https://consortiumnews.com/2015/05/09/america-as-dangerous-flailing-beast/
America as Dangerous Flailing Beast
When I think of America’s place in the world today, the image that comes to mind is of a very large animal, perhaps a huge bull elephant or even prehistoric mammoth, which long roamed as the unchallenged king of its domain but has become trapped by its own missteps, as caught in a tar pit or some quicksand, and it is violently flailing about, making a terrifying noises in its effort to free itself and re-establish its authority.
Any observer immediately knows the animal ultimately cannot succeed but certainly is frightened by the noise and crashing that it can sustain for a considerable time.
I think that is the pretty accurate metaphor for the situation of the United States today, still a terribly large and powerful society but one finding itself trapped after a long series of its own blunders and errors, a society certain ultimately to become diminished in its prestige and relative power with all the difficulties which that will entail for an arrogant people having a blind faith in their own rightness.
America simply cannot accept its mistakes or that it was ever wrong, for Americanism much resembles a fundamentalist religion whose members are incapable of recognizing or admitting they ever followed anything but the divine plan.
America has made a costly series of errors over the last half century, demonstrating to others that the America they may have been in awe of in, say, 1950, and may have considered almost godlike and incapable of mistakes, has now proved itself indisputably, in field after field, as often not even capable of governing itself. The irony of a people who are seen as often unable to govern themselves advising others how to govern themselves brings a distinct note of absurdity to American foreign policy.
America’s establishment, feeling its old easy superiority in the world beginning to slip away in a hundred different ways, seems determined to show everyone it still has what it takes, determined to make others feel its strength, determined to weaken others abroad who do not accept its natural superiority, determined to seize by brute force and dirty tricks advantages which no longer come to it by simply superior performance.
Rather than learn from its errors and adjust its delusional assumptions, America is determined to push and bend people all over the world to its will and acceptance of its leadership. But you cannot reclaim genuine leadership once you have been exposed enough times in your bad judgment, and it is clear you are on the decline, just as you cannot once others realize that they can do many things as well or better than you.
In the end, policies which do not recognize scientific facts are doomed. Policies based on wishes and ideology do not succeed over the long run, unless, of course, you are willing to suppress everyone who disagrees with you and demand their compliance under threat. The requirement for an imperial state in such a situation is international behavior which resembles the internal behavior of an autocratic leader such as Stalin, and right now that is precisely where the United States is headed.
Stalin’s personality had a fair degree of paranoia and no patience for the views of others. He felt constantly threatened by potential competitors and he used systematic terror to keep everyone intimidated and unified under him.
Stalin’s sincere belief in a faulty economic system that was doomed from its birth put him in a position similar to that of America’s oligarchs today. They have a world imperial system that is coming under increasing strain and challenge because others are growing and have their own needs and America simply does not have the flexibility to accommodate them.
America’s oligarchs are not used to listening to the views of others. Stalin’s belief in a system that was more an ideology than a coherent economic model is paralleled by the quasi-religious tenets of Americanism, a set of beliefs which holds that America is especially blessed by the Creator and all things good and great are simply its due.
Dominion over the Earth?
Americanism blurrily assumes that God’s promise in the Old Testament that man should have dominion over the earth’s creatures applies now uniquely to Americans. Such thinking arose during many years of easy superiority, a superiority that was less owing to intrinsic merits of American society than to a set of fortuitous circumstances, many of which are now gone.
In Vietnam, America squandered countless resources chasing after a chimera its ideologues insisted was deadly important, never once acknowledging the fatal weaknesses built right into communism from its birth. Communism was certain eventually to fail because of economic falsehoods which were part of its conception, much as a child born with certain genetic flaws is destined for eventual death.
America’s mad rush to fight communism on all fronts was in keeping with the zealotry of America’s Civic Religion, but it was a huge and foolish practical judgment which wasted colossal resources.
In Vietnam, America ended in something close to total shame – literally defeated on the battlefield by what seemed an inconsequential opponent, having also cast aside traditional ethical values in murdering great masses of people who never threatened the United States, murder on a scale (3 million) comparable to the Holocaust.
The United States used weapons and techniques of a savage character: napalm, cluster bombs, and secret mass terror programs. The savagery ripped into the fabric of America’s own society, dividing the nation almost as badly as its Civil War once had. America ended reduced and depleted in many respects and paid its huge bills with devalued currency.
Following Vietnam, it has just been one calamity after another revealing the same destructive inability to govern, the same thought governed by zealotry, right down to the 2008 financial collapse which was caused by ignoring sound financial management and basically instituting a system of unlimited greed. The entire world was jolted and hurt by this stupidity whose full consequences are not nearly played out.
The wars in Afghanistan and Iraq were completely unnecessary, cost vast sums, caused immense misery, and achieved nothing worth achieving. We now know what was kept hidden, that more than one million Iraqis died in an invasion based entirely on lies. These wars also set in motion changes whose long-term effects have yet to be felt. Iraq, for example, has just about had its Kurdish, oil-producing region hived off as a separate state.
Mishandling Russia
America’s primitive approach to the Soviet Union’s collapse, its sheer triumphalism and failure to regard Russia as important enough to help or with which to cooperate, ignored America’s own long-term interests. After all, the Russians are a great people with many gifts, and it was inevitable that they would come back from a post-collapse depression to claim their place in the world.
So how do the people running the United States now deal with a prosperous and growing Russia, a Russia which reaches out in the soundest traditional economic fashion for cooperation and partnership in trade and projects? Russia has embraced free trade, a concept Americans trumpeted for years whenever it was to their advantage, but now for Russia is treated as dark and sinister.
Here America fights the inevitable power of economic forces, something akin to fighting the tide or the wind, and only for the sake of its continued dominance of another continent. Americans desperately try to stop what can only be called natural economic arrangements between Russia and Europe, natural because both sides have many services, goods, and commodities to trade for the benefit of all. America’s establishment wants to cut off healthy new growth and permanently to establish its primacy in Europe even though it has nothing new to offer.
America’s deliberately dishonest interpretation of Russia’s measured response to an induced coup in Ukraine is used to generate an artificial sense of crisis, but despite the pressures that America is capable of exerting on Europe, we sense Europe only goes along to avoid a public squabble and only for so long as the costs are not too high.
The most intelligent leaders in Europe recognize what the United States is doing but do not want to clash openly, although the creation of the Minsk Agreement came pretty close to a polite rejection of America’s demand for hardline tactics.
The coup in Ukraine was intended to put a hostile government in control of a long stretch of Russian border, a government which might cooperate in American military matters and which would serve as an irritant to Russia. But you don’t get good results with malicious policy.
So far the coup has served only to hurt Ukraine’s economy, security and long-term interests. It has a government which is seen widely as incompetent, a government which fomented unnecessary civil war, a government which may have shot down a civilian airliner, and a government in which no one, including in the West, has much faith.
Its finances are in turmoil, many important former economic connections are severed, and there is no great willingness by Europe, especially an economically-troubled Europe, to assist it. It is not an advanced or stable enough place to join the EU because that would just mean gigantic subsidies being directed to it from an already troubled Europe.
And the idea of its joining NATO is absolutely a non-starter both because it can’t carry its own weight in such an organization and because that act would cross a dangerous red line for Russia.
Kiev is having immense problems even holding the country together as it fights autonomous right-wing outfits like the Azov Battalion in the southeast who threaten the Minsk Agreement, as the regime tries to implement military recruiting in western Ukraine with more people running away than joining up, as it finds it must protect its own President with a Praetorian Guard of Americans from some serious threats by right-wing militias unhappy with Kiev’s failures, as it must reckon with the de facto secession of Donetsk and the permanent loss of Crimea – all this as it struggles with huge debts and an economy in a nosedive.
America is in no position to give serious assistance to Ukraine, just plenty of shop-worn slogans about freedom and democracy. These events provide a perfect example of the damage America inflicts on a people with malicious policy intended only to use them to hurt others.
There is such a record of this kind of thing by America that I am always surprised when there are any takers out there for the newest scheme. One remembers Secretary of State Henry Kissinger in 1975 encouraging the Iraqi Kurds to revolt against Saddam Hussein and then leaving them in the lurch when the dictator launched a merciless suppression.
I also think of the scenes at the end of the Vietnam War as American helicopters took off in cowardly fashion from the roof of the embassy leaving their Vietnamese co-workers, tears streaming down their faces, vainly grasping for the undercarriages of helicopters, a fitting and shameful end to a truly brainless crusade.
Messing up Ukraine
I don’t know but I very much doubt that the present government of Ukraine can endure, and it is always possible that it will slip into an even more serious civil war with factions fighting on all sides, something resembling the murderous mess America created in Libya. Of course, such a war on Russia’s borders would come with tremendous risks.
The American aristocracy doesn’t become concerned about disasters into which they themselves are not thrust, but a war in Ukraine could easily do just that. In ironic fashion, heightened conflict could mark the beginning of the end of the era of European subservience to America. Chaos in Ukraine could provide exactly the shock Europe needs to stop supporting American schemes before the entire continent or even the world is threatened.
I remind readers that while Russia’s economy is not as large as America’s, it is a country with a strong history in engineering and science, and no one on the planet shares its terrifying experiences with foreign invasion. So it has developed and maintains a number of weapons systems that are second to none. Each one of its new class of ballistic missile submarines, and Russia is building a number of them, is capable of hitting 96 separate targets with thermo-nuclear warheads, and that capability is apart from rail-mounted ICBMs, hard-site ICBMs, truck-mounted missiles, air-launched cruise missiles, sea-launched cruise missiles, and a variety of other fearsome weapons.
Modern Russia does not make threats with this awesome power, and you might say Putin follows the advice of Theodore Roosevelt as he walks softly but carries a big stick, but I do think it wise for all of us to keep these things in mind as America taunts Russia and literally play a game of chicken with Armageddon.
I don’t believe America has a legitimate mandate from anyone to behave in this dangerous way. Europe’s smartest leaders, having lived at the very center of the Cold War and survived two world wars, do understand this and are trying very carefully not to allow things to go too far, but America has some highly irresponsible and dangerous people working hard on the Ukraine file, and accidents do happen when you push things too hard.
The Israel Obsession
In another sphere of now constant engagement, instead of sponsoring and promoting fair arrangements in the Middle East, America has carried on a bizarre relationship with Israel, a relationship which is certainly against the America’s own long term interests, although individual American politicians benefit with streams of special interests payments – America’s self-imposed, utterly corrupt campaign financing system being ultimately responsible – in exchange for blindly insisting Israel is always right, which it most certainly is not.
An important segment of Israel’s population is American, and they just carried over to Israel the same short-sightedness, arrogance and belligerence which characterize America, so much so, Israel may legitimately be viewed as an American colony in the Middle East rather than a genuinely independent state.
Its lack of genuine independence is reflected also in its constant dependence on huge subsidies, on its need for heavily-biased American diplomacy to protect it in many forums including the United Nations, and on its dependence upon American arm-twisting and bribes in any number of places, Egypt’s generous annual American pension requiring certain behaviors being one of the largest examples.
Here, too, inevitability has been foolishly ignored. The Palestinians are not going anywhere, and they have demonstrated the most remarkable endurance, yet almost every act of Israel since its inception, each supported by America, has been an effort to make them go away through extreme hardship and abuse and violence, looking towards the creation of Greater Israel, a dangerous fantasy idea which cannot succeed but it will fail only after it has taken an immense toll.
Despite America’s constant diplomatic and financial pressure on other states to support its one-sided policy here, there are finally a number of signs that views are turning away from the preposterous notion that Israel is always right and that it can continue indefinitely with its savage behavior.
Recently, we have had a great last effort by America and covert partners to secure Israel’s absolute pre-eminence in the Middle East through a whole series of destructive intrusions in the region – the “Arab Spring,” the reverse-revolution in Egypt, the smashing and now dismemberment of Iraq, the smashing and effective dismemberment of Libya, and the horrible, artificially-induced civil war in Syria which employs some of the most violent and lunatic people on earth from outside and gives them weapons, money and refuge in an effort to destroy a stable and relatively peaceful state.
I could go on, but I think the picture is clear: in almost every sphere of American governance, internally and abroad, America’s poor political institutions have yielded the poorest decisions. America has over-extended itself on every front, has served myths rather than facts, has let greed run its governing of almost everything, and has squandered resources on achieving nothing of worth.
I view America’s present posture in the world – supporting dirty wars and coups in many places at the same time and treating others as game pieces to be moved rather than partners – as a desperate attempt to shake the world to gain advantages it couldn’t secure through accepted means of governance and policy.
America is that great beast, bellowing and shaking the ground, and for that reason, it is extremely dangerous.
Monday, May 11, 2015
Sunday, May 10, 2015
SC128-3
http://www.resilience.org/stories/2015-05-06/beyond-petroleum-fracking-s-collapse-heralds-the-arrival-of-peak-oil
'Beyond Petroleum' - Fracking's Collapse Heralds the Arrival of Peak Oil
Despite the exploitation of unconventional oil resources like high-cost tar sands (pictured in Canada) and shales, peak oil really is upon us. Photo: Gord McKenna via Flickr (CC BY-NC-ND).
A few weeks ago tremors rocked the world of 'fracking' in the USA - though few heard them. The US Energy Information Agency (USEIA) had issued its latest Monthly Drilling Report and the news was not good.
It wasn't simply the economic failure of fracking (covered in The Ecologist last December) and the subsequent collapse in drilling (covered in January). The news from the USEIA was far more grim for those who understood its deeper meaning. Their press release was very matter-of-fact:
"EIA's most recent Drilling Productivity Report (DPR) indicates a change in the crude oil production growth patterns in three key oil producing regions... The DPR estimates include the first projected declines in crude oil production in these regions since publication of the DPR began in October 2013."
In the shale oil producing areas of Eagle Ford, Niobrara, and the Bakken, production had reached a peak and was beginning to decline. What the USEIA is not clear about is whether this is the result of recent economics, or some longer-term trend.
This message was echoed a few weeks later in the Post Carbon Institutes's new analysis of Marcellus shale production, along with a warning about the future prospects:
"Industry invariably drills its best prospects first, hence the cheapest gas is being exploited now. Infinite faith in technology cannot make up for the realities of geology. These realities are showing up now in the most productive counties."
In Britain, emulating the USA, we've been told that we have to go all out to realise the 'US shale energy revolution'. It has been sold to the public as a new economic Renaissance ... what went wrong?
I have to begin a decade ago ...
Ten years ago this month, in May 2005, I published my first book - Energy Beyond Oil (copies are still available from a few bookshops).
Long before $147 oil and the resultant economic crash that followed, the book analysed the evidence for the peaking of various energy resources, and the economic problems which might result from the practical reality of these phenomena.
'Peak oil' - or the peaks of other resources such as copper or rare metals - is not equivalent to 'running out'. The 'peak' is the point in time when half the available non-renewable reserve has been extracted - somewhere between a half and two-fifths through the lifetime of the resource.
From that point on it gets progressively harder to maintain production. Supply begins to fall, and both the energy and resources expended to produce a given quantity of the resource begins to increase exponentially over time.
This effect is the result of the interaction of geology and economics:
•Geology gives a natural distribution of resources - with a few large high-quality deposits, a slightly larger number of middling-quality deposits, and a lot of very small low-quality deposits.
•Economics dictates we use the easiest to exploit and cheapest first, which means we use the biggest, easiest to access ones. Over time what's left gets progressively harder and more expensive to produce as we work through the 'stock' of the resource.
The difficulty is that when we're talking about essential industrial minerals and energy resources, tight supply and rising prices - like the trends operating across the decade of the 2000s - can destabilise the economy.
That's very bad for business and our resource-consuming lifestyles.
In 2008 the crash came. What was worse, the warning signs related to the problems of finite energy supplies, ecological limits and debt were ignored; their message smothered beneath billions of pounds and trillions of dollars of quantitative easing.
