

Furthermore, without many private businesses, there was little history of past defaults. What little experience was available suggested the possibility of few future defaults. Wages had been rising very rapidly, making individual loans easy to repay. What could go wrong?

With the central government perceived to be in control, it seemed to make sense for one governmental organization to guarantee the loans of other governmental organizations. Businesses often guaranteed the loans of other businesses as well.

Why the Chinese System Errs in the Direction of Overdevelopment

In the model of development we are used to in the West, there are feedback loops if too much of anything is built–apartment buildings (sold as condominiums), coal mines, electricity generating capacity, solar panels, steel mills, or whatever else.

In China, these feedback loops don’t work nearly as well. Instead of the financial system automatically “damping out” the overcapacity, the state (or perhaps a corrupt public official) figures out some way around what seems to be a temporary problem. To understand how the situation is different, let’s look at three examples:

Apartments. China has had a well-publicized problem of  building way too many apartments. In about 2016, this problem seems to have been mostly fixed by local governments providing subsidies to migrant workers so that they can afford to buy homes. Of course, where the local governments get this money, and for how long they can afford to pay these stipends, are open questions. It is also not clear that this arrangement is leading to a much-reduced supply of new homes, because cities need both the revenue from land sales and the jobs resulting from building more units.

Figure 9 shows one view of the annual increase in Chinese house prices, despite the oversupply problem. If this graph is correct, prices have increased remarkably in 2017, suggesting some type of stimulus has been involved this year to keep the property bubble growing. The size of an apartment a typical worker can now afford is very small, so this endless price run-up must end somewhere.

Figure 9. Chinese house price graph from GlobalPropertyGuide.com.

Coal-Fired Power Plants. With all of the problems that China has with pollution, a person might expect that China would stop building coal-fired power plants. Instead, the solution of local governments has been to build additional power plants that are more efficient and less polluting. The result is significant overcapacity, in total.

May 2017 article says that because of this overcapacity problem, Beijing is forcing every coal-fired power plant to run at the same utilization rate, which is approximately 47.7 % of total capacity. A Bloomberg New Energy Finance article estimates that at year-end 2016, the “national power oversupply” was 35%, considering all types of generation together. (This is likely an overestimate; the authors did not consider the flexibility of generation.)

Beijing is aware of the overcapacity problem, and is cancelling or delaying a considerable share of coal-fired capacity that is in the pipeline. The plan is to limit total coal-fired capacity to 1,100 gigawatts in 2020. China’s current coal-fired generating capacity seems to be 943 gigawatts, suggesting that as much as a 16% increase could still be added by 2020, even with planned cutbacks.

It is not clear what happens to the loans associated with all of the capacity that has been cancelled or delayed. Do these loans default? If “normal” feedbacks of lower prices had been allowed to play out, it is doubtful that such a large amount of overcapacity would have been added.

If China’s overall growth rate slows to a level more similar to that of other economies, it will have a huge amount of generation that it doesn’t need. This adds a very large debt risk, it would seem.

Wind and Solar. If we believe Darien Ma, author of “The Answer, Comrade, Is Not Blowing in the Wind,” there is less to Beijing’s seeming enthusiasm for renewables than meets the eye.

According to Ma, China’s solar industry was built with the idea of having a product that could be exported. It was only in 2013 when Western countries launched trade suits and levied tariffs that China decided to use a substantial number of these devices itself, saving the country from the embarrassment of having many of these producers go bankrupt. How this came about is not entirely certain, but the administrator in charge of wind and solar additions was later fired for accepting bribes, and responsibility for such decisions moved higher up the chain of authority.

Figure 10. China current view of solar investment risk in China. Chart by Bloomberg New Energy Finance.

Ma also reports, “Officials say that they want ‘healthy, orderly development,’ which is basically code for reining in the excesses in a renewable sector that has become yet another emblem of irrational exuberance.”

According to Ma, the Chinese National Energy Administration has figured out that wind and solar are still about 1.5 and 2.5 times more expensive, respectively, than coal-fired power. This fact dampens their enthusiasm for the use of these types of generation. China plans to phase out subsidies for them by 2020, in light of this issue. Ma expects that there will still be some wind and solar in China’s energy mix, but that natural gas will be the real winner in the search for cleaner electricity production.

Viewed one way, we are looking at yet another way Chinese officials have avoided closing Chinese businesses because the marketplace did not seek their products. Thus, the usual cycle of bankruptcies, with loan defaults, has not taken place. This issue makes China’s total electricity generating capacity even more excessive, and reduces the profitability of the overall system.

Conclusion

We have shown how low wages and low energy prices seem to be connected. When prices are too low, some producers, including China, make a rational decision to cut back on production. This seems to be the true nature of the “Peak Coal” and “Peak Oil” problem. Because China is reacting in a rational way to lower prices, its production is falling. China is already the largest importer of oil and coal. If there is a shortfall elsewhere, China will be affected.

We have also given several examples of how the current system has been able to avoid defaults on loans. The issue is that these problems don’t really go away; they get hidden, and get bigger and bigger. At some point, all of the manipulations by government officials cannot hide the problem of way too many apartments, or of way too much electricity generating capacity, or of way too many factories of all kinds. The postponed debt collapse is likely to be much bigger than if market forces had been allowed to bring about earlier bankruptcies and facility closures.

Chinese officials are now talking about reining in the growth of debt. There is also discussion by heads of Central Banks about raising interest rates and selling QE securities (something which would also tend to raise interest rates). China will be very vulnerable to rising interest rates, because of stresses that have been allowed to build up in the system. For example, many mortgage holders will not be able to afford the new higher monthly payments if rates rise. If interest rates rise, factories will find it even harder to be profitable. Some may reduce staff levels, to try to reach profitability. If this is done, it will tend to push the system toward recession.

We likely now are in the lull before the storm. There are many things that could push China toward an energy or debt crisis. China is so big that the rest of the world is likely to also be affected.

 

 

About Gail Tverberg

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

  1. Baby Doomer says:

    MAGA 2024

  2. This blog has become so much more enjoyable in recent times.

    Gail is outstanding as usual and comments are on-topic and enlightening.

    I myself have engaged in too much snark on off-topic quibbles and it’s refreshing to see that like me the blog is weaning itself off such nonsense.

    I’d like to thank everyone for the great calibre of recent contributions because this blog is too precious to deserve anything less.

    I don’t contribute much to this blog as everyone seems to say what’s needed but can I at least give this community recognition for the part it plays in making so many of us find ways to express and understand ideas that have very little purchase anywhere else

    • Fast Eddy says:

      Most of the DelusiSTANI cockroaches have been fumigated out of existence…. it does make for a far more pleasant atmosphere…

      Just finishing up a biography on Gore Vidal…. a fascinating person …. yet utterly delusional…. and hypocritical…

      It is amazing how large an audience one can have when one is so deeply into DelusiSTAN…

      That said — he did see where were are headed … he probably did not know why …. he checked out just in time

      https://www.audible.com/pd/Bios-Memoirs/Empire-of-Self-Audiobook/B016027ESC

      • JMS says:

        Don’t be too harsh on Gore Vidal. He was a great social critic, much more aware than most of his contemporaries about issues like power politics or overpopulation. His essays are often very clever and enlightning, And some of his novels are rioutously funny – “Kalki”, for example, is very amusing, an apocalyptic fantasy that ends with…
        If you never read it, give it a try.

        • Fast Eddy says:

          See 14:20 mark…. he’s got quite a lot right …. but not quite everything….

          • Very fine statement of today’s problem!

            I see that the notes say, “This segment aired in 1975.” It is amazing how blind people today can make themselves to a problem that has been known for over 40 years.

          • JMS says:

            Thanks. Vidal was definitely more lucid than any writer (non-scientist) of his time. He didn’t have the full picture, true, but I suspect that before Gail had connected all the points (financial, ecological, energetic), very few people in the world, if any, had a complete picture of our predicament.
            And although he has never been very vocal in this regard, afaik he was the only Famous Novelist who ever alluded to 9-11 as a higly suspicious story.
            Praise him the lawd!

            • Fast Eddy says:

              Where I differ with Mr Vidal…. and I might ad that 10 years ago I would have not differed at all… is that he believed that man was capable of something better… if only we could rid ourselves of the bad men who lead us to unjust wars…

              I would now argue that all wars are just — all wars are over the limited resources of the planet — if we do not get amongst the wild dogs and fight we will not get any of the kill … and we wills starve….

              My epiphany on this came when I was reading a history of the Ottoman Empire some years ago … I distinctly recall the description of what was taking place as the empire staggered…. and was unable to defend itself…

              The various powers of the world were circling the wounded beast…. each one looking to tear off as much flesh as it could… but always wary because others were also trying to rip off chunks… and the others were all very formidable beasts…. there was no room for pity … nobody was going to help the Ottomans…. nobody wants to get in the way of the slashing teeth… to what purpose?

