Orlov Astyk and Greer on Collapse

Posted: June 21st, 2009 by: h2

Some things to think about, if you want to take a deeper look at the worse case scenarios (which I recommend, pretty much all climate science findings are pointing to results consistently worse than predicted as worst case scenarios only a few years ago), give this latest by Dmitry Orlov, Definancialisation, deglobalisation, relocalisation.

Back to what is actually happening right now. There seems to be a wide range of opinion on how to characterise it, from recession to depression to collapse. The press has recently been filled with stories about “green shoots” and the economists are discussing the exact timing of economic recovery. Mainstream opinion ranges from “later this year” to “sometime next year.” None of them dares to say that global economic growth might be finished for good, or that it will be over in “the not-too-distant future” — a vague term they seem to like a whole lot.

There does seem to be a consensus forming that last year’s financial crash was precipitated by the spike in oil prices last summer, when oil briefly touched $147/bbl. Why this should have happened seems rather obvious. Since most things in a fully developed, industrialised economy run on oil, it is not an optional purchase: for a given level of economic activity, a certain level of oil consumption is required, and so one simply pays the price for as long as access to credit is maintained, and after that suddenly it’s game over. Fran├žois Cellier has recently published an analysis in which he shows that at roughly $600/bbl the entire world’s GDP would be required to pay for oil, leaving no money for putting it to any sort of interesting use. At that price level, we can’t even afford to take delivery of it. In fact, at that price level, we can’t even afford to pump it out of the ground, because the tool pushers, roughnecks and roustabouts that make oil rigs work don’t drink the oil, and there would no longer be room in the budget for beer.

And so, the actual limiting price, beyond which no economic activity is possible, is certainly a lot lower, and last summer we seem to have experimentally established that to be around $150/bbl. which is something like 25% of global GDP. We may never run out of oil, but we have already run out of money with which to buy it, at least once, and will most likely do so again and again, until we learn the lesson. We will run out of money to pump it out of the ground as well. There might still be a few gushers left in the world, and so there will be a little bit of oil left over for us to fashion into exotic plastic jewelry for rich people. But it won’t be enough to sustain an industrial base, and so the industrial age will effectively be over, except for some residual solar panels and wind generators and hydroelectric installations.

I think that the lesson from all this is that we have to prepare for a non-industrial future while we still have some resources with which to do it. If we marshal the resources, stockpile the materials that will be of most use, and harness the heirloom technologies that can be sustained without an industrial base, then we can stretch out the transition far into the future, giving us time to adapt.

Contemplate the amount we will spend on oil as percentage of GDP. The cost of oil does NOT produce more GDP, unless you are an oil producing nation. Now, obviously, if we had any sense at all, we’d immediately nationalize our oil companies and fields, and start taking control over our own resource destinies, as much as possible, but since we’re fast proving we are totally lacking in sense, forget that plan for now. Maybe later though, we’ll see how things unwind.

My favorite quote, though, was this:

Another great marketing opportunity for our time is in survival goods. There are some web sites that push all sorts of supplies to put in your private bunker. It’s a clever bit of manipulation, actually. Users log in, see that the stock market is down, oil is up, shotgun shells are on sale, so are hunting knives, and if you add a paperback on “surviving financial armageddon” to your shopping cart you qualify for free shipping. Oh and don’t forget to add a large tin of dehydrated beans. Fear is a great motivator, and getting people to buy survival goods is almost a matter of operant conditioning: a marketer’s dream.

Also give the latest by Sharon Astyk, Whither America without China? and by John Michael Greer, Survival isn’t cost-effective. Both are trying to figure this stuff out, while being slightly realistic in the process. Not always perfect, but not bad in general.

These are pretty decent writers, maybe not the very best, but they do what they can, which is better than many do.

And this is against a slightly improved background where corporations are not using the government to directly dictate climate policy. Here’s the US government’s Global Change Research Program. Government scientists must be at least slightly relieved that they can start telling the truth again after the ridiculous Bush propaganda machine was voted out of office. Small win, not enough though, but at least one thing is not being lied about as much now.

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