The Depression of the 1930s Was an Energy Crisis

Economists, including Ben Bernanke, give all kinds of reasons for the Great Depression of the 1930s. But what if the real reason for the Great Depression was an energy crisis?

When I put together a chart of per capita energy consumption since 1820 for a post back in 2012, there was a strange “flat spot” in the period between 1920 and 1940. When we look at the underlying data, we see that coal production was starting to decline in some of the major coal producing parts of the world at that time. From the point of view of people living at the time, the situation might have looked very much like peak energy consumption, at least on a per capita basis.

Figure 1. World Energy Consumption by Source, based on Vaclav Smil estimates from Energy Transitions: History, Requirements and Prospects (Appendix) together with BP Statistical Data for 1965 and subsequent, divided by population estimates by Angus Maddison.

Even back in the 1820 to 1900 period, world per capita energy had gradually risen as an increasing amount of coal was used. We know that going back a very long time, the use of water and wind had never amounted to very much (Figure 2) compared to burned biomass and coal, in terms of energy produced. Humans and draft animals were also relatively low in energy production. Because of its great heat-producing ability, coal quickly became the dominant fuel.

Figure 2. Annual energy consumption per head (megajoules) in England and Wales during the period 1561-70 to 1850-9 and in Italy from 1861-70. Figure by Wrigley

In general, we know that energy products, including coal, are necessary to enable processes that contribute to economic growth. Heat is needed for almost all industrial processes. Transportation needs energy products of one kind or another. Building roads and homes requires energy products. It is not surprising that the Industrial Revolution began in Britain, with its use of coal.

We also know that there is a long-term correlation between world GDP growth and energy consumption.

Figure 3. X-Y graph of world energy consumption (from BP Statistical Review of World Energy, 2017) versus world GDP in 2010 US$, from World Bank.

The “flat period” in 1920-1940 in Figure 1 was likely problematic. The economy is a self-organized networked system; what was wrong could be expected to appear in many parts of the economy. Economic growth was likely far too low. The chance for conflict among nations was much higher because of stresses in the system–there was not really enough coal to go around. These stresses could extend to the period immediately before 1920 and after 1940, as well.

A Peak in Coal Production Hit the UK, United States, and Germany at Close to the Same Time

This is a coal supply chart for the UK. Its peak coal production (which was an all time peak) was in 1913. The UK was the largest coal producer in Europe at the time.

Figure 4. United Kingdom coal production since 1855, in a href=”http://www.davidstrahan.com/blog/?p=116″>figure by David Strahan. First published in New Scientist, 17 January 2008.

The United States hit a peak in its production only five years later, in 1918. This peak was only a “local” peak. There were also later peaks, in 1947 and 2008, after coal production was developed in new areas of the country.

Figure 5. US coal production, in Wikipedia exhibit by contributor Plazak.

By type, US coal production is as shown on Figure 6.

Figure 6. US coal production by type, in Wikipedia exhibit by contributor Plazak.

Evidently, the highest quality coal, Anthracite, reached a peak and began to decline about 1918. Bituminous coal hit a peak about the same time, and dropped way back in production during the 1930s. The poorer quality coals were added later, as the better-quality coals became less abundant.

The pattern for Germany’s hard coal shows a pattern somewhat in between the UK and the US pattern.

Figure 7. Source GBR.

Germany too had a peak during World War I, then dropped back for several years. It then had three later peaks, the highest one during World War II.

What Affects Coal Production?

If there is a shortage of coal, fixing it is not as simple as “inadequate coal supply leads to higher price,” quickly followed by “higher price leads to more production.” Clearly the amount of coal resource in the ground affects the amount of coal extraction, but other things do as well.

[1] The amount of built infrastructure for taking the coal out and delivering the coal. Usually, a country only adds a little coal extraction capacity at a time and leaves the rest in the ground. (This is how the US and Germany could have temporary coal peaks, which were later surpassed by higher peaks.) To add more extraction capacity, it is necessary to add (a) investment needed for getting the coal out of the ground as well as (b) infrastructure for delivering coal to potential users. This includes things like trains and tracks, and export terminals for coal transported by boats.

[2] Prices available in the marketplace for coal. These fluctuate widely. We will discuss this more in a later section. Clearly, the higher the price, the greater the quantity of coal that can be extracted and delivered to users.

[3] The cost of extraction, both in existing locations and in new locations. These costs can perhaps be reduced if it is possible to add new technology. At the same time, there is a tendency for costs within a given mine to increase over time, as it becomes necessary to access deeper, thinner seams. Also, mines tend to be built in the most convenient locations first, with best access to transportation. New mines very often will be higher cost, when these factors are considered.

[4] The cost and availability of capital (shares of stock and sale of debt) needed for building new infrastructure, and for building new devices made possible by new technology. These are affected by interest rates and tax levels.

[5] Time lags needed to implement changes. New infrastructure and new technology are likely to take several years to implement.

[6] The extent to which wages can be recycled into demand for energy products. An economy needs to have buyers for the products it makes. If a large share of the workers in an economy is very low-paid, this creates a problem.

If there is an energy shortage, many people think of the shortage as causing high prices. In fact, the shortage is at least equally likely to cause greater wage disparity. This might also be considered a shortage of jobs that pay well. Without jobs that pay well, would-be workers find it hard to purchase the many goods and services created by the economy (such as homes, cars, food, clothing, and advanced education). For example, young adults may live with their parents longer, and elderly people may move in with their children.

The lack of jobs that pay well tends to hold down “demand” for goods made with commodities, and thus tends to bring down commodity prices. This problem happened in the 1930s and is happening again today. The problem is an affordability problem, but it is sometimes referred to as “low demand.” Workers with inadequate wages cannot afford to buy the goods made by the economy. There may be a glut of a commodity (food, or oil, or coal), and commodity prices that fall far below what producers need to make a profit.

Figure 8. U.S. Income Shares of Top 10% and Top 1%, Wikipedia exhibit by Piketty and Saez.