            • JMS says:

              I have to agree with you. I would not say that all wars are just, I would rather say they are inevitable. What history and biology teaches us is that big fish eat the average fish and that average fish eat the little ones.
              Political power always tends towards empire, because human beings are just so, they want ever more and hate everything that curb their desires.
              I would argue though that Vidal was not really hopeful about humankind, he was deeply pessimistic.
              So let’s agree that he only suffered a mild strain of delusionism, that could easily be cured with three or four OFW pills.

            • Fast Eddy says:

              He was a rather stubborn man … so not sure if he could have been brought around …

              Interesting that he had a massive falling out with Hitchens — because of Hitchens support for the Iraq war…

            • JMS says:

              I know what you mean. To be against the Iraque war seemed the “moral stance” then. But we know now that morals doesn’t count when the issue is resource depletion and less for everybody, since morality is a byproduct of growth and well being. Anyway, morality has allways been conceived to function within a community. It did not apply to foreigners. This is how the real world operates, especially in End of More days.

    • Thanks for your compliment. I now have the settings so that I have to approve the first comments of new posters. That eliminates at quite a bit of spam comments.

      I expect that the article on China is rather difficult for readers as well. It is not something that too many feel confident in discussing.

      • Sungr says:

        “I expect that the article on China is rather difficult for readers as well. It is not something that too many feel confident in discussing.”

        Gail- Thanks for your article on China.. One of your best.

        I follow international relations pretty closely- particularly a major player like China- and found your article very useful- ie the Chinese skepticism on renewables vs coal & natural gas going forward caught me by surprise. I do find it difficult to discuss China due to the all the moving parts involved ie biggest debt bubble in history, most massive construction projects anywhere, cyberwar capacities are daunting but not quantifiable for laymen, high level capabilities in military technology, the wild swinging govt management of the economy, etc Lots and lots of shadows in the picture. Hard to predict anything.

        The royal welcome for Trump reminds me of the ancient Chinese strategy of neutralizing invaders by absorbing them into Chinese culture. This makes me think that China might try to convince western economic actors that profitable opportunities in the One Belt One Road initiative would be much more profitable than a US-China shooting war. Just a hunch.

        Of course, that begs the question of whether the Chinese can muster up the energy and materials to make it work.

        • Glad you liked the post. I was fortunate enough to have at least a little experience seeing China and meeting some of their fairly high-level people. Also traveling around, two different times, in different parts of the country.

          The renewables situation is confusing because the published research is very close to wrong. EROEI theory gives researchers the license to compare apples to oranges; for example, it assumes that intermittent electricity is equivalent to good quality electricity that can be used to power today’s devices; there is no need to consider the energy cost of the workarounds needed to keep the electrical system operating properly. It encourages what I consider “overly simple models.” It tells a person virtually nothing about the total cost of using solar panels for grid electricity.

    • doomphd says:

      still, we enjoy your occasional off-topic snarky take downs of the delusitanies.

  3. Theophilus says:

    It’s time to economically incentivize population decline.

    The worship of material consumerism and the belief in endless energy and resources growth must end. If we continue down this unsustainable path without a concerted effort to change our ways, we will inevitably face a world wide crisis that will result in the tragic death of billions of peop!e. The laws of physics have no mercy. War, famine, and disease are cruel and unnecessary means to reduce population.

    We must establish a balance between consumption and sustainable production. Since we have already exceeded the earth’s capacity to sustainably provide for the current population, effective economic incentives must begin now.

    I propose the following economic incentives to reduce population.

    1 Each person has two free credits to produce children.
    2 Each man and woman use one credit each for every child born. Example a couple would use all
    four of their free credits, two from the mother and two from the father, when they make two
    children.

    3. If someone had another child beyond the two free credits they would have to purchase an
    additional child credit.
    4. Money raised by the purchase of child credits would be distributed as retirement payments to
    those who did not use their two free credits during their child producing years.
    5. Those that used none of their child credits would receive double the amount of distribution than
    those that used only one of their credits.
    6. The collection of payments for child credits would be collected similar to a tax, attempts to
    evade this process would be punishable similar to tax evasion. payments could be collected
    over a twenty year period
    7. I would recommend the cost of a child credit be $50,000 USD or twenty percent of current annual
    salary, whichever is greater.

    This system should provide a positive economic incentive to those who have less than two children and a negative economic incentive for those who have more than two. I believe this is just and merciful. This is better than war, famine, and disease for controlling world population.

    • Theophilus says:

      Sorry for the spacing errors above.

    • The Second Coming says:

      Try enforcing your recommendations. Better yet, keep it simple..those that have a child get to live to 50, those that do not, get to live an extra decade to 60, barring early demise.
      Sure, that has as much chance getting enacted as yours.

      • Theophilus says:

        I agree with you that these recommendations are socially and politically unworkable. I was just having a romantic delusion about what life would be like if people and governments acted responsibly. I don’t know any politicians proposing economic incentives for population control. If they did they would have a short political career.

        People complain that their are no solutions to big global problems; so they do nothing. The truth is that there are solutions, but they have cost and pain associated with them. People only want solutions that cost nothing and are pain free. Second Coming you are right. The future will be full of war, famine, disease.

      • Fast Eddy says:

        See Japan for the result of that sort of situation

        • DJ says:

          What is so horrible about Japan?

          • Mark says:

            Well, they can have a tough time learning English. (Sorry futuresystems, et al.) 😉

            There’s a 10 hour version for those interested.

          • Fast Eddy says:

            Seriously – you have to ask that question?

            I cannot be bothered to try to explain to a simpleton the implications of declining population.

            Go find out for yourself.

            • DJ says:

              Should mostly have affected japanese tax income (borrow!) and maybe rural real estate. Most economy is global.

              More fun when whole 1st world depopulates, but that joy Japan won’t have to endure alone.

            • Supporting an aging population with a declining workforce doesn’t work. Having to pay interest on all of the debt outstanding becomes an impossible problem. There are no jobs building new homes, schools, or roads, because there are already plenty of them already.

            • DJ says:

              Yes, so no NEED for building new homes, schools, roads.

              Anyway, what is so horrible about Japan TODAY? Syria, Somalia or Venezuela …

            • It is already losing population. It is adding more and more debt. It is using QE to the extent that it makes its interest rates negative.

              It cannot afford to pay pensions to the large number of retirees coming up. In fact, it has structured the system so that many will not qualify for pensions.

              Its whole structure looks unsustainable, but it hasn’t collapsed yet. So in that sense, it is “not yet bad.”

            • Fast Eddy says:

              Think of it this way…. you are standing in Hiroshima …. it’s a fine sunny day …. everything is perfect…

              Then suddenly

              The only difference here is that due to decreasing population and other issues… the bomb is economic in nature… but no less devastating … and it is ticking

            • DJ says:

              And how much earlier than US or Germany will Japan collapse?, considering their demographic peak was maybe 20 years earlier.

            • Or does some event trigger the collapse of everything, more or less at once?

              Japan has looked like a potential trigger for a while, but we have a lot of other possibilities as well.

    • Artleads says:

      Sounds a little complex, especially if it has to be maintained long term. Energy to do anything top down will be scarce at best.

      • Theophilus says:

        Developed countries collect taxes and distribute social payments. No new institutions would be required. Simply said, we need to give to those who act responsibility, and take from those who dont. Since funds generated would equal funds distributed, money wouldn’t be taken away from other social needs.

        • Tim Groves says:

          The devil is in the details. We all think we know what action is responsible and what isn’t. But once we try to define collectively what is meant by “acting responsibly” we are going to be in for many years of fruitful debate.

          • Theophilus says:

            True Tim, consensus is probably impossible. I look at energy and resource depletion as a math problem. How can we maintain per capita energy consumption in a global environment of energy and resource depletion and reduction? Most people on this site would agree that continued energy growth on a finite planet is impossible. Since we can’t add to the energy supply side of the equation, in order to remain balanced, we would have to subtract from the population demand side. I thought economic incentives would be better than any forced reductions. My proposed plan doesn’t kill anyone. It just provides economic incentives for population reduction.

            In this situation, the cruelest thing would to do nothing. Let an uncontrolled population crash play out with all its needless suffering.

            • Fast Eddy says:

              You cannot reduce energy consumption without the result being a deflationary collapse of BAU.

              The thing to do is Burn More Coal – and oil… and gas…..

              More is Good. Greed is Good.

              TINA.

            • We don’t really know how an uncontrolled population crash would take place. In the past, the primary cause of death in collapses has been epidemics. This cause of death was not terribly different from what people otherwise would have experienced, except it came sooner.

          • Mark says:

            Or if the actions have already been taken in the past, then we meet fate.

            Fate has to do with events in history that are the summary and unintended results of innumerable decisions of innumerable men.
            -C. Wright Mills

        • What I recall hearing about the Chinese one-child policy plan is that it mostly worked among the “middle class.” It required a payment for extra children. The rich were well enough off to simply make the extra payment. The poor were too poor to have any chance of paying the extra payment. I expect that this would be the result of your program as well.

          • xabier says:

            Population was effectively (and humanely!) controlled in Norway up to the late 18th century by registering all males for the army.

            They could be called up at any time, and no one wanted to marry, start a family and then get called up for years of service, so they didn’t.

            Late start = fewer children (lower fertility, for one thing).

