The Bumpy Road Down, Part 4: Trends in Collapse

27 01 2018

IrvMillsIrv Mills has just published part 4 of his Bumpy Road Down series of articles…..

This time I’m going to look at some of the changes that will happen along the bumpy road down and the forces and trends that will lead to them. If you followed what I was saying in my last post, you’ll have realized that the bumpy road will be a matter of repeatedly getting slapped down as a result of going into overshoot—exceeding our limits, crashing, then recovering, only to get slapped again as we go into overshoot yet again.

Along the way, where people have a choice, they will choose to do a range of different things (some beneficial, others not so much), according to their circumstances and inclinations. Inertia is also an important factor—people resist change. And politicians are adept at “kicking the can down the road”—patching together the current system to keep it working for little while longer and letting the guy who gets elected next worry about the consequences.

Because the world will become a smaller place for most of us, we’ll feel less influence from other areas and in turn have less influence over them. There will be a lot more “dissensus”—people doing their own thing and letting other people do theirs. I expect this will lead to quite a variety of approaches, some that fail and some that do work to some extent. In the short run, of course, “working” means recovering from whatever disaster we are currently trying to cope with. But in the long run, the real challenge is learning to live within our limits and accept “just enough” rather than always striving for more. Trying a lot of different approaches to this will make it more likely that we find some that are successful.

Anyways—changes, forces and trend…and how they will work on the bumpy road down.

I’ve included the stepped or oscillating decline diagram from my last post here to make it easier to visualize what I’m talking about.

ENERGY DECLINE

Because I’m a “Peak Oil guy” and because energy is at the heart of the financial problems we’re facing, I’ll talk about energy first. As I said in a recent post:

“Despite all the optimistic talk about renewable energy, we are still dependent on fossil fuels for the great majority of our energy needs, and those needs are largely ones that cannot be met by anything other than fossil duels, especially oil. While it is true that fossil fuels are far from running out, the amount of surplus energy they deliver (the EROEI—energy returned on energy invested) has declined to the point where it no longer supports robust economic growth. Indeed, since the 1990s, real economic growth has largely stopped. What limited growth we are seeing is based on debt, rather than an abundance of surplus energy.”

It is my analysis that there is zero chance of implementing any alternative to fossil fuels remotely capable of sustaining “business as usual” in the remaining few years before a major economic crash happens and changes everything. So the first trend I’ll point to is a continued reliance on fossil fuels. Fuels of ever decreasing EROEI, which will increase the stress on the global economy and continue contribute to climate change and ocean acidification.

Those who are mainly concerned about the environmental effects of continuing to burn fossil fuels would have us stop using those fuels, whatever the cost. But it is clear to me that the cost of such a move would be a global economic depression different only in the details from the one I’ve been predicting. Lack of energy, excess of debt, environmental disaster—take your pick….

It has been interesting to watch the governments of Canada and the US take two different approaches to this over the last couple of years.

The American approach has been based on denial. Denial of climate change on the one hand, and denial of the fossil fuel depletion situation on the other. “Drill baby, drill!” is expected to solve the energy problem without causing an environmental problem. I don’t believe that either expectation will be borne out over the next few years.

Our Canadian government under Prime Minister Justin Trudeau has made quite a bit of political hay by acknowledging the reality of climate change and championing the Paris Climate Agreement in the international arena. Here at home, though, it is clear that Trudeau understands the role of oil in our economy and he has been quick to quietly reassure the oil companies that they have nothing to fear, approving two major pipeline projects to keep oil flowing from Alberta to the Pacific coast and, eventually, to Chinese markets.

Yes, Ottawa has set a starting price of $10 a tonne on carbon dioxide emissions in 2018, increasing to $50 a tonne by 2022. This is to be implemented by provincial governments who have until the end of the year to submit their own carbon pricing plans before a national price is imposed on those that don’t meet the federal standard. It will be interesting to see how this goes and if the federal government sticks to its plan. Canada is one of the most highly indebted nations in the world and I wouldn’t be surprised if our economy was one of the first to falter.

At any rate, sometime in the next few years the economy is going to fall apart (point “c” in the diagram). As I’ve said, this may well be initiated by volatility in oil prices as the current oil surplus situation comes to an end. This will lead to financial chaos that soon spreads to the rest of the economy.

On the face of it this isn’t too different from the traditional Peak Oil scenario—the collapse of industrial civilization caused by oil shortages and sharply rising oil prices. But as you might guess by now, this isn’t exactly what I think will happen.

In fact, I think that we’ll see an economic depression where the demand for oil drops more quickly than the natural decline rate of our oil supplies and the price falls even further than it did in the last few years. We won’t be using nearly so much oil as at present, so we will once again accumulate a surplus, and we’ll even leave some reserves of oil in the ground, at least initially. This will help drive a recovery after the depression bottoms out (point “e” in the diagram). Please note that I am talking about the remaining relatively high EROEI conventional oil here. Unconventional sources just don’t produce enough surplus energy to fuel a recovery.

But the demand for oil will be a lot less than it is today and this will have a very negative effect on oil companies. Some governments will subsidize the oil industry even more than they have traditionally, just to keep to it going in the face of low prices. Other governments will outright nationalize their oil industries to ensure oil keeps getting pumped out of the ground, even if it isn’t very profitable to do so. Bankruptcy of critical industries in general is going to be a problem during and after the crash. More on that in my next post.

During the upcoming crash and depression fossil fuel use may well decline enough to significantly reduce our releases of CO2 into the atmosphere—not enough perhaps to stop climate change, but enough to slow it down. As we continue down the bumpy road, though, our use of fossil fuels and the release of CO2 from burning them will taper off to essentially nothing, allowing the ecosphere to finally begin a slow recovery from the abuses of the industrial age.

The other trend involving fossil fuels, as we go further down the bumpy road, will be their declining availability as we gradually use them up. Eventually our energy consumption will be determined by local availability of renewable energy that can be accessed using a relatively low level of technology. Things like biomass (mainly firewood), falling water, wind, passive solar, maybe even tidal and wave energy. Since these sources vary in quantity from one locality to another, the level of energy use will vary as well. Where these sources are intermittent, the users will simply have to adapt to that intermittency.

No doubt some of my readers will be wondering why I don’t think high tech renewables like solar cells and large wind turbines will save the day. The list of reasons is a long one—difficulty raising capital in a contracting economy, low EROEI, intermittency of supply and difficulty of operating, maintaining and regularly replacing such equipment once fossil fuels are gone—to mention just a few.

Large scale storage of power to deal with intermittency will in the long run prove unfeasible. Certainly batteries aren’t going to do it. There are a few locations where pumped storage of water can be set up at a relatively low cost, but not enough to make a big difference. And on top of all that, I very much doubt that large electrical grids are feasible in the long run (and I spent half my life maintaining on one such grid).

THE FIRE INDUSTRIES

The next trend I can see is in the FIRE (financial, insurance and real estate) sector of the economy. During the growth phase of our economy over that last couple of centuries the FIRE industries embodied a wide range of organizational technologies that facilitated business, trade and growth. Unfortunately, because they were set up to support growth, they were unable to cope with the end of real growth late in the twentieth century. They have supported debt based growth for the last couple of decades as the only alternative that they could deal with. This led to the unprecedented amount of debt that we see in the world today. Much of this debt is quite risky and will likely lead to a wave of bankruptcies and defaults—the very crash I’ve been talking about.

The FIRE industries will be at the heart of that crash and will suffer horribly. Many, perhaps the majority, of the companies in that sector won’t survive. In today’s world they wield a great deal of political power. During the global financial crisis (GFC) in 2007-8 that power was enough to see them through largely unscathed. This is unlikely to be the case in the upcoming crash, creating a desperate need for their services and an opportunity to fill that need which will be another factor in the recovery after the crash bottoms out. But of course there is more than one way it can be done.

In the 3rd4th5th6th and 7th posts in my ” Collapse Step by Step” series, I dealt with the political realities of our modern world, which limit what can be done by democratic governments. I identified a political spectrum defined by those limits. At the left end of this spectrum we have Social Democratic societies, which still practice capitalism, but where those in power are concerned with the welfare of everyone within the society. At the right end we have Right Wing Capitalist societies where the ruling elite is concerned only with accumulating more wealth and power for itself.

Since the FIRE industries are crucial to the accumulation and distribution of wealth in our societies, the way they are rebuilt following the crash will be largely determined by the political goals of those doing the rebuilding.