The Fluctuating Nature of Commodity Prices

I have noted in the past that fossil fuel prices tend to move together. This is what we would expect, if affordability is a major issue, and affordability changes over time.

Figure 9. Price per ton of oil equivalent, based on comparative prices for oil, natural gas, and coal given in BP Statistical Review of World Energy. Not inflation adjusted.

We would expect metal prices to follow fossil fuel prices, because fossil fuels are used in the extraction of ores of all kinds. Investment strategist Jeremy Grantham (and his company GMO) noted this correlation among commodity prices, and put together an index of commodity prices back to 1900.

Figure 10. GMO Commodity Index 1900 to 2011, from GMO April 2011 Quarterly Letter. “The Great Paradigm Shift,” shown at the end is not really the correct explanation, something now admitted by Grantham. If the graph were extended beyond 2010, it would show high prices in 2010 to 2013. Prices would fall to a much lower level in 2014 to 2017.

Reason for the Spikes in Prices. As we will see in the next few paragraphs, the spikes in prices generally arise in situations in which everyday goods (food, homes, clothing, transportation) suddenly became more affordable to “non-elite” workers. These are workers who are not highly educated, and are not in supervisory positions. These spikes in prices don’t generally “come about” by themselves; instead, they are engineered by governments, trying to stimulate the economy.

In both the World War I and World War II price spikes, governments greatly raised their debt levels to fund the war efforts. Some of this debt likely went directly into demand for commodities, such as to make more bombs, and to operate tanks, and thus tended to raise commodity prices. In addition, quite a bit of the debt indirectly led to more employment during the period of the war. For example, women who were not in the workforce were hired to take jobs that had been previously handled by men who were now part of the war effort. (These women were new non-elite workers.) Their earnings helped raise demand for goods and services of all kinds, and thus commodity prices.

The 2008 price spike was caused (at least in part) by a US housing-related debt bubble. Interest rates were lowered in the early 2000s to stimulate the economy. Also, banks were encouraged to lend to people who did not seem to meet usual underwriting standards. The additional demand for houses raised prices. Homeowners, wishing to cash in on the new higher prices for their homes, could refinance their loans and withdraw the cash related to the new higher prices. They could use the funds withdrawn to buy goods such as a new car or a remodeled basement. These withdrawn funds indirectly supplemented the earnings of non-elite workers (as did the lower interest rate on new borrowing).

The 2011-2014 spike was caused by the extremely low interest rates made possible by Quantitative Easing. These low interest rates made the buying of homes and cars more affordable to all buyers, including non-elite workers. When the US discontinued its QE program in 2014, the US dollar rose relative to many other currencies, making oil and other fuels relatively more expensive to workers outside the US. These higher costs reduced the demand for fuels, and dropped fuel prices back down again.

Figure 11. Monthly Brent oil prices with dates of US beginning and ending QE.

The run-up in oil prices (and other commodity prices) in the 1970s is widely attributed to US oil production peaking, but I think that the rapid run-up in prices was enabled by the rapid wage run-up of the period (Figure 12 below).

Figure 12. Growth in US wages versus increase in CPI Urban. Wages are total “Wages and Salaries” from US Bureau of Economic Analysis. CPI-Urban is from US Bureau of Labor Statistics.

The Opposing Force: Energy prices need to fall, if the economy is to grow. All of these upward swings in prices can be at most temporary changes to the long-term downward trend in prices. Let’s think about why.

An economy needs to grow. To do so, it needs an increasing supply of commodities, particularly energy commodities. This can only happen if energy prices are trending lower. These lower prices enable the purchase of greater supply. We can see this in the results of some academic papers. For example, Roger Fouquet shows that it is not the cost of energy, per se, that drops over time. Rather, it is the cost of energy services that declines.

Figure 13. Total Cost of Energy and Energy Services, by Roger Fouquet, from Divergences in Long Run Trends in the Prices of Energy and Energy Services.

Energy services include changes in efficiency, besides energy costs themselves. Thus, Fouquet is looking at the cost of heating a home, or the cost of electrical services, or the cost of transportation services, in inflation-adjusted units.

Robert Ayres and Benjamin Warr show a similar result, related to electricity. They also show that usage tends to rise, as prices fall.

Figure 14. Ayres and Warr Electricity Prices and Electricity Demand, from “Accounting for growth: the role of physical work.”

Ultimately, we know that the growth in energy consumption tends to rise at close to the same rate as the growth in GDP. To keep energy consumption rising, it is helpful if the cost of energy services is falling.

Figure 15. World GDP growth compared to world energy consumption growth for selected time periods since 1820. World real GDP trends for 1975 to present are based on USDA real GDP data in 2010$ for 1975 and subsequent. (Estimated by author for 2015.) GDP estimates for prior to 1975 are based on Maddison project updates as of 2013. Growth in the use of energy products is based on a combination of data from Appendix A data from Vaclav Smil’s Energy Transitions: History, Requirements and Prospects together with BP Statistical Review of World Energy 2015 for 1965 and subsequent.

How the Economic Growth Pump Works

There seems to be a widespread belief, “We pay each other’s wages.” If this is all that there is to economic growth, all that is needed to make the economy grow faster is for each of us to sell more services to each other (cut each other’s hair more often, or give each other back rubs, and charge for them). I think this story is very incomplete.

The real story is that energy products can be used to leverage human labor. For example, it is inefficient for a human to walk to deliver goods to customers. If a human can drive a truck instead, it leverages his ability to deliver goods. The more leveraging that is available for human labor, the more goods and services that can be produced in total, and the higher inflation-adjusted wages can be. This increased leveraging of human labor allows inflation-adjusted wages to rise. Some might call this result, “a higher return on human labor.”

These higher wages need to go back to the non-elite workers, in order to keep the growth-pump operating. With higher-wages, these workers can afford to buy goods and services made with commodities, such as homes, cars, and food. They can also heat their homes and operate their vehicles. These wages help maintain the demand needed to keep commodity prices high enough to encourage more commodity production.