As billions poured into the banks, all the bankers could do in the midst of a recession was to lend to the few large industrial investment projects which were under-way - such as 'fracking' in the USA, or the housing market in Britain.
By 2009 I found that people no longer wanted to talk about peak oil and its effects. They could experience that reality every day! As a result, in mid-2009, I shifted my work away from ecological limits into unconventional gas and oil production - aka 'fracking' - in Britain.
As with my shift into peak oil back around 2002, it was to become a fortuitous choice.
'The death of peak oil'
The high oil prices of the 2000s led, by the end of the decade, to a concern about 'peak oil' and geopolitics. Once more people were researching and talking about the ecological 'limits to growth'.
For neoliberal economists the offence of ecological limits is not that it seeks to describe physical trends with reference to historical statistics. The offence is that it attacks the philosophical heart of neoliberalism - because if energy supply cannot grow inexorably then neither can the global economy.
For the economic lobby fracking was a human-made miracle. It answered the criticisms of peak oil theory by alluding to a vast untapped resource of oil and gas that could be brought to the market by new technology and human ingenuity.
From 2011 the pro-fracking lobby began to spin a story of 'the death of peak oil'. It was promoted by senior oil economists such as Daniel Yergin, and repeated uncritically in the media. When The Oil Drum, a peak oil analysts' web site, closed in 2013, the pro-fracking economic lobby were ecstatic:
" ... today, it is probably safe to say we have slayed 'peak oil' once and for all, thanks to the combination new shale oil and gas production techniques and declining fuel use."
Peak oil defined by the existence of a web site? How absurd!
Peak oil's not dead, it's very much alive!
The deeper meaning of the USEIA's announcement about the downturn in shale oil production is that - for the pro-fracking economic lobby - it represents the return of the monster they thought they'd slain.
In late 2014 - when the first signs of an impending collapse in fracking, and the exaggeration of the available resources came to light - the arguments over the 'death of peak oil', which had been quiet for a year, were dragged from the economic lobby's closet.
Stories of the continued demise of peak oil were spread by the economic media and pro-fracking lobbyist sites.
Around this time I began watching the statistics on oil and gas production closely once more. And with the USEIA's recent announcement, the reality has become clearer.
The quiet reality of North American oil
Canada produces a lot of conventional and unconventional oil - a large proportion of which gets sent to the USA. This fact is used as a positive message by the tar sands lobby to promote their industry.
What that message misses is that the whole of the continent of North American acts as a single market - in part due to NAFTA.
Mexico used to supply a lot of oil to the USA too, but production in the Cantarell field peaked in 2003 and is now in decline. For the last few years all that those increases in Canadian production have done is to roughly keep pace with the decline of Mexico's production.
In the USA, yes they've produced a lot of new oil and gas from shale. What's equally significant is that, as a result of the economic downturn, they're also consuming 10% less oil than they were before the crash.
Within the North American energy system, the impacts of the US economic recession on consumption is every bit as important as all those fracking rigs. In the global context too, the recent Chinese economic slowdown is a major factor in OPEC having the ability to floor the price of oil, thereby curtailing unconventional sources of oil.
The figures are clear - we've peaked!
If we take the data from the BP Annual Statistical Review for 2014, global oil supply was higher than in any other previous year. Peak oil averted? - arguably not.
BP's figures include fracked shale oil, Canadian tar sands, and natural gas liquids from unconventional gas production. As outlined recently by the USEIA and Post Carbon Institute, shale oil is beginning to hit the limits of production. In Canada too, production is being constrained by a lack of new investment due to currently low prices.
The other major factor is that, even amongst conventional producers, all is not rosy. Six nations produce half the worlds oil, three of which have peaked conventional production; 14 produce 75%, six of which are arguably past their conventional oil peak.
For the last decade fracking and tar sands have produced enough oil to influence the global figure - but only by a few percent. Strip out that few percent of unconventional oil (let's ignore the gas liquids for now) and that small buffer evaporates.
Once shale production falls significantly, or Mexico or another key producer begins to hit the steeper part of their depletion curve, or just a few more oil producers reach their peak, production will fall more steeply - portending yet another global energy, then economic crisis.
Without the small contribution from unconventional oil, global oil production peaked in 2005, and has been on a very gradual downward trajectory ever since. This is the cleft stick within today's global energy supply: too little 'cheap energy' to enable economic growth, too low a return on capital to allow investment in higher production.
In terms of a definition of 'peak oil' which encompasses both its economic and geophysical nature - this is a situation which demonstrates the reality of oil's ecological limits.
Today, doubts over the future of unconventional oil make peak oil a reality.
If prices rise, won't fracking and tar sands make a comeback?
If supply falls, and prices rise, won't we just start the whole bandwagon over again? That depends upon the economic conditions the other side of the crisis.
During the early 2000s 'gas fracking' in the US arose under the lax credit arrangements which existed in the USA before the 2007/8 economic crash. After the 2008/9 crash most of those gas rigs were withdrawn and re-directed to oil production. What has fuelled 'oil fracking' since 2009 has been near-zero interest rates and the 'cheap' money created by quantitative easing.
Also, given what we know about unconventional fossil fuels today - their impacts upon the climate, and human health, and their unwholesome relationship with political power and academia - the public are in a far better position to resist any attempt to resurrect the industry.
More significantly, any meaningful climate deal in Paris in December will have to put limits on global fossil fuel production. As the dirtiest fossil fuels, fracking and tar sands would have to be on the list of what we must 'keep in the ground'.
The Age of Oil is winding down - it has been doing so since 2005. In a greenhouse gas constrained world, where the swift adaptation of our food system to climate change is arguably a higher priority than fuelling private cars or passenger air travel, there is no room for unconventional fossil fuels.
Of course the neoliberal economists who chuckled at the 'death of peak oil' will scream with rage! Peak oil hasn't just refused to die; it's alive and well and perturbing their economic models once more.
That's their own ideological problem. They will have to adapt their theories in the face of peak oil's statistical reality, or stand aside and allow ecological economists - who do internalise these factors - to begin guiding society on a new path.
That's the real implication of peak oil.
The data on this and other ecological issues indicates that the core of neoliberal theory - of continual growth, technological progress and monetary wealth creation - is fatally flawed.
Just as energy and industrial planners will inevitably need to find solutions beyond oil, governments will need to go back to the drawing board and find new model for the political economy.
'Beyond Petroleum' - Fracking's Collapse Heralds the Arrival of Peak Oil
Despite the exploitation of unconventional oil resources like high-cost tar sands (pictured in Canada) and shales, peak oil really is upon us. Photo: Gord McKenna via Flickr (CC BY-NC-ND).
A few weeks ago tremors rocked the world of 'fracking' in the USA - though few heard them. The US Energy Information Agency (USEIA) had issued its latest Monthly Drilling Report and the news was not good.
It wasn't simply the economic failure of fracking (covered in The Ecologist last December) and the subsequent collapse in drilling (covered in January). The news from the USEIA was far more grim for those who understood its deeper meaning. Their press release was very matter-of-fact:
"EIA's most recent Drilling Productivity Report (DPR) indicates a change in the crude oil production growth patterns in three key oil producing regions... The DPR estimates include the first projected declines in crude oil production in these regions since publication of the DPR began in October 2013."
In the shale oil producing areas of Eagle Ford, Niobrara, and the Bakken, production had reached a peak and was beginning to decline. What the USEIA is not clear about is whether this is the result of recent economics, or some longer-term trend.
This message was echoed a few weeks later in the Post Carbon Institutes's new analysis of Marcellus shale production, along with a warning about the future prospects:
"Industry invariably drills its best prospects first, hence the cheapest gas is being exploited now. Infinite faith in technology cannot make up for the realities of geology. These realities are showing up now in the most productive counties."
In Britain, emulating the USA, we've been told that we have to go all out to realise the 'US shale energy revolution'. It has been sold to the public as a new economic Renaissance ... what went wrong?
I have to begin a decade ago ...
Ten years ago this month, in May 2005, I published my first book - Energy Beyond Oil (copies are still available from a few bookshops).
Long before $147 oil and the resultant economic crash that followed, the book analysed the evidence for the peaking of various energy resources, and the economic problems which might result from the practical reality of these phenomena.
'Peak oil' - or the peaks of other resources such as copper or rare metals - is not equivalent to 'running out'. The 'peak' is the point in time when half the available non-renewable reserve has been extracted - somewhere between a half and two-fifths through the lifetime of the resource.
From that point on it gets progressively harder to maintain production. Supply begins to fall, and both the energy and resources expended to produce a given quantity of the resource begins to increase exponentially over time.
This effect is the result of the interaction of geology and economics:
•Geology gives a natural distribution of resources - with a few large high-quality deposits, a slightly larger number of middling-quality deposits, and a lot of very small low-quality deposits.
•Economics dictates we use the easiest to exploit and cheapest first, which means we use the biggest, easiest to access ones. Over time what's left gets progressively harder and more expensive to produce as we work through the 'stock' of the resource.
The difficulty is that when we're talking about essential industrial minerals and energy resources, tight supply and rising prices - like the trends operating across the decade of the 2000s - can destabilise the economy.
That's very bad for business and our resource-consuming lifestyles.
In 2008 the crash came. What was worse, the warning signs related to the problems of finite energy supplies, ecological limits and debt were ignored; their message smothered beneath billions of pounds and trillions of dollars of quantitative easing.
As billions poured into the banks, all the bankers could do in the midst of a recession was to lend to the few large industrial investment projects which were under-way - such as 'fracking' in the USA, or the housing market in Britain.
By 2009 I found that people no longer wanted to talk about peak oil and its effects. They could experience that reality every day! As a result, in mid-2009, I shifted my work away from ecological limits into unconventional gas and oil production - aka 'fracking' - in Britain.
As with my shift into peak oil back around 2002, it was to become a fortuitous choice.
'The death of peak oil'
The high oil prices of the 2000s led, by the end of the decade, to a concern about 'peak oil' and geopolitics. Once more people were researching and talking about the ecological 'limits to growth'.
For neoliberal economists the offence of ecological limits is not that it seeks to describe physical trends with reference to historical statistics. The offence is that it attacks the philosophical heart of neoliberalism - because if energy supply cannot grow inexorably then neither can the global economy.
For the economic lobby fracking was a human-made miracle. It answered the criticisms of peak oil theory by alluding to a vast untapped resource of oil and gas that could be brought to the market by new technology and human ingenuity.
From 2011 the pro-fracking lobby began to spin a story of 'the death of peak oil'. It was promoted by senior oil economists such as Daniel Yergin, and repeated uncritically in the media. When The Oil Drum, a peak oil analysts' web site, closed in 2013, the pro-fracking economic lobby were ecstatic:
" ... today, it is probably safe to say we have slayed 'peak oil' once and for all, thanks to the combination new shale oil and gas production techniques and declining fuel use."
Peak oil defined by the existence of a web site? How absurd!
Peak oil's not dead, it's very much alive!
The deeper meaning of the USEIA's announcement about the downturn in shale oil production is that - for the pro-fracking economic lobby - it represents the return of the monster they thought they'd slain.
In late 2014 - when the first signs of an impending collapse in fracking, and the exaggeration of the available resources came to light - the arguments over the 'death of peak oil', which had been quiet for a year, were dragged from the economic lobby's closet.
Stories of the continued demise of peak oil were spread by the economic media and pro-fracking lobbyist sites.
Around this time I began watching the statistics on oil and gas production closely once more. And with the USEIA's recent announcement, the reality has become clearer.
The quiet reality of North American oil
Canada produces a lot of conventional and unconventional oil - a large proportion of which gets sent to the USA. This fact is used as a positive message by the tar sands lobby to promote their industry.
What that message misses is that the whole of the continent of North American acts as a single market - in part due to NAFTA.
Mexico used to supply a lot of oil to the USA too, but production in the Cantarell field peaked in 2003 and is now in decline. For the last few years all that those increases in Canadian production have done is to roughly keep pace with the decline of Mexico's production.
In the USA, yes they've produced a lot of new oil and gas from shale. What's equally significant is that, as a result of the economic downturn, they're also consuming 10% less oil than they were before the crash.
Within the North American energy system, the impacts of the US economic recession on consumption is every bit as important as all those fracking rigs. In the global context too, the recent Chinese economic slowdown is a major factor in OPEC having the ability to floor the price of oil, thereby curtailing unconventional sources of oil.
The figures are clear - we've peaked!
If we take the data from the BP Annual Statistical Review for 2014, global oil supply was higher than in any other previous year. Peak oil averted? - arguably not.
BP's figures include fracked shale oil, Canadian tar sands, and natural gas liquids from unconventional gas production. As outlined recently by the USEIA and Post Carbon Institute, shale oil is beginning to hit the limits of production. In Canada too, production is being constrained by a lack of new investment due to currently low prices.
The other major factor is that, even amongst conventional producers, all is not rosy. Six nations produce half the worlds oil, three of which have peaked conventional production; 14 produce 75%, six of which are arguably past their conventional oil peak.
For the last decade fracking and tar sands have produced enough oil to influence the global figure - but only by a few percent. Strip out that few percent of unconventional oil (let's ignore the gas liquids for now) and that small buffer evaporates.
Once shale production falls significantly, or Mexico or another key producer begins to hit the steeper part of their depletion curve, or just a few more oil producers reach their peak, production will fall more steeply - portending yet another global energy, then economic crisis.
Without the small contribution from unconventional oil, global oil production peaked in 2005, and has been on a very gradual downward trajectory ever since. This is the cleft stick within today's global energy supply: too little 'cheap energy' to enable economic growth, too low a return on capital to allow investment in higher production.
In terms of a definition of 'peak oil' which encompasses both its economic and geophysical nature - this is a situation which demonstrates the reality of oil's ecological limits.
Today, doubts over the future of unconventional oil make peak oil a reality.
If prices rise, won't fracking and tar sands make a comeback?
If supply falls, and prices rise, won't we just start the whole bandwagon over again? That depends upon the economic conditions the other side of the crisis.
During the early 2000s 'gas fracking' in the US arose under the lax credit arrangements which existed in the USA before the 2007/8 economic crash. After the 2008/9 crash most of those gas rigs were withdrawn and re-directed to oil production. What has fuelled 'oil fracking' since 2009 has been near-zero interest rates and the 'cheap' money created by quantitative easing.
Also, given what we know about unconventional fossil fuels today - their impacts upon the climate, and human health, and their unwholesome relationship with political power and academia - the public are in a far better position to resist any attempt to resurrect the industry.
More significantly, any meaningful climate deal in Paris in December will have to put limits on global fossil fuel production. As the dirtiest fossil fuels, fracking and tar sands would have to be on the list of what we must 'keep in the ground'.
The Age of Oil is winding down - it has been doing so since 2005. In a greenhouse gas constrained world, where the swift adaptation of our food system to climate change is arguably a higher priority than fuelling private cars or passenger air travel, there is no room for unconventional fossil fuels.
Of course the neoliberal economists who chuckled at the 'death of peak oil' will scream with rage! Peak oil hasn't just refused to die; it's alive and well and perturbing their economic models once more.
That's their own ideological problem. They will have to adapt their theories in the face of peak oil's statistical reality, or stand aside and allow ecological economists - who do internalise these factors - to begin guiding society on a new path.
That's the real implication of peak oil.
The data on this and other ecological issues indicates that the core of neoliberal theory - of continual growth, technological progress and monetary wealth creation - is fatally flawed.
Just as energy and industrial planners will inevitably need to find solutions beyond oil, governments will need to go back to the drawing board and find new model for the political economy.
Saturday, May 9, 2015
SC128-2
http://www.resilience.org/stories/2015-05-07/why-we-have-an-oversupply-of-almost-everything-oil-labor-capital-etc
Why We Have an Oversupply of Almost Everything (Oil, labor, capital, etc.)
The Wall Street Journal recently ran an article called, Glut of Capital and Labor Challenge Policy Makers: Global oversupply extends beyond commodities, elevating deflation risk. To me, this is a very serious issue, quite likely signaling that we are reaching what has been called Limits to Growth, a situation modeled in 1972 in a book by that name.