At the left end of the spectrum there is much that can be done to regulate the FIRE industries and stop their excesses from leading immediately to further crises.

At the right end of the political spectrum the elite is so closely tied to the FIRE industries and so little concerned with the welfare of the general populace, that those industries will likely be rebuilt on a plan very similar to their current organization. A policy of “exterminism” is likely to be followed, where prosperity for the elite and an ever shrinking middle class is seen as the only goal and the poor are a burden to be abandoned or outright exterminated.(Thanks for Peter Frase, author of Four Futures—Life After Captialism for the term “exterminism”.)

In the case of either of these extremes, or anywhere along the spectrum between them, there are some common things I can see happening.

The whole FIRE sector depends on trust. In the last few decades (since the 1970s) we have switched from currencies based on precious metals to “fiat money” which is based on nothing but trust in the governments issuing it. This was done to accommodate growth fueled by abundant surplus energy and then to facilitate issuing ever more debt as the surplus energy supply declined. I don’t advocate going back to precious metals—what we need is a monetary system that can accommodate degrowth, of which a great deal lies in our future. Unfortunately we don’t yet know what such a system might look like.

It is clear, though, that the coming crash is going to shake our trust in the FIRE industries to its very roots. Since central banks will have been central to the monetary problems leading to the crash, they may well be set up as scapegoats for that crash and their relative lack of success in coping with it. People will be very suspicious after watching the FIRE industries fall apart during the crash and their lack of trust will force those industries to take some different approaches.

I think governments will take over the functions of central banks and stop charging themselves interest on the money they print. Yes, I know that printing money has often led to runaway inflation, but the conditions during the crash and its aftermath will be so profoundly deflationary that inflation will not likely be a problem.

The creation of debt will be viewed much less favourably and credit will be much harder to get. And of course this will make the crash and following depression that much worse. In response to this many areas will create local banks and currencies to provide the services that local businesses need to get moving again.

During the last couple of decades there has been a move to loosen regulations in the FIRE industries, to let single large entities become involved in investment banking, business and personal banking, insurance and real estate. Most such entities began as experts in one of those areas, but one has to question their expertise in the new areas they moved into. In any case they became “too big to fail” and their failure threatened the stability the whole FIRE sector. Following the GFC there was only minor tightening of regulations to discourage this sort of thing, but after the upcoming crash I suspect many governments, especially toward the left end of the political spectrum, will institute a major re-regulation of the FIRE industries and a splitting up of the few “too big to fail” companies who didn’t actually fail.

It is all very well to talk about business and even governments failing when their debt load becomes too great. But there is also a lot of personal debt that is, at this point, unlikely ever to get paid back. What does it mean, in this context, for a person to fail? What I carry as debt is an asset for someone else—probably the share holders of a bank. They are understandably reluctant to watch their assets evaporate, and I have to admit that there is a moral hazard involved in just letting people walk away from their debts. That feeling was so strong in the past that those who couldn’t pay their debts ended up in debtors’ prisons. Such punishment was eventually seen as futile and the practice was abandoned and personal bankruptcies were allowed.

One suspects that in the depression following the coming crash it will be necessary to declare a jubilee, forgiving large classes of personal debt. What might become of all the suddenly destitute people depends on where their country lies on the political spectrum. I wouldn’t rule out debtors prisons or work camps, the sort of modern slavery that is already gaining a foothold in the prison system of the United States.

If we were willing to give up growth as the sole purpose of our economic system, there are many changes that could be made to the FIRE industries that would allow them to provide the services needed by businesses and individuals without stimulating the unchecked growth that leads to collapse. I think we are unlikely to see this happen after the upcoming crash—we will be desperate for recovery and that will still mean growth at destructive levels.

I think the crash following that recovery will involve the food supply and still unchecked population growth and sadly a lot of people won’t make it through (more on this in my next post). Following that, it’s even possible that in some areas people may reach the conclusion that growth is the problem and quit sticking their heads up to get slapped down again. They’ll have to find a more sustainable way to live, but with it will come a less bumpy road forward.

AUTHORITARIANISM

In the aftermath of the next crash, I think we’ll see an increase in authoritarianism in an attempt to optimize the systems that failed during the crash—to make them work again and work more effectively. Free market laissez faire economics will be seen to have failed by many people. Others will hang tight, claiming that if they just keep doing yet again the same thing that failed before, it will finally work.

As is always the case with this sort of optimization, it will create a less resilient system, much more susceptible to subsequent crashes. And after those crashes governments will be reduced to such a small scale affair that authoritarianism won’t be so much of an issue.

Fortunately, beyond authoritarianism, there are some other trends that will lead to increased resilience and sustainability. We’ll take a look at those in my next post.

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The Bumpy Road Down, Part 2

8 01 2018

Irv Mills has finally published Part 2 of the original article I posted a few weeks ago….. here it is for your enjoyment..!

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IrvMills

Irv Mills

In the last post in this series I started talking about the bumpy road down—the cyclic pattern of crash and partial recovery that I believe will characterize the rest of the age of scarcity and make for a slow step by step collapse, rather than a single hard and fast crash. Because I expect this to take place differently in various parts of the world and for people of various social classes, I guess it should really be “The Bumpy Roads Down“.

At any rate, this led to looking at the next expected bump in the process—a financial crash of even greater magnitude than the global financial crisis in 2007-8. We looked at what’s leading up to this (a huge debt bubble), how it might start (with one or more currency crashes) and what might trigger the process (a spike in the price of oil).

From where I sit this crash seems essentially inevitable. We are living beyond our means—the available surplus energy is simply not enough to support the continued growth that our economy requires. Some degree of “degrowth” is going to happen, whether we like it or not. The only uncertainly is exactly when it will occur, how far it will take us down and by what route. I’d be surprised if it started sooner than the fall of 2018. I don’t really care to guess how much longer it might take to get started—years, easily.

Of course, as we learned in the Global Financial Crisis of 2007-08, these things tend to teach us new things about how they work as they are happening. While we learn more with each crisis, there are things about each one that we would never have guessed in advance. And I am certainly not claiming to be exempt from this.

Since I wrote that last post, I read David Korowicz’s “Financial system supply-chain cross contagion – a study in global systemic collapse”, and much of what I have to say in this post has been influenced by Korowicz’s ideas.

His essay directly addresses how things may proceed once a crash gets started, and how difficult it will be to do something about it. He focuses on the degree of interconnection in our modern world and how a financial crash can spread to other parts of the economy. He also looks closely at how fragile our globalized economy is, with many supply chains based on “just in time delivery” and minimal inventories of important supplies.

Before going on with the rest of this post, I’d like to share some thoughts that came to me as I was reading Korowicz’s essay. It seems to me that when talking about such subjects, one has to consider one’s audience and what one is trying to achieve.

Korowicz clearly feels he is speaking to a doubtful audience and he is eager to convince them. As he says, “The consensus view, even if backed by experts is not, in and of itself, a justification for the consensus view.” I sympathize with him in that—the majority of people today are functioning at a high level of complacency and denial. They will latch onto any morsel of hope and use it to convince themselves that everything is going to be fine and that no extraordinary action is required. If you give them that morsel, the rest of what you have to say may well be lost on them.

And so it is very tempting to spin (and Korowicz has spun) a rather one sided story, lacking the sorts of subtleties and nuances that are needed for a solid understanding of any subject and which I have tried to make an identifying characteristic of this blog. I am not going to change that goal, and so some of my readers will see what follows, in this and my next few posts, as unreasonably optimistic. If that is what is necessary to take a balanced approach to the subject, then so be it.

David Korowicz is an intelligent and well informed man and so even he makes some qualifying statements about the solidly gloomy picture he paints: “a collapse could have intermediate states, characterised by partial breakdown and semi-stable states.” And near the end of his essay he suggests that we should classify countries as red, amber and green, according to the likelihood of their suffering severely in the crash he is talking about. And he admits that there are indeed some green countries, and interestingly (to me) includes the U.S. in that group. But the essay was written in 2012 and things have changed in the U.S. since then.

For those looking for nothing but hope and reassurance, I’m sorry, but I must make it clear that the bump I am talking about here is likely to be a big one and solidly jarring, especially to those who aren’t expecting it. When I say that this shouldn’t be considered a fast collapse, I mean that a significant number of people will still be able to get food, shelter, clothing—that “just enough” will still be attainable for most of us. I meet people quite regularly who clearly consider that any change in their lifestyle, however minor, amounts to “the end of the world”, and who are simply unwilling to consider that such things may happen. I know they find most of what I have to say to be way too pessimistic. I think they are in for a rude awakening.