Raising wages for elite workers (such as managers and those with advanced education), or paying more in dividends to shareholders, doesn’t have the same effect. These individuals likely already have enough money to buy the necessities of life. They may use the extra income to buy shares of stock or bonds to save for retirement, or they may buy services (such as investment advice) that require little use of energy.

The belief, “We pay each other’s wages,” becomes increasingly false, if wages and wealth are concentrated in the hands of relatively few. For example, poor people become unable to afford doctors’ visits, even with insurance, if wage disparity becomes too great. It is only when wages are fairly equal that all can afford a wide range of services provided by others in the economy.

What Went Wrong in 1920 to 1940?

Very clearly, the first thing that went wrong was the peaking of UK coal production in 1913. Even before 1913, there were pressures coming from the higher cost of coal production, as mines became more depleted. In 1912, there was a 37-day national coal strike protesting the low wages of workers. Evidently, as extraction was becoming more difficult, coal prices were not able to rise sufficiently to cover all costs, and miners’ wages were suffering. The debt for World War I seems to have helped raise commodity prices to allow wages to be somewhat higher, even if coal production did not return to its previous level.

Suicide rates seem to behave inversely compared to earning power of non-elite workers. A study of suicide rates in England and Wales shows that these were increasing prior to World War I. This is what we would expect, if coal was becoming increasingly difficult to extract, and because of this, the returns for everyone, from owners to workers, was low.

Figure 16. Suicide rates in England and Wales 1861-2007 by Kyla Thomas and David Gunnell from International Journal of Epidemiology, 2010.

World War I, with its increased debt (which was in part used for more wages), helped the situation temporarily. But after World War I, the Great Depression set in, and with it, much higher suicide rates.

The Great Depression is the kind of result we would expect if the UK no longer had enough coal to make the goods and services it had made previously. The lower production of goods and services would likely be paired with fewer jobs that paid well. In such a situation, it is not surprising that suicide rates rose. Suicide rates decreased greatly with World War II, and with all of the associated borrowing.

Looking more at what happened in the 1920 to 1940 period, Ugo Bardi tells us that prior to World War I, the UK exported coal to Italy. With falling coal production, the UK could no longer maintain those exports after World War I. This worsened relations with Italy, because Italy needed coal imported from the UK to rebuild after the war. Ultimately, Italy aligned with Germany because Germany still had coal available to export. This set up the alliance for World War II.

Looking at the US, we see that World War I caused favorable conditions for exports, because with all of the fighting, Europe needed to import more goods (including food) from the United States. After the war ended in 1918, European demand was suddenly lower, and US commodity prices fell. American farmers found their incomes squeezed. As a result, they cut back on buying goods of many kinds, hurting the US economy.

One analysis of the economy of the 1920s tells us that from 1920 to 1921, farm prices fell at a catastrophic rate. “The price of wheat, the staple crop of the Great Plains, fell by almost half. The price of cotton, still the lifeblood of the South, fell by three-quarters. Farmers, many of whom had taken out loans to increase acreage and buy efficient new agricultural machines like tractors, suddenly couldn’t make their payments.”

In 1943, M. King Hubbert offered the view that all-time employment had peaked in 1920, except to the extent that it was jacked up by unusual means, such as war. In fact, some historical data shows that for four major industries combined (foundries, meat packing, paper, and printing), the employment index rose from 100 in 1914, to 157 in 1920. By September 1921, the employment index had fallen back to 89. The peak coal problem of the UK had been exported to the US as low commodity prices and low employment.

It was not until the huge amount of debt related to World War II that the world economy could be stimulated enough so that total energy production per capita could continue to rise. The use of oil especially became much greater starting after World War II. It was the availability of cheap oil that allowed the world economy to grow again.

Figure 17. Per capita energy consumption by fuel, separately for several energy sources, using the same data as in Figure 1.

The stimulus of all the debt-enabled spending for World War II seems to have been what finally encouraged the production of the oil needed to pull the world economy out of the problems it was having. GDP and Disposable Personal Income could again rise (Figure 18.)

Figure 18. Comparison of 3-year average change in disposable personal income with 3-year change average in GDP, based on US BEA Tables 1.1.5 and 2.1.

Furthermore, total per capita energy consumption began to rise, with growing oil consumption (Figure 1). This growth in energy consumption per capita seems to be what allows the world economy to grow.

I might note that there is one other exceptional period: 1980 to 2000. Space does not allow for an explanation of the situation here, but falling per capita energy consumption seems to have led to the collapse of the former Soviet Union in 1991. This was a different situation, caused by lower oil consumption related to efficiency gains. This was a situation of an oil producer being “squeezed out” because additional oil was not needed at that time. This is an example of a different type of economic disruption caused by flat per capita energy consumption.

Figure 19. World per Capita Energy Consumption with two circles relating to flat consumption. World Energy Consumption by Source, based on Vaclav Smil estimates from Energy Transitions: History, Requirements and Prospects (Appendix) together with BP Statistical Data for 1965 and subsequent, divided by population estimates by Angus Maddison.

Conclusion

There have been many views put forth about what caused the Depression of the 1930s. To my knowledge, no one has put forth the explanation that the Depression was caused by Peak Coal in 1913 in the UK, and a lack of other energy supplies that were growing rapidly enough to make up for this loss. As the UK “exported” this problem around the world, it led to greater wage disparity. US farmers were especially affected; their incomes often dropped below the level needed for families to buy the necessities of life.

The issue, as I have discussed in previous posts, is a physics issue. Creating GDP requires energy; when not enough energy (often fossil fuels) is available, the economy tends to “freeze out” the most vulnerable. Often, it does this by increased wage disparity. The people at the top of the hierarchy still have plenty. It is the people at the bottom who find themselves purchasing less and less. Because there are so many people at the bottom of the hierarchy, their lower purchasing power tends to pull the system down.

In the past, the way to get around inadequate wages for those at the bottom of the hierarchy has been to issue more debt. Some of this debt helps add more wages for non-elite workers, so it helps fix the affordability problem.