What happens is that economic growth eventually runs into limits. Many people have assumed that these limits would be marked by high prices and excessive demand for goods. In my view, the issue is precisely the opposite one: Limits to growth are instead marked by low prices and inadequate demand. Common workers can no longer afford to buy the goods and services that the economy produces, because of inadequate wage growth. The price of all commodities drops, because of lower demand by workers. Furthermore, investors can no longer find investments that provide an adequate return on capital, because prices for finished goods are pulled down by the low demand of workers with inadequate wages.
Evidence Regarding the Connection Between Energy Consumption and GDP Growth
We can see the close connection between world energy consumption and world GDP using historical data.
Figure 1. World GDP in 2010$ compared (from USDA) compared to World Consumption of Energy (from BP Statistical Review of World Energy 2014).
Figure 1. World GDP in 2010$ compared (from USDA) compared to World Consumption of Energy (from BP Statistical Review of World Energy 2014).
This chart gives a clue regarding what is wrong with the economy. The slope of the line implies that adding one percentage point of growth in energy usage tends to add less and less GDP growth over time, as I have shown in Figure 2. This means that if we want to have, for example, a constant 4% growth in world GDP for the period 1969 to 2013, we would need to gradually increase the rate of growth in energy consumption from about 1.8% = (4.0% – 2.2%) growth in energy consumption in 1969 to 2.8% = (4.0% – 1.2%) growth in energy consumption in 2013. This need for more and more growth in energy use to produce the same amount of economic growth is taking place despite all of our efforts toward efficiency, and despite all of our efforts toward becoming more of a “service” economy, using less energy products!
Figure 2. Expected change in GDP growth corresponding to 1% growth in total energy, based on Figure 1 fitted line.
Figure 2. Expected change in GDP growth corresponding to 1% growth in total energy, based on Figure 1 fitted line.
To make matters worse, growth in world energy supply is generally trending downward as well. (This is not just oil supply whose growth is trending downward; this is oil plus everything else, including “renewables”.)
Figure 3. Three year average percent change in world energy consumption, based on BP Statistical Review of World Energy 2014 data.
Figure 3. Three-year average percent change in world energy consumption, based on BP Statistical Review of World Energy 2014 data.
There would be no problem, if economic growth were something that we could simply walk away from with no harmful consequences. Unfortunately, we live in a world where there are only two options–win or lose. We can win in our contest against other species (especially microbes), or we can lose. Winning looks like economic growth; losing looks like financial collapse with huge loss of human population, perhaps to epidemics, because we cannot maintain our current economic system.
The symptoms of losing the game are the symptoms we are seeing today–low commodity prices (temporarily higher, but nowhere nearly high enough to maintain production), not enough good paying jobs for common workers, and lack of investment opportunities, because workers cannot afford the high prices of goods that would be required to provide adequate return on investment.
The symptoms of losing the game are the symptoms we are seeing today–low commodity prices (temporarily higher, but nowhere nearly high enough to maintain production), not enough good paying jobs for common workers, and lack of investment opportunities, because workers cannot afford the high prices of goods that would be required to provide adequate return on investment.
How We Have Won in Our Contest with Other Species–Early Efforts
The “secret formula” humans have had for winning in our competition against other species has been the use of supplemental energy, adding to the energy we get from food. There is a physics reason why this approach works: total population by all species is limited by available energy supply. Providing our own external energy supply was (and still is) a great work-around for this limitation. Even in the days of hunter-gatherers, humans used three times as much energy as could be obtained through food alone (Figure 1).
Figure 1
Figure 4
Earliest supplementation of food energy came by burning sticks and other biomass, starting one million years ago. Using this approach, humans were able to gain an advantage over other species in several ways:
1.We were able to cook some of our food. This made a wider range of plants and animals suitable for food and made the nutrients from these foods more easily available to our bodies.
2.Because less energy was needed for chewing and digesting, our bodies could put energy into growing a larger brain, thus giving us an advantage over other animals.
3.The use of cooked food freed up time for such activities as hunting and making clothes, because less time was needed for chewing.
4.Heat from burning plant material could be used to keep warm in cold areas, thereby extending our range and increasing total human population that could be supported.
5.Fire could be used to chase off predatory animals and hunt prey animals.
Our bodies are now adapted to the need for supplemental energy. Our teeth our smaller, and our jaws and digestive apparatus have shrunk in size, as our brain has grown. The large population of humans that are alive today could not survive without supplemental energy for many purposes, such as cooking food, heating homes, and fighting illnesses that spread when humans are in as close proximity as they are today.
Our Modern Formula For Winning the Battle Against Other Species
In my view, the formula that has allowed humans to keep winning the battle against other species is the following:
1.Use increasing amounts of inexpensive supplemental energy to leverage human energy so that finished goods and services produced per worker rises each year.
2.Pay for this system with debt, because (if supplemental energy costs are cheap enough), it is possible to repay the debt, plus the interest on the debt, with the additional goods and services made possible by the cheap additional energy.
3.This system gradually becomes more complex to deal with problems that come with rising population and growing use of resources. However, if the output of goods per worker is growing rapidly enough, it should be possible to pay for the costs associated with this increased complexity, in addition to interest costs.
4.The whole system “works” as long as the total quantity of finished goods and services rises rapidly enough that it can fund all of the following: (a) a rising standard of living for common workers so that they can afford increasing amounts of debt to buy more goods, (b) debt repayment, and interest on the debt of the system, and (c) and an increasing amount of “overhead” in the form of government services, medical care, educational services, and salaries of high paid officials (in business as well as government). This overhead is needed to deal with the increasing complexity that comes with growth.
The formula for a growing economy is now failing. The rate of economic growth is falling, partly because energy supply is slowing (Figure 3), and partly because we need more and more growth of energy supply to produce a given amount of economic growth (Figure 2). With this lowered world economic growth, the amount of goods and services being produced is not rising fast enough to support all of the functions that it needs to cover: interest payments, growing wages of common workers, and growing “overhead” of a more complex society.
Some Reasons the Economic Growth Cycle is Now Failing
Let’s look at a few areas where we are reaching obstacles to this continued growth in final goods and services. An overarching problem is diminishing returns, which is reflected in increasingly higher prices of production.
1. Energy supplies are becoming more expensive to extract.
We extract the easiest to extract energy supplies first, and as these deplete, need to use the more expensive to extract energy supplies. We hear much about “growing efficiency” but, in fact, we are becoming less efficient in the production of energy supplies.
In the US, EIA data shows that we are becoming less efficient at coal production, in terms of coal production per worker hour (Figure 5).
Figure 5. US coal production per worker, on a Btu basis based on EIA data.
Figure 5. US coal production per worker, on a Btu basis based on EIA data.
With oil, growing inefficiency is shown by the steeply rising cost of oil exploration and production since 1999 (Figure 6).
Figure 6. Figure by Steve Kopits of Westwood Douglas showing trends in world oil exploration and production costs per barrel.
Figure 6. Figure by Steve Kopits of Douglas-Westwood showing trends in world oil exploration and production costs per barrel.
Thus, it is for a fairly recent period, namely the period since about 2000, that we have been encountering rising costs both for US coal and for worldwide oil extraction.
The extra workers and extra costs required for producing the same amount of energy counteract the tendency toward growth in the rest of the economy. This occurs because the rest of the economy must produce finished products with fewer workers and less resources as a result of the extra demands on these resources by the energy sector.
2. Other materials, besides energy products, are experiencing diminishing returns.
Other resources, such as metals and other minerals and fresh water, are also becoming increasingly expensive to extract. The issue with mineral ores is similar to that with fossil fuels. We start with a fixed amount of ores in good locations and with high mineral percentages. As we move to less desirable ores, both human labor and more energy products are required, making the extraction process less efficient.
With fresh water, the issue is likely to be a need for desalination or long distance transport, to satisfy the needs of a growing population. Workarounds again involve more human labor and more resource use, making the production of fresh water less efficient.
In both of these cases, growing inefficiency leaves the rest of the economy with less human energy and less energy products to produce the finished goods and services that the economy needs.
3. Growing pollution is taking its toll.
Instead of just producing end products, we are increasingly finding ourselves fighting pollution. While this is a benefit to society, it really is only offsetting what would otherwise be a negative. Thus, it acts like overhead, rather than producing economic growth.
From the point of view of workers having to pay for higher cost energy in order to fight pollution (say, substitution of a higher cost energy source, or paying for more pollution controls), the additional cost acts like a tax. Workers need to cut back on other expenditures to afford the pollution control workarounds. The effect is thus recessionary.
4. The amount of “overhead” to the world economy has been growing rapidly in recent years, for a number of reasons:
•The amount of overhead is growing because we are reaching natural barriers. For example, population per acre of arable land is growing, so we need more intensity of development to produce food for a rising population.
•With greater population density and increased bacterial antibiotic resistance, disease transmission becomes a more of a problem.
•Increasing education is being encouraged, whether or not there are jobs available that will make use of that education. Education that cannot be used in a productive way to produce more goods and services can be considered overhead for the economy. Educational expenses are frequently financed by debt. Repayment of this debt leads to a decrease in demand for other goods, such as new homes and vehicles.
•We have more elderly to whom we have promised benefits, because with the benefit of better nutrition and medical care, more people are living longer.
5. We are reaching debt limits.
As economic growth has slowed, we have been adding more and more debt, to try to mitigate the problem. This additional debt becomes a problem in many ways: (a) without cheap energy to leverage human labor, there are not many productive investments that can be made; (b) the addition of more debt leads to a need for more interest payments; and (c) at some point debt ratios become overwhelmingly high.
At least part of the slowdown in economic growth that we are seeing today is coming from a slowdown in the growth of debt. Without debt growth, it is hard to keep commodity prices high enough. Investment in new manufacturing plants is also affected by low growth in debt.
Reasons for Confusion in Understanding Our Current Predicament
1. Not understanding that all of the symptoms we are seeing today are manifestations of the same underlying “illness”.
Most analysts think that the economy has stubbed its toe and has a headache, rather than recognizing that it has a serious underlying illness.
2. Academia is focused way too narrowly, and tied too closely to what has been written before.
Academics, because of their need to write papers, focus on what previous papers have said. Unfortunately, previous papers have not understood the nature of our problem. Academics have developed models based on our situation when we were away from limits. The issues we are facing cover such diverse subjects as physics, geology, and finance. It is hard for academics to become knowledgeable in many areas at once.
3. Models that seemed to work before are no longer appropriate.
We take models like the familiar supply and demand model of economists and assume that they represent everlasting truths.
Figure 7. (Source Wikipedia). The price P of a product is determined by a balance between production at each price (supply S) and the desires of those with purchasing power at each price (demand D). The diagram shows a positive shift in demand from D1 to D2, resulting in an increase in price (P) and quantity sold (Q) of the product.
Figure 7. (Source Wikipedia). The price P of a product is determined by a balance between production at each price (supply S) and the desires of those with purchasing power at each price (demand D). The diagram shows a positive shift in demand from D1 to D2, resulting in an increase in price (P) and quantity sold (Q) of the product.
Unfortunately, as we get close to limits, things change. Both wage levels and debt levels have an impact on demand; the quantity goods available is also affected by diminishing returns. The model that worked in the past may be totally inappropriate now.
Even a complex model like the climate change model being used by the IPCC is likely to be affected by financial limits. If near-term financial limits are to be expected, IPCC’s estimate of future carbon from fuels is likely to be too high. At a minimum, the findings of the IPCC need to be framed differently: climate change may be one of a number of problems facing those people who manage to survive a financial crash.
4. Too much wishful thinking.
Everyone would like to present a positive result, especially when grants are being given for academic research will support some favorable finding.
A favorite form of wishful thinking is believing that higher costs of energy products will not be a problem. Higher cost energy products, whether they are renewable or not, are a problem for many reasons:
•They represent growing inefficiency in the economy. With growing inefficiency, we produce fewer finished goods and services per worker, not more.
•Countries using more of the higher cost types of energy become less competitive in the world market, and because of this, may develop financial problems. The countries most affected by the Great Recession were countries using a high percentage of oil in their energy mix.
•The amount workers have available to spend is limited. If a worker has $100 to spend on energy supply, he can buy 100 times as much in energy supplies priced at $1 as he can energy supplies priced at $100. This same principle works even if the cost difference is much lower–say $3.50 gallon vs. $3.00 gallon.
5. Too much faith in, “We pay each other’s wages.”
There is a common belief that growing inefficiency is OK; the wages we pay for unneeded education will work its way through the system as more wages for other workers.
Unfortunately, the real secret to economic growth is not paying each other’s wages; it is growing output of finished products per worker through increased use of cheap energy (and perhaps technology, to make this cheap energy useful).
Increased overhead for the system is not helpful.
6. An “upside down” peak oil story.
Most people in the peak oil community believe what economists say about supply and demand–namely, that oil prices will rise if there is a supply problem. They have not realized that in a networked economy, wages and prices are tightly linked. The way limits apply is not necessarily the way we expect. Limits may come through a lack of good paying jobs, and because of this lack of jobs, inability to purchase products containing oil.
The connection between energy and jobs is clear. Good jobs require the use of energy, such as electricity and oil; lack of good-paying jobs is likely to be a manifestation of an inadequate supply of cheap energy. Also, high paying jobs are what allow rising buying power, and thus keep demand high. Thus, oil limits may appear as a demand problem, with low oil prices, rather than as a high oil price problem.
In my opinion, what we are seeing now is a manifestation of peak oil. It is just happening in an upside down way relative to what most were expecting.
Conclusion
One way of viewing our problem today is as a crisis of affordability. Young people cannot afford to start families or buy new homes because of a combination of the high cost of higher education (leading to debt), the high cost of fuel-efficient new cars (again leading to debt), the high cost of resale homes, and the relatively low wages paid to young workers. Even older workers often have an affordability problem. Many have found their wages stagnating or falling at the same time that the cost of healthcare, cars, electricity, and (until recently) oil rises. A recent Gallop Survey showed an increasing share of workers categorize themselves as “working class” rather than “middle class.”
It is this affordability crisis that is bringing the system down. Without adequate wages, the amount of debt that can be added to the system lags as well. It becomes impossible to keep prices of commodities up at a high enough level to encourage production of these commodities. Return on investment tends to be low for the same reason. Most researchers have not recognized these problems, because they are narrowly focused and assume that models that worked in the past will continue to work today.
Why We Have an Oversupply of Almost Everything (Oil, labor, capital, etc.)
The Wall Street Journal recently ran an article called, Glut of Capital and Labor Challenge Policy Makers: Global oversupply extends beyond commodities, elevating deflation risk. To me, this is a very serious issue, quite likely signaling that we are reaching what has been called Limits to Growth, a situation modeled in 1972 in a book by that name.
What happens is that economic growth eventually runs into limits. Many people have assumed that these limits would be marked by high prices and excessive demand for goods. In my view, the issue is precisely the opposite one: Limits to growth are instead marked by low prices and inadequate demand. Common workers can no longer afford to buy the goods and services that the economy produces, because of inadequate wage growth. The price of all commodities drops, because of lower demand by workers. Furthermore, investors can no longer find investments that provide an adequate return on capital, because prices for finished goods are pulled down by the low demand of workers with inadequate wages.
Evidence Regarding the Connection Between Energy Consumption and GDP Growth
We can see the close connection between world energy consumption and world GDP using historical data.
Figure 1. World GDP in 2010$ compared (from USDA) compared to World Consumption of Energy (from BP Statistical Review of World Energy 2014).
Figure 1. World GDP in 2010$ compared (from USDA) compared to World Consumption of Energy (from BP Statistical Review of World Energy 2014).