But enough of that, let’s take a closer look at how the coming crash is likely to proceed. Tim Morgan predicts that it will start with a “currency crash?” What does he mean by this? Simply that at some point currency traders will lose faith in the value of some particular currency. They will all start selling out of it pretty much at once—what is known as a “run”. This would cause the price of that currency to drop drastically compared to others, with negative effects on the economy of the effected country, perhaps leading it to default on its debts. But why this loss of trust? In the case of Britain, Morgan (a Brit himself) points to a lack of economic growth, high debt, Brexit and poor economic management by governments over the last couple of decades, including a laisser faire approach to regulating business and the financial industry.

It will probably only take one currency crash (or maybe not even that many, if the price of oil spikes high enough) to trigger a loss of faith in debt and start a wave of bankruptcies and government defaults. Banks and other financial institutions will be at the head of that wave. Modern banking is based on the idea of a fractional reserve—banks are allowed to create money out of thin air when they make a loan, rather than just loaning out money they already have. The loan itself then becomes an asset, a claim on the future productivity of the debtor, based on trust that the debtor will prosper and be able to pay back the money he has borrowed, with interest. Under this system banks’ real assets amount to only 2 to 9% of their total assets. The rest is debt, or from the viewpoint of the bank, credit they have extended as loans. It is normal to have a very small percentage of debtors default on their loans, but according to Korowicz, defaults of around 4% are enough to leave a bank in big trouble, and it may end up going out of business, as the financial community loses faith in the debts it holds.

Since the amount of risky debt is much larger than ever before, it seems likely that many of those “too big to fail” banks will indeed be in trouble this time around. In 2008 governments took steps to prevent this, but governments whose currency has crashed and/or who have defaulted on their debts, won’t be able to be of much help. Even governments which aren’t in financial trouble themselves will face a bigger challenge than they did in 2008, since interest rates are already pretty much as low as they can go. And also because more banks (and other businesses) will need help, in the form of loans on very favourable terms, or outright bailouts. Still, because the effect of a crash like this touch on pretty much everyone, there will be immense pressure on governments to do whatever they can.

As I understand it, what governments have done and will no doubt do in the next crash is to print money to offset the bad debts of failing financial institutions and other businesses. This has been done indirectly, by borrowing money from the central bank of the country. Because it ends up on the government’s balance sheet as debt, owed to the central bank, paying the interest is a big budgetary problem. Paying back the principle is a problem for future generations.

Conventional economic wisdom holds that printing too much money causes inflation—the price of goods goes up to match the excess money circulating in the market. This didn’t happen to any significant extent in the years following 2008, perhaps because that excess money, rather than going into circulation, was poured into the black holes of the banks’ balance sheets.

It seems likely to me that central banks will take a lot of blame for “letting” this next crash happen. There is actually no reason that governments have to borrow money for bailouts from independent central banks. Those banks could be eliminated and governments could take on their role themselves, creating money without incurring debt or interest charges. And as long as that money goes straight to paying off bad debts, the amount in circulation won’t increase, and it shouldn’t cause inflation.

If this disaster was limited to the financial industry alone it would be bad enough. It is important to realize that in our capitalist system if a business is not profitable, or if investors lose hope of it eventually becoming profitable, it’s not going to be running for long, especially in the middle of an economic crash. Even if it is the sole provider of goods and services that folks like you and I consider to be necessities. One would hope that governments would step in to preferentially bail out companies that really do have a vital role to play.

The financial sector also provides many critical services to businesses and in a crash such as we’re talking about, those services may not be readily available, thus hurting businesses that would otherwise still be viable.

Perhaps the most basic of those services is moving wealth from what we think of as “investments” (where the point is to earn a return) to ordinary money with which one can buy goods and services. We take this for granted in “normal” times and are largely unaware of what is going on in the background to make it happen so smoothly. During a crash and in its aftermath, this will no longer be the case and without that ready access, businesses and individuals will find it difficult to continue operating as usual.

To judge from what happened in 2008, those banks that are still in business will also get very conservative in their lending practices and much less trusting of the banks at the other end of transactions. The free flow of credit and funds that the commercial world counts on would grind to a halt, at least temporarily, and so the financial crash would spread to the commercial sector. From the viewpoint of ordinary people this is very bad news.

Mind you, in 2008 things were pretty serious. Many people lost their houses because they couldn’t pay their variable rate mortgages when the payments went up—indeed that was what started that crash. In the recession that followed, many businesses downsized or went bankrupt and laid people off. Some of the unemployed fell through the cracks in the social/community/family safety nets and ended up homeless and destitute. A lot of wealth and savings disappeared into thin air. But despite all this, the supply of consumer goods continued unabated. If you could afford to shop, the shelves were far from bare.

I think this is likely not to be the case in the upcoming crash. There will be some noticeable effects in the day to day lives of ordinary people, beyond the obvious increasing unemployment, tighter credit and a decrease in the value of whatever savings you may have left.

The basic issue is that today, more than at any time in our history or prehistory, we rely on a complex, internationally networked economy to provide us with the necessities of life. Supply chains have been optimized, with minimal inventories and “just in time” delivery so that they are very efficient, but also very fragile. One little thing can go wrong, a long way down the chain, and within days (sometimes within hours), the whole supply chain begins grinding to a halt.

The global economy relies of a few critical systems, which enable supply chains to function.

The first of those systems is banking itself. The sort of day to day transactions that all of us take part in really are necessary to keep the world working. Most individuals and businesses rely on chequing accounts, over draughts, lines of credit, debit cards, credit cards and so forth, all of which will stop working if your bank fails. At the international level, banks issue letters of credit that facilitate the shipping of goods from one country to another.

Shipping is itself a critical system, and is dependent not just on banking but also, among other things, on energy, mostly in the form of petroleum products: bunker fuel for ships, diesel fuel for trucks and jet fuel for air freight. I suspect that shipping will suffer a good deal of disruption during this crash, not just at the international level, but also among the trucking companies who move goods around within countries, and on which we are very dependent.

Even if mining, forestry, fishing, agriculture, the electric grid, manufacturing and retail remain untouched in a crash (which is by no means certain), problems with just banking and shipping can make for very unreliable supplies of things that we have come to take completely for granted.

When it comes to necessities, water seems straightforward, right? It comes out of the tap. But most municipal water treatment facilities keep only a very few day’s supply of treatment chemicals on hand. If deliveries of those chemicals stop, it won’t be long—a very few days—before you can no longer rely on the safety of your water supply.

And there is always food on the supermarket shelves, right? But that’s only because of daily deliveries that rely on many long and complex supply chains. If those deliveries stop, there is probably only about three days of food available in most communities, less than that of perishable items.

In the developed world, and even many areas in the developing world, access to medical care is taken for granted (the U.S. is an exception). But modern medicine relies on pharmaceuticals and other consumable supplies of which hospitals keep a very limited inventory, relying instead on regular deliveries.

I mention those three areas because they are necessities for everyone, and the supply chains that provide them to us are likely to be negatively affected during a financial crash. In fact, it will be hard to find any industry that isn’t affected to some degree.

Now the conventional thing for a collapse writer to do at this point is to suggest that once this starts, it will be impossible to stop and everything will grind to a halt, bringing industrial civilization to an abrupt end and likely enough the human race with it. When you’ve been studying collapse for a while and coping with disbelief from most of those around you, it is natural, I suppose, to be eager for something to finally happen that will prove you right beyond all doubt.

But I am not that sort of kollapsnik. I’m pretty sure that collapse has been going on for decades now and that it will take a few decades more before it is complete. And along the way, what is happening will be far from obvious to the many people.

To understand why I hold this opinion, we need to do a couple of things:

1) take a systems dynamic approach to the events we are talking about. First off, the model of a fast collapse with a catastrophic impact at the “bottom” is fundamentally flawed. It may portray fairly accurately what happens when you jump (or are pushed) off a cliff, but that is not exactly the situation our civilization faces. We need to look at what happens when overshoot occurs in nature, in systems more like the one we inhabit. Which is, after all, a subset of the ecosphere. Overshoot is a common enough phenomenon and usually works in fairly predictable ways.

2) look at the sort of things governments, communities and individuals can do to limit the damage when a financial crash spreads to other critical systems.

I set out recently to draw some graphs illustrating overshoot and pretty quickly gained some new insights into this process—insights that I think are worth sharing.

