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The Musical Chairs Economy

2012 February 19
by Ian Welsh

Ok, for some time, folks have been after me for a formal economics post.  What’s going to happen in the future in the US?

The answer, for around the next 5 to 6 years, maybe longer, is the musical chairs economy.  Let’s lay out the basics.

What has happened is that the general circle of prosperity has been reduced.  Less people now live in the “good” US economy.  When they drop out of that economy they also use a lot less oil and gas, and even electricity.

Since the US can no longer sell nearly as much paper in exchange for real resources and goods, the US now has to sell something the rest of the world wants.  One part of that is intellectual property, which is why you will continue to see stricter and stricter IP laws.  The other part of that is hydrocarbons.  The world is still hungry for oil.  And if Americans use less of it, and if the US moves massively to fracking of unconventional oil (which it is) then the US can, again, become an oil exporter.  (Remember, for much of the 20th century the US exported oil.)

This plan includes impoverishing large numbers of Americans, since the reduction in oil use is not primarily being produced by providing the same services with less energy, but that is not an issue to those who run America’s industry or politics, since they do not, despite rhetoric, care about the welfare of ordinary Americans.

This game, in a lesser form, has been going on for a long time.  In the older version, going on since at least 1980 or so) production was offshored or outsourced, workers laid off and they never found good jobs again.  Industries of the past were offshored, but industries of the future were mostly not created (the internet boom being the last large-scale industry creation episode).  When they were created, they “went to scale” in other countries–once how to produce was understood, the production was done overseas, where it was cheaper, not just in wages but in terms of regulations (for example, batteries are made in China by hand.  Batteries, of course, are mostly acid containers.)

The game has now moved into a more virulent stage.  During the 2000′s various economists and financial gurus used to laugh that the fools overseas were giving America real goods and resources in exchange for worthless paper.  They thought they had found a free lunch, and many of them were right, form themselves, individually (who cares about fellow Americans?  If they can’t make too bad for them.)

So what happens now is a recovery of sorts.  Life is not so bad for the upper middle class and the upper class (I don’t include the oligarchs in the upper class, they are the ruling class, the upper class are the lawyers, doctors, judges, county pols, mid-level real-estate developers and so on.)  Since the majority of the population who wants a job can find one, who cares if millions of Americans are unemployed?  They are not economically functional in this economy, it is better for them to just go away, so that oil can be sold overseas.

Bear in mind that the short history of American economics in the post-war period can be summed up as “suburbanization.”  Wave after wave of developments, and the money which were made from them.  Suburbanization, by its very nature, requires gasoline, because it requires cars.  Suburbs do not, and probably cannot, have rapid transit.  They are also not economically self-sufficient, generally deliberately (the horror of some one working from home causes vapors amongst developers and suburban homeowners, it seems.)

Peak oil may or may not be here, but it’s pretty clear that peak cheap-oil has passed.  The American lifestyle of the 20th century, which has not been fundamentally changed by the internet and assorted telecom gadgets, is oil based.

So, there will be recessions and non-recessions (amidst what is an ongoing long Depression).  And in each recession those who fail to grab a chair will be cast out into the dispossessed.  Those who keep their chairs will be allowed to keep some facsimile of the “American lifestyle”.

The people who run the American economy and political system will continue along these lines so long as it continues to bring them money or power.  As noted, they do not have fellow feeling for other Americans, they believe they earned everything they have, and that if someone else isn’t prosperous, it’s because they didn’t earn it.  Such useless eaters are a drag on society.

I emphasize the thought process, which some will find polemical, because it is at the heart of the problem.  It is the most important part of the post.  There are other options, from the managed decline favored by environmental purists through to various types of smart growth.  They are not being pursued and will not be pursued because they are more work with less certainty of who will reap the profits and power than simply managing the current decline, and culling the herd from time to time, as necessary.

“The powerful do as they will, the weak suffer what they must.”

As long as you, the people, believe you are weak, you will suffer what you must.