This chart gives a clue regarding what is wrong with the economy. The slope of the line implies that adding one percentage point of growth in energy usage tends to add less and less GDP growth over time, as I have shown in Figure 2. This means that if we want to have, for example, a constant 4% growth in world GDP for the period 1969 to 2013, we would need to gradually increase the rate of growth in energy consumption from about 1.8% = (4.0% – 2.2%) growth in energy consumption in 1969 to 2.8% = (4.0% – 1.2%) growth in energy consumption in 2013. This need for more and more growth in energy use to produce the same amount of economic growth is taking place despite all of our efforts toward efficiency, and despite all of our efforts toward becoming more of a “service” economy, using less energy products!
Figure 2. Expected change in GDP growth corresponding to 1% growth in total energy, based on Figure 1 fitted line.
Figure 2. Expected change in GDP growth corresponding to 1% growth in total energy, based on Figure 1 fitted line.
To make matters worse, growth in world energy supply is generally trending downward as well. (This is not just oil supply whose growth is trending downward; this is oil plus everything else, including “renewables”.)
Figure 3. Three year average percent change in world energy consumption, based on BP Statistical Review of World Energy 2014 data.
Figure 3. Three-year average percent change in world energy consumption, based on BP Statistical Review of World Energy 2014 data.
There would be no problem, if economic growth were something that we could simply walk away from with no harmful consequences. Unfortunately, we live in a world where there are only two options–win or lose. We can win in our contest against other species (especially microbes), or we can lose. Winning looks like economic growth; losing looks like financial collapse with huge loss of human population, perhaps to epidemics, because we cannot maintain our current economic system.
The symptoms of losing the game are the symptoms we are seeing today–low commodity prices (temporarily higher, but nowhere nearly high enough to maintain production), not enough good paying jobs for common workers, and lack of investment opportunities, because workers cannot afford the high prices of goods that would be required to provide adequate return on investment.
The symptoms of losing the game are the symptoms we are seeing today–low commodity prices (temporarily higher, but nowhere nearly high enough to maintain production), not enough good paying jobs for common workers, and lack of investment opportunities, because workers cannot afford the high prices of goods that would be required to provide adequate return on investment.
How We Have Won in Our Contest with Other Species–Early Efforts
The “secret formula” humans have had for winning in our competition against other species has been the use of supplemental energy, adding to the energy we get from food. There is a physics reason why this approach works: total population by all species is limited by available energy supply. Providing our own external energy supply was (and still is) a great work-around for this limitation. Even in the days of hunter-gatherers, humans used three times as much energy as could be obtained through food alone (Figure 1).
Figure 1
Figure 4
Earliest supplementation of food energy came by burning sticks and other biomass, starting one million years ago. Using this approach, humans were able to gain an advantage over other species in several ways:
1.We were able to cook some of our food. This made a wider range of plants and animals suitable for food and made the nutrients from these foods more easily available to our bodies.
2.Because less energy was needed for chewing and digesting, our bodies could put energy into growing a larger brain, thus giving us an advantage over other animals.
3.The use of cooked food freed up time for such activities as hunting and making clothes, because less time was needed for chewing.
4.Heat from burning plant material could be used to keep warm in cold areas, thereby extending our range and increasing total human population that could be supported.
5.Fire could be used to chase off predatory animals and hunt prey animals.
Our bodies are now adapted to the need for supplemental energy. Our teeth our smaller, and our jaws and digestive apparatus have shrunk in size, as our brain has grown. The large population of humans that are alive today could not survive without supplemental energy for many purposes, such as cooking food, heating homes, and fighting illnesses that spread when humans are in as close proximity as they are today.
Our Modern Formula For Winning the Battle Against Other Species
In my view, the formula that has allowed humans to keep winning the battle against other species is the following:
1.Use increasing amounts of inexpensive supplemental energy to leverage human energy so that finished goods and services produced per worker rises each year.
2.Pay for this system with debt, because (if supplemental energy costs are cheap enough), it is possible to repay the debt, plus the interest on the debt, with the additional goods and services made possible by the cheap additional energy.
3.This system gradually becomes more complex to deal with problems that come with rising population and growing use of resources. However, if the output of goods per worker is growing rapidly enough, it should be possible to pay for the costs associated with this increased complexity, in addition to interest costs.
4.The whole system “works” as long as the total quantity of finished goods and services rises rapidly enough that it can fund all of the following: (a) a rising standard of living for common workers so that they can afford increasing amounts of debt to buy more goods, (b) debt repayment, and interest on the debt of the system, and (c) and an increasing amount of “overhead” in the form of government services, medical care, educational services, and salaries of high paid officials (in business as well as government). This overhead is needed to deal with the increasing complexity that comes with growth.
The formula for a growing economy is now failing. The rate of economic growth is falling, partly because energy supply is slowing (Figure 3), and partly because we need more and more growth of energy supply to produce a given amount of economic growth (Figure 2). With this lowered world economic growth, the amount of goods and services being produced is not rising fast enough to support all of the functions that it needs to cover: interest payments, growing wages of common workers, and growing “overhead” of a more complex society.
Some Reasons the Economic Growth Cycle is Now Failing
Let’s look at a few areas where we are reaching obstacles to this continued growth in final goods and services. An overarching problem is diminishing returns, which is reflected in increasingly higher prices of production.
1. Energy supplies are becoming more expensive to extract.
We extract the easiest to extract energy supplies first, and as these deplete, need to use the more expensive to extract energy supplies. We hear much about “growing efficiency” but, in fact, we are becoming less efficient in the production of energy supplies.
In the US, EIA data shows that we are becoming less efficient at coal production, in terms of coal production per worker hour (Figure 5).
Figure 5. US coal production per worker, on a Btu basis based on EIA data.
Figure 5. US coal production per worker, on a Btu basis based on EIA data.
With oil, growing inefficiency is shown by the steeply rising cost of oil exploration and production since 1999 (Figure 6).
Figure 6. Figure by Steve Kopits of Westwood Douglas showing trends in world oil exploration and production costs per barrel.
Figure 6. Figure by Steve Kopits of Douglas-Westwood showing trends in world oil exploration and production costs per barrel.
Thus, it is for a fairly recent period, namely the period since about 2000, that we have been encountering rising costs both for US coal and for worldwide oil extraction.
The extra workers and extra costs required for producing the same amount of energy counteract the tendency toward growth in the rest of the economy. This occurs because the rest of the economy must produce finished products with fewer workers and less resources as a result of the extra demands on these resources by the energy sector.
2. Other materials, besides energy products, are experiencing diminishing returns.
Other resources, such as metals and other minerals and fresh water, are also becoming increasingly expensive to extract. The issue with mineral ores is similar to that with fossil fuels. We start with a fixed amount of ores in good locations and with high mineral percentages. As we move to less desirable ores, both human labor and more energy products are required, making the extraction process less efficient.
With fresh water, the issue is likely to be a need for desalination or long distance transport, to satisfy the needs of a growing population. Workarounds again involve more human labor and more resource use, making the production of fresh water less efficient.
In both of these cases, growing inefficiency leaves the rest of the economy with less human energy and less energy products to produce the finished goods and services that the economy needs.
3. Growing pollution is taking its toll.
Instead of just producing end products, we are increasingly finding ourselves fighting pollution. While this is a benefit to society, it really is only offsetting what would otherwise be a negative. Thus, it acts like overhead, rather than producing economic growth.
From the point of view of workers having to pay for higher cost energy in order to fight pollution (say, substitution of a higher cost energy source, or paying for more pollution controls), the additional cost acts like a tax. Workers need to cut back on other expenditures to afford the pollution control workarounds. The effect is thus recessionary.
4. The amount of “overhead” to the world economy has been growing rapidly in recent years, for a number of reasons:
•The amount of overhead is growing because we are reaching natural barriers. For example, population per acre of arable land is growing, so we need more intensity of development to produce food for a rising population.
•With greater population density and increased bacterial antibiotic resistance, disease transmission becomes a more of a problem.
•Increasing education is being encouraged, whether or not there are jobs available that will make use of that education. Education that cannot be used in a productive way to produce more goods and services can be considered overhead for the economy. Educational expenses are frequently financed by debt. Repayment of this debt leads to a decrease in demand for other goods, such as new homes and vehicles.
•We have more elderly to whom we have promised benefits, because with the benefit of better nutrition and medical care, more people are living longer.
5. We are reaching debt limits.
As economic growth has slowed, we have been adding more and more debt, to try to mitigate the problem. This additional debt becomes a problem in many ways: (a) without cheap energy to leverage human labor, there are not many productive investments that can be made; (b) the addition of more debt leads to a need for more interest payments; and (c) at some point debt ratios become overwhelmingly high.
At least part of the slowdown in economic growth that we are seeing today is coming from a slowdown in the growth of debt. Without debt growth, it is hard to keep commodity prices high enough. Investment in new manufacturing plants is also affected by low growth in debt.
Reasons for Confusion in Understanding Our Current Predicament
1. Not understanding that all of the symptoms we are seeing today are manifestations of the same underlying “illness”.
Most analysts think that the economy has stubbed its toe and has a headache, rather than recognizing that it has a serious underlying illness.
2. Academia is focused way too narrowly, and tied too closely to what has been written before.
Academics, because of their need to write papers, focus on what previous papers have said. Unfortunately, previous papers have not understood the nature of our problem. Academics have developed models based on our situation when we were away from limits. The issues we are facing cover such diverse subjects as physics, geology, and finance. It is hard for academics to become knowledgeable in many areas at once.
3. Models that seemed to work before are no longer appropriate.
We take models like the familiar supply and demand model of economists and assume that they represent everlasting truths.
Figure 7. (Source Wikipedia). The price P of a product is determined by a balance between production at each price (supply S) and the desires of those with purchasing power at each price (demand D). The diagram shows a positive shift in demand from D1 to D2, resulting in an increase in price (P) and quantity sold (Q) of the product.
Figure 7. (Source Wikipedia). The price P of a product is determined by a balance between production at each price (supply S) and the desires of those with purchasing power at each price (demand D). The diagram shows a positive shift in demand from D1 to D2, resulting in an increase in price (P) and quantity sold (Q) of the product.
Unfortunately, as we get close to limits, things change. Both wage levels and debt levels have an impact on demand; the quantity goods available is also affected by diminishing returns. The model that worked in the past may be totally inappropriate now.
Even a complex model like the climate change model being used by the IPCC is likely to be affected by financial limits. If near-term financial limits are to be expected, IPCC’s estimate of future carbon from fuels is likely to be too high. At a minimum, the findings of the IPCC need to be framed differently: climate change may be one of a number of problems facing those people who manage to survive a financial crash.
4. Too much wishful thinking.
Everyone would like to present a positive result, especially when grants are being given for academic research will support some favorable finding.
A favorite form of wishful thinking is believing that higher costs of energy products will not be a problem. Higher cost energy products, whether they are renewable or not, are a problem for many reasons:
•They represent growing inefficiency in the economy. With growing inefficiency, we produce fewer finished goods and services per worker, not more.
•Countries using more of the higher cost types of energy become less competitive in the world market, and because of this, may develop financial problems. The countries most affected by the Great Recession were countries using a high percentage of oil in their energy mix.
•The amount workers have available to spend is limited. If a worker has $100 to spend on energy supply, he can buy 100 times as much in energy supplies priced at $1 as he can energy supplies priced at $100. This same principle works even if the cost difference is much lower–say $3.50 gallon vs. $3.00 gallon.
5. Too much faith in, “We pay each other’s wages.”
There is a common belief that growing inefficiency is OK; the wages we pay for unneeded education will work its way through the system as more wages for other workers.
Unfortunately, the real secret to economic growth is not paying each other’s wages; it is growing output of finished products per worker through increased use of cheap energy (and perhaps technology, to make this cheap energy useful).
Increased overhead for the system is not helpful.
6. An “upside down” peak oil story.
Most people in the peak oil community believe what economists say about supply and demand–namely, that oil prices will rise if there is a supply problem. They have not realized that in a networked economy, wages and prices are tightly linked. The way limits apply is not necessarily the way we expect. Limits may come through a lack of good paying jobs, and because of this lack of jobs, inability to purchase products containing oil.
The connection between energy and jobs is clear. Good jobs require the use of energy, such as electricity and oil; lack of good-paying jobs is likely to be a manifestation of an inadequate supply of cheap energy. Also, high paying jobs are what allow rising buying power, and thus keep demand high. Thus, oil limits may appear as a demand problem, with low oil prices, rather than as a high oil price problem.
In my opinion, what we are seeing now is a manifestation of peak oil. It is just happening in an upside down way relative to what most were expecting.
Conclusion
One way of viewing our problem today is as a crisis of affordability. Young people cannot afford to start families or buy new homes because of a combination of the high cost of higher education (leading to debt), the high cost of fuel-efficient new cars (again leading to debt), the high cost of resale homes, and the relatively low wages paid to young workers. Even older workers often have an affordability problem. Many have found their wages stagnating or falling at the same time that the cost of healthcare, cars, electricity, and (until recently) oil rises. A recent Gallop Survey showed an increasing share of workers categorize themselves as “working class” rather than “middle class.”
It is this affordability crisis that is bringing the system down. Without adequate wages, the amount of debt that can be added to the system lags as well. It becomes impossible to keep prices of commodities up at a high enough level to encourage production of these commodities. Return on investment tends to be low for the same reason. Most researchers have not recognized these problems, because they are narrowly focused and assume that models that worked in the past will continue to work today.
SC128-1
http://www.truthdig.com/report/item/make_the_rich_panic_20150503
Make the Rich Panic
It does not matter to the corporate rich who wins the presidential election. It does not matter who is elected to Congress. The rich have the power. They throw money at their favorites the way a gambler puts cash on his favorite horse. Money has replaced the vote. The wealthy can crush anyone who does not play by their rules. And the political elites—slobbering over the spoils provided by their corporate masters for selling us out—understand the game. Barack and Michelle Obama, as did the Clintons, will acquire many millions of dollars once they leave the White House. And your elected representative in the House or Senate, if not a multimillionaire already, will be one as soon as he or she retires from government and is handed seats on corporate boards or positions in lobbying firms. We do not live in a democracy. We live in a political system that has legalized bribery, exclusively serves corporate power and is awash in propaganda and lies.
If you want change you can believe in, destroy the system. And changing the system does not mean collaborating with it as Bernie Sanders is doing by playing by the cooked rules of the Democratic Party. Profound social and political transformation is acknowledged in legislatures and courts but never initiated there. Radical change always comes from below. As long as our gaze is turned upward to the powerful, as long as we invest hope in reforming the system of corporate power, we will remain enslaved. There may be good people within the system—Sanders and Elizabeth Warren are examples—but that is not the point. It is the system that is rotten. It must be replaced.
“The only way you can get the parties’ attention is if you take votes away from them,” Ralph Nader told me by phone. “So,” he said of Sanders, “How serious is he? He makes Clinton a better phony candidate. She is going to have to agree with him on a number of things. She is going to have to be more anti-Wall Street to fend him off and neutralize him. We know it is bullshit. She will betray us once she becomes president. He is making her more likely to win. And by April he is done. Then he fades away.”
We must build mass movements that are allied with independent political parties—a tactic used in Greece by Syriza and in Spain by Podemos. Political action without the support of radical mass movements inevitably becomes hollow, and that, I think, will be the fate of the Sanders presidential campaign. Only by building militant mass movements that are unrelentingly hostile to the system of corporate capitalism, imperialism, militarism and globalization can we wrest back our democracy.
“The gates are controlled by two parties indentured to the same commercial interests,” Nader said. “If you don’t go through those gates, if you do what [Ross] Perot did, ... you [might] get 19 million votes [but] not one electoral vote. If you do not get electoral votes you don’t come close. And even if you do get electoral votes you are up against a winner-take-all. This means if you lose you don’t build for the future as you would with proportional representation. The system is a locked-out system. It is brilliantly devised. It is pruned to perfect a two-party duopoly.”
We have to organize around a series of non-negotiable demands. We have to dismantle the array of mechanisms the rich use to control power. We have to destroy the ideological and legal system cemented into place to justify corporate plunder.