Figure 20. Three-year average percent increase in debt compared to three year average percent increase in non-government wages, including proprietors’ income, which I call my wage base.

At this time, we seem to be reaching the point where, even with more debt, we are running out of cheap energy to add to the system. When this happens, the economic system seems more prone to  fracture. Ugo Bardi calls the situation “reaching the inflection point in a Seneca Cliff.”

Figure 21. Seneca Cliff by Ugo Bardi

We were very close to the inflection point in the 1930s. We were very close to that point in 2008. We seem to be getting close to that point again now. The model of the 1930s gives us an indication regarding what to expect: apparent surpluses of commodities of all types; commodity prices that are too low; a lack of jobs, especially ones that pay an adequate wage; collapsing financial institutions. This is close to the opposite of what many people assume that peak oil will look like. But it may be a better representation of what we really should expect.

2,841 thoughts on “The Depression of the 1930s Was an Energy Crisis

    • yes, each succeeding generation will only get poorer…

      the shrinking energy surplus will leave them farther and farther behind.

    • I saw a YouTube vid in which many millennials now live in their vehicles. Still working but living in a van, keeping expenses really low to pay off student loans. But some have been doing it for years now and like it. I can see their view on it although it does seem like a much more difficult life than having a pad, especially in super hot or cold weather. I think when they are a bit older they will decide that experiment is over and hopefully will be able to secure a regular place to live that isn’t too expensive.

      A few years ago I saw this architectural design for future living on a much lower income. It was these concrete tubes all stacked on each other, set up with electrode plates so the occupant could later get a small frig and slip it into a slot that would hook up the power. Same for other appliances.

      The trouble with all these alternative ways to live is it still runs into the same needs, like sewage, water, garbage pick up, internet modem, satellite for TV for those that like it, electricity. Those needs don’t go away just because someone is living in a van.

      • “The trouble with all these alternative ways to live is it still runs into the same needs, like sewage, water, garbage pick up”
        Another trouble is that in some/most developed countries it is illegal building houses of to low standard.

    • This says it all…

      I continue to see this as a two horse race…. the CBs continue to do whatever it takes to keep the hamster running on the wheel…. for as long as there is enough energy available to feed him….

      There are many things that can be done to keep the BAU horse running…. just as there are many things that can be done to keep the energy horse running….

      Difficult to say which horse collapses first… but my money is on the energy horse going down…. (see Mexico… see Australia…) and the BAU horse gets tangled up in the crash…. and both horses are put out of their misery with bullets to the head.

  1. now you finite worlders need to realise one thing there is a plan B out there that will keep the system going for a long time to come the plan B requires all bubbles to pop for the powers that be to have complete control the bubble will burst this year and as a result of this the powers that be will bring in the solution with all the governments blessing.

    • The bubbles should have popped years ago — but the CBs keep them going — so me thinks you are wrong.

    • interesting, adonis, very interesting…

      again, how is it that TPTB have let you in on their secrets?

      I’m absolutely amazed…

      hu·bris
      /ˈ(h)yo͞obrəs/
      noun
      1.
      excessive pride or self-confidence.
      synonyms:
      arrogance, conceit, haughtiness, hauteur, pride, …

      and you guarantee the Everything Bubble will burst this year?

      I’m absolutely amazed… you can see the future!

      I bow down to you, oh great adonis.

  2. Mexican Spring imminent?

    Contagion Effect

    Even as early as Jan 1 prices at the pump had begun creeping up, although there were sharp regional variations due to differences in logistical costs. In some states, including Oaxaca and Tijuana, the increases were as much as 66 cents (centavos) per liter for regular gas and 70 cents for Diesel.

    The knock on effects on basic food costs are already being felt. The average price of the country’s staple food, corn tortilla, consumed by 21 million of the country’s 26 million families, is estimated to have increased by 35% since Mexico’s last gasolinazo. According to the national tortilla-maker association, there could be a further 20% rise in prices in the coming weeks due to cost pressures.

    The last time the price of tortilla rose so fast, in 2006, it led to food riots. At its climax, prices reached as high as 10 pesos per kilogram, before temporary price controls kicked in. Since then average prices have more than doubled and are now as high as 18-19 pesos in some regions.

    It’s not just tortillas that are facing price pressures. According to Ruben Vasquéz de la Rosa, president of the national association of grain growers, the rise in the price of diesel, which is essential to run farm vehicles, could trigger price increases of between 15-20% for basic grains like corn, wheat, rice and beans. Eggs are also up between 10 and 15% over the last month, depending on the type.

    https://wolfstreet.com/2018/01/06/surging-prices-in-slowing-economy-tough-year-for-mexico/

    Funny … no mention of the cause of this i.e. that Mexico’s oil production has collapsed…

    I’d post this but WS does not all me to post because Wolf and his suckophants do not like the truth.

    Click 5 YR view:

    https://tradingeconomics.com/mexico/crude-oil-production

    View at Medium.com

      • Since it appears the CBs can hold the financial system together doing whatever it takes… and a resource bottleneck looks the likely trigger….

        Mexico is a significant country in that it is on the border with a core country …. and it is running very low on oil…. and as we are seeing … the death throes involve price spikes in gasoline and diesel…. which will kill growth and drive the country into chaos….

        So what happens here? Is Mexico bailed out….. or is it left to implode …. with the US military lined up on the border shooting anyone attempting to cross into the US?

        The think tanks must be working over time trying to work out the best policies to ensure that Mexico does not become the straw that breaks BAU’s back….

  3. did you watch the video i posted then you may have seen that the fed is planning to collapse the bond bubble this year according to my calculations we only have 145 days till the collapse i have provided all evidence in past links so if you were listening then you might on the same page i am now.

    • hu·bris
      /ˈ(h)yo͞obrəs/
      noun
      1.
      excessive pride or self-confidence.
      synonyms:
      arrogance, conceit, haughtiness, hauteur, pride, …

    • Panicky people have been predicting imminent full spectrum collapse for ages. At least from the time I’m watching the scene (“PO/depletion” aware since ~early 2000s) there actually instead appeared dozen, clearly pre-identified/”called” opportunities in various assets bubbles as well as shorts..