So I’ll wrap this post up now and carry on with points 1 and 2 above next time.





The Bumpy Road Down

18 12 2017

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IrvMills

Irv Mills

The term “bumpy road down” refers to the cyclic pattern of crash and partial recovery that I believe will characterize the rest of the age of scarcity and make for a slow step by step collapse, rather than a single hard and fast crash. Indeed, that is where the “step-by-step” in the title of this series of posts comes from. And yes, many of the individual steps down will happen quite quickly and seem quite harsh. But it will likely take many steps and many decades before we can say collapse is essentially complete, and between those steps down there will (in many areas) be long periods when things are stable or even actually improving somewhat.

The fast collapse is a favourite trope of collapse fiction and makes for some exciting stories, in which stalwart heroes defend their group from hungry hordes and evil strong men. And if the story happens in the U.S. the characters get to do their best to stop a whole lot of ammunition from going stale. But it seems to me that in most parts of the world things will progress quite differently when disaster strikes. Indeed there is a branch of sociology which studies how people and societies respond to disaster, and it has identified a set of incorrect beliefs, known as “the disaster mythology” that much of the general public holds on the subject. In particular, the expectation of looting, mass panic and violence is not borne out in really. Here are some further links on the subject: 1234.

Dysfunctional as today’s world may seem to many of us, it is working fairly well for those who are in power. They have a great deal invested in maintaining the “status quo”, and in making sure that whatever changes do happen don’t have any great effect on them. They also have a lot of resources to bring to bear on pursuing those ends, and a lot of avenues to go down before they run out of alternatives.

The other 80% of us, who are just along for the ride so to speak, still rely on industrial society for the necessities of life. We are hardly self sufficient at all, dependent on “the system” to a degree that is unprecedented in mankind’s history and prehistory. As unhappy as we may be with the way things are at present, it’s hard to imagine collapse without a certain amount of trepidation. Denial is a very common response to this situation.

Some of us, though, aren’t very good at denial. Even if we only follow the news on North American TV, which largely ignores the rest of the world, we’ve seen lots of disturbing events in the last year or two and it is hard not to wonder if they are leading up to something serious. Many people in the “collapse sphere” are predicting a major disturbance in the next few years, and some think that this will be the one that takes us down—all the way.

I definitely agree that something is about to happen, but I don’t think it is going be the last straw. Just one more step along the way.

As always, I am directing this mainly to those who are not highly “collapse aware”, so a closer look at what’s going on and what this next big bump might look like would seem to be a good idea. And of course I am making generalizations in what follows. As always, things will vary a good bit between different areas and at different times, and all of this will affect people of the various social classes differently. Also beware that I am not an economist, just a layman who has been watching the field with keen interest for some time. What follows is a summary of what I have learned, in a field where there is lots of disagreement and where the experts themselves have been wrong again and again.

Despite all the optimistic talk about renewable energy, we are still dependent on fossil fuels for around 87% of our energy needs, and those needs are largely ones that cannot be met by anything other than fossil fuels, especially oil. While it is true that fossil fuels are far from running out, the amount of surplus energy they deliver (the EROEI—”energy returned on energy invested”) has declined to the point where it no longer supports robust economic growth. Indeed, since the 1990s, real economic growth has largely stopped. What limited growth we are seeing is based on debt, rather than an abundance of surplus energy. And various adjustments to the way GDP is calculated have made the situation seem less serious that it really is.

Because of the growth situation, investors looking for good returns on their money have been hard pressed to find any and so have turned to riskier investments, which has resulted in speculative bubbles and subsequent crashes. The thing about bubbles is they are based on trust. Trust in some sort of investment that in saner times would be recognized for the risky proposition it really is. But always there comes a day when the risk becomes obvious, people rush to get out, and the bubble crashes.

The dot com bubble was the first to burst in this century, and the real estate bubble in the US was the next, leading to the crash of 2008.

After 2008 many governments borrowed money to bailout financial institutions (banks) which were in danger of failing, since that failure would have had a very negative effect on the rest of the economy. To control the cost of that borrowing and stimulate the economy, they lowered interest rates. These low interest rates have made it possible to use debt as a temporary replacement for surplus energy as the driver of the economy. Unfortunately this is pretty inefficient—it takes several dollars of debt to create a dollar’s worth of growth, and the result has been debt increasing to totally unprecedented levels.

Meanwhile, much of the ill advised risk taking in the financial industry that led to the crash in 2008 has continued on unabated. You may wonder why responsible governments didn’t enact regulations to stop that sort of thing. And indeed they did, to a limited extent. I suspect, though, that really effective regulations would have stopped growth cold, and no one was willing to accept the negative results of that. Better to let things to go on as they are, leaving future governments to worry about the consequences.

So, in 2017 we are deep into what might be called a “debt bubble.” It relies on trust that interest rates will remain low and that any day now there will be a return to robust growth so that we can all make some money and pay off our debts. Those are risky propositions, to say the least.

On top of that, low interest rates have made it much more of a challenge for pension funds to raise enough money to meet their obligations, a vital concern for retired baby boomers like myself.

Those same low interest rates have made it possible for many non-viable or barely viable businesses to continuing operating on borrowed money, where under more normal circumstances they would have been forced out of business. This makes for a weaker economy, not a stronger one.

Here in Canada we still have a real estate bubble going on, especially in cities like Toronto, Calgary and Vancouver, and that despite recent government efforts to cool the real estate market by making it more difficult to get a mortgage, and by applying a tax on foreign real estate investors.

And over the last year that have been a long list of natural disasters which have increased the financial stress on governments, insurance companies and even re-insurance companies (who insure the insurance companies themselves).

The more conventional economists have come to think that all this is a normal situation and that it can just keep on keeping on. But there are others who think that this will lead to a crash of even greater magnitude that 2008. And many kollapsniks think this crash will mean the end of industrial civilization.

Some commentators expect this crash to take the form of a rash of debt defaults by governments who can no longer carry the debt loads they have built up. And a similar wave of bankruptcies of those shaky businesses I was just talking about, when they finally get to the point where they can no longer hold on. Tim Morgan, one of my favourite economists (who is certainly aware of the possibility of collapse), speculates that this bubble may burst in a different way than those of the past, with the collapse of one or more currencies. He points to the British pound as a prime candidate for the first to go and thinks that the U.S. dollar may follow it.

Other experts I’ve asked say that while the U.S government does have huge debts, they are not so large in comparison to the size of its economy—an economy that is strong enough that trust in it is unlikely to fail. I am not so sure. Much of the strength of the U.S. dollar comes from the fact that all trading of oil is done in it. If you want to buy oil then you need U.S. dollars, so the demand for them is always high. But a number of countries who are not allies of the US have proposed abandoning this system, suggesting that they are willing to accept other currencies for their oil. If this were to happen on a large scale it would significantly weaken the US dollar.

But it takes some sort of unusual event to start a crash like this, to initiate the loss of trust. And that brings us back to the fossil fuel industry.

While the falling EROEIs of fossil fuels have hurt economic growth, it is a mistake to think that those fuels are not still the life blood of our civilization. The success of modern industry is based on the productivity boost provided by cheap energy. The price of oil, for many years, was a fraction of its worth in terms of what could be made with the energy embodied in that oil. But when the price of energy goes up, it reduces the profitability of industry, often leading to a recession.

The oil prices I quote here are for Brent crude, just to keep things simple. In fact, oil trades at a dizzying variety of different prices, depending on where it comes from and its quality, among other things. If you look back over the history of recessions since the 1950s it is interesting to note almost all of them were preceded by a spike in the price of oil. In the summer of 2008 the price of oil, which had been going up for several years, topped out just before the crash at almost $140 per barrel.

After the crash, the economy slowed down significantly, and the price of oil dropped to around $30 per barrel due to falling demand. Starting in mid-2009 the economy began to recover and the price of oil increased to over $100. This appeared to be a straight forward case of supply and demand—an indication that the supply of oil was barely keeping up and suppliers were being forced to turn to more expensive sources of oil to meet the demand.

Then in mid 2014 something surprising happened— the price of oil and many other bulk commodities began to go down. By early 2016 the price of oil was under $40/barrel, and it stayed in the range between $40 and $60 until quite recently when it edged up over $60.