This is called revolution. It is about ripping power away from a cabal of corporate oligarchs and returning it to the citizenry. This will happen not by appealing to corporate power but by terrifying it. And power, as we saw in Baltimore, will be terrified only when we take to the streets. There is no other way.
“The rich are only defeated when running for their lives,” the historian C.L.R. James noted. And until you see the rich fleeing in panic from the halls of Congress, the temples of finance, the universities, the media conglomerates, the war industry and their exclusive gated communities and private clubs, all politics in America will be farce.
It is apparent to most people across the globe that organizing political and social behavior around the dictates of the marketplace has proved to be a disaster for working men and women. The promised prosperity that was to have raised living standards through trickle-down economics has been exposed as a lie. The corporate state, understanding that it has been unmasked with the rise of unrest, has formed militarized police forces, stripped us of legal protection, taken over the legislative bodies, the courts and mass media, and built the most intrusive system of mass surveillance in human history. Corporate power, if unchecked, will suck every last bit of profit out of human society and the ecosystem before collapse. It has no self-imposed limits. And it has no external limits. Only we can create them.
To save ourselves from impending financial and environmental catastrophe we need to build movements that have as their uncompromising goal the abolition of corporate power. Corporation after corporation, including banks, energy companies, the health care sector and defense contractors, must be broken up and nationalized. We must institute a nationwide public works program, especially for those under the age of 25, to create conditions for full employment. We must mandate a $15-an-hour minimum wage. We must slash our obscene spending on defense—we spend $610 billion a year, more than four times the outlay of the second-largest military spender, China—and cut the size of our armed forces by more than half. We must rebuild our infrastructure, including mass transit, roads, bridges, schools, libraries and public housing. We must make war on the fossil fuel industry and turn to alternative sources of energy. We must place heavy taxes on the rich, including a special tax on Wall Street speculators that would be used to wipe out the $1.3 trillion in student debt. We must ensure that education at all levels, along with health care, is a free right of all Americans, not something accessible for the wealthy alone. We must abolish the Electoral College and mandate public financing of political campaigns. We must see that the elderly, the disabled, poor single parents and the mentally ill receive a weekly income of at least $600, or we must find them space in state-run institutions if they require daily care. We must institute a moratorium on foreclosures and bank repossessions. We must end our wars and the proxy wars in the Middle East and bring home our soldiers, Marines, airmen and sailors. We must pay reparations to Iraq and Afghanistan, and to African-Americans whose ancestors largely built this country as slaves who never were compensated for their labor. We must repeal the Patriot Act and Section 1021 of the National Defense Authorization Act. We must abolish the death penalty. We must dismantle our system of mass incarceration, release the vast majority of our 2.3 million prisoners, place them in job-skill programs and find them work and housing.
Police must be demilitarized. Mass surveillance must end. Undocumented workers must be given citizenship and full protection under the law. NAFTA, CAFTA and other free-trade agreements must be revoked. Anti-labor laws such as the Taft-Hartley Act, along with laws that criminalize poverty and dissent, must be repealed.
All this is the minimum.
Do not expect the corporate masters of war and commerce to willingly let this happen. They must be forced.
Revolutions take time. They are often begun by one generation and completed by the next. “Those who give the first check to a state are the first overwhelmed in its ruin,” Michel de Montaigne wrote in 1580. “The fruits of public commotion are seldom enjoyed by him who was the first mover; he only beats the water for another’s net.” Revolutions can be crushed by force, as amply demonstrated by history. Or they may be hijacked by individuals such as Vladimir Lenin, Leon Trotsky and Josef Stalin or movements that betray the populace. There are no guarantees that we will move toward a worker’s paradise or socialist utopia—we might move toward the most efficient form of totalitarianism in human history.
Radical movements are often their own worst enemies. The activists within them have a bad habit of fighting over arcane bits of doctrine, forming counterproductive schisms, misreading power and engaging in self-defeating and ultimately self-destructive internal power struggles. When they do not carefully calculate their power and the moment to strike, they often overreach and are crushed. The state uses its ample resources to infiltrate, monitor and vilify groups and arrest or assassinate movement leaders—and all uprisings, even supposedly leaderless ones, have leaders. Success is not assured, especially given the endemic levels of violence that have characterized American society.
But no matter what happens, the chain reaction that leads to revolt has begun. Most people realize that our expectations for a better future have been obliterated, not only those for ourselves but also for our children. This realization has lit the fuse. There is a widespread loss of faith in established systems of power. The will to rule is weakening among the elites, who are entranced by hedonism and decadence. Internal corruption is rampant and transparent. Government is despised.
The nation, like many prerevolutionary societies, is headed into crisis. Lenin identified the components that come together to foster a successful revolt:
The fundamental law of revolution, which has been confirmed by all revolutions, and particularly by all three Russian revolutions in the twentieth century, is as follows: it is not enough for revolution that the exploited and oppressed masses should understand the impossibility of living in the old way and demand changes, what is required for revolution is that the exploiters should not be able to live and rule in the old way. Only when the “lower classes” do not want the old way, and when the “upper classes” cannot carry on in the old way—only then can revolution win.
When I was a foreign correspondent I covered revolts, insurgencies and revolutions, including the guerrilla conflicts in the 1980s in Central America; the civil wars in Algeria, Sudan and Yemen; and the two Palestinian uprisings or intifadas, along with the revolutions in East Germany, Czechoslovakia and Romania and the war in the former Yugoslavia. I have seen that despotic regimes collapse internally. Once the foot soldiers of the elite—the police, the courts, the civil servants, the press, the intellectual class and finally the army—no longer have the will to defend the regime, the regime is finished. When these state organs are ordered to carry out acts of repression—such as clearing people from parks and arresting or even shooting demonstrators—and refuse their orders, the old regime crumbles. The veneer of power appears untouched before a revolution, but the internal rot, unseen by the outside world, steadily hollows out the state edifice. And when dying regimes collapse, they do so with dizzying speed. Upheaval is coming. The people must be prepared. If we are, we will have a chance.
Make the Rich Panic
It does not matter to the corporate rich who wins the presidential election. It does not matter who is elected to Congress. The rich have the power. They throw money at their favorites the way a gambler puts cash on his favorite horse. Money has replaced the vote. The wealthy can crush anyone who does not play by their rules. And the political elites—slobbering over the spoils provided by their corporate masters for selling us out—understand the game. Barack and Michelle Obama, as did the Clintons, will acquire many millions of dollars once they leave the White House. And your elected representative in the House or Senate, if not a multimillionaire already, will be one as soon as he or she retires from government and is handed seats on corporate boards or positions in lobbying firms. We do not live in a democracy. We live in a political system that has legalized bribery, exclusively serves corporate power and is awash in propaganda and lies.
If you want change you can believe in, destroy the system. And changing the system does not mean collaborating with it as Bernie Sanders is doing by playing by the cooked rules of the Democratic Party. Profound social and political transformation is acknowledged in legislatures and courts but never initiated there. Radical change always comes from below. As long as our gaze is turned upward to the powerful, as long as we invest hope in reforming the system of corporate power, we will remain enslaved. There may be good people within the system—Sanders and Elizabeth Warren are examples—but that is not the point. It is the system that is rotten. It must be replaced.
“The only way you can get the parties’ attention is if you take votes away from them,” Ralph Nader told me by phone. “So,” he said of Sanders, “How serious is he? He makes Clinton a better phony candidate. She is going to have to agree with him on a number of things. She is going to have to be more anti-Wall Street to fend him off and neutralize him. We know it is bullshit. She will betray us once she becomes president. He is making her more likely to win. And by April he is done. Then he fades away.”
We must build mass movements that are allied with independent political parties—a tactic used in Greece by Syriza and in Spain by Podemos. Political action without the support of radical mass movements inevitably becomes hollow, and that, I think, will be the fate of the Sanders presidential campaign. Only by building militant mass movements that are unrelentingly hostile to the system of corporate capitalism, imperialism, militarism and globalization can we wrest back our democracy.
“The gates are controlled by two parties indentured to the same commercial interests,” Nader said. “If you don’t go through those gates, if you do what [Ross] Perot did, ... you [might] get 19 million votes [but] not one electoral vote. If you do not get electoral votes you don’t come close. And even if you do get electoral votes you are up against a winner-take-all. This means if you lose you don’t build for the future as you would with proportional representation. The system is a locked-out system. It is brilliantly devised. It is pruned to perfect a two-party duopoly.”
We have to organize around a series of non-negotiable demands. We have to dismantle the array of mechanisms the rich use to control power. We have to destroy the ideological and legal system cemented into place to justify corporate plunder.
This is called revolution. It is about ripping power away from a cabal of corporate oligarchs and returning it to the citizenry. This will happen not by appealing to corporate power but by terrifying it. And power, as we saw in Baltimore, will be terrified only when we take to the streets. There is no other way.
“The rich are only defeated when running for their lives,” the historian C.L.R. James noted. And until you see the rich fleeing in panic from the halls of Congress, the temples of finance, the universities, the media conglomerates, the war industry and their exclusive gated communities and private clubs, all politics in America will be farce.
It is apparent to most people across the globe that organizing political and social behavior around the dictates of the marketplace has proved to be a disaster for working men and women. The promised prosperity that was to have raised living standards through trickle-down economics has been exposed as a lie. The corporate state, understanding that it has been unmasked with the rise of unrest, has formed militarized police forces, stripped us of legal protection, taken over the legislative bodies, the courts and mass media, and built the most intrusive system of mass surveillance in human history. Corporate power, if unchecked, will suck every last bit of profit out of human society and the ecosystem before collapse. It has no self-imposed limits. And it has no external limits. Only we can create them.
To save ourselves from impending financial and environmental catastrophe we need to build movements that have as their uncompromising goal the abolition of corporate power. Corporation after corporation, including banks, energy companies, the health care sector and defense contractors, must be broken up and nationalized. We must institute a nationwide public works program, especially for those under the age of 25, to create conditions for full employment. We must mandate a $15-an-hour minimum wage. We must slash our obscene spending on defense—we spend $610 billion a year, more than four times the outlay of the second-largest military spender, China—and cut the size of our armed forces by more than half. We must rebuild our infrastructure, including mass transit, roads, bridges, schools, libraries and public housing. We must make war on the fossil fuel industry and turn to alternative sources of energy. We must place heavy taxes on the rich, including a special tax on Wall Street speculators that would be used to wipe out the $1.3 trillion in student debt. We must ensure that education at all levels, along with health care, is a free right of all Americans, not something accessible for the wealthy alone. We must abolish the Electoral College and mandate public financing of political campaigns. We must see that the elderly, the disabled, poor single parents and the mentally ill receive a weekly income of at least $600, or we must find them space in state-run institutions if they require daily care. We must institute a moratorium on foreclosures and bank repossessions. We must end our wars and the proxy wars in the Middle East and bring home our soldiers, Marines, airmen and sailors. We must pay reparations to Iraq and Afghanistan, and to African-Americans whose ancestors largely built this country as slaves who never were compensated for their labor. We must repeal the Patriot Act and Section 1021 of the National Defense Authorization Act. We must abolish the death penalty. We must dismantle our system of mass incarceration, release the vast majority of our 2.3 million prisoners, place them in job-skill programs and find them work and housing.
Police must be demilitarized. Mass surveillance must end. Undocumented workers must be given citizenship and full protection under the law. NAFTA, CAFTA and other free-trade agreements must be revoked. Anti-labor laws such as the Taft-Hartley Act, along with laws that criminalize poverty and dissent, must be repealed.
All this is the minimum.
Do not expect the corporate masters of war and commerce to willingly let this happen. They must be forced.
Revolutions take time. They are often begun by one generation and completed by the next. “Those who give the first check to a state are the first overwhelmed in its ruin,” Michel de Montaigne wrote in 1580. “The fruits of public commotion are seldom enjoyed by him who was the first mover; he only beats the water for another’s net.” Revolutions can be crushed by force, as amply demonstrated by history. Or they may be hijacked by individuals such as Vladimir Lenin, Leon Trotsky and Josef Stalin or movements that betray the populace. There are no guarantees that we will move toward a worker’s paradise or socialist utopia—we might move toward the most efficient form of totalitarianism in human history.
Radical movements are often their own worst enemies. The activists within them have a bad habit of fighting over arcane bits of doctrine, forming counterproductive schisms, misreading power and engaging in self-defeating and ultimately self-destructive internal power struggles. When they do not carefully calculate their power and the moment to strike, they often overreach and are crushed. The state uses its ample resources to infiltrate, monitor and vilify groups and arrest or assassinate movement leaders—and all uprisings, even supposedly leaderless ones, have leaders. Success is not assured, especially given the endemic levels of violence that have characterized American society.
But no matter what happens, the chain reaction that leads to revolt has begun. Most people realize that our expectations for a better future have been obliterated, not only those for ourselves but also for our children. This realization has lit the fuse. There is a widespread loss of faith in established systems of power. The will to rule is weakening among the elites, who are entranced by hedonism and decadence. Internal corruption is rampant and transparent. Government is despised.
The nation, like many prerevolutionary societies, is headed into crisis. Lenin identified the components that come together to foster a successful revolt:
The fundamental law of revolution, which has been confirmed by all revolutions, and particularly by all three Russian revolutions in the twentieth century, is as follows: it is not enough for revolution that the exploited and oppressed masses should understand the impossibility of living in the old way and demand changes, what is required for revolution is that the exploiters should not be able to live and rule in the old way. Only when the “lower classes” do not want the old way, and when the “upper classes” cannot carry on in the old way—only then can revolution win.
When I was a foreign correspondent I covered revolts, insurgencies and revolutions, including the guerrilla conflicts in the 1980s in Central America; the civil wars in Algeria, Sudan and Yemen; and the two Palestinian uprisings or intifadas, along with the revolutions in East Germany, Czechoslovakia and Romania and the war in the former Yugoslavia. I have seen that despotic regimes collapse internally. Once the foot soldiers of the elite—the police, the courts, the civil servants, the press, the intellectual class and finally the army—no longer have the will to defend the regime, the regime is finished. When these state organs are ordered to carry out acts of repression—such as clearing people from parks and arresting or even shooting demonstrators—and refuse their orders, the old regime crumbles. The veneer of power appears untouched before a revolution, but the internal rot, unseen by the outside world, steadily hollows out the state edifice. And when dying regimes collapse, they do so with dizzying speed. Upheaval is coming. The people must be prepared. If we are, we will have a chance.
SC127-15
http://thearchdruidreport.blogspot.com/
The Whisper of the Shutoff Valve
Last week’s post on the impending decline and fall of the internet fielded a great many responses. That was no surprise, to be sure; nor was I startled in the least to find that many of them rejected the thesis of the post with some heat. Contemporary pop culture’s strident insistence that technological progress is a clock that never runs backwards made such counterclaims inevitable.
Still, it’s always educational to watch the arguments fielded to prop up the increasingly shaky edifice of the modern mythology of progress, and the last week was no exception. A response I found particularly interesting from that standpoint appeared on one of the many online venues where Archdruid Report posts appear. One of the commenters insisted that my post should be rejected out of hand as mere doom and gloom; after all, he pointed out, it was ridiculous for me to suggest that fifty years from now, a majority of the population of the United States might be without reliable electricity or running water.
I’ve made the same prediction here and elsewhere a good many times. Each time, most of my readers or listeners seem to have taken it as a piece of sheer rhetorical hyperbole. The electrical grid and the assorted systems that send potable water flowing out of faucets are so basic to the rituals of everyday life in today’s America that their continued presence is taken for granted. At most, it’s conceivable that individuals might choose not to connect to them; there’s a certain amount of talk about off-grid living here and there in the alternative media, for example. That people who want these things might not have access to them, though, is pretty much unthinkable.
Meanwhile, in Detroit and Baltimore, tens of thousands of residents are in the process of losing their access to water and electricity.