            It was reflecting on this arrangement, compared to those countries where the poor could marry very young, which started Malthus on his exploration of the dire consequences of over-population exceeding resources.

            This worked in a peasant economy with little industry and small towns, but obviously did not meet the needs of industrialists and capitalists, who still dream only of masses of cheap, disposable labour (and import it, if the local supply is inadequate.)

            • Tim Groves says:

              Lots of good points. I agree with Theo that we need to try humane incentive-based population reduction in order to bring down energy demand. Xabier’s historical illustration of how to encourage later marriage could also play a role in population reduction. (In this context, when I arrived in Japan almost 40 years ago, the average age of marriage for women was 25. If a woman remained unmarried she was referred to as Christmas Cake, as she was hard to sell on the marriage market after the 25th. Nowadays, however, the average age of first marriage is up to about 30 and the number of women going unmarried is much higher than a generation ago.) I also agree with Eddy that we can’t bring down energy demand without crashing the system, but that it is going to come down all on its own at short notice, just like a ripe apple.

              Which brings me onto a possible future scenario. If I was the Head Elder and I wanted to chart a future course to a society where the Elders (by which I mean whoever is part of the Global Super-Elite) could remain in power and remain opulent, I would be thinking very seriously about deadly pandemics, possibly genetically engineered and with an 80% kill rate among the unvaccinated, and 95% among the elderly and those with compromised immune systems. This would take population down to about 10% of its current level within 2 or 3 years, by which time a vaccine would be announced and made available.

              Would this work? Technically, I think it could be done, and there are certainly contingency plans. There are two problems, and the consciences of individual Elders are not among them. The first problem is that the world is not sufficiently united yet under one group to allow such a plan to be executed smoothly. The second is that even if there was sufficient unity, it would be a logistic nightmare to try to keep the system running while most people were sick and dying. I doubt they could keep the train wreck together and be confident of remaining in power all the way through the Great Die-Off. But such a solution might be put into practice if it seemed like the only way to avert something even worse for the Elders.

    • In some ways your ideas make sense, but not exactly. The places where population are increasing are the poorer countries of the world. Sub-Sahara Africa especially, and to a lesser extent the Middle East.

      Birthrates within many developed countries are below “replacement” rates. We can come up with ideas, but it is very difficult to implement them on the other side of the globe. Life styles and customs are very different. Women don’t necessarily have the power to say no, and they often don’t have access to birth control materials.

      Even in the US, there are quite a few poor people with several children. You can’t really force them to buy credits, or tax them for extra children. The Department of Family and Child Services already has a lot of problems with poor mothers and fathers not really taking good care of their children. We would be better off handing out free birth control, I expect. Or offering free abortions within the first three months of pregnancy.

      • Theophilus says:

        There is One thing people all over the world have in common. They are selfish.

        Economic incentives are more important to poor people than they are to rich people. A poor man in an underdeveloped nation sees a large family as a means to economic security. He may pressure his wife to keep having children for that reason. What if he thought having fewer children would bring economic security? Would be change his behavior, and have fewer kids?

        I don’t think economic incentives are a one size fits all or a silver bullet solution for population reduction. But, I do think economic incentives could play an important role in bringing about a humane reduction in world population.

        Gail, you have pointed out how people who are trying to solve economic problems often underestimate the role of energy and resources play in the economy. I have found that people who are trying to solve energy and resource problems underestimate the role population plays in energy and resource depletion issues.

        With love and respect

        • You are right about poor people seeing children as a means to economic security. They can provide income, even as children. They are a source of security in old age.

          Today, we talk about reducing population, but actuaries (correctly) say, “This cannot work.” They look at the big picture and say, “There would not be nearly enough workers to support all of the elderly in such a system.” There could never be enough tax revenue.

          I also say, “the economy would stop growing enough to support all of the expected payouts from shares of stock, pensions, and bonds. This would create a huge financial problem.”

          In a sense, everyone in the year 2020, or the year 2025, will have to live on the total goods and services produced in those years. If those amounts are lower, it will create a huge problem for a system that is designed to keep growing.

          The reason that citizens in developed countries are complacent about not having children is because they assume that government programs will “be there” for them. The catch is that government programs don’t work at all well, it the system as a whole produces too few children.

          Of course, there is the other side of issue as well. With more children, the total amount produced must be divided among more people. With rising (cheap) energy production, we have been been able to keep raising the total amount consumed. But once this stops, then it becomes much more difficult to keep raising the total output of the system.

          • Ed says:

            When obligations can no longer be met we will go to a work and get payed economy. The pay maybe in kind. Pick apples gets some apples as pay. The old who can not get out and work will either be fed by loved ones or will die.

            • In Cuba, part of the pay of workers in the cigar factories is individual cigars that they can sell to tourists, to try to get more income than the standard wage ($20 per month, when I was there a couple of years ago). These cigars are often made to look like they are higher-priced brands than they are, if I understood correctly.

          • xabier says:

            According to the European Union, this is all going to be solved by ….’Stardust Project’!

            Three cities (will develop ‘smart’ projects based on ‘e-energy’, all the wonderful solutions to be rolled out across Europe as a whole in the 2020’s,

            There’s a unicorn somewhere in there, I am sure; and many research grants……..

        • Artleads says:

          The system is too complex to understand by reason-based deduction. Intuition-based deduction has its limits too, but can fill in for some of what we can’t deduce through reasoning. Using the latter mode, I suggest that population has to work itself out through a self organizing principle that we ought not even try to control. What we ought to try and control centers on food.

          I would look for a way to give tax credits for ordinary citizens to produce food (backyard gardening). How the market for the food would work, I don’t know, but I’m confident that your style of thinking would take us part of the way.

          Another approach would be enacting universal rain water catchment for every roof. I’m specifically thinking of one old-town center that is built on a 45 degree angle slope. If you otherwise provide catchment at the top of the slope, a system of relay catchment using gravity might be imagined. The house above supplies water to the house below. Only government could manage this, and it wouldn’t be cheap to set up. But you could manage it without oil. I’m not too sure what this would be good for other than in an emergency–like in Puerto Rico, where you need running water to flow through pipes.

          I just think we need common sense order and structure and that population management will take care of itself therefrom.

          • Theophilus says:

            Great points. Changes in lifestyle could also reduce energy demand per capita.

            This could produce some of the same benefits as reduced population. I wonder which approach would be met with the greater opposition. How could you incentivize such changes? I recommended dealing with population because I believe most people today are obsessed with materialism and consumerism and less interested in larger families. I could be wrong. In more economically developed nations, the trend is already for smaller families.

            If demand for energy and resources is reduced at a comparable level with reductions in supply of energy and resources, I don’t see a fundamental energy and resource crisis. People will still have access to the same levels of energy and resources on a per capita basis.

            However, the problem we will inevitably face sooner or later will be economic. Stagnant or decreasing economic activity will make it impossible to repay debt obligations. Burn more coal so we can keep BAU going is a mantra on this site. In other words, “Keep growing the economy even if it means destroying the fundamental capacity to supply energy and resources to The world’s population.” The assumption is a failing BAU economy will cause the end of the world as we know it. I strongly disagree.

            The economy we have today will not exist ten years from now no matter what we do. The truth is the economy is always changing. Economies are complex social contracts. This social contract will be renegotiated and rewritten. As long as we can maintain a system that produces and distributes essential resources to people who can offer value in return a new economy can and will emerge. A new market will replace the old market. Today’s BAU will die and be replaced by tomorrow’s BAU. Remember, food, water, and shelter are essential; paper money, central banks, and derivatives are not.

      • Lastcall says:

        The Green Party in NZ see no need to reduce current immigration rates, while at the same time are aiming for a zero carbon economy. The problem is there is a building boom because of our relatively high population increase. So there are many many more concrete floors being poured every day. Concrete is a terrible energy sink. So go figure.

        In addition, to round this out, quite often migrants are from low carbon per capita countries and then when they arrive here, up their carbon footprint enormously.

        So a Green Manifesto should avoid population growth, tax cement products, limit vehicle engines to under 500 cc, outlaw smartphones due to their toxic nature, and remove all airports from existence. Can we see any of these things occurring? No way, cos green politicians need to be connected, they need to fly in and out of international hand-wringing conferences on climax chaaange, and virtue signal their humanity by importing low-carbon people and turning them into high carbon people.

        Its a tangled web we have woven.

      • MG says:

        The End is Near…Depopulation is Out of Control…So Buy Stocks (Seriously)

        https://econimica.blogspot.sk/2017/11/the-end-is-neardepopulation-is-out-of.html

        • The article talks about East Asia being the source of oil consumption growth, and defines that to be China, North and South Korea, and Japan.

          If I look at BP Statistical Review of World Energy, the big growth in oil consumption has come from China (+113.6 MTOE since 2011), India (+49.7 MTOE), and South Korea (+16.3 MTOE). Japan had a decrease of 19.4 MTOE in the same time period.

          I think the grouping of countries is strange.

          The place where oil consumption has been growing is where farming is being mechanized, and former farmers are now working more at industrial operations. This is aided by more population, but there are still an awfully lot of poor farmers in both China and India. This movement is what fuels growth in oil consumption.

