It suddenly hit me the other day that it was the first oil shocks of the 80’s when oil skyrocketed due to the Arab oil embargo, that started Western Civilisation on its merry way to conversion from an oil powered economy to a money powered one. The looming climate/energy/economic crisis is stirring up the old Left/Right divide in global industrial politics…. This rift derives from the two core dogmas of what constitutes wealth: does wealth come from human ingenuity and innovation, or is it found in nature? Is human capacity the source, or a by-product of real power?
I think the two alternative paradigms implied by these questions, have shaped the history of the ‘civilised’ world far more so than the now redundant Left-Right political ideologies. These increasingly conflicted paradigms can be described as faith in wealth and power from “human brilliance” (by which I mean “blind faith in ingenuity and technology to overcome physical limitations”) versus the belief that power and wealth come from control of “holes in the ground”
In the new world order of energy descent and climate change, both these dogmas are failing, and worse, we increasingly see the believers of both paradigms at war in a futile battle for global domination……
If one doesn’t understand the nature of this ideological battle, as critical for environmentalists and social activists, then it is unlikely that the reader will also understand the science behind Climate Change and Peak Oil.
This important ideological divide has not been recognised by historians or the blogosphere (let alone politicians!), and so it is very easy to come to the conclusion that one or the other of these paradigms is either benign or lethal, without truly understanding the nature and implications of these ideologies.
Climate activists in particular tend to focus on the fossil energy industries as the “enemies” (both for the Carbon emissions and/or funding climate change denial), but naturally see any parties accepting the new climate change agenda as allies. I believe that many of the global players promoting the climate agenda are as dangerous as those denying that agenda. How can this be so?
Ecology and Human Ingenuity
I am sure that the current peak in global oil production is an effective (net) energy peak for humanity. This is as good as it gets, and we are entering an era of ongoing and permanent “energy descent.” The scale of this change is unprecedented in human history. Every past era of humanity has gone from one low yield energy source (firewood) to a higher yield one (charcoal, then coal, then oil, then nuclear). Transitioning to a world of less energy requires energy literacy (sadly lacking everywhere I look) so that we can learn how to make do with less, and avoid costly mistakes when we can least afford them. The era of exponential energy growth, abundance, and affordability has left the populace and the politicians of the industrial world blinded, and without the intuitive understanding of energy needed to deal with the conundrum we now face……
Everything, from ecosystems to human economies, can be viewed through the lens of energy flows. Since energy behaves according to universal laws (not least entropy…), much can be learned from studying these flows…. This first occurred to me twenty years ago when I had an epiphany and realised that everything is powered by the sun. And that the energy we consume everyday are flows from this primary source of energy, everything…
When any system, whether economic, biological or ecological, it is always fed by an increasing amount of energy. The result is an increase in the complexity of that system. For example, during the current era of the growth of extraction of fossil fuels, human economies, communications, education systems, laws, technologies etc have all developed to unbelievable levels of complexity. The availability of the concentrated solar energy that is fossil energy sets exact limits on what any system can achieve in terms of both scale and complexity. This occurs in all ecological systems; and man made systems are not immune! A loss in either energy concentration, or rate of flow results in the lowering of civilisational complexity. This energy descent is either slow, or, occurs in potentially catastrophic events.
I am absolutely convinced that the unrestrained faith in human ingenuity and innovation to overcome physical limitations, is just as ridiculous as the equally doomed faith in digging holes in the earth for wealth, since the latter utterly relies on significant quantities of non renewable, cheap, and abundant energy resources…… especially oil, the master resource….
Blind faith in human ingenuity
Faith in human brilliance to overcome physical limitations is widespread and pervasive in society. It’s almost become a religion. No… it has become a religion. Since the Age of Enlightenment, the marvel of cultural and technological complexity has created hubris about our achievements that is, to some degree understandable, so dazzling it has become; nature, has replaced the humility of ancient spirituality that comes with the wizardry and mystery of nature itself…..
Social justice advocates and environmentalists, bureaucrats, politicians, and diplomats believe the imposition of regulations, rules, and laws, arrived at through negotiation and/or compromise are all that is needed to achieve collective wealth, and its wise control.