      He who is still poor on this forum can only blame himself and his attitudes, me included, lolz.

      • Recessions and monetary policy can throw off the timing but the general premise that we will run out of the means to keep industrial civilization running is not wrong. People who get obsessed with timing, are looking for a reason to discredit the entire idea that industrial civilization is unsustainable.

        There’s more evidence to support a near-term collapse than near-term crimegate change but crimegate change is easier to accept because is postulates that there are solutions and that industrial civilization is sustainable.

    • “did you watch the video i posted then you may have seen that the fed is planning to collapse the bond bubble this year according to my calculations we only have 145 days till the collapse i have provided all evidence in past links so if you were listening then you might on the same page i am now.”

      Didn’t watch video and not on same page. This behemoth of a civilization isn’t just going to roll over and expire – there is too much vested interest in pushing the limits much farther. Even if people are falling by the wayside, nothing much changes. It just keeps going, somehow morphing into whatever contorted condition it must take on to continue to march to the tune of BAU.

      Those looking out their windows expecting in the short term for all hell to break loose will be disappointed by the bills still arriving like clockwork.

      • Yep, when they allowed to take China on board among the big guys, meaning it could one day command similar powers to the FED structure, it was basically about let prolong our fading rule-power for at least next ~50yrs and then, who cares, my children at their prime will be still at the helm, and grand children at least inherit some money and influence, doing good. That was decided around mid/late 1970s..

        Now, we are entering 2020s, later in that decade it will easily seen in rear view mirror..

      • The revolution will not only be televised…

        …it will be signed into law.

          • The thing is…

            The people who have the power to make such a thing happen…. do not give a flying f789 about people headed down and out … their entire system is based on survival of the fittest… it is anathema to them to play robin hood.

            If you are drowning and you somehow get a grip on the gunwale….and cry out help me … please help me….. they will stomp on your fingers and kick you in the face…. particularly now …. when the end of more is nigh

        • Abi is out of touch with Reality…

          wealthy persons have most of the power…

          they will never allow this…

          but good try.

          ps: doesn’t “freelance journalist” mean unemployed journalist?

        • I’ve got another idea….

          (if the world were not about to end…) If you have kids… make sure they have enough for an education — and if you have the means… perhaps a downpayment on a home….

          Then piss the rest of it away….

          Increasing stipends to people who cannot or refuse to work — is not helpful. It is a breeding program that will produce more losers.

          • I advise the owners to deploy the killer AI ASAP. They need a clean intact world or at least not too damaged.

      • When food prices hike up in Mexico, or….there is not enough food anymore, millions will stream across the border into the US. I think we may all be surprised one day at how the system reaches its limits. Fools think the US can provide for anyone and any number of them. It cannot last forever.

        • No Mexicans allowed.

          Shoot to kill.

          At some point … this will be part of the policy of ‘whatever it takes’

          We are not playing games here…. this is a very serious situation ….

            • I agree.

              I can’t wait for a few peripheral countries to totally collapse….. because I want to be entertained … I want to be a doom voyeur watching clips of chaos on a daily basis …..

              Because when collapse comes to The Core…. there will be no clips…. I will be sitting in the dark… polishing my 308…. and whistling yankee doodle…. hardly entertaining….

  4. I’m going to say it – the BAU-or-bust club is hampering rational discourse on OFW. They feel the need – for whatever reason/s – to interpret all information in a way that fits an apocalyptic scenario. Any piece of information, or any opinion, that portends an outcome which is less than sudden apocalyptic near-term human extinction is discarded as delusional. The result? Pages and pages of Virginia Woolf-esque screeds by FE or Davidwhatever, with the occasional panegyric on “objectivity”. Meanwhile, people who actually respect objectivity get bored/annoyed and leave.

    Don’t get me wrong, I don’t think doomer-ism involves any special insight into humanity’s problems, or that it necessarily places upon its possessor the responsibility of trying to solve said problems, or even that said problems can all be solved to begin with. At bottom, it’s identical to any other process of reasoning/observation/collation of information, except that its conclusions are extremely disappointing to people (i.e. most people) who believe in a very recently originated, yet very popular, set of beliefs about the nature of the world and our place in it. But no matter how disappointing those conclusions may be, they are not – in my estimation – apocalyptic. To interpret them as such would require an ulterior motivation – like a desire to rationalise some form of nihilism, or the inability to reconcile them with previously held unrealistic expectations.

    • David believes we are a long way off from collapse. FE is always wrong with all his predictions. Once you under stand these facts you will find more humor in their posts. Otherwise, make your “rational” case and ignore them.

      • Belief and facts are two different things. One of the many reasons why past civilizations collapsed is because people like you and jupiviv became very complacent. It’s very easy to be an optimist when you are very far removed from human hardship. You have an easy life, you see many other people leading easier lives, and assume there is so much wealth that a 90% reduction in economic output would not mean anything for most people.

      • The concepts of instadoom, total extinction etc. aren’t deluded in themselves. If someone uses those possibilities to support a deluded worldview or philosophy, as the BAU-or-bust club seem to do, they cannot discuss it rationally with others.

        • “The concepts of instadoom, total extinction etc. aren’t deluded in themselves.”

          most would agree that the idea of total extinction is objective…

          instadoom… not so much.

          • If global trade ground to a halt. The likelihood of you dying would increase exponentially with each week. The people in power are instadoomers. They know if they did not bail out the banks in 2008 and if they allowed Greece to default, the global economy would stop and would not start again. But according to geniuses like you, they were totally wrong. BAU-lite is entirely possible. Starvation, disease and violence are things that will slowly happen over a very long time. That will give us PLENTY of time to adapt. It might be enough time for humans to come up with a tech-fix and repair the soil and perfect green energy and send some people to Mars and invent Artificial Intelligence and….and….