          Admittedly, slower population growth will slow things down, but India has not been slowing its birth rate. I think the big constraint will be cheap coal and cheap total energy supplies.

          • CH says:

            “India has not been slowing its birth rate”???

            Bit of a strange statement…India’s fertility rate has fallen from a peak of 6 children per female way back in 1960 to 2.3 as of 2015 (2.1 is zero growth)…and will almost surely turn negative before 2020.

            India’s births likewise peaked in the late ’90’s around 28 million annually and are now likely below 26 million annually.

            Rural areas in China, India, and worldwide (in general) are massively depopulating and the migration of young from the rural areas is the only fuel (albeit waning) to urban growth.

            • I should have said, not slowing its birth rate as much. It still has an awfully lot of farmers that could be converted to factory workers, with farm mechanization.

            • MG says:

              Converting farmers to cheap highly qualified industrial labor is not that easy today, when we have the declining purchasing power and we need massive financial injections and robots to keep the industrial products affordble.

      • grayfox says:

        It always seems cruel in the animal kingdom when offspring are subjected to the vagaries of nature: competition for limited food, drought, predation, disease, accidents. Only the fittest and best adapted survive long enough to reach adulthood. Only the fittest adults reproduced. We humans believe that we are not subject to these conditions anymore. I expect that we will learn that nature’s way was kindest in the long run, after our little experiment is over.

        • Our medical system definitely operates opposite to “survival of the best adapted,” leaving a population that is over time, ever less well adapted.

          Our little experiment can’t work. Micro-organisms quickly mutate to defeat any new drug we develop. In the plant world, plants quickly mutate to work around new weed killers. Children who have been “saved” from all kinds of diseases will live to reproduce, leaving a population that is probably less resistant to disease. The system cannot work.

          • Neil says:

            Maybe it can’t, but if industrial society collapsed tomorrow, everyone not capable of surviving without sophisticated medical care would not survive. Therefore if keeping “unfit “ people alive is a problem, the problem will be solved. One flaw – the horrifyingly obese will still be here long after the thin have died of starvation.

            • I expect that illnesses associated with polluted water (and not having fuel to boil the water) will kill a lot of people, long before starvation becomes a problem. Also, more diseases carried by insects will become a problem.

              I don’t know whether the obese will live very long. Many are taking many kinds of medications. Their systems are out of balance. Perhaps those who are a little overweight, but in shape, will live a longer.

    • zenny says:

      Theophilus
      WOW That will not work on a global scale.
      That being said. What we are doing now is not working.
      Good on you for even thinking about it.
      The way I see it is we have a problem with low IQ people breeding like rabbits and the high IQ people not. It gets worse as the high IQ people are adopting them as pets.

      But yet the SJW crew wants to bring people in from low carbon footprint areas and let them in on our orgy of burn more coal.

      • The Second Coming says:

        Remember a story on population control incentives regarding India and the fact that largely it was ineffective. Seems there were not enough of clinics, nor personnel to preform necessary operations to fix couples seeking to participate in the program.
        The demographics was such it would hardly put a dent in the numbers.
        Perhaps nature will figure out an outcome for us all.

    • DJ says:

      What about father unknown? I suppose that obevisat the mother two credits.

      A bigger problem is those who can never pay penalty.

      Easiest would be to not pay people to have children. But since it is not a childs fault it wasn’t afforded by its parent/s, we will pay and pay until collapse.

      • DJ says:

        Anyway, does anyone here believe a slow reduction over many generations are enough?

        I suppose I am an optimist for believing a halfing in three consecutive generations MIGHT be enough.

    • It is not possible to subsitute money for energy.

      every person born demands housing clothing and food—plus as many extras as their particular environment allows.
      If their environment doesn’t allow the above, even at a basic level, then babies die off until some kind of median support level is reached..

      We might watch TV adverts advocating ways and means of saving lives in various parts of the world, but our contributions are only feelgood sticking plasters on a destructive cancer that represents the disease of all of us.

      We are on our bumpy plateau before descent into the median level of what the planet can support. We cannot “buy” our way out of this with cash incentives, because our genetic forces do not recognise cash.

      If there is sufficient energy available to rear a child, then that child will thrive, if there isn’t, it will die. Moving money packages around is meaningless. It is not possible to put a cash thread into it, if the means to support a human being from birth to maturity isn’t there in physical terms.

      Sorry to be brutal here, but survival of every scrap of human life has been a phenomenon of our own time, a period of less than a century in the million years of our existence.
      It has been entirely due to fossil fuel input, it can never be our ‘normality’, because fossil fuels are not our normality.

      yet we will continue to act as though it is our new normal, deny and deny, and breed ourselves into oblivion

      Sex and reproduction are a universal activity, genetic forces ignore human-conceived plans to curb numbers. We imagine that we control our existences, but we do not. We have bred to the point of overcapacity. Right now our brains are formulating ideas and plans and denials about it, but that is where we are.

      • xabier says:

        A traveller in the 17th century asked the Circassian villagers why they had so many children? They replied:

        1/ So we have lots of extras to make up for the all the deaths; 2/ So we have lots of men to fight; 3/ So we have lots of spares to give to the Turks when they come collecting taxes.

        Turks put Circassians the top of their list of desirable slaves, Russians at the bottom (too ugly and clumsy!)

        He also asked them why they strangled crippled children and smothered the elderly? The answer: ‘It is kind! We are not animals, we have souls! Don’t you do that too?’

        Very common in the Near and Middle East was to leave sick people with food and drink, and let them survive or die as the cards happened to fall – no attempt at treatment of any kind.

        Having heard of my great-aunt begging to be killed at the end of her life, the above seems very sensible to me. I felt sorry for the physician.

        • When I first got involved in the insurance world, I was amazed in the difference in claim cost between a dead child and a permanently injured child. At least at one time, the belief was that a dead child could easily be “replaced” by the parents, so there was no great financial loss.

          On the other hand, a child needing constant care would be a cost for the rest of that child’s life. The mother might not be able to work outside the home, because of the need to care for the child. The house might need to be specially adapted. Special schools might be needed, and even with that, the child might never be able to hold down a reasonable-paying job.

        • having lived on the fringes of the medical profession all my life (family) I can assure that the same thing was common in UK until about 50 years ago (tho not the stranling bit!!
          —then everything got regulated

      • Artleads says:

        – So there’s no point in prohibiting abortion, infanticide of deformed fetuses included. .

        – No point in promoting a culture of marriage and child rearing, which is widely done. (But ingle people are literally forced to marry and reproduce…against their will.)

        – Education and business norms that make women depend on marriage (or men) to survive make no sense.

        – A lot of what we’re dealing with here is cultural.

        • Artleads says:

          I would also not see the point of processes that discriminate against the LGBT community. This is not a major constituency for bring more children into existence.

          Part of the difficulty with doing this is that sex makes money. So sex and preference must be front and center of public attention through millions of avenues that we are not conditioned to examine critically. If people were as concerned about growing food as they should be they would have no time to consider sexuality of any sort.

          • reproducing our species is our prime function

            next comes feeding the result of that reproduction.

            if we have reproduced with insufficient available resources, then our reproductive efforts have been a waste of time, even if pleasurable (our offspring die)

            if the majority does that, the species dies out.

            Nature is indifferent, and allows another species to occupy our niche

            we might dress it up as romance etc, but that’s what it is

            • Artleads says:

              “reproducing our species is our prime function”

              Not any more it isn’t. We grew hands and fingers we needed to do what we needed to flourish. With 8 billion people and diminishing resources we stop reducing as a prime function. A sub prime function only. Change happens.

            • my comment was meant in the collective context—not at individuals

              if you take say, a typical famine in africa affecting 1 m people, and stop that famine, you will find that that population will at least double or treble in the following 20 years.

              why

              because adults look on children as an insurance for their future, as there is no other form of safety net in their old age.
              and if food is available ”now” then nature perceives that as an existing support structire of available food.

              if it isnt there in sufficient quantity to support offspring, then nature is indifferent–the children die.

            • Artleads says:

              “adults look on children as an insurance for their future, as there is no other form of safety net in their old age.
              and if food is available ”now” then nature perceives that as an existing support structire of available food”

              We’re living in an unnatural world, and are no longer able to live on nature or through traditionally natural processes. If we lose this artificial system (as we seem highly in danger of doing) we go extinct in short order. For some reason, TPTB don’t yet see it that way. If (or since) they know about the “having kids as insurance” scheme, they would need to see it as in their self interest to provide at least enough alternative “insurance” to subvert the previous natural means of “insurance.” My uninformed 2 cents anyway.

            • Dana says:

              It’s not nice to reproduce, then expect other people to work to feed your offspring. That is slavery, which the government forces on us as part of the welfare state.

            • i agree

              but effectively that is what happens in certain circumstance.

              most parents support their own kids, but there is always a proportion who do not—-same applies to the elderly of course. we expect the state to take care of them—but that means the taxpayer

            • Artleads says:

              Poor third world people are under extreme stress, often imposed by rich foreign countries which want their natural and other materials. Their leaders are almost always corrupt and oppressive. If it were otherwise, foreign powers would change the situation there to make it so. You might say that such places are not governed. That is part of the international system, which wants and effects third world nations that can be destabilized, impoverished, robbed or terrorized. To expect responsible child rearing in such places is a fantasy.