Technologists, educators, and journalists also tend towards the belief that thinking, discussion, debate, and consensus are the way to solve problems. Economists and business entrepreneurs share this faith in human ingenuity, without question. They, particular, have been much more zealous participants in focusing the tools of science to create wealth though increased production and market forces. There is no merit and truth in these perspectives, because they are incomplete as they ignore the energy base which made these ideals possible in the first instance….
The apex of this great human project, to free humanity from the forces of nature, is held by bankers in particular, the all seeing masters of the lubricant that makes the whole system of industrial modernity function: money.
The bankers, and their army of drones in the growing financial services, insurance and real estate economies not only believe the continuous growth in financial value and debts controlled by the magic of the market is the pinnacle of human evolution, but also religiously think that the energy/environment problem will be solved by the market forces they have put in place…… thus bringing to existence technological and organisational innovation that will bypass the limits of nature’s capacity to deliver the essential resources we now take for granted, and absorb our waste…
Recently, a Senate enquiry into Australia’s future fuel security (in 2007) saw the head of ABARE, (who have been notoriously wrong for years) challenged about relying on market forces to deal with future energy crises. Famously, he replied, “if the price of eggs goes high enough, roosters will lay eggs”. I don’t think he believed this to be literally true, but I could not have come up with a more breathtaking rhetorical expression of fanatical faith in markets to save us if I’d tried! I’m certain it was a very sobering moment for the energetically literate followers of the Senate enquiry……!
Money as Energy
The old saying that “it is the love of money, rather than money itself, which is the source of evil in the world”, is worth repeating here. This ancient wisdom, the love of money (greed), was once upon a time acknowledged as the force behind the innovation of interest generation, which must be repaid by growth in our extraction of wealth from nature. It is more than ironic that ignoring this taboo against interest-bearing money in the Judeo-Christian tradition was one of the drivers that supercharged Western civilisation into the global industrial culture it is today….
Beyond the creation of debt-based interest-bearing money, the creation of fiat currency, inconvertible paper money made legal tender by a government decree, is an extreme expression of the love of money. In nearly all societies throughout history, the abstraction of money was backed by a commodity of recognised and lasting value like silver and gold. Fiat currency gets its value by order of a powerful sovereign and the collective faith of the populace. As long as we agree that it’s worth something…. it is. But should confidence ever fail……
Independence from available stocks of precious metals has many advantages in complex economies…. However, fiat currencies are more vulnerable to systemic greed and corruption by simply printing money, along with all the massively complex variants of this process that have kept the US dollar as the global currency since the abandonment of the gold standard. It has now been calculated that the true worth of gold today, if it were to represent the worth of the global economy, would be over $200,000 an ounce. It’s no wonder the value of gold is being manipulated down… because if it wasn’t, you could never afford all those gold contacts in your computers and smart phones!
The complex financial devices and the collective faith which have been the basis of decades of economic growth, also make the global economy vulnerable to collapse. Analysis of the global energy situation points to a gradual loss of technological and cultural complexity as inevitable. However, a sudden collapse of human civilisation certainly does not. The out of control power of money and markets is leading us as rapidly towards the collapse of human civilisation as the shortcomings or impacts of technology, including/especially the burning of fossil fuels.
The frantic activity in the material economy that is damaging our life support systems is above all driven by a dysfunctional debt-based money system that must grow by its own design, just to survive. Our monetary system requires constant growth to fend off deflation. The money system currently in place has no neutral gear, and no “steady-state” option. And a growing money supply requires a corresponding increase in resource extraction, otherwise runaway inflation would be the result. The “love of money” building on the more fundamental and widespread belief in “human brilliance” has become, not only a source of moral corruption but also the supercharger of environmental collapse.
It is utterly ironic, that our systems of financial accounting have become so disconnected from the real world. While we may have come to expect such lack of understanding from bean counters, awareness of environmental crises does not necessarily imply an energetic literacy, and many environmentalists have failed to grasp the importance of energetic limits to the wider human project in the quest for politically acceptable solutions to the climate catastrophe.
Ecological history and ecological economics have provided a growing array of evidence to strengthen the belief that real wealth is a gift from nature. Systems of ecological accounting that provide more concrete and numeric measures of real wealth have been a powerful influence on my understanding of how the world really operates.
Unfortunately such academic fields of inquiry remain unfunded and ignored in a world dominated by the magic of money and the latest techno fix that helps accelerate the extraction of more real wealth from nature. We have become dazzled by our own brilliance, and are blind to what the future brings…….