The Race To Collapse

As readers of this blog know, I have long regarded the return of economic crisis as an inevitability (because the core energy and no-growth predicament facing the Western world wasn’t solved in 2008-9 but merely kicked further down the road by increasing debt and printing money). It looks like 2012 will be the crunch year, as a series of inter-related crises are rapidly converging: (1) The European sovereign debt crisis; (2) The continuation of the chronic US inability to balance its books, and of instability in the Middle East; (3) The probable onset of serious declines in global oil production, as new oil megaprojects are no longer able to compensate for accelerating decline from existing fields; (4) heightened risks of a war with Iran, as the narrow window opens between the start of US delivery of the next-generation bunker buster MOP (from November 2011) and the culmination of the Iranian nuclear weapons program and its hardening against air strikes (next year or two).

The European debt crisis dominates headlines, with the Anglo-Saxon media crowing about the lazy, shiftless Meds (as opposed to the diligent and careful Germans) and blaming socialism for their problems. This of course has a number of flaws within it. Greeks work the most hours in the EU – 2000 per year, relative to 1300 in Germany. And the only major EU nations without huge debt and fiscal problems are the Scandinavians, who are about as “socialist” as one gets nowadays.

But this is all sidestepping the fact that debt and fiscal crisis afflict the entire Western world, and it is just that – due to the special political weaknesses of the Eurozone – have manifested first and foremost in Greece, Italy, and Spain. However, a look at the actual statistics reveals that even the “serious” countries are in a great deal of trouble. For instance, in 2010 both the US and Britain had bigger primary deficits (cyclically adjusted) than “basketcase” Greece, whereas Italy’s was actually positive! The Meds’ total net government debt is larger, but on the other hand, if even France is beginning to experience perturbations – a country whose fiscal balances are better in every way than Britain’s or America’s – then it surely cannot be long before the crows come home to roost in the Anglo-Saxon world.

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Another View of the US Economy: Observations on Exergy, GDP & Median Incomes

The standard view of the American economy is one of exponential growth: even if interrupted by a recession once a decade and a Depression once every two generations (the 1890′s, the 1930′s, the 2010′s?), the engines of industry would always come back roaring again. Output per American could always be expected to increase as it has from 1790 until the present day. There has never been a decade, even during America’s two Depressions, when US GDP was lower at the end than at the beginning.

However, another point of view on the US economy can be developed by drawing on observations of factors such as median income, energy consumption and inequality. Broadly speaking, this picture is one relative stagnation from 1890-1940, and again from 1973-today, punctuated by the truly remarkable “miracle economy” of the post-war boom. Furthermore, the US is now about to transition to a new phase: economic stagnation and anarchic stasis, to be followed by oligarchic Caesarism. This first post will be, for now, just a series of observations that I believe to be inextricably linked, but lack the theoretical foundations to put on a sound footing. Feel free to skip it, as it might be hard to follow and I’m mostly writing it to get greater understanding for myself. More polished version(s) to follow.

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Ecotechnic Dictatorship is Our Last Hope of Averting Collapse

As a follow-up to my article on the historical necessity of Green Communism, I would like to  1) refute some common myths and misconceptions about limits to growth-induced collapse, 2) clarify the concept of Green Communism, and 3) elucidate why the only realistic way to prevent collapse now is to force through a “sustainable retreat” by an “ecotechnic dictatorship”.

Let’s take as a starting point our current situation. From the late 1970′s or early 1980′s, calculations indicate that humanity exceeded the long-term carrying capacity of the Earth. Fossil fuel resources are being used up at an unsustainable rate, producing an increase in what William Catton called the “phantom carrying capacity“, which now supports many of the Earth’s surplus billions. However, should the energy base becomes too weak to sustain this phantom carrying capacity, there will be a catastrophic fall of the human population as the Earth system snaps back into equilibrium, producing a massive Malthusian dieoff. The recent peaking of world oil production and accelerated Arctic methane release are but the early portents of hard limits to growth on our finite planet.

We are in a predicament, dependent on an industrial Machine whose insatiable appetite for ever higher levels of material throughput will eventually doom us all. A Machine and its brother, Mammon, with whom we have made a Faustian bargain. We have to somehow wriggle out of this physical and spiritual dependency on our industrial Mephistopheles to avert a collapse of industrial civilization by 2050, but continued dithering and denial makes the changes required ever more drastic year by year. Had the world begun the transition to sustainability in the 1970′s, a great deal of personal freedom and private affluence could have been preserved; as of today, it looks ever likelier than only a Leviathan invested with total power over society can haul us back from the brink of the Olduvai Gorge.

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References: Peak Oil And Resource Depletion (up to 2010)

Although I have several articles on the threats posed to industrial civilization by runaway global warming and ecological degradation on Sublime Oblivion (see 1, 2, 3, 4, 5), I have yet to cover the Charybdis of resource depletion in as much detail (1, 2, 3, 4). As such, I have assembled many links to relevant articles on blogs such as the Oil Drum and Energy Watch Group to provide a foundation for the layman interested in exploring these very important concepts. With time I will write short descriptions next to some of the more important links summarizing what they are about.

EDIT Dec 2010: The Best of TheOilDrum.com 2005-2010 is ultra-recommended.

Basic Summaries

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Review of “World Made by Hand” by James Howard Kunstler

“World Made by Hand” by James Howard Kunstler, published in 2008. Rating: 3/5.

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[easyazon_link asin="0802144012" locale="US" new_window="default" tag="httpakarcom-20" add_to_cart="default" cloaking="default" localization="default" nofollow="default" popups="default"]WORLD MADE BY HAND[/easyazon_link] is a speculative fiction book about how a sociopolitical collapse may be experienced by small-town Americans. It is of a reasonable length, engaging and generally well-written, although far from a literary masterpiece – not that that is necessarily a minus, since it serves a polemic rather than a purely artistic purpose, and it is from the latter angle that we shall approach it.

Kunstler depicts a collapsed world where by the 2020’s the engines of commerce have grounded to a shuddering halt, the arm of the state has withered into oblivion, and the electric lights (‘juice’) of modern civilization petered out, ushering in a new Dark Age, both literally and metaphorically. The largely listless and apathetic population is wracked by super-high mortality rates as that Malthusian trinity, famine, disease and war, stalks the land and reaps down the weak and stupid. Although life is dirtier and more violent, at least for some, like Robert Earle, the narrator and hero of the story, it is also more wholesome and fulfilling. With ‘machine noise’ silenced and its noxious, hallucinogenic fumes and toxins curtailed, man is free to rediscover nature, revealing a world much realer and richer than the rows of bland metallic boxes and suffocating serpents of asphalt that symbolize our consumer society.

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Oily Origins of the Economic Crisis

In an article some months ago I suggested that “perhaps this crisis is simply an unconscious recognition of this inconvenient truth?” – namely, the peaking of oil extraction and all that it implies for the continued survival of a financial system built on assumptions of continuous economic growth. In other words, the fashionable approach of focusing on exotic financial instruments, regulatory failures, etc, if a case of mistaking the forest for the trees.

The Oil Drum had a nice graphical summary. According to the author, Gail the Actuary, the chain of causation runs thus: rising oil prices -> inflated asset values -> booming phantom wealth -> high energy costs undermine real economy -> more and more bubbles pricked -> banking crisis -> credit crisis -> cascaded economic failure -> oil demand destruction -> oil prices plummet -> so do ever costlier long-term investments in oil extraction -> economic recovery at lower level -> rising oil prices. Cycle repeats itself to oblivion.

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