            • Fast Eddy says:

              This is the defining documentary on this issue — note how the CIA fed Lumumba his constitution just prior to offing him…

              The message here is — there is no democracy — there is no ‘fairness’ — do not be stupid — if you are not strong enough to compete with the big boys — then you best align yourself with one of them — Live Large — and despised by your people…..

              Because the alternative is death — and replacement by someone more compliant.

              Poor Patrick and his ideals… he could have had such a wonderful life…. selling out his country in exchange for a piece of the action — riding around on private jets… socking away billions … then perhaps retiring to the Riviera when a better strong man came along….

            • all major famines are caused by outside influences—whether that’s looting resources at one extreme, or health programs (thus increasing population beyond carrying capacity) at the other.

              genetic forces are oblivious to all that, and reproduction carries on.

        • I don’t think I said that, and certainly didn’t mean to infer it.

          Different cultures can affect our social patterns, but I don’t think that has much to do with the overall rise in global population, and the basic unsustainability of our ultimate numbers.

          We seem to be a species that breeds to a maximum, on the basis that our offspring will provide the energy resource necessary for survival into old age.

          No other species does this, so one can only assume that this will be the cause of our extinction (or something close to it)
          When a lion has cubs, or a fish spawns eggs, there is no concept that those offspring will provide for the parent.

          We see this as a ”good thing”…. and maybe it is. But it makes life difficult when numbers grow past the point where they can be supported from the environment in which they live.
          We have absorbed fossil fuel usage into our lives, so that everyone is now dependent on them.

          It is surplus energy availability that supports homes for the elderly and infirm, or life for barely viable babies, or heart transplants for the terminally ill. It also supports the social infrastructure in which we live, and the violent conflict that pits one “social normality” against another “social normality”

          • The whole idea of retirement is relatively recent. An economy has to be quite wealthy to support non working members. Grandmothers could help with child care; grandfathers could continue to be active with some other tasks. Children could work as well.

            Perhaps we need to add retirement to the list of concepts that is non sustainable.

            • Ed says:

              Not sustainable in a world with 8 billion people, sustainable in a world with 8 million people.

            • theblondbeast says:

              I expect it will be a two generation phenomenon. One generation retired on pensions, a second retired on 401k’s, and a third will not be supported.

            • The US Social Security law was signed into law in 1935. The first taxes were collected in 1937, and the first monthly payments came in 1940. It is now 77 years later. So we have already had retirement for more than two generations.

              There are really three types of systems:

              1. Government programs, financed essentially through tax dollars (although they may be called premiums). In general, the taxes collected in year x go to pay the benefits in year x. Thus, actuaries have always felt that population needed to continue to increase, for these programs to be viable. (They forgot about resources.) There may be attempts at a little pre-funding, as in the US plan. The fact that governments use “cash” basis accounting makes true pre-funding impossible, however.

              2. Pensions, typically provided by an employer or employer group. These are typically guaranteed in amount. They are generally funded (but not nearly enough) by investments in stocks and bonds. These are also called Defined Benefit Plans.

              3. 401k type plans (in the US), in which the employee makes a contribution to a fund, which is invested in some mix of stocks and bonds (and perhaps ETFs) The employer may or may not provide some matching funds. When a person retires, he or she gets whatever happens to be in the fund. Tax requirements say that people in the US must start taking money out of these 401k plans by the year that they turn 70.5. If the amount runs out, it is your problem. (It is possible to buy an annuity that acts like a pension with the proceeds, however.) These are also known as Defined Contribution Plans.

              Actuaries discovered quite a few years ago that it is very easy to overestimate the amount of value that stocks and bonds will have in the future. This is why “defined benefit” plans for have mostly disappeared, especially for younger employees.

              I think that all three kinds of plans pretty much fail at the same time–within a few years of each other. None of the plans can withstand the economy really shrinking.

              If the economy is truly shrinking, the financial system will have major problems. The value of paper investments of all kinds will fall. Gold may not really be a solution either, because there won’t be goods made with fossil fuels to buy with it.

              Also, in a shrinking economy, tax revenue will be very much inadequate, as it was in the 2008-2009 recession. So there will be problems all around.

      • Theophilus says:

        Excellent points Norman. The only one point I question is, “Our genetic forces do not recognize cash” Really

        Really? I’m not a sociologist. I can only speak from my limited perspective.
        I have been married to the world’s most beautiful woman for thirty years. I would love to have fathered an entire village with her. Unfortunately after our second child, we struggled to pay our bills. We decided to stop at two. Very difficult decision. Not sure if was the right one. Didn’t have the cash to pay my current bills, let alone the impossibility of affording an even larger home for a larger family.

        My genetic forces surrendered to my lack of cash.
        Do you think I have a genetic mutation. Lol

        With Respect, I’m a big fan of your posts.

        • lol—thanks

          your genetic forces recognised a lack of resources, cash is just a token of resource exchange

          There’s a lake close to where I live, and it supports about 100 Canada geese. We’ve noticed that only 2 maybe 3 pairs of geese reproduce each year.
          How they organise that is a mystery, but their genetic forces somehow work out the balance between the size of the lake and the food it produces, and the number of geese living on it.

          You did the same thing with your lady wife, but unfortunately humankind seems to have lost that collective ability

          • I am not sure if we have lost the ability to limit our numbers. When people feel too crowded, they tend to have few children. Cuba and Haiti are practically next door to each other, yet Cuba’s population has grown far less than Haiti’s. Part of this relates to different cultural norms. Cuba built homes for its people, but not too many of them. There wasn’t a way to keep adding more and more. This helped keep population down.

            Japan had a problem with crowding, and its population is shrinking. Beijing and Shanghai are very expensive to live in. I expect that few parents will have more than one child, even if it is encouraged.

            • Artleads says:

              I hadn’t thought of Cuban housing in this way.Very interesting. Restraint in housing supply seems to work for suppressing resource depletion in some instances.

            • If anyone can create a new “house” using a piece of blue tarp plus something to hold it up, or using a few pieces of cartons tied together and a piece of discarded metal, or using logs to build a four sided structure without a kitchen or bathroom, then the population can grow endlessly. I think this is part of the reason why population seems to grow endlessly in some parts of the world. China does not permit this kind of building, as far as I could see. India seems to, some of Africa seems to, so does Haiti. This is a chart I made a while ago.

              Cuba population growth compared to other countries.

            • Artleads says:

              “I think this is part of the reason why population seems to grow endlessly in some parts of the world. China does not permit this kind of building, as far as I could see. India seems to, some of Africa seems to, so does Haiti. This is a chart I made a while ago.”

              I can’t get my mind around this issue. Crowdedness (Japan) can reduce population, but Haiti is crowded and is growing. Resource depletion is a problem that shanty towns somewhat tamp down, but shanty towns lead to escalating population. Housing with blue tarp and posts cut from small trees solves problems of scarcity and government dependence, but doesn’t pay taxes. I’m guided by aesthetics, and, despite its macroeconomic deficits, shanty development seems more vital and alive than mainstream building… The list continues.

              A kind of compromise (just in terms of what I can conceive of as a “win”) would be very small habitats in nooks and crannies of urban centers. Those could be “taxed” in some kind of way. Other policies, such as free abortion and female autonomy might deal with population control within such a model…

            • I think it has to do with expectations as to what living conditions should be. In a sense, it is a cost-threshold for raising children.

              If the cost of raising more children is very low, and in fact the children work in farms and factories at a young age, then people will have a lot of children.

              If more children have to be crammed into your home, at least some couples will think twice about having more children.

              When we visited St. Petersburg, Russia, a few years ago, we visited the home of one professional couple. I forget now what exactly their occupations were, perhaps college professor and dentist. They had one small child. The child had to sleep in the living room of the home, because the apartment had only one bedroom, a living room, and a partial kitchen. The apartment also shared some appliances and a single bathroom with several other apartments. The bedroom also served as the husband’s office and had many books, taking up quite a bit of space. The couple said that they didn’t think that they would have another child. Too difficult, given their cramped living space (and expectations of how people should live).

              If they had had fewer belongings and lower expectations, they probably could have squeezed in many more children.

              Of course, years ago in Mexico, I saw a large single room hut (from the outside), where I was told a family with ten children lived.

            • Artleads says:

              I suspect it matters what’s around them to determine what people will accept. A lot of third world people live in extremely informal ways. But I suppose that if a new, more formal enclave gets built beside them, there might be psychological pressure to keep up with the Jones’s. Status can be inordinately important. It takes planning and cultural work to figure out how to maneuver such currents.

              Mexican immigrants in CA that I was aware of were probably undocumented, and far from concerned with status. Someone said years ago that Mexicans “like themselves.” I suppose that would reinforce their ability to stick together in close association. Then again, the contrast between the poverty they came from and the promise they see in America focused the mind. An amazing number of them could live in one apartment, even taking shifts for the bed by working different shifts, and sharing cars and child care responsibilities.