All kinds of ideas have been put forth as to why this drop in the price of oil happened, many of them contradictory. It is my thought that two things have been happening. First, demand destruction—a slowing down of the world economy caused by high energy prices. Second, a temporary increase in the supply of oil, mainly from fracking in the continental US and tapping of unconventional oil—tar sands in Canada, heavy oil in Venezuela, and deep offshore oil in various place around the world, that were suddenly profitable when the price was around $100 per barrel.

Whatever is the cause, it is clear that we have had a surplus of oil for the last few years, and this has kept the price down. OPEC discussed limiting supply to force the price back up, but very little came of it, even though the lower price was severely hurting the economies of the OPEC nations.

In the short run, lower oil prices have had a beneficial effect on economic growth. But unfortunately, the big oil companies were making so little profit that they couldn’t afford to invest much in oil discovery.

Regardless of what you may think of the idea of “peak oil” on a global basis, it is a simple fact that the output of any individual oil field declines as it ages. Exploration for new oil aims to match that natural decline with new discoveries. For conventional oil, that has not happened since 1963 and by the start of this century this was becoming a problem. A problem that likely had something to do with the run up of oil prices prior to 2008.

Following 2008, higher prices and improved technology (like fracking and the syncrude process for getting oil out of the tar sands) made more oil accessible. But with the current lower prices, that is no longer the case. Furthermore the wells opened up by fracking are proving to have very high decline rates.

So it seems that sometime in the next year or two, the decline rate of the world’s oil fields will have eaten up the surplus of oil. Discovery of new oil fields doesn’t happen overnight, so there will be a crunch in oil supply. Not that there will be no oil available, but oil suppliers will be hard pressed to keep up with the demand and the price will spike upward. There may even be shortages of some petroleum products until those higher prices pull demand back to match the available supply.

It seems very likely that such a spike in the price of oil will touch off a loss of trust leading to a recession of such severity as to make 2008 look minor.

In my next post in this series I’ll look at how that recession—might as well call it a crash—might proceed and what will likely be done to mitigate its effects.





How I came to know that I am a closet climate denier

5 09 2017

File 20170828 17154 1asx2tb
So large are the nation’s daily greenhouse gas emissions that if yours is a typical Australian lifestyle you’re contributing disproportionately to climate change.
Carbon Visuals/flickr, CC BY

Joy Murray, University of Sydney

This article is part of an ongoing series from the Post-Truth Initiative, a Strategic Research Excellence Initiative at the University of Sydney. The series examines today’s post-truth problem in public discourse: the thriving economy of lies, bullshit and propaganda that threatens rational discourse and policy.

The project brings together scholars of media and communications, government and international relations, physics, philosophy, linguistics, and medicine, and is affiliated with the Sydney Social Sciences and Humanities Advanced Research Centre (SSSHARC), the Sydney Environment Institute and the Sydney Democracy Network.


What we believe and how we act don’t always stack up. Recently, in considering what it means to live in a post-truth world, I had cause to examine my understanding of how the world works and my actions on sustainability.

I realised I was, in effect, almost as much a climate denier as those who profess to be. Here’s how.

1.1 A way of understanding how the world works

I take a cybernetic view of the world. For me this means a holistic systems perspective based on circularity and feedback with a biological/evolutionary slant.

As I understand it, we learn and change as we bump up against the milieu we inhabit, which changes as we bump into it.

Our ontogeny – our life history since conception – determines what we contribute to that milieu, and the life histories of others determine what they take from it.

1.2 Sustainability

Now to the messages that we – the Integrated Sustainability Analysis (ISA) group at the University of Sydney – strive to communicate to the world.

Using input-output analysis, we put numbers to trends in emissions. We communicate on environmental and social sustainability through books, journals and conferences, showing how complex supply chains snake around the world.

We suggest that once producers, consumers and global corporations know the damage that is being done they will take action to stop it. Meanwhile, we discuss the motivations of climate deniers and wonder what we can do to change things.

1.3 The big collision

This is where I bump into my understanding of the world. What messages do people take from what we contribute to the milieu? Are they changed by the sustainability messages we try to communicate?

Dan Kahan and colleagues from the Yale Law School suggest that perception of risk from climate change depends on our cultural worldview: we dismiss risk if accepting it would mean social upheaval. Survival within the group, they say, trumps lifestyle change.

This fits with my understanding of how our ontogeny determines our survival needs and how our perception of survival within the group influences our actions. It also fits with my view about how people learn – we pick up from the surrounding milieu what fits with our views and ignore the rest.

I nodded along with Kahan, aligning myself with those trying to tell others of the risk. Until I realised there were two problems in such a position.

Problem one

The first problem is that my behaviour is little different from that of Kahan’s subjects. I live in Australia, which has the fifth-highest gross national income per capita. We also have the highest per-capita emissions in the OECD.

While I minimise waste and do my recycling, it would take a lifestyle upheaval to drop my household emissions to the sustainable share suggested by people like Peter Singer. So, I behave as though the call to act on climate change in an equitable way does not apply to me.

I am not alone in understanding the issues, being concerned about the consequences, and yet failing to act. It’s known as the “knowledge, concern, action paradox”.

Julien Vincent, writing about investors who ostensibly support the Paris Agreement yet fail to act, refers to this as a “much subtler, but no less damaging, form of denial”. He cites a case of Santos investors, aware of the consequences, professing concern, yet choosing to vote against a resolution that would have committed the company to conduct a 2°C scenario analysis.

It would seem that knowing the truth and professing concern about climate change are the easy parts. They cost nothing and allow us to claim the kudos that accrues to taking up such a position.

However, knowing the truth and professing concern without taking action is somewhat disingenuous. At worst it is living a lie, akin to being a closet climate denier.

So, even when recognising this truth/action/denial dilemma, why don’t we act? George Marshall, in his book Don’t Even Think About It, provides an insight. He discusses our evolutionary origins, our perception of threats, including climate change, and our instincts to protect family and tribe.

This resonates with my take on cybernetics, which suggests I live the way I do because I need to survive in my physical, economic, social and cultural environment; and because in a different era it would have given my offspring the best chance of survival.

It doesn’t let me off the hook – I still need to take action to lower my emissions – but it reminds me I shouldn’t be so quick to judge. I’m as much a part of the system as anyone else.

Meanwhile, my cybernetic take on life says that whatever we put into the milieu matters. So even though very few of us living in high-income countries can reduce our emissions to an equitable share, whatever actions we take to reduce them contribute to the world of tomorrow, next week, next year. They change the milieu, which changes the possibilities for change.

Problem two

Putting myself outside the system leads to the second problem, which is contingent on the first and means that if I can’t change my own actions I can’t expect to change those of others.

For while I shout about climate change, hoping others will hear what I say and act on it, in so many ways I communicate that I’m not acting on it myself.

A recent online survey showed that a researcher’s perceived carbon footprint affected her/his credibility and influenced the participants’ intentions to change their energy consumption.

If I know the figures, accept the science and yet continue to lead my rich nation lifestyle, I’m fair game as an excuse, conscious or not, for the deniers to continue their climate-indifferent lifestyles.

This doesn’t mean sharing our research is a waste of time. It provides valuable information about the social, economic and environmental effects of doing business; again, it changes the milieu. But it’s highly unlikely that people will read it and change what they do, which is a far more complex process.

Changing attitudes and action

Much research has been devoted to the question of how, and how not, to influence people’s responses to the threats posed by climate change.

Michael Mann is wary of scare campaigns as a motivating force. Bob Costanza and colleagues suggest that scare campaigns from scientists and activists alike are not the answer to weaning us off our addiction to an unsustainable lifestyle.

There’s research to suggest that enlisting the help of a trusted community member might be an effective alternative. Having an advocate present benefits of a low-carbon lifestyle, framed around community issues like energy security rather than climate change, has had some success.

Such an approach could help provide a way to take action for people who know about the science but whose political affiliations and values position them at the climate denial end of the spectrum, regardless of their knowledge.

However, it may not help those of us whose political affiliations and values are aligned with acting on climate change, yet still find it hard to act.

Probably more pertinent to our case is research showing that our actions on climate change are circumscribed not only by the political and cultural contexts that we inhabit but also by the infrastructure provided by them. That’s because this infrastructure forms the milieu that enfolds our lives.

So, where to from here?

If this is the case, then resolution to my first problem might require a significant change to the web of edifices that support my lifestyle. It would take a climate-friendly government with a narrative that normalises action on climate change to make it easy for me to survive in the group and live a low-carbon lifestyle.

Sweden provides an example of what this could look like. For many countries, though, a shift in the national narrative might seem impossible.