            I don’t know if you believe in all these things the people who deny instadoom is most likely tend to be optimistic people who believe human ingenuity will prevent a severe bottleneck from occurring. They label their opponents nihilists because they have an unfounded belief in human ingenuity.

      • Darth Eddy will not prevail…

        strong with BAU, the force is…

    • I’d reckon that anyone who thinks humans in significant numbers can go back to a pastoral, postindustrial existence have an ulterior motivation– they don’t want to deal with reality. Fast Eddy’s positions are backed by evidence. Yours is backed by a need for optimism .You have a belief deeply ingrained in your mind.You believe that the current problems pointed out by doomers can be solved.
      Humans have not solved any problems.
      Our current problems are the result of past attempts at solving problems.
      Human problem solving is an oxymoron.
      What humans have do is come up with technologies and social organizations that work for a little while. What humans do is kick the can down the road with respects to problem solving.

      It is the end of the world that we are discussing. The world, is, for most people, human civilization. Some of us believe that God will save some of us. Some of us think several technological solutions will materialize at the second. Some of us believe that some humans can survive but I think it will be humans who are isolated from civilization. Some us are nihilists and accept human extinction as a probable outcome for chronic disruption and degradation of the natural world.

      • I don’t think there are many posters here that believe we can go back to a simpler life.

        But many believe that we can go on for quite some time, i.e. creeping collapse, that is decades of non-growth eating away at civilization from all sides. This will create a more hostile/unstable geopolitical claymate where anything may happen on any given day. But to claim to know how it all ends, well that is either ignorance or arrogance. We don’t know.

        • It ends in the power going off permanently….. and it does not take a rocket science to work out the implications of that….

          Disease — starvation — violence — radiation. And almost certain extinction.

          Absolutely guaranteed.

        • We have had “creeping collapse” A.K.A. decline for several decades now.
          Decline did not begin in 2008.

          • we need to define terms like human and humanity going extinct. i doubt that the highland tribes of Papus New Guinea and Irinan Java will know or care if what we define here as BAU collapses. The are very unplugged from us and live far away from radiation sources. They are humans, so strictly speaking, extinction of the species is probably not going to happen, UNLESS climato chango gets them via crop failure and ecosystem collapse.

            • I doubt that any humans are exempt from the impact of the spend fuel ponds…. 4000 of them will spew for many years….. and ocean and air currents will deliver the radiation to every corner of the planet…

              But yes… if any humans are to survive it will be those who already live completely unplugged… the faux organic hobby farmers who think they are unplugged… will be targets for the hordes.

            • The oceans…. That source of almost free food (if you could get it). That’s the kicker even for the highland tribes. Reality is that the oceans are not doing as well as before, and it seems to get worse every decade.

            • If any humans do survive… the good thing is that we have burned out all the low hanging resources… so they are guaranteed to not rekindle the BAU flame….

              Their lives will be nasty brutish and short.

              They will be nothing more than a bunch of grunting, stinking savages….

      • “I’d reckon that anyone who thinks humans in significant numbers can go back to a pastoral, postindustrial existence have an ulterior motivation– they don’t want to deal with reality.”

        There claim that 100% of humans will die without industrial civilisation can only be backed up by fantastic beliefs like genocidal spent fuel pools or global synchronised instant collapse.

        “You have a belief deeply ingrained in your mind.You believe that the current problems pointed out by doomers can be solved.”

        This is quite clearly false.

        “Humans have not solved any problems.
        Our current problems are the result of past attempts at solving problems.”

        I would say that humans have never really attempted to solve problems that affect all humans, at least within the practical/material domain. Growth happened, and humans as a whole reacted to it.

        “Some us are nihilists and accept human extinction as a probable outcome for chronic disruption and degradation of the natural world.”

        All things go extinct sooner or later. That fact doesn’t support nihilism though. Indeed, *nothing* can support nihilism, by definition.

        • “I would say that humans have never really attempted to solve problems that affect all humans,”

          Are you kidding me?
          This sounds like the” True ——-ism has never been attempted” arguments
          when someone is trying to explain the shortcomings of something.

          The statement that humans have never tried to solve problems that affect all humans is a laughable argument and one easily proven wrong.

          • humans cannot solve or attempt to solve the problems that affect us all because that would mean a universal world government, and everyone acceding the their decisions

            The UN is the closest we’ve got to that, and that body cannot influence anything that is critical to a specific nation—because the people who live there wouldn’t accept it if it adversely affected them.

            If the UN were to try to enforce universal food and fuel distribution for instance—how far would that get? Nowhere. Even though it would clearly be to universal benefit. Food and fuel have been commercialised….you cannot sell energy to people who do not have the means to pay for it.
            And until you can instigate control at that level, the rest cannot work, because that is the fundamental problem

            And even if you did manage food equality, the starving millions would immediately have more kids, and in 20 years you’d be back to square one.

            oops.

        • “There claim that 100% of humans will die without industrial civilisation can only be backed up by fantastic beliefs like genocidal spent fuel pools or global synchronised instant collapse”
          No, it is the spent fuel problem that backs up those beliefs.
          If most of the world’s spent fuel ponds were to lose power, from the grid or the power plant, it could contaminate large areas of the Earth. This scenario sounds far fetched if you believe the amount of spent fuel is too small to cause problems. You already scoffed at the threat of nuclear contamination so I’m going to assume you don’t believe in nuclear radiation contamination.

          “All things go extinct sooner or later. That fact doesn’t support nihilism though. Indeed, *nothing* can support nihilism, by definition.” Then why are you so threatened by it? Clearly it can support something if you are obsessed with it.

          • “No, it is the spent fuel problem that backs up those beliefs.”

            I and Pintada have already debunked this idiotic myth adequately. Short of a breach in the reinforced concrete structures, spent fuel pools won’t contaminate anything. Even with a breach, their harmful effects will be far from global unless the earth’s climate system changes drastically.

            “Then why are you so threatened by it?”