            • DJ says:

              It is one thing stopping population growth when economic growth stops.

              I think all nations with some kind och wealth does this. It is obvious for would be parents that having a child averages down their own wealth.

              A whole another how to handle maybe -75% economic growth in not to many years.

            • “Having a child averages down their own wealth” –that is a good way of putting the issue.

              If a child can be put to work early, and a family has little wealth to begin with, this isn’t much of an issue. If parents have to pay for expensive child care for years to come, this does become a big issue.

            • DJ says:

              Great chart! I suppose US is the only one selfsufficient in food?

            • DJ says:

              Artleads,
              If you live in a two bedroom apartment maybe you can squeeze in two kids. You won’t move to a cardboard shanty shack because you prefer five kids.

            • DJ, Your question regarding which countries are self-sufficient in food is too far down in the links to answer. In some sense, no country is self-sufficient in food. We are dependent on a whole chain of imports to keep our system operating (oil, steel, computers). Even at the level of food, the US imports a lot of food, such as fish and out of season fruits and vegetables.

              In terms of total calories, I am sure that the US provides more than enough total calories for its population. According to this article, 70% to 80% of Cuba’s food is imported. They produce quite a lot of fruits and vegetables, but not very much grain or meat. They also produce a lot of sugar for export. I don’t know how the balance would come out, if the sugar cane calories were considered part of their food supply. One issue is the fact that as an island nation, they are surrounded by ocean, yet they eat very little fish.

              Puerto Rico’s population has grown relatively little, because people can easily move to the US mainland. Why stay, if there is a problem? I found an article saying that Puerto Rico imports 85% of its food.

              I believe cheap food imports from the US make farming non-competitive on a lot of islands.
              https://www.export.gov/article?id=Haiti-Agricultural-Sector
              The site this is from is export.gov, which is dedicated to “Helping US Companies Export”

              Rice is a staple food for a majority of Haitians. Although previously self-sufficient in this area, eighty percent of rice now consumed in Haiti is imported. The U.S. is especially competitive in medium quality (10 to 20 percent broken) milled rice and in best quality (2 percent) broken rice.

              Also

              The Haitian agriculture sector has high potential for organic product development that could sustain exports to the U.S. and the European markets.

              So the idea is to growth high priced organic food for the US and European markets, rather than feeding the people of Haiti. The same article points out the possibility of Haiti raising sugar cane for export.

            • Fast Eddy says:

              Turn off the electricity and petrol — and the production will be negligible — in ALL countries.

          • Fast Eddy says:

            Canada Geese fly to New Zealand in the Canadian winter… in Canada they are protected … here in NZ people shoot them down and eat them.

            I wonder if I can get one for Christmas dinner?

        • Fast Eddy says:

          Too bad — more children (for anyone but me) is GOOD…. just like Greed is GOOD… because it means we burn more coal and oil… the global economy keeps growing…. and BAU LIVES!

          Listen to this guy ranting on this poor woman and her children… she is a hero… not a villain

          • Fast Eddy says:

            And btw – I think you prove Norman’s point …. if the resources were available to you … you would have kept on pumping the little rats out….

    • Nehemiah says:

      In regard to population reduction, why resort to a method that is complicated, controversial, intrusive, and tyrannical, and brings the government deeply into the most private and evolutionarily loaded aspect of family life, when you could accomplish the same goal by just tightly restricting immigration (the sole driver of net population growth in the US and many other countries, yet a factor which you oddly omitted any mention of). Most Americans have never wanted to increase immigration rates, many want less immigration and feel rather strongly about it, most of those who support current levels if immigration do not feel strongly about it, and even for most of our Hispanic residents, who have mostly arrived since 1965 (in the 1960 census, “other”–that is, neither White nor Black–were only 1% of the US population), and who often favor more immigration from their home countries, this issue is low on their list of priorities–nice to have, but negotiable. All you would have to do is force the hands of our elites, which means bringing more pressure on our prostitute-politicians (I know, it’s redundant) than the wealthier classes (who want more cheap and compliant workers and household servants) and certain activists who see the arrival of poor, uneducated, and often desperate people as the importation of future voters for their populist political appeals. This may, in fact, be the issue that put Trump over the top in the Republican primaries and the general election. Logically, this issue should appeal not only to conservative White voters, but to the working classes in general, to Black voters (who may suffer the most from competition for low skilled jobs and the dilution of affirmative action opportunities), to rank-and-final environmentalists (the non-Watermelon kind who put the environment before ideology), to social liberals (since most of our immigrants are from more traditional cultures), and to people who want an expanded welfare state, since this is harder to achieve under conditions of ethnic competition, envy, and resentment. Yet when the issue of overpopulation comes up, the first response I typically see (don’t feel singled out, Theophilus) is not to close the door on the true driver of net population increase, but to bring the government into our bedrooms and restrict the liberty of our citizens, no matter how hated this policy will be by the voters and long-suffering taxpayers. Why?

      • Something that seemed to work to limit population in Cuba was not building more housing. Grandparents, parents, and children would all live in the same small home. Parents made a concerted effort not to have too many children.

      • Theophilus says:

        Nehemiah, I didn’t raise the issue of immigration because I was thinking globally. In a perfect world, which this is not. Lol, the same laws would apply to immigrants as well. This would probably reduce immigration pressures on some countries.

        My main purpose was to bring up the issue of population. I think it has been neglected by many. The proposals I suggested could be a good starting point for discussion, but far from a finished policy ready for implementation. I appreciate the well thought out responses. They confirm my belief that population needs to be part of an overall discussion on finite resources.

        P.S. Government is already involved in our lives in an intrusive and tyrannical way regarding family size. Most tax policies incentivize larger families through increased deductions for dependents and in some cases other credits are given to offset the cost of raising children. Almost the opposite of what I am proposing!

        • I don’t think the tax deductions are great enough to incentivize having more children.

          What are more of a problem are tax programs that did-incentivize marriage. If a couple comes out ahead financially by claiming “single head of household ” for the mother and child and “single ” for the father, it incentivizes broken homes.

        • Fast Eddy says:

          We MUST increase population. ALWAYS.

    • Slow Paul says:

      So what happens if you have excess children that you can’t pay for?

      • they become Fast Eddy’s lunch

      • Theophilus says:

        The same thing that happens when you don’t pay taxes. Standard collection procedures: garnished wages, confiscation of property, and for the most obstinant community service or incarceration. People to go jail for not paying taxes, don’t they?

        • Slow Paul says:

          I mean, will they confiscate or incarcerate the babies? If you can’t pay taxes then you probably don’t have much to offer…

          What I’m getting at is that incentives is a good way to go, but punishment for making babies is kind of harsh. The poor can’t pay but will still make babies. The rich can pay and will still make babies.

  4. Baby Doomer says:

    Cash-strapped Rome eyes up Trevi Fountain coins tossed by tourists
    http://www.france24.com/en/20171110-cash-strapped-rome-eyes-trevi-fountain-coins

    • zenny says:

      I am sure that if they put up a sign saying PROCEEDS TO RAPEUGEES they could get more coins

    • Another way of headlining this would be, “Revenue stream previously directed to charity, to be given over to Italian government.”

      It is a story of discretionary funding being redirected, when total funding is short.

  5. Baby Doomer says:

    We Are In A Depression, If Borrowing Money Is Not Income -Seeking Alpha
    https://seekingalpha.com/article/4109827-depression-borrowing-money-income

    Gail, here is the article to that chart of US GDP minus debts..

    • Thanks very much. I think I would need to go back and figure out my own numbers, to be entirely comfortable with what is being done.

      I notice that many of the comments are of the form, “You should have done this rather than that.”

      It would also be interesting to see what Medicare and Social Security are doing to the numbers.

      I would also add that the whole premise is of the article is that increased borrowing is not really income for the government. In fact, it acts the same way as income for the government. Also, increased borrowing by individuals and businesses is also what keeps the system going. He is just looking at one piece of the big picture of rising borrowing funding the whole system.

  6. MG says:

    What was the real story behind the philosophy of Hitler:

    1. Arbeit macht frei = solving energy shortages by cheap labor force
    2. Pure race = unpolluted world

    Slavery consumes human beings who constitute pollution to the world, as the higher is the human population, the higher is the pollution.

    The line regarding the decline of the pollution in the predictions of the Limits to Growth is faulty, as when we do not have wast amounts of free energy, we can not remove the accumulated pollution caused by the industrial civilization, including radiation:

    The rising pollution constitues the population control limit, as it causes not only biological pollution by harmful microorganisms, but also the pollution by toxic elements. Fighting the pollution requires wast amounts of energy invested into healthcare.

    • MG says:

      https://en.wikipedia.org/wiki/Water_supply_and_sanitation_in_Japan

      “Access to an improved water source is universal in Japan. 97% of the population receives piped water supply from public utilities and 3% receive water from their own wells or unregulated small systems, mainly in rural areas.[4]”

    • DJ says:

      Birth rate is also wrong. Food per capita 1/3-1/2 of 1900 and no farm to leave to the first born and some kind of government left birth rate will continue down.