31 Responses
  1. February 20, 2012

    Please check your facts on this post. The U.S. is NOT, nor is it anywhere close, to being a “net exporter of oil.” The total amount we import has dropped from about 2/3rds to less than 50%, but that is still an enormous amount of oil.

    http://www.reuters.com/article/2011/05/25/us-usa-oil-imports-idUSTRE74O78R20110525

  2. Ian Welsh permalink*
    February 20, 2012

    Thanks Bill. Fixed. One sentence and one word changed, the rest left as original.

  3. sunburn permalink
    February 20, 2012

    ” As noted, they do not have fellow feeling for other Americans, they believe they earned everything they have, and that if someone else isn’t prosperous, it’s because they didn’t earn it. Such useless eaters are a drag on society.”

    This is the problem of a meritocracy. No concept of noblesse oblige. Sometimes I miss the old wasp elite.

  4. February 20, 2012

    Employment does seem to be picking up. Slowly, but it does look like there will be a full recovery by 2020 or so. Things are very hard and will be so far a decade to come, but are not quite hopeless. I think that around 2020 we will see the rise of a new generation of progressive politicians and activists; some of these people are active in the Occupy movement right now. Likewise, the American lifestyle is changing.

    I like McKibben’s observation on the fossil-fuel companies, over on TomDispatch, which I am going to have to subscribe to: “Their value is largely based on fossil-fuel reserves that won’t be burned if we ever take global warming seriously.”–link. It’s not even a matter of malice: they are facing huge losses and no businessperson can tolerate that. So it’s going to take some guts to make the necessary changes.

    (And I am very fuzzy, and this writing is very fuzzy, and it is time to go to sleep.)

  5. February 20, 2012

    Shalom Ian,

    Like Bill Hicks, I did a double-take when I read your second bullet point — The US is now a net exporter of oil petroleum products. Oil imports have dropped 10% since 2006 — and while I appreciate the technical accuracy of your change from oil to petroleum products I still find the statement misleading.

    To be fair, I also found the Reuters statement — “Imports of crude and petroleum products accounted for 49.3 percent of U.S. oil demand last year, down from the recent high of 60.3 percent in 2005. — unclear in that the reader cannot know if the demand here is by refineries or by American consumers.

    Further into the Reuters piece we learn that in 2010, the U.S. demand for refined petroleum was 19.1 million barrels per day and that the refineries exported 2.3 million BPD. The Money Morning piece cites difference figures for the first 10 months of 2011, but is unclear exactly what the totals are and how they relate to the 2010 figures quoted by Reuters.

    I’ll grant that it is possible that we now export more refined petroleum products than we import (which I imagine is a relatively small number), but that is not what the casual reader might take away from either the Money Morning headline or your bullet point which is that the United States is somehow exporting more petroleum products than it is importing raw petroleum

    Access to the raw figures used by both Retuers and Money Morning would be very helpful in this case.

    B’shalom,

    Jeff Hess
    Have Coffee Will Write

  6. Morocco Bama permalink
    February 20, 2012

    Per that link, the second one, not only is the U.S. now a net exporter of fuel because of declining domestic demand and new sources of domestic crude (shale and tar sands), but also because of this:

    Such widespread overseas demand for fuel has presented a juicy opportunity for U.S. refining companies, such as Exxon Mobil Corp (NYSE: XOM), Valero Energy Corp. (NYSE: VLO), and Marathon Petroleum Corp. (NYSE: MPC).

    Nice, so the U.S. is now positioning itself to be the world’s refinery. You couple the environmental degradation of that with the environmental degradation of fracking, and there won’t be anyone left to enjoy any form of “recovery”, as if a “recovery” were even possible.

    This is why Newt is the best choice for president. At least he’s talking about getting off the planet.

  7. someofparts permalink
    February 20, 2012

    Believe we are weak? Weak would be an upgrade.

    It is literally, very very literally, impossible to have an ordinary rational conversation with the people around me.

    Last week I made a feeble attempt. Someone was describing yet another jacked up cost her family pays for a service that used to be free or reasonably priced. I figured it was conservative and restrained to just say that I thought it was a shame her family had to cough up that money.