In Sweden, a rare example of a rich nation with low emissions, Hammarby in Stockholm is a model of environmentally friendly city development.
Ola Ericson/imagebank.sweden.se

There are examples of dramatic change to a seemingly inviolable narrative, but they come with a “be careful what you wish for” label.

Recently, we’ve seen Bernie Sanders, Jeremy Corbyn, Nigel Farage and Donald Trump make spectacular changes to the political landscape. They illustrate the power of engaging at the community level, discussing local issues (albeit sometimes with the help of big data), portraying empathy and swearing commitment to local solutions.

These leaders have changed the discourse. A cybernetic take on the process might say that their acts of communication triggered a lifetime of connotations in their hearers. The hearers interpreted the message through the prism of their ontogeny, feeding back into the mix their personal understandings, amplifying the message and influencing others by their own communications.

This is a process that works for good or ill, depending where you stand. So a world leader with climate credentials and sufficient clout to make the low-carbon lifestyle message sound mainstream could change the world’s trajectory.

However, ranged against the wisdom of waiting for such a one is the ominous presence of big data companies with the capacity to help manipulate individuals as well as whole communities; uber-wealthy individuals and groups with the ability to influence leaders and world politics; and the top 10% of global income earners who are responsible for almost as much greenhouse gas emissions as the rest of us together.

All are acting out of their own survival instincts and are unlikely to succumb to any amount of persuasive argument from a climate-conscious leader.

So how else to change the milieu to support more of us in achieving a more sustainable lifestyle? Nobel prize-winning economist Elinor Ostrom’s view is that the planet’s salvation lies with communities everywhere bypassing governments and taking action themselves. In 2012 she wrote:

… evolutionary policymaking is already happening organically. In the absence of effective national and international legislation to curb greenhouse gases, a growing number of city leaders are acting to protect their citizens and economies.

Those mayors defying Trump’s exit from the Paris Agreement come to mind as examples.

Ostrom suggests that supporting distributed leadership is the answer. And, to bring us back to cybernetics, management cybernetics guru Stafford Beer did exactly that.

Beer took Ashby’s law of requisite variety and revolutionised the way business management operated. Ashby’s law tells us that only variety (or complexity) can control variety. That leaves 90% of the global population to bring together the system variety required to influence – Ashby says “control” – the very wealthy high-emissions minority.

So, I’m backing distributed leadership to overcome my own inability to cut my emissions further. Investing in the work of organisations that can act will be my proxy.

This may look like a slow haul to change the milieu so that action on climate change becomes normal life, but I’m counting on the snowballing power of amplification to make it happen sooner rather than later.

The complexity of the 90% will eventually trump that of the 10%, by which time my second problem should be irrelevant.


You can read other pieces in the post-truth series here.

The ConversationThe Democracy Futures series is a joint global initiative between The Conversation and the Sydney Democracy Network. The project aims to stimulate fresh thinking about the many challenges facing democracies in the 21st century.

Joy Murray, Senior Research Fellow in Integrated Sustainability Analysis, School of Physics, Faculty of Science, University of Sydney

This article was originally published on The Conversation. Read the original article.





More gnashing of teeth

7 02 2017

The Über-Lie

By Richard Heinberg, Post Carbon Institute

heinbergNevertheless, even as political events spiral toward (perhaps intended) chaos, I wish once again, as I’ve done countless times before, to point to a lie even bigger than the ones being served up by the new administration…It is the lie that human society can continue growing its population and consumption levels indefinitely on our finite planet, and never suffer consequences.

This is an excellent article from Richard Heinberg, the writer who sent me on my current life voyage all those years ago. Hot on the heels of my attempt yesterday of explaining where global politics are heading, Richard (whom I met years ago and even had a meal with…) does a better job than I could ever possibly muster.  Enjoy……

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Our new American president is famous for spinning whoppers. Falsehoods, fabrications, distortions, deceptions—they’re all in a day’s work. The result is an increasingly adversarial relationship between the administration and the press, which may in fact be the point of the exercise: as conservative commentators Scott McKay suggests in The American Spectator, “The hacks covering Trump are as lazy as they are partisan, so feeding them . . . manufactured controversies over [the size of] inaugural crowds is a guaranteed way of keeping them occupied while things of real substance are done.”

But are some matters of real substance (such as last week’s ban on entry by residents of seven Muslim-dominated nations) themselves being used to hide even deeper and more significant shifts in power and governance? Steve “I want to bring everything crashing down” Bannon, who has proclaimed himself an enemy of Washington’s political class, is a member of a small cabal (also including Trump, Stephen Miller, Reince Priebus, and Jared Kushner) that appears to be consolidating nearly complete federal governmental power, drafting executive orders, and formulating political strategy—all without paper trail or oversight of any kind. The more outrage and confusion they create, the more effective is their smokescreen for the dismantling of governmental norms and institutions.

There’s no point downplaying the seriousness of what is up. Some commentators are describing it as a coup d’etat in progress; there is definitely the potential for blood in the streets at some point.

Nevertheless, even as political events spiral toward (perhaps intended) chaos, I wish once again, as I’ve done countless times before, to point to a lie even bigger than the ones being served up by the new administration—one that predates the new presidency, but whose deconstruction is essential for understanding the dawning Trumpocene era. I’m referring to a lie that is leading us toward not just political violence but, potentially, much worse. It is an untruth that’s both durable and bipartisan; one that the business community, nearly all professional economists, and politicians around the globe reiterate ceaselessly. It is the lie that human society can continue growing its population and consumption levels indefinitely on our finite planet, and never suffer consequences.

Yes, this lie has been debunked periodically, starting decades ago. A discussion about planetary limits erupted into prominence in the 1970s and faded, yet has never really gone away. But now those limits are becoming less and less theoretical, more and more real. I would argue that the emergence of the Trump administration is a symptom of that shift from forecast to actuality.

Consider population. There were one billion of us on Planet Earth in 1800. Now there are 7.5 billion, all needing jobs, housing, food, and clothing. From time immemorial there were natural population checks—disease and famine. Bad things. But during the last century or so we defeated those population checks. Famines became rare and lots of diseases can now be cured. Modern agriculture grows food in astounding quantities. That’s all good (for people anyway—for ecosystems, not so much). But the result is that human population has grown with unprecedented speed.

Some say this is not a problem, because the rate of population growth is slowing: that rate was two percent per year in the 1960s; now it’s one percent. Yet because one percent of 7.5 billion is more than two percent of 3 billion (which was the world population in 1960), the actual number of people we’re now adding annually is the highest ever: over eighty million—the equivalent of Tokyo, New York, Mexico City, and London added together. Much of that population growth is occurring in countries that are already having a hard time taking care of their people. The result? Failed states, political unrest, and rivers of refugees.

Per capita consumption of just about everything also grew during past decades, and political and economic systems came to depend upon economic growth to provide returns on investments, expanding tax revenues, and positive poll numbers for politicians. Nearly all of that consumption growth depended on fossil fuels to provide energy for raw materials extraction, manufacturing, and transport. But fossil fuels are finite and by now we’ve used the best of them. We are not making the transition to alternative energy sources fast enough to avert crisis (if it is even possible for alternative energy sources to maintain current levels of production and transport). At the same time, we have depleted other essential resources, including topsoil, forests, minerals, and fish. As we extract and use resources, we create pollution—including greenhouse gasses, which cause climate change.

Depletion and pollution eventually act as a brake on further economic growth even in the wealthiest nations. Then, as the engine of the economy slows, workers find their incomes leveling off and declining—a phenomenon also related to the globalization of production, which elites have pursued in order to maximize profits.

Declining wages have resulted in the upwelling of anti-immigrant and anti-globalization sentiments among a large swath of the American populace, and those sentiments have in turn served up Donald Trump. Here we are. It’s perfectly understandable that people are angry and want change. Why not vote for a vain huckster who promises to “Make America Great Again”? However, unless we deal with deeper biophysical problems (population, consumption, depletion, and pollution), as well as the policies that elites have used to forestall the effects of economic contraction for themselves (globalization, financialization, automation, a massive increase in debt, and a resulting spike in economic inequality), America certainly won’t be “great again”; instead, we’ll just proceed through the five stages of collapse helpfully identified by Dmitry Orlov.

Rather than coming to grips with our society’s fundamental biophysical contradictions, we have clung to the convenient lies that markets will always provide, and that there are plenty of resources for as many humans as we can ever possibly want to crowd onto this little planet. And if people are struggling, that must be the fault of [insert preferred boogeyman or group here]. No doubt many people will continue adhering to these lies even as the evidence around us increasingly shows that modern industrial society has already entered a trajectory of decline.