The situation in both cities is much the same, and there’s every reason to think that identical headlines will shortly appear in reference to other cities around the nation. Not that many decades ago, Detroit and Baltimore were important industrial centers with thriving economies. Along with more than a hundred other cities in America’s Rust Belt, they were thrown under the bus with the first wave of industrial offshoring in the 1970s. The situation for both cities has only gotten worse since that time, as the United States completed its long transition from a manufacturing economy producing goods and services to a bubble economy that mostly produces unpayable IOUs.
These days, the middle-class families whose tax payments propped up the expansive urban systems of an earlier day have long since moved out of town. Most of the remaining residents are poor, and the ongoing redistribution of wealth in America toward the very rich and away from everyone else has driven down the income of the urban poor to the point that many of them can no longer afford to pay their water and power bills. City utilities in Detroit and Baltimore have been sufficiently sensitive to political pressures that large-scale utility shutoffs have been delayed, but shifts in the political climate in both cities are bringing the delays to an end; water bills have increased steadily, more and more people have been unable to pay them, and the result is as predictable as it is brutal.
The debate over the Detroit and Baltimore shutoffs has followed the usual pattern, as one side wallows in bash-the-poor rhetoric while the other side insists plaintively that access to utilities is a human right. Neither side seems to be interested in talking about the broader context in which these disputes take shape. There are two aspects to that broader context, and it’s a tossup which is the more threatening.
The first aspect is the failure of the US economy to recover in any meaningful sense from the financial crisis of 2008. Now of course politicians from Obama on down have gone overtime grandstanding about the alleged recovery we’re in. I invite any of my readers who bought into that rhetoric to try the following simple experiment. Go to your favorite internet search engine and look up how much the fracking industry has added to the US gross domestic product each year from 2009 to 2014. Now subtract that figure from the US gross domestic product for each of those years, and see how much growth there’s actually been in the rest of the economy since the real estate bubble imploded.
What you’ll find, if you take the time to do that, is that the rest of the US economy has been flat on its back gasping for air for the last five years. What makes this even more problematic, as I’ve noted in several previous posts here, is that the great fracking boom about which we’ve heard so much for the last five years was never actually the game-changing energy revolution its promoters claimed; it was simply another installment in the series of speculative bubbles that has largely replaced constructive economic activity in this country over the last two decades or so.
What’s more, it’s not the only bubble currently being blown, and it may not even be the largest. We’ve also got a second tech-stock bubble, with money-losing internet corporations racking up absurd valuations in the stock market while they burn through millions of dollars of venture capital; we’ve got a student loan bubble, in which billions of dollars of loans that will never be paid back have been bundled, packaged, and sold to investors just like all those no-doc mortgages were a decade ago; car loans are getting the same treatment; the real estate market is fizzing again in many urban areas as investors pile into another round of lavishly marketed property investments—well, I could go on for some time. It’s entirely possible that if all the bubble activity were to be subtracted from the last five years or so of GDP, the result would show an economy in freefall.
Certainly that’s the impression that emerges if you take the time to check out those economic statistics that aren’t being systematically jiggered by the US government for PR purposes. The number of long-term unemployed in America is at an all-time high; roads, bridges, and other basic infrastructure is falling to pieces; measurements of US public health—generally considered a good proxy for the real economic condition of the population—are well below those of other industrial countries, heading toward Third World levels; abandoned shopping malls litter the landscape while major retailers announce more than 6000 store closures. These are not things you see in an era of economic expansion, or even one of relative stability; they’re markers of decline.
The utility shutoffs in Detroit and Baltimore are further symptoms of the same broad process of economic unraveling. It’s true, as pundits in the media have been insisting since the story broke, that utilities get shut off for nonpayment of bills all the time. It’s equally true that shutting off the water supply of 20,000 or 30,000 people all at once is pretty much unprecedented. Both cities, please note, have had very large populations of poor people for many decades now. Those who like to blame a “culture of poverty” for the tangled relationship between US governments and the American poor, and of course that trope has been rehashed by some of the pundits just mentioned, haven’t yet gotten around to explaining how the culture of poverty all at once inspired tens of thousands of people who had been paying their utility bills to stop doing so.
There are plenty of good reasons, after all, why poor people who used to pay their bills can’t do so any more. Standard business models in the United States used to take it for granted that the best way to run the staffing dimensions of any company, large or small, was to have as many full-time positions as possible and to use raises and other practical incentives to encourage employees who were good at their jobs to stay with the company. That approach has been increasingly unfashionable in today’s America, partly due to perverse regulatory incentives that penalize employers for offering full-time positions, partly to the emergence of attitudes in corner offices that treat employees as just another commodity. (I doubt it’s any kind of accident that most corporations nowadays refer to their employment offices as “human resource departments.” What do you do with a resource? You exploit it.)
These days, most of the jobs available to the poor are part-time, pay very little, and include nasty little clawbacks in the form of requirements that employees pay out of pocket for uniforms, equipment, and other things that employers used to provide as a matter of course. Meanwhile housing prices and rents are rising well above their post-2008 dip, and a great many other necessities are becoming more costly—inflation may be under control, or so the official statistics say, but anyone who’s been shopping at the same grocery store for the last eight years knows perfectly well that prices kept on rising anyway.
So you’ve got falling incomes running up against rising costs for food, rent, and utilities, among other things. In the resulting collision, something’s got to give, and for tens of thousands of poor Detroiters and Baltimoreans, what gave first was the ability to keep current on their water bills. Expect to see the same story playing out across the country as more people on the bottom of the income pyramid find themselves in the same situation. What you won’t hear in the media, though it’s visible enough if you know where to look and are willing to do so, is that people above the bottom of the income pyramid are also losing ground, being forced down toward economic nonpersonhood. From the middle classes down, everyone’s losing ground.
That process doesn’t continue any further than the middle class, to be sure. It’s been pointed out repeatedly that over the last four decades or so, the distribution of wealth in America has skewed further and further out of balance, with the top 20% of incomes taking a larger and larger share at the expense of everybody else. That’s an important factor in bringing about the collision just described. Some thinkers on the radical fringes of American society, which is the only place in the US you can talk about such things these days, have argued that the raw greed of the well-to-do is the sole reason why so many people lower down the ladder are being pushed further down still.
Scapegoating rhetoric of that sort is always comforting, because it holds out the promise—theoretically, if not practically—that something can be done about the situation. If only the thieving rich could be lined up against a convenient brick wall and removed from the equation in the time-honored fashion, the logic goes, people in Detroit and Baltimore could afford to pay their water bills! I suspect we’ll hear such claims increasingly often as the years pass and more and more Americans find their access to familiar comforts and necessities slipping away. Simple answers are always popular in such times, not least when the people being scapegoated go as far out of their way to make themselves good targets for such exercises as the American rich have done in recent decades.
John Kenneth Galbraith’s equation of the current US political and economic elite with the French aristocracy on the eve of revolution rings even more true than it did when he wrote it back in 1992, in the pages of The Culture of Contentment. The unthinking extravagances, the casual dismissal of the last shreds of noblesse oblige, the obsessive pursuit of personal advantages and private feuds without the least thought of the potential consequences, the bland inability to recognize that the power, privilege, wealth, and sheer survival of the aristocracy depended on the system the aristocrats themselves were destabilizing by their actions—it’s all there, complete with sprawling overpriced mansions that could just about double for Versailles. The urban mobs that played so large a role back in 1789 are warming up for their performances as I write these words; the only thing left to complete the picture is a few tumbrils and a guillotine, and those will doubtless arrive on cue.
The senility of the current US elite, as noted in a previous post here, is a massive political fact in today’s America. Still, it’s not the only factor in play here. Previous generations of wealthy Americans recognized without too much difficulty that their power, prosperity, and survival depended on the willingness of the rest of the population to put up with their antics. Several times already in America’s history, elite groups have allied with populist forces to push through reforms that sharply weakened the power of the wealthy elite, because they recognized that the alternative was a social explosion even more destructive to the system on which elite power depends.
I suppose it’s possible that the people currently occupying the upper ranks of the political and economic pyramid in today’s America are just that much more stupid than their equivalents in the Jacksonian, Progressive, and New Deal eras. Still, there’s at least one other explanation to hand, and it’s the second of the two threatening contextual issues mentioned earlier.
Until the nineteenth century, fresh running water piped into homes for everyday use was purely an affectation of the very rich in a few very wealthy and technologically adept societies. Sewer pipes to take dirty water and human wastes out of the house belonged in the same category. This wasn’t because nobody knew how plumbing works—the Romans had competent plumbers, for example, and water faucets and flush toilets were to be found in Roman mansions of the imperial age. The reason those same things weren’t found in every Roman house was economic, not technical.
Behind that economic issue lay an ecological reality. White’s Law, one of the foundational principles of human ecology, states that economic development is a function of energy per capita. For a society before the industrial age, the Roman Empire had an impressive amount of energy per capita to expend; control over the agricultural economy of the Mediterranean basin, modest inputs from sunlight, water and wind, and a thriving slave industry fed by the expansion of Roman military power all fed into the capacity of Roman society to develop itself economically and technically. That’s why rich Romans had running water and iced drinks in summer, while their equivalents in ancient Greece a few centuries earlier had to make do without either one.
Fossil fuels gave industrial civilization a supply of energy many orders of magnitude greater than any previous human civilization has had—a supply vast enough that the difference remains huge even after the vast expansion of population that followed the industrial revolution. There was, however, a catch—or, more precisely, two catches. To begin with, fossil fuels are finite, nonrenewable resources; no matter how much handwaving is employed in the attempt to obscure this point—and whatever else might be in short supply these days, that sort of handwaving is not—every barrel of oil, ton of coal, or cubic foot of natural gas that’s burnt takes the world one step closer to the point at which there will be no economically extractable reserves of oil, coal, or natural gas at all.
That’s catch #1. Catch #2 is subtler, and considerably more dangerous. Oil, coal, and natural gas don’t leap out of the ground on command. They have to be extracted and processed, and this takes energy. Companies in the fossil fuel industries have always targeted the deposits that cost less to extract and process, for obvious economic reasons. What this means, though, is that over time, a larger and larger fraction of the energy yield of oil, coal, and natural gas has to be put right back into extracting and processing oil, coal, and natural gas—and this leaves less and less for all other uses.
That’s the vise that’s tightening around the American economy these days. The great fracking boom, to the extent that it wasn’t simply one more speculative gimmick aimed at the pocketbooks of chumps, was an attempt to make up for the ongoing decline of America’s conventional oilfields by going after oil that was far more expensive to extract. The fact that none of the companies at the heart of the fracking boom ever turned a profit, even when oil brought more than $100 a barrel, gives some sense of just how costly shale oil is to get out of the ground. The financial cost of extraction, though, is a proxy for the energy cost of extraction—the amount of energy, and of the products of energy, that had to be thrown into the task of getting a little extra oil out of marginal source rock.
Energy needed to extract energy, again, can’t be used for any other purpose. It doesn’t contribute to the energy surplus that makes economic development possible. As the energy industry itself takes a bigger bite out of each year’s energy production, every other economic activity loses part of the fuel that makes it run. That, in turn, is the core reason why the American economy is on the ropes, America’s infrastructure is falling to bits—and Americans in Detroit and Baltimore are facing a transition to Third World conditions, without electricity or running water.
I suspect, for what it’s worth, that the shutoff notices being mailed to tens of thousands of poor families in those two cities are a good working model for the way that industrial civilization itself will wind down. It won’t be sudden; for decades to come, there will still be people who have access to what Americans today consider the ordinary necessities and comforts of everyday life; there will just be fewer of them each year. Outside that narrowing circle, the number of economic nonpersons will grow steadily, one shutoff notice at a time.
As I’ve pointed out in previous posts, the line of fracture between the senile elite and what Arnold Toynbee called the internal proletariat—the people who live within a failing civilization’s borders but receive essentially none of its benefits—eventually opens into a chasm that swallows what’s left of the civilization. Sometimes the tectonic processes that pull the chasm open are hard to miss, but there are times when they’re a good deal more difficult to sense in action, and this is one of these latter times. Listen to the whisper of the shutoff valve, and you’ll hear tens of thousands of Americans being cut off from basic services the rest of us, for the time being, still take for granted.
The Whisper of the Shutoff Valve
Last week’s post on the impending decline and fall of the internet fielded a great many responses. That was no surprise, to be sure; nor was I startled in the least to find that many of them rejected the thesis of the post with some heat. Contemporary pop culture’s strident insistence that technological progress is a clock that never runs backwards made such counterclaims inevitable.
Still, it’s always educational to watch the arguments fielded to prop up the increasingly shaky edifice of the modern mythology of progress, and the last week was no exception. A response I found particularly interesting from that standpoint appeared on one of the many online venues where Archdruid Report posts appear. One of the commenters insisted that my post should be rejected out of hand as mere doom and gloom; after all, he pointed out, it was ridiculous for me to suggest that fifty years from now, a majority of the population of the United States might be without reliable electricity or running water.
I’ve made the same prediction here and elsewhere a good many times. Each time, most of my readers or listeners seem to have taken it as a piece of sheer rhetorical hyperbole. The electrical grid and the assorted systems that send potable water flowing out of faucets are so basic to the rituals of everyday life in today’s America that their continued presence is taken for granted. At most, it’s conceivable that individuals might choose not to connect to them; there’s a certain amount of talk about off-grid living here and there in the alternative media, for example. That people who want these things might not have access to them, though, is pretty much unthinkable.
Meanwhile, in Detroit and Baltimore, tens of thousands of residents are in the process of losing their access to water and electricity.
The situation in both cities is much the same, and there’s every reason to think that identical headlines will shortly appear in reference to other cities around the nation. Not that many decades ago, Detroit and Baltimore were important industrial centers with thriving economies. Along with more than a hundred other cities in America’s Rust Belt, they were thrown under the bus with the first wave of industrial offshoring in the 1970s. The situation for both cities has only gotten worse since that time, as the United States completed its long transition from a manufacturing economy producing goods and services to a bubble economy that mostly produces unpayable IOUs.
These days, the middle-class families whose tax payments propped up the expansive urban systems of an earlier day have long since moved out of town. Most of the remaining residents are poor, and the ongoing redistribution of wealth in America toward the very rich and away from everyone else has driven down the income of the urban poor to the point that many of them can no longer afford to pay their water and power bills. City utilities in Detroit and Baltimore have been sufficiently sensitive to political pressures that large-scale utility shutoffs have been delayed, but shifts in the political climate in both cities are bringing the delays to an end; water bills have increased steadily, more and more people have been unable to pay them, and the result is as predictable as it is brutal.
The debate over the Detroit and Baltimore shutoffs has followed the usual pattern, as one side wallows in bash-the-poor rhetoric while the other side insists plaintively that access to utilities is a human right. Neither side seems to be interested in talking about the broader context in which these disputes take shape. There are two aspects to that broader context, and it’s a tossup which is the more threatening.
The first aspect is the failure of the US economy to recover in any meaningful sense from the financial crisis of 2008. Now of course politicians from Obama on down have gone overtime grandstanding about the alleged recovery we’re in. I invite any of my readers who bought into that rhetoric to try the following simple experiment. Go to your favorite internet search engine and look up how much the fracking industry has added to the US gross domestic product each year from 2009 to 2014. Now subtract that figure from the US gross domestic product for each of those years, and see how much growth there’s actually been in the rest of the economy since the real estate bubble imploded.
What you’ll find, if you take the time to do that, is that the rest of the US economy has been flat on its back gasping for air for the last five years. What makes this even more problematic, as I’ve noted in several previous posts here, is that the great fracking boom about which we’ve heard so much for the last five years was never actually the game-changing energy revolution its promoters claimed; it was simply another installment in the series of speculative bubbles that has largely replaced constructive economic activity in this country over the last two decades or so.