    The result? Hysterical conviction that I had called her stupid. Then, passing that completely hostile and delusional misunderstanding of what I said onto the gossip grapevine. That way, within a couple of days, the IT guy was yelling at me to stop talking to him like he was stupid. And one of my managers, Tom Friedman reader and judicious moderate, was glaring at me because he bought into the hoked up gossip too.

    And this is the fucking state branch of the EPA we’re talking about people.

    So you think we see ourselves as weak? Like I said, that would be an upgrade. There is not one shred of community identity here at all – weak or otherwise.

  8. someofparts permalink
    February 20, 2012

    Response to sunburn – the people we are speaking of are an IMAGINED meritocracy. They are actually where they are because of a crony system. In a CRONY system, where people only IMAGINE they have earned what they have, we find heartless indifference to others who were never invited to the party.

    In a REAL meritocracy work is respected and people who know the difference between ability and social advantage are in charge. Those people don’t have indifference to the unemployed, just impatience with the lazy and dishonest.

  9. Tony Wikrent permalink
    February 20, 2012

    ‘zackly, as usual.

    And, I hope readers will take a while to contemplate this very important sentence: “They are not being pursued and will not be pursued because they are more work with less certainty of who will reap the profits and power than simply managing the current decline, and culling the herd from time to time, as necessary.” At some point, we’re going to have to be less civil and be quite blunt about what “culling the herd” means. The persistent belief that there are too many people on the planet is very carefully cultivated and nurtured by the ruling elites. Just look at who sits on the boards of the big environmental groups like WWF or Greenpeace. Are these socially conscious rich people? Or are they social darwinists donning the more socially acceptable garb of being “green”?

  10. February 20, 2012

    “(the horror of some one working from home causes vapors amongst developers and suburban homeowners, it seems.)”

    Maybe you should rephrase that. Lots of people work from home in neighborhoods and apartment buildings that forbid running a business from home. If working from home means telecommuting with a laptop and an internet connection to your office, nobody cares and they will even tell you that when you sign your lease. It’s the traffic and parking and sometimes disruptive behavior of customers and clients that gets you in trouble. Almost nobody wants a criminal lawyer bringing his criminal clients to his home office in their neighborhood. And they don’t like massage therapists much either.

  11. February 20, 2012

    And you forgot to mention the continued attacks on unions and government workers. This will liquefy the labor markets so that compensation can be driven down more effectively. Most people at my government office readily parrot the learned helplessness phrases “At least we have jobs”, “nobody else gets cost of living raises anymore”, “nobody else has good pensions anymore” (overlooking the fact that a only generation ago federal civil servants had pensions that were twice as good as now, and they were not lavish, but apparently having half of a defined benefit plan is now is so exceptional that we should feel ashamed of ourselves for having them) “I never expected Social Security to be there for us, so no biggie”, etc. In fact, when I hear that loser talk, I almost want to help screw them over (but “them” is unfortunately “us”)

  12. February 20, 2012

    @Tony Wikrant – speaking as a useless eater, I’ll just say that the current spike in population is directly related to the historically atypical availability of cheap energy. There will be a culling. I’m sure that the “ruling class” is comfortable in their assumption that it will be the likes of me that will go first. They’re probably right to a certain degree, but as many point out, you can’t eat gold or money (and neither can the latter-day praetorian guard, so it will be harder to hoard the actual food supply).

    Thanks for this post, Ian.

  13. Compound F permalink
    February 20, 2012

    that’s in my 95% confidence interval, along with john michael greer and dmitry orlov. thank you for weighing in (not sarcastic).

  14. beowulf permalink
    February 20, 2012

    “This is the problem of a meritocracy. No concept of noblesse oblige. Sometimes I miss the old wasp elite.”