While Trump is a symptom of both the end of economic growth and of the denial of that new reality, events didn’t have to flow in his direction. Liberals could have taken up the issues of declining wages and globalization (as Bernie Sanders did) and even immigration reform. For example, Colin Hines, former head of Greenpeace’s International Economics Unit and author of Localization: A Global Manifesto, has just released a new book, Progressive Protectionism, in which he argues that “We must make the progressive case for controlling our borders, and restricting not just migration but the free movement of goods, services and capital where it threatens environment, wellbeing and social cohesion.”

But instead of well-thought out policies tackling the extremely complex issues of global trade, immigration, and living wages, we have hastily written executive orders that upend the lives of innocents. Two teams (liberal and conservative) are lined up on the national playing field, with positions on all significant issues divvied up between them. As the heat of tempers rises, our options are narrowed to choosing which team to cheer for; there is no time to question our own team’s issues. That’s just one of the downsides of increasing political polarization—which Trump is exacerbating dramatically.

Just as Team Trump covers its actions with a smokescreen of controversial falsehoods, our society hides its biggest lie of all—the lie of guaranteed, unending economic growth—behind a camouflage of political controversies. Even in relatively calm times, the über-lie was watertight: almost no one questioned it. Like all lies, it served to divert attention from an unwanted truth—the truth of our collective vulnerability to depletion, pollution, and the law of diminishing returns. Now that truth is more hidden than ever.

Our new government shows nothing but contempt for environmentalists and it plans to exit Paris climate agreement. Denial reigns! Chaos threatens! So why bother bringing up the obscured reality of limits to growth now, when immediate crises demand instant action? It’s objectively too late to restrain population and consumption growth so as to avert what ecologists of the 1970s called a “hard landing.” Now we’ve fully embarked on the age of consequences, and there are fires to put out. Yes, the times have moved on, but the truth is still the truth, and I would argue that it’s only by understanding the biophysical wellsprings of change that can we successfully adapt, and recognize whatever opportunities come our way as the pace of contraction accelerates to the point that decline can no longer successfully be hidden by the elite’s strategies.

Perhaps Donald Trump succeeded because his promises spoke to what civilizations in decline tend to want to hear. It could be argued that the pluralistic, secular, cosmopolitan, tolerant, constitutional democratic nation state is a political arrangement appropriate for a growing economy buoyed by pervasive optimism. (On a scale much smaller than contemporary America, ancient Greece and Rome during their early expansionary periods provided examples of this kind of political-social arrangement). As societies contract, people turn fearful, angry, and pessimistic—and fear, anger, and pessimism fairly dripped from Trump’s inaugural address. In periods of decline, strongmen tend to arise promising to restore past glories and to defeat domestic and foreign enemies. Repressive kleptocracies are the rule rather than the exception.

If that’s what we see developing around us and we want something different, we will have to propose economic, political, and social forms that are appropriate to the biophysical realities increasingly confronting us—and that embody or promote cultural values that we wish to promote or preserve. Look for good historic examples. Imagine new strategies. What program will speak to people’s actual needs and concerns at this moment in history? Promising a return to an economy and way of life that characterized a past moment is pointless, and it may propel demagogues to power. But there is always a range of possible responses to the reality of the present. What’s needed is a new hard-nosed sort of optimism (based on an honest acknowledgment of previously denied truths) as an alternative to the lies of divisive bullies who take advantage of the elites’ failures in order to promote their own patently greedy interests. What that actually means in concrete terms I hope to propose in more detail in future essays.





Wilful Blindness, Wilful Hypocrisy, You first. What’s your spin?

27 11 2014

My Photo

John Weber

Reblogged from John Weber’s website, with permission…….  John has lived off the grid for over 30 years making his own electricity from sun and wind..  He is most concerned about the psychological impact of the culture shock coming down the pike.

Here’s the deal. Research reveals that we lie to ourselves. Not you and I of course, but others do prolifically. Wilful Blindness is one of various books and research papers that verify this. We seem to fool ourselves for a variety of reasons. Two of the main reasons, one is self protective and the other is social protective.

From Margaret Heffernan’s Wilful Blindness:

“People are highly driven to do things that build self-worth; you can’t transgress and think of yourself as bad. You need to protect your sense of yourself as good. And so people transform harmful practices into worthy ones, by coming up with social justification, by distancing themselves with euphemisms, by ignoring the long-term consequences of their actions. “

Heffernan, Margaret. 2011. Wilful Blindness: Why We Ignore the Obvious at Our Peril. Walker. N.Y. pg. 195.

This is something that I have known for a long time. Here is a quote from my journal written when I was around twelve years of age. It is from a book on psychology but I don’t know which. I started reading psychology books at eleven – Freud, Havelock Ellis, Kraft-Ebing, Jung, etc. Yes, I have always been strange. I didn’t know to copy references at that age.

“We build up a picture of ourselves; hence, we come to expect certain things from ourselves, to value ourselves and to do everything possible to keep this idealized picture of ourselves unspoiled.”

The social protective is our very human need to belong. The essence of being human is being a social animal. We must learn the rules of our particular game early – language, emotional display, right, wrong, and most importantly how to belong. We carry this early training (shaping) with us our whole life. Without it we do not survive physically or psychologically.

“As the pioneering psychopharmacologist Jaak Panksepp put it, ‘social affect and social bonding are in some fundamental neurochemical sense opioid addictions.’In other words, our desire to seek social connection with others comes from chemical rewards as well as social ones.”

Heffernan, Margaret. 2011. Willful Blindness: Why We Ignore the Obvious at Our Peril. Walker. N.Y. pg. 132.

Endorphins: Endorphins (“endogenous morphine”) are endogenous opioid peptides that function as neurotransmitters.[1] They are produced by the pituitary gland and the hypothalamus in vertebrates during exercise,[2] excitement, pain, consumption of spicy food, love and orgasm,[3][4] and they resemble the opiates in their abilities to produce analgesia and a feeling of well-being.

http://en.wikipedia.org/wiki/Endorphin

. . . the general argument is that we deceive ourselves the better to deceive others. To fool others, we may be tempted to reorganize information internally in all sorts of improbable ways and to do so largely unconsciously. . . . the primary function of self-deception is offensive – measured as the ability to fool others.

Trivers, Robert. 2011. The Folly of Fools. Basic Books. N.Y.

Here is the point of this. There is lots of information about the convergence of serious problems. There is lots of information – books, articles, internet, meetings – on these problems and the solutions.

“. . . A lot of people think we were facing our last century as a viable civilization, maybe even as a species. Global warming, overpopulation, the death of he seas, the loss of arable land, the proliferation of disease, the threat of nuclear or biological warfare . . .”

“We might have destroyed ourselves but at least it would have been our own fault.”

“Would it, though? Whose fault exactly? Yours? Mine? No, it would have been the result of several billion humn beings making relatively innocuous choices: to have kids, drive a car to work, keep their job, solve the short-term problems first. When you reach the point at which even the most trivial acts are punishable by the death of the species, then obviously, obviously, you’re at a critical juncture, a different kin of point of no return.”

Wilson, Robert Charles. 2005. Spin. Tom Doherty Associates Book. N.Y. pg.127-128.

In essence few if any of us are really doing a damn thing about it. We all have our spin.

From the Energy Round Table – a quote from the moderator and in italics a poster:

“Hitting the gas pedal decades ago is not something that

I think anyone who understood the problem would have

done. Why would anyone with half a brain make a plan

that severely damaged the biosphere of the planet that

their descendants would have to live (or die) on??”

Bill Tamblyn – Moderator

If we don’t use all the water, someone else will.

If we don’t use the oil, someone else will.

If we don’t burn the coal, someone else will.

If we don’t spread GMO crops, someone else will.

If we don’t make more babies, someone else will.

If we don’t waste the biosphere, someone else will.

If hitting the oil or coal or baby or gas pedal

gets me ahead or more status, then I must do it.

Was this a plan or lots of little plans?

More likely we just can’t help ourselves?

Does tragedy of the commons fit here?

Arlen Comfort

My partner in answer to using a banana each day at breakfast and buying strawberries grown a thousand miles away said, “But I don’t buy roses.” Friends, who I love dearly and who are very environmentally and energy conscious, have a business totally dependent on driving to supply it and tourism for its success. They modified their distribution paths and feel they have made a significant change.