What’s more, it’s not the only bubble currently being blown, and it may not even be the largest. We’ve also got a second tech-stock bubble, with money-losing internet corporations racking up absurd valuations in the stock market while they burn through millions of dollars of venture capital; we’ve got a student loan bubble, in which billions of dollars of loans that will never be paid back have been bundled, packaged, and sold to investors just like all those no-doc mortgages were a decade ago; car loans are getting the same treatment; the real estate market is fizzing again in many urban areas as investors pile into another round of lavishly marketed property investments—well, I could go on for some time. It’s entirely possible that if all the bubble activity were to be subtracted from the last five years or so of GDP, the result would show an economy in freefall.
Certainly that’s the impression that emerges if you take the time to check out those economic statistics that aren’t being systematically jiggered by the US government for PR purposes. The number of long-term unemployed in America is at an all-time high; roads, bridges, and other basic infrastructure is falling to pieces; measurements of US public health—generally considered a good proxy for the real economic condition of the population—are well below those of other industrial countries, heading toward Third World levels; abandoned shopping malls litter the landscape while major retailers announce more than 6000 store closures. These are not things you see in an era of economic expansion, or even one of relative stability; they’re markers of decline.
The utility shutoffs in Detroit and Baltimore are further symptoms of the same broad process of economic unraveling. It’s true, as pundits in the media have been insisting since the story broke, that utilities get shut off for nonpayment of bills all the time. It’s equally true that shutting off the water supply of 20,000 or 30,000 people all at once is pretty much unprecedented. Both cities, please note, have had very large populations of poor people for many decades now. Those who like to blame a “culture of poverty” for the tangled relationship between US governments and the American poor, and of course that trope has been rehashed by some of the pundits just mentioned, haven’t yet gotten around to explaining how the culture of poverty all at once inspired tens of thousands of people who had been paying their utility bills to stop doing so.
There are plenty of good reasons, after all, why poor people who used to pay their bills can’t do so any more. Standard business models in the United States used to take it for granted that the best way to run the staffing dimensions of any company, large or small, was to have as many full-time positions as possible and to use raises and other practical incentives to encourage employees who were good at their jobs to stay with the company. That approach has been increasingly unfashionable in today’s America, partly due to perverse regulatory incentives that penalize employers for offering full-time positions, partly to the emergence of attitudes in corner offices that treat employees as just another commodity. (I doubt it’s any kind of accident that most corporations nowadays refer to their employment offices as “human resource departments.” What do you do with a resource? You exploit it.)
These days, most of the jobs available to the poor are part-time, pay very little, and include nasty little clawbacks in the form of requirements that employees pay out of pocket for uniforms, equipment, and other things that employers used to provide as a matter of course. Meanwhile housing prices and rents are rising well above their post-2008 dip, and a great many other necessities are becoming more costly—inflation may be under control, or so the official statistics say, but anyone who’s been shopping at the same grocery store for the last eight years knows perfectly well that prices kept on rising anyway.
So you’ve got falling incomes running up against rising costs for food, rent, and utilities, among other things. In the resulting collision, something’s got to give, and for tens of thousands of poor Detroiters and Baltimoreans, what gave first was the ability to keep current on their water bills. Expect to see the same story playing out across the country as more people on the bottom of the income pyramid find themselves in the same situation. What you won’t hear in the media, though it’s visible enough if you know where to look and are willing to do so, is that people above the bottom of the income pyramid are also losing ground, being forced down toward economic nonpersonhood. From the middle classes down, everyone’s losing ground.
That process doesn’t continue any further than the middle class, to be sure. It’s been pointed out repeatedly that over the last four decades or so, the distribution of wealth in America has skewed further and further out of balance, with the top 20% of incomes taking a larger and larger share at the expense of everybody else. That’s an important factor in bringing about the collision just described. Some thinkers on the radical fringes of American society, which is the only place in the US you can talk about such things these days, have argued that the raw greed of the well-to-do is the sole reason why so many people lower down the ladder are being pushed further down still.
Scapegoating rhetoric of that sort is always comforting, because it holds out the promise—theoretically, if not practically—that something can be done about the situation. If only the thieving rich could be lined up against a convenient brick wall and removed from the equation in the time-honored fashion, the logic goes, people in Detroit and Baltimore could afford to pay their water bills! I suspect we’ll hear such claims increasingly often as the years pass and more and more Americans find their access to familiar comforts and necessities slipping away. Simple answers are always popular in such times, not least when the people being scapegoated go as far out of their way to make themselves good targets for such exercises as the American rich have done in recent decades.
John Kenneth Galbraith’s equation of the current US political and economic elite with the French aristocracy on the eve of revolution rings even more true than it did when he wrote it back in 1992, in the pages of The Culture of Contentment. The unthinking extravagances, the casual dismissal of the last shreds of noblesse oblige, the obsessive pursuit of personal advantages and private feuds without the least thought of the potential consequences, the bland inability to recognize that the power, privilege, wealth, and sheer survival of the aristocracy depended on the system the aristocrats themselves were destabilizing by their actions—it’s all there, complete with sprawling overpriced mansions that could just about double for Versailles. The urban mobs that played so large a role back in 1789 are warming up for their performances as I write these words; the only thing left to complete the picture is a few tumbrils and a guillotine, and those will doubtless arrive on cue.
The senility of the current US elite, as noted in a previous post here, is a massive political fact in today’s America. Still, it’s not the only factor in play here. Previous generations of wealthy Americans recognized without too much difficulty that their power, prosperity, and survival depended on the willingness of the rest of the population to put up with their antics. Several times already in America’s history, elite groups have allied with populist forces to push through reforms that sharply weakened the power of the wealthy elite, because they recognized that the alternative was a social explosion even more destructive to the system on which elite power depends.
I suppose it’s possible that the people currently occupying the upper ranks of the political and economic pyramid in today’s America are just that much more stupid than their equivalents in the Jacksonian, Progressive, and New Deal eras. Still, there’s at least one other explanation to hand, and it’s the second of the two threatening contextual issues mentioned earlier.
Until the nineteenth century, fresh running water piped into homes for everyday use was purely an affectation of the very rich in a few very wealthy and technologically adept societies. Sewer pipes to take dirty water and human wastes out of the house belonged in the same category. This wasn’t because nobody knew how plumbing works—the Romans had competent plumbers, for example, and water faucets and flush toilets were to be found in Roman mansions of the imperial age. The reason those same things weren’t found in every Roman house was economic, not technical.
Behind that economic issue lay an ecological reality. White’s Law, one of the foundational principles of human ecology, states that economic development is a function of energy per capita. For a society before the industrial age, the Roman Empire had an impressive amount of energy per capita to expend; control over the agricultural economy of the Mediterranean basin, modest inputs from sunlight, water and wind, and a thriving slave industry fed by the expansion of Roman military power all fed into the capacity of Roman society to develop itself economically and technically. That’s why rich Romans had running water and iced drinks in summer, while their equivalents in ancient Greece a few centuries earlier had to make do without either one.
Fossil fuels gave industrial civilization a supply of energy many orders of magnitude greater than any previous human civilization has had—a supply vast enough that the difference remains huge even after the vast expansion of population that followed the industrial revolution. There was, however, a catch—or, more precisely, two catches. To begin with, fossil fuels are finite, nonrenewable resources; no matter how much handwaving is employed in the attempt to obscure this point—and whatever else might be in short supply these days, that sort of handwaving is not—every barrel of oil, ton of coal, or cubic foot of natural gas that’s burnt takes the world one step closer to the point at which there will be no economically extractable reserves of oil, coal, or natural gas at all.
That’s catch #1. Catch #2 is subtler, and considerably more dangerous. Oil, coal, and natural gas don’t leap out of the ground on command. They have to be extracted and processed, and this takes energy. Companies in the fossil fuel industries have always targeted the deposits that cost less to extract and process, for obvious economic reasons. What this means, though, is that over time, a larger and larger fraction of the energy yield of oil, coal, and natural gas has to be put right back into extracting and processing oil, coal, and natural gas—and this leaves less and less for all other uses.
That’s the vise that’s tightening around the American economy these days. The great fracking boom, to the extent that it wasn’t simply one more speculative gimmick aimed at the pocketbooks of chumps, was an attempt to make up for the ongoing decline of America’s conventional oilfields by going after oil that was far more expensive to extract. The fact that none of the companies at the heart of the fracking boom ever turned a profit, even when oil brought more than $100 a barrel, gives some sense of just how costly shale oil is to get out of the ground. The financial cost of extraction, though, is a proxy for the energy cost of extraction—the amount of energy, and of the products of energy, that had to be thrown into the task of getting a little extra oil out of marginal source rock.
Energy needed to extract energy, again, can’t be used for any other purpose. It doesn’t contribute to the energy surplus that makes economic development possible. As the energy industry itself takes a bigger bite out of each year’s energy production, every other economic activity loses part of the fuel that makes it run. That, in turn, is the core reason why the American economy is on the ropes, America’s infrastructure is falling to bits—and Americans in Detroit and Baltimore are facing a transition to Third World conditions, without electricity or running water.
I suspect, for what it’s worth, that the shutoff notices being mailed to tens of thousands of poor families in those two cities are a good working model for the way that industrial civilization itself will wind down. It won’t be sudden; for decades to come, there will still be people who have access to what Americans today consider the ordinary necessities and comforts of everyday life; there will just be fewer of them each year. Outside that narrowing circle, the number of economic nonpersons will grow steadily, one shutoff notice at a time.
As I’ve pointed out in previous posts, the line of fracture between the senile elite and what Arnold Toynbee called the internal proletariat—the people who live within a failing civilization’s borders but receive essentially none of its benefits—eventually opens into a chasm that swallows what’s left of the civilization. Sometimes the tectonic processes that pull the chasm open are hard to miss, but there are times when they’re a good deal more difficult to sense in action, and this is one of these latter times. Listen to the whisper of the shutoff valve, and you’ll hear tens of thousands of Americans being cut off from basic services the rest of us, for the time being, still take for granted.
Monday, May 4, 2015
SC127-14
http://guymcpherson.com/2015/05/motivated-by-evidence/
Motivated by Evidence
I’m often questioned about my motives for writing and speaking the unspeakable. More often, my motives are disparaged without question by people under the influence of the dominant paradigm.
I understand that the burden of my message is great. I understand that the process of unlearning the lies of civilization is a difficult enterprise. I understand that questioning one’s entire life might lead to actions that attract unwelcome attention from authorities or, worse yet, one’s friends and colleagues. As a result, I understand the desire to avoid the unthinkable. After all, thinking is difficult.
As with most of the dominant paradigm, a little thought would dismiss most of the disparagement of my work. But most people capitulate to the dominant paradigm without even the slightest bit of thinking. The unquestioned assumptions underlying the notions of infinite growth and imperialism are too heavily embedded in the typical, patriarchal mind to bear mention, much less action.
The evidence supporting the idea of near-term human extinction is overwhelming. But the patriarchs refuse to be overwhelmed by evidence. There is no convincing people who ignore, disparage, or deny the evidence. There is little point discussing important issues with people who choose belief over evidence. There are plenty of people in the latter category. If you’re among them, you can save time and effort by skipping the remainder of this essay.
What I Promote
Among the untrue insults most commonly launched my way are that I propose inaction, or worse. I have never proposed inaction, nor would I. And the notion that I encourage people to “roll over and die” is of course utter lunacy. As indicated by the subtitle of my latest book, I promote living.
According to the patriarchal perspective, I’m the leader of a death cult. But it’s the dominant culture, with only a little help from me, driving to extinction 150 to 200 species each day. It’s the dominant culture, with only a little help from me, destroying every aspect of the living planet. If there is a death cult to be found, it’s the dominant culture. As I’ve pointed out too many times to count, I’m a huge fan of terminating the death cult, even though it will kill me.
Unlike the typical, privileged patriarch, I’m not interested in actions that benefit only the continuation of human beings. Non-human species are worthy of human attention and action, and not in the directions typically promoted by self-absorbed humans within the dominant culture. To presume that the 13.8 billion years of this universe’s existence is simply a warm-up act for the 200,000-year run of our species seems a tad ridiculous to me. And yet, most people with whom I come into contact believe humans represent the crowning achievement of this universe, which is one among an infinite number within an unending multiverse. According to the narrow, patriarchal view, the species known as Homo sapiens is unimpeachably good, and the notions of mortality and extinction are unspeakable.
I agree with iconoclastic Tucson-based writer Edward Abbey: “Action is the antidote to despair.” It’s clearly too late to extend our run as a species. But it’s not too late for the myriad species we drive to extinction every day. Acting on their behalf by terminating the omnicide of the dominant paradigm, thus overcoming the arrogance of humanism as we dive into the existential abyss of extinction, is hardly the same as rolling over and dying.
I encourage additional actions, too. Promoting decency, compassion, excellence, and love in a culture avidly pursuing indecency, hate, mediocrity, and indifference is a tough sell. But acting with respect and bestowing dignity upon ourselves and others is hardly the same as doing nothing, much less rolling over and dying. If you believe I’m a nihilist, perhaps you ought to check your dictionary.
Contrary to the oft-mentioned myth, my message does not encourage suicide. No evidence indicates my message contributed to the death of my friend and colleague, Michael C. Ruppert, contrary to recent commentary in the blogosphere. Indeed, many people find my message quite liberating and the suggestion my message contributed to Ruppert’s death laughable. I encourage people to pursue love and excellence while imposing constraints, including semantic ones, on neither pursuit.
Birth is lethal. Civilization is a prison. Patriarchs would have you believe the opposite about both issues.
The Role of Education
I spread the message about abrupt climate change for many reasons. First and foremost, I’m a teacher. The word and the attendant act define me, and undoubtedly blind me to the other roles I play. Teaching is not what I do. A teacher is what I am. It’s not only personal. Rather, it’s pragmatic, too.
Who else is connecting the dots in the public realm? The world’s corporate media and corporate governments do not benefit from the knowledge I transmit. If you stop playing your designated role as consumer on the treadmill of civilization, the jig is up. When that happens — and it’s a question of when, not if — the house of cards comes tumbling down. The privileged among us, almost certainly including most people reading these words, lose their privilege.
If you’re on the verge of death, you deserve to know. If your medical doctor withholds relevant information from you regarding your imminent demise, it’s called malpractice. The world’s corporate media and corporate governments are guilty of malpractice. Those who protect them because they’re afraid of the truth are doing a great disservice to the rest of us.
Along with the media and governments are misinformed patriarchs who would have us believe atmospheric methane is a minor problem to be solved by future generations. Promotion of this incorrect perspective is analogous to telling a patient with an open wound there’s no need to practice good hygiene.
Sustainability and Conservation
I’ve come to realize, many years beyond the time it could have occurred had I been paying proper attention, that sustainability is a myth promoted by the dominant culture. It generally is assumed to mean sustaining the unsustainable set of living arrangements known as civilization for as long as possible, notwithstanding the costs and consequences. Non-human species do not matter unless they can be exploited for financial gain. From the perspective of the patriarchs pulling the levers of industry, the same goes for most humans.
For those of us who do not comprise the 0.01%, we are all indigenous now. We are all collateral damage on the vicious road to imperialist dreams. We’re needed as consumers and cannon fodder. Willfully ignorant of the evidence, we march to the drum of empire because we cannot imagine another way to live. We cannot imagine lives more important than our own. We cannot imagine a species more important than ours. We cannot imagine questioning the dominant paradigm, much less resisting it. So we pursue progress, even if it means progressing over a cliff or into the gas chambers.
There is no meaning to our individual lives beyond what we create. Instead of facing the horrors of finding our own way, most of us defer to empire. We throw ourselves into the machine on behalf the 0.01% because we imagine that throwing ourselves onto the machine comes at too high a cost.
The conclusion is probably correct. Living differently has its rewards but, in my limited experience, the few rewards are massively overwhelmed by the many penalties of pursing life beyond the mainstream.
Making it Personal
My own attempts to walk away from American Empire have failed for many reasons. Afflicted by my own expansive ego, I assumed others would follow my lead, hence slowing or, in my wildest dreams, stopping the machine. I can’t even seem to escape my place of birth and my duty station, the United States, although I no longer view it as my country.