            I’m annoyed by it. The reason being that the nihilists on this site seem to use a nihilistic standard of truth. Opinions about collapse are judged to be insightful or ignorant purely on the basis of how pessimistic or optimistic they are. This lowers the quality of the discussions and unnecessarily antagonises people like me, who don’t believe that pessimism/nihilism = rationality. In fact, it annoys everyone involved, since the premise is too ridiculous to actually resolve any issue to anyone’s satisfaction. The techno/green optimists have the inverted version of this mentality, and it is equally annoying.

        • I’m quite OK to define collapse as a 90% reduction in humans. Anyone disagree with that?

          • My money is on extinction.

            Ah … another bullet point for pariah status:

            – support the extinction of all humans (for the good of the planet and all other species)

            And one more:

            – think young children are vermin…. worse than rodents…. monstrous vile beasts actually

          • I think it is a good idea to have some well defined concepts of collapse. Imagine that we are in Rome and the barbarians are approaching. Constantinople has already been established but we who are still in Rome have naysayers who still claim they can resurrect the glory of Rome. There will always be the range of claims as to outcome. With numerous states currently in collapse, Puerto Rico, Venezuela, Ukraine, Brazil, Mexico, Greece, The PIGS of the EU, we have other core areas that are susceptible to collapse….Australia, Egypt, Pakistan, Saudi Arabia, Japan. Parts of the US are in collapse, Baltimore, Detroit, Illinois, Connecticut.
            A range of measures could be deployed to categorize collapse:
            % of population in poverty – this measure is not so good as it is relative.
            birthrate – a low birthrate is a long term indicator of collapse, or future collapse
            Deathrate – when this rate increases it can indicate collapse
            % of population in famine – when there is not enough cheap FF we will be out of food…largescale famine will be a good indicator of collapse.
            % homeless – a good indicator of a society in the collapse process
            % Unemployed – another good indicator that the system is either not distributing wealth properly, or is in collapse.
            % of population with reliable energy and electrical power – by this measure Puerto Rico has collapsed.
            % home ownership – collapse will cause this factor to reduce therefore the trend is important. With highly leveraged societies this rate can change quickly.
            crime rate – I think that under collapse conditions, crime will increase markedly, accentuating the difficulties of society. The tame end of this is like Rio right now with crime gangs/state warfare going on. The extreme end of this is murderous mobs killing for food ( yes, it can happen).
            Real GDP….when this falters or goes negative, we are in the collapse process
            Infrastructure – if it is going to pot and not being maintained, then you know you are in the collapse process. Perhaps a percentage is a good measure here. Say, if 50% of the infrastructure is decrepit and not being repaired, the society is in collapse.
            90% population reduction – definitely collapsed

            • Greece hasnt collapsed. You don’t go on vacations to collapsed countries. Not without guns and guides.

    • “Any piece of information, or any opinion, that portends an outcome which is less than sudden apocalyptic near-term human extinction is discarded as delusional. The result? Pages and pages of Virginia Woolf-esque screeds by FE or Davidwhatever…”

      That’s because FE is a prolific poster on here but it does fit your description above. However, I’ve found that if I ignore, I.e. completely pass over FE posts the rest are a mix of positive and negative viewpoints. So I wouldn’t let his inability to see anything other than his pure dystopian viewpoint disproportionally color your view of the site.

      • “The rest are a mix of positive and negative viewpoints. ”
        There is the truth and lies people tell themselves to protect themselves from feeling depressed by anything unpleasant.

        • Humans can not live without illusions. For the men and woman of today, an irrational faith in progress may be the only antidote to nihilism. Without the hope that the future will be better than the past they could not go on.

          -John N Gray

      • If you are skipping FE’s posts…. your life is not complete…. when you wake up in the morning and think … I don’t feel right in the head… you can attribute that to failure to read FE …. think Confucius… with a foul mouth…

        Anyway …. we have no idea when this will topple over …. it has bumped along for a decade now…. but at some point what cannot continue will stop …. suddenly. That is guaranteed.

        We are here to observe and discuss our progression towards total annihilation.

        • Darth Eddy writes:

          “Anyway …. we have no idea when this will topple over …. it has bumped along for a decade now…. but at some point what cannot continue will stop …. suddenly. That is guaranteed.
          We are here to observe and discuss our progression towards total annihilation.”

          these first three points are true…

          but then “suddenly” is a lot of the discussion here…

          it takes hubris to guarantee this future…

          I’m guessing it will be more Creeping Collapse, and all of us will be long gone before “total annihilation”…

          by the way, that’s an opinion… which is often discussed.

  5. Nationwide Blackout As Nigeria’s Power Grid Collapses
    1-3-17

    The Federal Ministry of Power, Works and Housing has confirmed the collapse of Nigeria’s power transmission grid on Tuesday night.

    This development led to widespread blackout across the country.

    The ministry says the collapse was due to a fire incident on the Escravos Lagos Pipeline System of the Nigerian Gas Processing and Transportation Company Limited.

    The incident led to a shutdown of the pipeline that supplies gas to six thermal power plants.

    In 2017, power generation reached 7000 megawatts, while about 5155 megawatts was transmitted leaving 2000 megawatts stranded.

    The national transmission grid is owned and operated by the Transmission Company of Nigeria.

    https://tvcnews.tv/2018/01/nationwide-blackout-as-nigerias-power-grid-collapses/

    Reminds me of something Duncan Richard wrote-

    “The Olduvai Theory is defined by the ratio of world energy production and population ( e).… It states that energy production per capita will fall to its 1930 value by 2030, thus giving industrial civilization a lifetime of less than or equal to 100 years. The theory projects that the collapse will be strongly correlated with an epidemic of blackouts worldwide.”

      • I hadn’t looked at this recently. Duncan gets the date wrong, because he misses the impact of the rapid rise of coal production/consumption in China, India, and other Asian countries in the 2001 – 2013 timeframe. But he definitely gets the importance of energy per capita, something that tends to get lost in all of the discussion of EROEI (which doesn’t really analyze the issue properly, IMO).

    • We lost electricity at the Atlanta airport lost for 11 hours on December 17, disrupting flights around the country. There are a lot of outages.