      • MG says:

        Yes, I am still wondering how could they model birthrates going up. It is this interdependence of the rising pollution with the falling birthrate that they misunderstood…

        • DJ says:

          I think birthrate was a function of prosperity in the model.

          But sequences of events that gave lowered birth rate might not unfold in reverse.

          Currently poor people in the west can kind of make a living by having a lot of children. Society can probably not afford that much longer.

          • MG says:

            We live in the world that is artificial – roads with bridges, pipelines, electric cables, manipulated food prices. When there is less or no affordable energy and food, this artificial world disappears. But the pollution remains.

            • Slow Paul says:

              The pollution doesn’t go away, but maybe the graph shows pollution rate?

            • Some kinds of pollution get diluted enough that they are not important any more. Smoke can be polluting for a while, but then it blows away and disburses. Even the global warming gasses are assumed to be a problem for a specific length of time, not indefinitely. So I would tend to think they authors did mean pollution, rather than a rate. But as I said before, I don’t think their post peak modeling tells us much at all.

        • Nehemiah says:

          I think the BAU model of Limits to Growth predicted higher birth rates because they thought people would respond to higher death rates by having more offspring (look at the graph). But they still show death rates rising faster than (and earlier than) birth rates. As long as effective contraception remains available (and NFP has been refined to the point that it is as effective as “the pill,” so the survival of advanced technology and long distance trade are not essential), I think the model greatly overestimates how much birth rates will rise in response to rising death rates; especially if deaths rise in episodic bursts, such as intermittent famines and epidemics, rather than a steady, predictable rise in the background death rate. I think contraception has changed the demographic equation, and intermittent population die offs will not be followed by rebounds in the total population.

          I think the general trend to below replacement fertility in country after country will only reverse when strict religious sects (which have elevated fertility rates–and I don’t mean so much groups like the Southern Baptist Convention, but the really strict groups, which are currently very small and make the late Jerry Falwell or Pat Robertson look like flaming liberals) grow to the point that they are a large share of the total population. But that is many generations in the future.

          • godbotherers will grow in influence as everything else is seen not to work

            prayer is the last resort—and will be inflicted on everyone else.

            that won’t work either but that is part of the overall denial factor

            • theblondbeast says:

              I think one of the things to understand about modern life is that we’re ALREADY a cargo cult – of fossil fuel riches. There is no need to fear religious insanity. We’re already living it.

            • xabier says:

              In some places, religious cults; in others, atheist revolutionary ideologies -with a Great Leader as the god.

              Both futile as solutions, but each providing their own form of comfort for distressed minds.

    • Someplace in the original book, the authors say that the model really isn’t right after industrial output per capita, and food and services per capita, hit a peak. I think that they should have simply “chopped off” the model at that point, because they had no idea what would happen. In fact, at one point, I made a version of the chart, showing where it needed to end. This happens before the pollution gets very bad.

      • Baby Doomer says:

        Study: Limits to Growth was Right. Research Shows We’re Nearing Global Collapse (Turner, 2014)

        http://sustainable.unimelb.edu.au/sites/default/files/docs/MSSI-ResearchPaper-4_Turner_2014.pdf

      • MG says:

        Also the line for resources should be split into two: energy and stuff. We will not run out of the oil, coal or metals, but we will be unable to obtain them from the ores with low concentration or from big depths etc. We accumulate big amounts of steel etc. that will not be reprocessed as there will not be cheap energy and population in the need of all those products as the population will lack the energy for everyday purposes and operation of the produced things, not one-time production of goods that can be done by robots.

        I would rather say that the line named resources should be named energy, as we deplete the accumulated energy and accumulate the stuff using it.

      • Nehemiah says:

        Speaking of the “original book,” anyone can read it free online at

        http://donellameadows.org/the-limits-to-growth-now-available-to-read-online/
        OR, in pdf:
        http://www.donellameadows.org/wp-content/userfiles/Limits-to-Growth-digital-scan-version.pdf

        Pollution fears were all the rage in the late sixties-earlier seventies when the LTG models were created, and I think for that reason they overestimated the effects of pollution. I remember seeing a film in grade school, about 1971, about a near term future where people could not venture outside with gas masks or oxygen masks. Scientist Stephen Schneider was warning the public that pollution would trigger a full blown ice age in fifty years (a few years later he suddenly flip-flopped to warning us about man-made global warming instead of man-made global cooling). The hysteria was at a peak. Pollution is undesirable and I would like to have less of it, contingent upon a realistic cost-benefit analysis, but I think resource depletion is 90% of the problem, and we could muddle through for a long time if not for that. Resource depletion is a camel and the other problems are gnats in comparison.

        • MG says:

          The pollution contributes to accumulation of genetic mutations in the populations. Think about Tchernobyl and, e.g. what I know also about my country, the areas polluted by toxic waste, like in the East part of Slovakia, where PCBs were produced or processed various metals and the environment is polluted with them and their by-products:

          View story at Medium.com

          The pollution is not just air you breath or global warming or cooling caused by volcanoes or people, but the whole food chain, the insufficient hygiene of other people who can spread the diseases etc.

          If we have free energy, we can create whatever stuff we need. If we have at least cheap energy, we can create a lot of stuff. But if we have no energy, we can create nothing.

          The resources is not a problem. The problem is the low concentration of existing raw materials vis-a-vis costly energy plus the dispersion of pollutants when producing the finished products with the costly energy.

          • xabier says:

            Today, even our clothes are pollution, in landfill – before, they just rotted or were recycled as paper.

          • You are right. What we need to create goods and services is either free energy, or extremely cheap energy. Having such energy will eliminate resource shortages, because we can produce energy intensive workarounds, like getting metals from seawater, or from underwater nodules, or mined from asteroids or wherever they may be found.

        • DJ says:

          Until now we have handled pollution by diverting resources. At some point maybe we cant afford that.

          • Right! All of the filters we use to keep materials out of the air and water take resources. Sometimes poor countries can get a competitive advantage by not adding filters and other workarounds, and this lowering costs. But the people suffer instead from the results of this pollution. So do the plants and animals.

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  8. jerry says:

    Found on MSN this morning an interesting piece about hostilities between Saudi Arabia and Iran. If they should go to war well the outcome would be horrifying. 2 paragraphs are of special importance however to the topic of energy and economy and the fragility of it all and O if that missile that Yemen fired at Saudi Arabia had instead landed and ignited one of her oil fields what then?

    The impact of such a closure on the global economy would be severe and immediate. For example, the Suez Crisis of 1957 saw 10 percent of the world’s oil production taken off the market. Within a month, the U.S. and Europe were facing a recession which would last the better part of a year.
    In 1973, the Arab-Israeli War and resulting Arab OPEC embargo would bring long lines to gas stations as the oil price quadrupled. On an annual basis, global oil production held steady, but Persian Gulf exports to the U.S. fell by 1.2 million barrels / day, or about 7 percent of total U.S. consumption. This oil shock would plunge the U.S. into a recession which lasted for two years.
    In the event of a Saudi-Iranian hostilities lead to a sustained outage of Persian Gulf exports, a severe and prompt global recession will follow similarly.
    Much as in 1973, U.S. imports from the Persian Gulf still amount to 8 percent of consumption, the loss of which was sufficient to knock 10 percent from GDP from 1973 to 1975. However, China and other importers would seek to outbid the U.S. on its imports from countries like Nigeria, Angola and even Brazil and Columbia. In all, U.S. imports could fall by 15 percent of total consumption–twice the drop from 1957 to 1973 and sufficient to plunge the U.S. into a deep recession lasting years

    .https://www.msn.com/en-ca/money/topstories/saudi-iran-war-would-create-this-domino-effect-of-global-disaster-opinion/ar-BBEP7jk?li=AAggNb9

    • over the past few years of doomerizing in here, I’ve said again and again, that collapse of Saudi oil, (and thus the world economy) will not come from final depletion of the oil, but by fighting over what’s left of it.

      Dress it up anyway you like, but wars are always about resources.

      If Saudi and Iran come to war, the first strike will come against their oilwells.

      After that, the genius-generals will realise theyve got no means of continuing their war, once the reserves have been used up.

      They will not be able to buy oil or food from anywhere, because even the slowest of thinkers of other regimes will take 10 seconds to figure out that they too will be running on empty within weeks. No matter what their political affliations, the USA and Russia will just walk away.

      El Trumpo will pull up his drawbridge, only to find the inmates of fortress USA will find themselves in the same situation, because Canada will shut off their gas and oil lines (Canada gets cold in winter)
      and the USA will find that an economy that needs to burn fuel at twice the rate of extraction is well and truly screwed

      • jerry says:

        “After that, the genius-generals will realise theyve got no means of continuing their war, once the reserves have been used up.”

        Ah there’s always sticks and stones Norman and swords and rapiers

        O what a prime example Vietnam was. Kill until they could no longer afford to kill. Unbelievable!

      • I think it may come by collapse, in the same direction where Venezuela is headed. The country becomes too poor to produce the oil.