Too little, too late, I’ve come to realize I’m not very influential after all. It’s quite the bitter pill.
With respect to my ongoing work, and the human children I’m said to kill with every step I take, I weakly begin with a few words from writer Barbara Kingsolver: “Living takes life, but it can be thoughtful.” By living, we all contribute to death.
Much, and probably most, of the criticism tossed my way comes from city-dwellers who believe their own lives are beyond reproach. But if you live in a city, you’re living at the apex of civilization. As long as the fuel, food, and water keep showing up on demand, you’re on the front lines of imperialism. Believing otherwise while disparaging those who participate in the dominant culture is yet another thoughtless act of patriarchy.
Feeling superior doesn’t make one superior. Hubris does not humble others.
The Details
A tiny bit of thoughtful research could lead one to conclude that conservation of fossil fuels is austerity for the masses, proposed and promoted by a few for their own benefit. Jevons’ Paradox, the Khazzoom-Brookes postulate, half-empty flights, and consumption of fossil energy by the United States military all provide further support for the notion that the imposition of austerity onto the majority of humans is beneficial to the financially wealthy and allows continuation of the horrors of civilization.
Far be it for me to mention the Rockefeller funding behind 350.org or the People’s (sic) Climate (sic) March. If you’re interested in targets for your wrath, you might try NASCAR, the Rockefellers, professional sports, celebrity culture, or the cities supporting your own patriarchy. A single, little-noticed target is easier. And the messenger is far easier to attack than the evidence-imbued message.
Most city-dwellers will not admit their own complicity in promoting the dominant culture. Ensconced within lives of privilege, sucking the teat of empire, they look out rather than in. They accuse me of encouraging hedonism while, paradoxically, pursuing hedonism.
I would be remiss if I failed to mention the role of global dimming requisite to maintaining civilization. Those embedded within civilization, those who depend completely upon its continued, smooth functioning for their very lives fail to see the bigger picture of which they are part. I suspect the blinders are self-imposed.
A Final Thought
I stop where I began this brief essay: motive. Contrary to what I read on the Internet, I’m not a profiteer of doom. If I received a paycheck each time I’m said to be paid for speaking the unspeakable, I wouldn’t rely on personal savings from a frugal life and donations from others to continue my work.
Had I not made an irreversible error by leaving active service at the university six years ago, I would have more than a million extra dollars in my bank account and I’d be able to further my work without assistance from donors (instead, the taxpayers would be on the proverbial hook). Mistakes have been made, and they’ve led me here. Us, too.
An old axiom indicates we learn from our mistakes. This, of course, is why I make mine repeatedly: I like to really hammer home the lessons learned from experience. I recommend you learn from mine, thereby preventing some of your own.
Motivated by Evidence
I’m often questioned about my motives for writing and speaking the unspeakable. More often, my motives are disparaged without question by people under the influence of the dominant paradigm.
I understand that the burden of my message is great. I understand that the process of unlearning the lies of civilization is a difficult enterprise. I understand that questioning one’s entire life might lead to actions that attract unwelcome attention from authorities or, worse yet, one’s friends and colleagues. As a result, I understand the desire to avoid the unthinkable. After all, thinking is difficult.
As with most of the dominant paradigm, a little thought would dismiss most of the disparagement of my work. But most people capitulate to the dominant paradigm without even the slightest bit of thinking. The unquestioned assumptions underlying the notions of infinite growth and imperialism are too heavily embedded in the typical, patriarchal mind to bear mention, much less action.
The evidence supporting the idea of near-term human extinction is overwhelming. But the patriarchs refuse to be overwhelmed by evidence. There is no convincing people who ignore, disparage, or deny the evidence. There is little point discussing important issues with people who choose belief over evidence. There are plenty of people in the latter category. If you’re among them, you can save time and effort by skipping the remainder of this essay.
What I Promote
Among the untrue insults most commonly launched my way are that I propose inaction, or worse. I have never proposed inaction, nor would I. And the notion that I encourage people to “roll over and die” is of course utter lunacy. As indicated by the subtitle of my latest book, I promote living.
According to the patriarchal perspective, I’m the leader of a death cult. But it’s the dominant culture, with only a little help from me, driving to extinction 150 to 200 species each day. It’s the dominant culture, with only a little help from me, destroying every aspect of the living planet. If there is a death cult to be found, it’s the dominant culture. As I’ve pointed out too many times to count, I’m a huge fan of terminating the death cult, even though it will kill me.
Unlike the typical, privileged patriarch, I’m not interested in actions that benefit only the continuation of human beings. Non-human species are worthy of human attention and action, and not in the directions typically promoted by self-absorbed humans within the dominant culture. To presume that the 13.8 billion years of this universe’s existence is simply a warm-up act for the 200,000-year run of our species seems a tad ridiculous to me. And yet, most people with whom I come into contact believe humans represent the crowning achievement of this universe, which is one among an infinite number within an unending multiverse. According to the narrow, patriarchal view, the species known as Homo sapiens is unimpeachably good, and the notions of mortality and extinction are unspeakable.
I agree with iconoclastic Tucson-based writer Edward Abbey: “Action is the antidote to despair.” It’s clearly too late to extend our run as a species. But it’s not too late for the myriad species we drive to extinction every day. Acting on their behalf by terminating the omnicide of the dominant paradigm, thus overcoming the arrogance of humanism as we dive into the existential abyss of extinction, is hardly the same as rolling over and dying.
I encourage additional actions, too. Promoting decency, compassion, excellence, and love in a culture avidly pursuing indecency, hate, mediocrity, and indifference is a tough sell. But acting with respect and bestowing dignity upon ourselves and others is hardly the same as doing nothing, much less rolling over and dying. If you believe I’m a nihilist, perhaps you ought to check your dictionary.
Contrary to the oft-mentioned myth, my message does not encourage suicide. No evidence indicates my message contributed to the death of my friend and colleague, Michael C. Ruppert, contrary to recent commentary in the blogosphere. Indeed, many people find my message quite liberating and the suggestion my message contributed to Ruppert’s death laughable. I encourage people to pursue love and excellence while imposing constraints, including semantic ones, on neither pursuit.
Birth is lethal. Civilization is a prison. Patriarchs would have you believe the opposite about both issues.
The Role of Education
I spread the message about abrupt climate change for many reasons. First and foremost, I’m a teacher. The word and the attendant act define me, and undoubtedly blind me to the other roles I play. Teaching is not what I do. A teacher is what I am. It’s not only personal. Rather, it’s pragmatic, too.
Who else is connecting the dots in the public realm? The world’s corporate media and corporate governments do not benefit from the knowledge I transmit. If you stop playing your designated role as consumer on the treadmill of civilization, the jig is up. When that happens — and it’s a question of when, not if — the house of cards comes tumbling down. The privileged among us, almost certainly including most people reading these words, lose their privilege.
If you’re on the verge of death, you deserve to know. If your medical doctor withholds relevant information from you regarding your imminent demise, it’s called malpractice. The world’s corporate media and corporate governments are guilty of malpractice. Those who protect them because they’re afraid of the truth are doing a great disservice to the rest of us.
Along with the media and governments are misinformed patriarchs who would have us believe atmospheric methane is a minor problem to be solved by future generations. Promotion of this incorrect perspective is analogous to telling a patient with an open wound there’s no need to practice good hygiene.
Sustainability and Conservation
I’ve come to realize, many years beyond the time it could have occurred had I been paying proper attention, that sustainability is a myth promoted by the dominant culture. It generally is assumed to mean sustaining the unsustainable set of living arrangements known as civilization for as long as possible, notwithstanding the costs and consequences. Non-human species do not matter unless they can be exploited for financial gain. From the perspective of the patriarchs pulling the levers of industry, the same goes for most humans.
For those of us who do not comprise the 0.01%, we are all indigenous now. We are all collateral damage on the vicious road to imperialist dreams. We’re needed as consumers and cannon fodder. Willfully ignorant of the evidence, we march to the drum of empire because we cannot imagine another way to live. We cannot imagine lives more important than our own. We cannot imagine a species more important than ours. We cannot imagine questioning the dominant paradigm, much less resisting it. So we pursue progress, even if it means progressing over a cliff or into the gas chambers.
There is no meaning to our individual lives beyond what we create. Instead of facing the horrors of finding our own way, most of us defer to empire. We throw ourselves into the machine on behalf the 0.01% because we imagine that throwing ourselves onto the machine comes at too high a cost.
The conclusion is probably correct. Living differently has its rewards but, in my limited experience, the few rewards are massively overwhelmed by the many penalties of pursing life beyond the mainstream.
Making it Personal
My own attempts to walk away from American Empire have failed for many reasons. Afflicted by my own expansive ego, I assumed others would follow my lead, hence slowing or, in my wildest dreams, stopping the machine. I can’t even seem to escape my place of birth and my duty station, the United States, although I no longer view it as my country.
Too little, too late, I’ve come to realize I’m not very influential after all. It’s quite the bitter pill.
With respect to my ongoing work, and the human children I’m said to kill with every step I take, I weakly begin with a few words from writer Barbara Kingsolver: “Living takes life, but it can be thoughtful.” By living, we all contribute to death.
Much, and probably most, of the criticism tossed my way comes from city-dwellers who believe their own lives are beyond reproach. But if you live in a city, you’re living at the apex of civilization. As long as the fuel, food, and water keep showing up on demand, you’re on the front lines of imperialism. Believing otherwise while disparaging those who participate in the dominant culture is yet another thoughtless act of patriarchy.
Feeling superior doesn’t make one superior. Hubris does not humble others.
The Details
A tiny bit of thoughtful research could lead one to conclude that conservation of fossil fuels is austerity for the masses, proposed and promoted by a few for their own benefit. Jevons’ Paradox, the Khazzoom-Brookes postulate, half-empty flights, and consumption of fossil energy by the United States military all provide further support for the notion that the imposition of austerity onto the majority of humans is beneficial to the financially wealthy and allows continuation of the horrors of civilization.
Far be it for me to mention the Rockefeller funding behind 350.org or the People’s (sic) Climate (sic) March. If you’re interested in targets for your wrath, you might try NASCAR, the Rockefellers, professional sports, celebrity culture, or the cities supporting your own patriarchy. A single, little-noticed target is easier. And the messenger is far easier to attack than the evidence-imbued message.
Most city-dwellers will not admit their own complicity in promoting the dominant culture. Ensconced within lives of privilege, sucking the teat of empire, they look out rather than in. They accuse me of encouraging hedonism while, paradoxically, pursuing hedonism.
I would be remiss if I failed to mention the role of global dimming requisite to maintaining civilization. Those embedded within civilization, those who depend completely upon its continued, smooth functioning for their very lives fail to see the bigger picture of which they are part. I suspect the blinders are self-imposed.
A Final Thought
I stop where I began this brief essay: motive. Contrary to what I read on the Internet, I’m not a profiteer of doom. If I received a paycheck each time I’m said to be paid for speaking the unspeakable, I wouldn’t rely on personal savings from a frugal life and donations from others to continue my work.
Had I not made an irreversible error by leaving active service at the university six years ago, I would have more than a million extra dollars in my bank account and I’d be able to further my work without assistance from donors (instead, the taxpayers would be on the proverbial hook). Mistakes have been made, and they’ve led me here. Us, too.
An old axiom indicates we learn from our mistakes. This, of course, is why I make mine repeatedly: I like to really hammer home the lessons learned from experience. I recommend you learn from mine, thereby preventing some of your own.
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http://seekingalpha.com/instablog/29482055-gregory-mannarino/3201455-global-debt-and-the-human-bubble
Global Debt And The Human Bubble
The issue of a global population bubble is virtually not spoken of, in fact I may have been one of the first to openly discuss how grave a situation it really is. However this bubble may be about to burst.
When an issue facing an individual or an entire population in this case is so immense, without any solution, it gets blocked involuntarily by the brains inability to cope. When an event is so far out and away from the ability of the average individual to get their head around a self-preservation mode "kicks in," and subsequently the reality of a given situation gets pushed out of the psyche. The actuality is that the explosion in world population brought directly about by a complete "mismanagement" of the global monetary system via the world's central banks has inflated a HUMAN BUBBLE. As I have discussed in my book The Politics Of Money and on my business day MarketReport many times, the issue of exploding global debt IS NOT just a monetary issue, it is a problem regarding resources. It's just that simple. When our politicians allowed Central Banks to implement a fiat monetary system (a debt based economic model), a virtual alternate reality was allowed to manifest itself. This debt based economic model has now evolved into the greatest threat facing mankind with no way out, and there lies the problem. A massive global loss of life is a mathematical certainty. The world's central banks are responsible for creating a "market" for their product, "currency backed by nothing."
This "arrangement" demands cash be borrowed into existence in perpetuity. This mechanism is a self-feeding one as well, allow me to explain. This debt based system permits and demands an ever increasing debt to be acquired in order to function. Therefore as this fiat currency is borrowed into existence, resources are pulled from the future creating an environment of excess. This has allowed a global population boom and as such the demand for more debt to be borrowed into existence is constantly generated. What must be understood by you the reader is this, without exception all "bubbles" must burst at one point and why is that? Simple, because they rise above a level which can be sustained BY ANY MEANS. The world's central banks fiat monetary system has allowed a borrowing of monies from the future to live a better now. By pulling monies from the future we have been able to acquire and have access to resources which would normally not have been available. As such we now exist in a "reality" which is not sustainable. A global ever ballooning bubble in debt has directly fueled a population boom, in fact they have risen in tandem. It should be clear to you that the issue of exploding global debt is not sustainable by any means. Therefore, this global HUMAN BUBBLE will burst along with the DEBT BUBBLE simultaneously and tens of millions of people in every continent around the world will die.
Global Debt And The Human Bubble
The issue of a global population bubble is virtually not spoken of, in fact I may have been one of the first to openly discuss how grave a situation it really is. However this bubble may be about to burst.
When an issue facing an individual or an entire population in this case is so immense, without any solution, it gets blocked involuntarily by the brains inability to cope. When an event is so far out and away from the ability of the average individual to get their head around a self-preservation mode "kicks in," and subsequently the reality of a given situation gets pushed out of the psyche. The actuality is that the explosion in world population brought directly about by a complete "mismanagement" of the global monetary system via the world's central banks has inflated a HUMAN BUBBLE. As I have discussed in my book The Politics Of Money and on my business day MarketReport many times, the issue of exploding global debt IS NOT just a monetary issue, it is a problem regarding resources. It's just that simple. When our politicians allowed Central Banks to implement a fiat monetary system (a debt based economic model), a virtual alternate reality was allowed to manifest itself. This debt based economic model has now evolved into the greatest threat facing mankind with no way out, and there lies the problem. A massive global loss of life is a mathematical certainty. The world's central banks are responsible for creating a "market" for their product, "currency backed by nothing."
This "arrangement" demands cash be borrowed into existence in perpetuity. This mechanism is a self-feeding one as well, allow me to explain. This debt based system permits and demands an ever increasing debt to be acquired in order to function. Therefore as this fiat currency is borrowed into existence, resources are pulled from the future creating an environment of excess. This has allowed a global population boom and as such the demand for more debt to be borrowed into existence is constantly generated. What must be understood by you the reader is this, without exception all "bubbles" must burst at one point and why is that? Simple, because they rise above a level which can be sustained BY ANY MEANS. The world's central banks fiat monetary system has allowed a borrowing of monies from the future to live a better now. By pulling monies from the future we have been able to acquire and have access to resources which would normally not have been available. As such we now exist in a "reality" which is not sustainable. A global ever ballooning bubble in debt has directly fueled a population boom, in fact they have risen in tandem. It should be clear to you that the issue of exploding global debt is not sustainable by any means. Therefore, this global HUMAN BUBBLE will burst along with the DEBT BUBBLE simultaneously and tens of millions of people in every continent around the world will die.
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