      The peak oil movement has tended to miss the fact that it is all energy combined that makes a difference. We can’t possibly substitute electricity for oil; they will go down at the same time.

  6. ob·jec·tiv·i·ty
    /ˌäbjekˈtivədē/
    noun
    1.
    the quality of being objective:
    “the piece lacked any objectivity”
    synonyms:
    impartiality, absence/lack of bias, absence/lack of prejudice, fairness, fair-mindedness, …

    er…

    very hard for mere humans!

    or, impossible…

    take your pick.

      • Predicament is not harsh enough….

        I suggest Nightmarish… or perhaps Apocalyptic ….

        As in we are facing an Apocalyptic outcome….

          • by definition, all civilisations must collapse

            ancient civilisations collapsed slowly, because their power sources (muscle basically) deteriorated slowly

            we on the other hand have used fossil fuels for a rapid buildup, so our collapse will be rapid and catastrophic as the oil-rug is pulled from under us.

            looked at in the spectrum of geological time, we’ve burned the earth’s fuel stores in an instant, single flash of light and heat.
            Call it the supernova of humankind

        • Apocalypse: From Ancient Greek ἀποκάλυψις (apokálupsis, “revelation”), from ἀπό (apó, “after”) and καλύπτω (kalúptō, “I cover”).

          Noun
          apocalypse (plural apocalypses)
          A revelation. [from 14th c.]
          The early development of Perl 6 was punctuated by a series of apocalypses by Larry Wall.
          (Christianity) The unveiling of events prophesied in the Revelation; the second coming and the end of life on Earth; global destruction. [from 19th c.]
          A disaster; a cataclysmic event. [from 19th c.]

          Synonyms
          armageddon
          doomsday
          Ragnarok (Ragnarök)
          end times
          eschaton

          Hyponyms
          nuclear holocaust
          Final Judgment
          judgement day

          Derived terms
          apocalyptic
          apocalypticism
          snowpocalypse

    • This issue demonstrates how utterly stuuuupid humans are.

      IF we have so much oil available…. then why in the f789 are we drilling kms beneath the ocean … at massive expense… at grave risk to the environment from blow outs.

      IF we have so much oil available …. why are exploring the Arctic….

      Try asking a human those questions …. I have once or twice… the response is the same as if you asked a donkey the questions …. a dummmmmm stare…. or a degree of irritation implying don’t ask such silly questions…. or why are you so negative….

      MORE ons MORE ons… everywhere….

      • There is a denial that the situation is deteriorating more quickly then they’d like to believe. Look at how many people here who still believe
        “we can go on for quite some time, i.e. creeping collapse,” for decades.

        • you might be right…

          but you might be misreading Reality and might be thinking you see more and quicker deterioration than is really there…

          and this BAU might go on for another decade…

          and I might be right…

          time will tell…

          and here’s my broken new year’s resolution:

          BAU tonight, baby!

        • Most of the people who hang out here are attempting to prepare themselves to psychologically to deal with a situation that is likely deteriorating more quickly then they’d prefer. For those of us in that group, having to read posts claiming things will deteriorate so slowly that they don’t have to be concerned, or worse, that things are going to get better and better thanks to “progress”, can be both irritating and distracting. Comments presenting optimistic or cornucopian scenarios ruin the sombre ambience of this blog.

          • In other words…. we are gathered here for a funeral…. stop interrupting and shouting – I’ve got the elixir that will bring him back to life!!!

            Tim, Greg… Norm, Real Black etc… … can you lend me a hand…. BAU is one heavy sonofabi.tch

          • yes…

            things actually are deteriorating at just the right pace…

            fast enough that we can see it and feel it emotionally…

            slow enough that we can still discuss it on OFW…

            yes…

            this is the best of all possible collapses…

            this is the Sombre Collapse.

        • I think there is/will be (near future) a 5% or more decline rate in all energy. That actually means close to 40% reduction in 10 years with a similar prospect for the following 10 years. I don’t know if you define that as instant, but fast enough that my daughter doesn’t have a chance of ever travelling like we do. (And if you’re reading this – you’re doing very well! Internet connection, and time to read this kind of stuff….)

          • yes!

            I’m reading this!

            therefore…

            The Collapse hasn’t happened yet…

            bummer about the 2020s though.

    • this reminds me of about 1970, when the Texas Railroad Commission released all production to maximum levels, a sure sign the US had hit its conventional crude oil production peak in the lower 48, per Ken Deffeyes in his Beyond Oil book.

  7. Watching Meet the Press this morning on NBC and they showed a chart that said “US Economy” and it showed the stock market and unemployment rates…LOL You don’t judge an economy on the stock market you judge it on “Economic Growth (GDP)”..Which they of course didn’t show..How Orwellian and total FAKE NEWS!

      • What happens to the economy when the stock market crashes?

        If people have faith in the future, they invest in stock and bonds. They also take out loans. Part of that faith is their perception of the economy via the stock market. Before the great depression in the 30’s even taxi cab drivers and waitresses were investing in stocks. Now that’s a lot of faith.

            • Oh I see… it’s the same as CNN… and Bloomberg… and the NYT … and WAPO … and cnbs… and so on

              Do people watch NBC and believe that they are learning something? Wow…. I must get out more

        • That’s the $10M question. I think in theory they could print money and buy all stocks, so there would never be a collapse. But that also means no one has any stocks any more!

    • LOL. They could also have showed the shrinkage of the labor force and pointed to all early retirees!!! Too risky?

      • I really don’t understand why anyone watches the ‘news’ ….

        Would one sit down every evening and turn on a broadcast discussing Santa Claus and the Tooth Fairies comings and goings that day?

        Surely there must be better things to do with one’s time — because watching the ‘news’ is pretty much a total waste of time…

        Now if one is watching it for the entertainment value — see Trump — or just to marvel at the scale of the lies on any given day —- yes…. I can see the appeal…

        But tuning in … expecting to be informed … to get help with understanding an issue…… all I can say is ….

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