          • This is an article Chris Martenson wrote about the Saudi situation.
            https://www.peakprosperity.com/blog/113426/if-saudi-arabia-situation-doesnt-worry-youre-not-paying-attention

            Martenson points out Saudi Arabia’s new close ties to China and Russia, and talks about it pullback in relations with the US.

            He talks about the arrangement between Saudi Arabia and the United States, with the US buying oil and providing protection for Saudi Arabia, and Saudi Arabia recycling at least part of its excess funds into buying US debt, as if this arrangement were completely secret. I had thought that this arrangement had been pretty well known for a long time. In fact, I thought that the purpose of the debt recycling was to hold down US interest rates, sort of like an early form of QE.

            The thing Martenson doesn’t mention is that fact that once the oil price dropped, Saudi Arabia could no longer provide its debt recycling service–the price was not high enough to provide excess dollars to recycle. Thus, Saudi Arabia’s benefit to America is lower. The United States is also competing with respect to who pumps oil. China is clearly a buyer, so makes a better friend for Saudi Arabia. China might also lend Saudi Arabia money.

            • Fast Eddy says:

              I wonder about the Israel role here… given Israel basically dictates US policy…

              If anyone out there still believes the MSM exists to inform …. then they really need to read this comment… it is not their job to tell you the truth…. well… the sports scores are the truth … but beyond that….

              That it’s receiving too little attention in the US press given the implications, is a tip off as to just how big a deal this is — as we’re all familiar by now with how the greater the actual relevance and importance of a development, the less press coverage it receives. This is not a direct conspiracy; it’s just what happens when your press becomes an organ of the state and other powerful interests. Like a dog trained with daily rewards and punishments, after a while the press needs no further instruction on the house rules.

            • I think that the fact that some (but definitely not all) churches support Israel is an issue.

              I can remember a lot of prayers for Palestinian Christians over the years. I never remember a single word spoken in support of Israel in the Lutheran Church I attend.

              We do have members of the congregation now who are of Jewish heritage (as well as Mexican, black, and various Asian backgrounds). Lots of former Catholics, who could not put up with the church any more.

    • Nehemiah says:

      The recession following the OPEC embargo was the worst recession since the Great Depression. In 1981, OPEC redoubled the price of oil and we had another worst-recession-since-the-Great-Depression. In 2008, oil hit US$147 a barrel and we experienced yet another worst-recession-since-the-Great-Depression. I expect intense pressure will be brought on SA and Iran through diplomatic channels to avoid a war between them.

  9. Ed says:

    The population of England went from 3 million in 200CE to 6 million in 1700CE. If we look at the social practices of England we will see how to control population numbers. 1) land ownership 2) work for food or die 3) sheriff to kill those who trespass or steal and runoff the homeless.

    • xabier says:

      and, 4) Persist in failing to develop flushing lavatories and complex sewerage systems.

      ‘Cleaner of the Royal Lavatory Shaft ‘ (true!) was not a pleasant post to hold.

      • Actually, the powers that be, who had servants cleaning their latrines, didn’t give a crap.

        They kind of knew that it was kind of a population control of the lower class, and kept things stable.

        It was the son of a coal miner, John Snow, who found the well which was the center of a cholera epidemic in a poor area. The higher ups were not happy about his findings, and he was forced to leave his public health position. He was only recognized long after his death.

        Such is how the world works.

        • xabier says:

          My point is that until modern sewerage and water-purifying systems came in, and the invention of antibiotics, anyone at all, of any class, however well-fed and housed, was liable to be struck down at any time by a ‘fever’ followed by quick demise.

          • But being poorly fed tended to make diseases more lethal. If I remember correctly, the well to do had longer life expectancies and a greater share of their children lived to maturity. That is certainly the way it works out today. When there are shortages, disparities tend to become greater.

        • public health factors were always rejected

          doctors resisted hand washing as ridiculous when moving between performing a post mortem and assisting at birth—hence mothers died

          it took years for it to be accep[ted as dangerous

    • Theophilus says:

      Better yet, if you really want to know how to reduce a population quickly, study English land policies during the Irish famine.
      I’m of irish descent, it’s a miracle i am alive to think about it.

      • xabier says:

        Yes, horrible.

        The Irish have very good reason to detest the English and Scots settlers. Make a people poor, take their land, and then kick them for it!

        Out of curiosity I picked up one of the old Irish chronicles recording life in the medieval period – constantly chopping one another up in petty wars between idiot ‘princes’!

        A catalogue of misery, whoever ruled……

        • Fast Eddy says:

          Same as it ever was… same as it ever was….

          The weak get trampled…. and they inherit sweet f789 in ‘the next life’

          Message: join the tramplers or live like a starving dog.

      • richarda says:

        It’s been some time since I last explained to anyone that they had the wrong idea about the Irish Famine and population change. Unfortunately for your education, I now find that life is too short to waste time. Do your own real research.

        • Plenty of British apologists about this, since it is not something glorious in the march of the British Empire.

          In the older days the British Establishment simply ignored it as something which didn’t happen. GW Trevelyan, the eminent English historian whose grandpa engineered the famine and became a baronet for his troubles, had nothing to write about the Famine and his grandpa’s role in it.

          After Britain lost most of its Empire, it became some topic of introspection. Still the Baronet of Trevelyan still exists (it is not clear who is the holder of the title now though), and nobody has issued a settlement of it. Ditto to the Irish elites, many of them pro-crown during the famine and supported the policies which culled the less educated and less powerful peasants, who would rather bury this matter forever.

    • Interesting!

      Yet about the same time, Americans, Norwegians and others were sending missionaries to Africa, Japan, China, and India. While there was a religious aspect to it, there was also a plan to improve living conditions, and to provide medical care. (In fact, this is part of the reason why population has exploded so much–an unintended outcome.)

      The WSJ recently had a review of a new book by David Hollinger “Protestants Abroad: How Missionaries Tried to Change the World but Changed America.” According to the book summary,

      They sought to transform the world, and ended up transforming twentieth-century America

      Between the 1890s and the Vietnam era, many thousands of American Protestant missionaries were sent to live throughout the non-European world. They expected to change the people they encountered, but those foreign people ended up transforming the missionaries. Their experience abroad made many of these missionaries and their children critical of racism, imperialism, and religious orthodoxy. When they returned home, they brought new liberal values back to their own society. Protestants Abroad reveals the untold story of how these missionary-connected individuals left an enduring mark on American public life as writers, diplomats, academics, church officials, publishers, foundation executives, and social activists.

      My father (who is no longer alive) was one of these children of missionaries. He was born and raised in Madagascar. His parents moved to Madagascar a few years before WWI. So I have heard many stories, and seen many photos from long ago.

      I still have relatives who are somewhat involved with related efforts. For example, I have a female cousin who is in her early 60’s. She is nurse; her husband has died, and she has no children. She frequently goes on humanitarian aid trips to various parts of Africa and to Madagascar. I asked her about the risk of catching one of the many untreatable diseases from over there. She says, “I have no one depending on me. I am as well suited as anyone to go there.” She generally has to pay her own way to participate in these efforts.

      • Niko says:

        I’m sorry to hear about your father, but based on what I know of you, he led a good life.

        • My father would be in his 90s now, if he were still alive.

          He became a physician when he became an adult. He wanted to go back to Madagascar to help later in his adult life, but that never worked out. He did go back to visit, with my mother and a group of other relatives. The country had gone downhill greatly after French Colonial rule had ended. I believe that this pattern happened in some other African nations as well.

          • Artleads says:

            “I believe that this pattern happened in some other African nations as well.”

            I would say so. The entire colonial African Diaspora that I know of.

      • xabier says:

        It’s easy to criticise empire in a facile way: of course, it is always at one level about asset- stripping and plunder, but many empires have brought a freedom from civil war and instability greatly appreciated at the time.

        Mughal India, before the British took control. was a living nightmare for the ordinary person: endless wars, massacres, mad rulers, and bandits everywhere. Native tribes allied with the Spanish conquistadors in order to be free of Aztec overlords, etc. Everyone loved Augustus for bringing peace to the Roman world (not the Germans he attacked, though!) And so on.

        Empires eliminate bandits and impose civil order so they can tax people and improve trade – in many cases, a very good exchange!

        Dumb empires, like that of the Germans in the 1940’s, merely enslave, steal and murder in one crude grab for resources in the short-term: they don’t last that long in consequence.

        • And when the real students were dying at Flanders, GH Hardy invited a clerk from India who roamed Cambridge like a Maharajah, and demanded vegetarian food when people didn’t have enough to eat.

          That was the beginning fo the end of the West. Ramanujan should have been hacked to pieces by real Cambridge students after the war, and his brain sliced up and served as curry. I do not consider him a math genius – I consider him as an alien invader.

        • Artleads says:

          Well said.Colonial rationalism. Order through cold rationalism has many benefits.

    • if Chuck Fitzclarence did not order that stupid charge at Gheluvalt on oct 28, 1914, the Third World would have been cleared for European settlements , jungles destroyed, and natives written off from the book of evolution.

      And we would be in the stars by now.

      All the resources wasted to bring billions of people who will do nothing for the future will probably be our undoing.

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