WHAT IS YOUR SPIN?

Let’s be clear.  Every mile we drive supports fracking, tar sands, pollution of the oceans, underground water, rivers, the air, and our food.Each meeting we attend to save the earth from whatever surely makes us feel good.Each thing we write, each time we talk about this, we are playing the Transactional Analysis game – “Ain’t it Awful?”.

Each of the maybe billion of us at the top of the energy/resource heap are rushing towards the cliff. I do not to excuse myself from the spinning. This from one of my other essays:

Just say I.

I am polluting our ground water by using the natural gas from fracking. I am creating havoc in the oceans by spilling life-killing oil. I am also plasticizing the oceans. I am also limiting or eliminating species after species in the ocean, on the land, in the air. I am putting my medicines into the rivers and the water supply. I am greedily creating food sources that only I control. I am removing the topsoil. I am gouging huge holes in the earth. I am burning coal and creating nuclear waste for thousands of years to come for my flat screen television, my computer and my DVD player. I am putting mercury and acids into the air, water and life. I am melting the ice caps and the glaciers. I am heating the planet to drive my snowmobile, my wave runner, and my four-wheeler and to drive to any damn place I want. I am using many people to cater to my many whims.

I saw the DVD “What a Way to Go” yesterday. It was very well done in listing the freight train laden with our woes coming straight at us. The many speakers continually said, “we are doing this” and “we are doing that”. They must have been talking about me. Because I am aware of these things and more and I keep doing it.

http://sunweber.blogspot.com/2011/05/just-say-i.html

John Weber

Busy in Northern Minnesota doing all these things and more.

So enjoy while you can. I am.

Some internet sources:

http://climateandenergynews.zparking.net/

http://www.peakoil.com/

http://www.energybulletin.net/

http://guymcpherson.com/

My site: http://sunweber.blogspot.com/

http://cluborlov.blogspot.com/

Abelson, Robert P. 2004. Experiments with people : revelations from social psychology. Lawrence Erlbaum. Mahwah, N.J.

Bayne, Tim and Fernández.Jordi, editors. 2009. Delusion and self-deception : affective and motivational influences on belief formation. Psychology Press. New York.

Berne, Eric. 1964. Games people play : the psychology of human relationships. Grove Press. New York.

Berners-Lee. Mike. 2011. How Bad Are Bananas?: The Carbon Footprint of Everything. Greystone. Vancouver.

Cumpsty. John S. 1991. Religion as Belonging. University Press of America. N.Y.

Fonseca, Eduardo Giannetti da. 2000. Lies we live by : the art of self-deception. St. Martin’s Press. New York.

Gianetti, Eduardo. 1997. Lies We Live By: The Art of Self-Deception. Bloomsbury. N.Y.

Hirstein, William. 2005. Brain fiction : self-deception and the riddle of confabulation. MIT Press. Cambridge, Mass.

Keyes, Ralph. 2004. The Post-truth Era. St. Martin’s Press. N.Y.

Kurzban, Robert. 2010. Why everybody (else) is a hypocrite. Princeton.

Lockard, Joan S. and Paulhus, Delroy L. Editors. 1988. Self-Deception: An Adaptive Mechanism. Prentice Hall. New Jersey.

Mele, Alfred R. 2001. Self-deception unmasked. Princeton University Press. Princeton, N.J.

Triandis, Harry Charalambos. 2009. Fooling ourselves : self-deception in politics, religion, and terrorism. Praeger Publishers. Westport, Conn.

Twerski, Abraham J. 1997. Addictive thinking : understanding self-deception. Hazelden. Center City, MN.

http://en.wikipedia.org/wiki/Depersonalization_disorder

“. . . The farther removed we become from our neighbours, the more siloed in our self-sufficiency, the easier it is to treat people as things, to turn a blind eye to the human costs of toxic cultures and to make immoral decisions.

LIES

Credibility gap

Reframing

Terminological inexactitudes (Winston Churchill’s)

Poetic truth

Parallel truth

Nuanced truth

Imaginative truth

Virtual truth

Alternative reality

Strategic misrepresentations

Creative enhancement

Non-full disclosure

Selective disclosure

Augmented reality

Nearly true

Almost true

Counterfactual statements

Fact-based information

TO LIE

Enrich the truth

Enhance the truth

Embroider the truth

Massage the truth

Tamper with the truth

Tell more than the truth

Bend the truth

Soften the truth

Shade the truth

Shave the truth

Stretch the truth

Stray from the truth

Withhold the truth

Tell the truth improved

Present the truth in a favourable perspective

Make things clearer than the truth

Be lenient with honesty

Spin

Keyes, Ralph. 2004. The Post-truth Era. St. Martin’s Press. N.Y. pg.15-16.





The Energy Cliff Revisited

22 10 2014

Gough Whitlam died yesterday.  The whole country seems to have paused for thought, many media outlets are even saying things like “where to from here”, and the cluelessness abounds.  Where to from here indeed……  Today, our politicians are elected to office based on false promises.  They promise things they can’t deliver, and we continue to be perpetually shocked when they don’t deliver.  We never seem to get tired of this game, we always lose.

I have spent little time posting here, mainly for fear of simply repeating myself.  As I am doing now, really…. but once you ‘get it’, what else is there to say?  As the price of oil fell to $80 last week, much wringing of hands and gnashing of teeth occurred on the subject of how long the unconventional oil drillers of oil would last….  while some commentators were despairing at the thought that cheaper fossil fuels would mean the end of the current push for renewables, if you can still call it that.

When I pointed out to these people that the fossil fuel companies were actually going broke, I was met with the derision I am now accustomed to.  I’m getting quite immune to that now, if you don’t believe me, it’s your problem, not mine…  mind you, as we approach ‘the knee’ of the energy cliff curve, it is baffling as to why the price of oil dropped so much, when it should have in fact risen, and risen substantially.  The answer of course is that the global economy is on its knees.  Growth is fetid at best, and in Europe, things are going from bad to worse, even prompting some people to predict that ‘the big one’ was going to occur on the 27th anniversary of the Black Monday crash.  Didn’t happen, unfortunately…..  but the ducks have all lined up in waiting.

Most of us here have surely heard of the seven stages of grief…. Shock, Denial, Anger, Bargaining, Guilt, Depression, Acceptance. Where are we in our journey through these stages when it come to the financial crisis, and to growth? There’s only one stage that even remotely sounds right: Denial. We’re not even close to Anger yet, not when it comes to the larger population.  Me, I’d like to add another stage:  REACTION….!

justwalkawayIf enough people just walked away, the whole mess would end.  Any time people post whinges on FB these days, I reply with that picture.

Apart from denial, there is of course ignorance.  The concept of the energy cliff is foreign to just about anyone who doesn’t follow blogs such as this one.  It occurred to me that we have been sliding down the edges of the energy cliff for a very long time.  At the beginning of the oil era, when the ERoEI was 100:1, everything was easy.  We just had to invent it, and we had so much surplus energy that we could fumble our way around and build outrageous cars and airplanes, steel skyscrapers, huge ships, growth was easy…..  and when the ERoEI of oil dropped to 50:1, who noticed?  We still had 100:1 oil to make the equipment needed to get that oil (which, let’s face it, was still amazing value…)http://www.terrysmithblog.com/.a/6a0120a5f40b9d970b01347fbc85dd970c-400wi

As the easy pickings were exploited, it was still easy to burn 25:1 and even 15:1 energy sources…. but it is at this stage that we approach ‘the knee’ of the nett energy curve, and start falling off its cliff.

Building 5:1 solar energy gizmos with 15:1 oil, let alone with more 5:1 PVs or those appallingly inefficient tar sands and shale oil suddenly becomes a struggle.  This is what people who argue that we don’t need fossil fuels to make renewables do not understand.  Bad ERoEI compounds when you use one low source to get another.  Social complexity utterly relies on surplus energy.  It was with surplus energy that Europe’s cathedrals were build during the middle ages, and the same applies to building wind and solar farms.

If you are new to these concepts, I urge you to watch the video below from Chris Martenson’s excellent crash course series, a must watch program of videos for anyone who doesn’t yet know why the world is going to hell in a handbasket……  NOTE:  This video shows solar as having an ERoEI somewhere around 20:1.  This is because it was made in 2009, and in the intervening 5 years, it has been established that it is fact less than 5…. maybe even less than 3!  This is displayed more accurately in the more recent chart above……