    Do you watch Downton Abbey? Excellent show and the most interesting thing about it
    is the sense of noblesse oblige that Lord Grantham and his family exhibit (the show takes place before and during WWI). Even factoring in the rose colored glasses of its creator Julian Fallowes, it is true the ruling classes in England didn’t hesitate to put their own sons’ lives on the line during WWI (or in the case of Winston Churchill his own. After being kicked out of the cabinet, he served in the trenches as a battalion CO) Even today, its remarkable that both Prince William and Prince Harry are active duty military officers.

  15. Ian Welsh permalink*
    February 20, 2012

    I’ll write a proper post on the oil situation to clarify. A sloppy mistake on my part, compounded by bad writing. The US is producing more oil. The US is refining a lot more oil, in large part Canadian tar sands oil. The US is using less oil. The US is still a net importer of oil, but less than it used to be. The US has huge shale oil reserves, and I believe a concerted attempt will be made to become a net exporter of oil, really ramping up after the election.

    Guest: if they won’t even tolerate a massage therapist, they’re worthless. One of the changes I would mandate is no performing mortgages in any neighbourhood where it is not legal to have everything up to light industry. Suburbia as consumption is not viable any more (well, it never was, but that’s another discussion.) If you can get an entire neighbourhood with true private mortgages, you can have your restrictions (ie. no backing from Freddie or Fannie, none.)

  16. beowulf permalink
    February 20, 2012

    “Guest: if they won’t even tolerate a massage therapist, they’re worthless.”

    Never let it be said that Ian Welsh doesn’t believe in happy endings.
    :o )
    I’m actually a fan of Houston and its lack of a zoning code (it does have some de facto land use planning in the form of deed restrictions).
    Ed Glaeser’s study of the “zoning tax” (the land use regulatory cost imbedded in housing prices) a decade ago is still more or less accurate. Bear in mind that only the metro populations of New York, LA and Chicago are larger than Houston’s and all three have far more expensive housing. The bulk of the difference is the zoning tax.
    http://news.heartland.org/newspaper-article/2002/11/01/land-use-regulation-makes-housing-less-affordable-harvard-study-finds

  17. Bolo permalink
    February 20, 2012

    @someofparts

    And this is the fucking state branch of the EPA we’re talking about people.

    Hello fellow EPA employee! My co-workers are slightly more tolerant, but equally devoid of good ideas. I’ve heard them argue for government budget cuts to show empathy with the private sector (i.e. we are overpaid and should have our benefits and job security reduced to make private sector workers… feel better?). Also, while Obama does not appear to be doing all that much, he’s really got our (fed. employees) best interests at heart. Ugh. I guess compared to the Repubs he’s “good,” but that’s not saying much.

  18. amspirnational permalink
    February 20, 2012

    http://petras.lahaine.org/?p=1887

    Petras says much the same.

  19. February 20, 2012

    During the 2000′s various economists and financial gurus used to laugh that the fools overseas were giving America real goods and resources in exchange for worthless paper.

    They were giving them goods and services in exchange for not getting turned into a incandescent cloud of ammonia, ozone, and carbon monoxide. The worthless paper was a way to give the thing an amusing air of respectability..

  20. February 20, 2012

    “The persistent belief that there are too many people on the planet is very carefully cultivated and nurtured by the ruling elites.”

    And those pesky scientists, who can’t see the earth can sustain its current human population at any level of wealth other than grinding poverty, if even that. I wrote about this at length some time ago; the article was called Going Green. I think I will hand the mike over to Gregory Bateson for a paragraph or so:

    The environment will seem to be yours to exploit. Your survival unit will be your and your folks or conspecifics against the environment of other social units, other races, and the brutes and vegetables.

    If this is your estimate of your relation to nature and you have an advanced technology, your likelihood of survival will be that of a snowball in hell. You will die either of the toxic by-products of your own hate, or, simply, of overpopulation and overgrazing. The raw materials of the world are finite.

  21. CMike permalink
    February 21, 2012

    2008 Scientific American article discussing the Republican “drill baby drill” strategy:

    >>>>>[Robert Kaufman, an expert on world oil markets and director of Boston University's Center for Energy and Environmental Studies,] dismisses as “nonsense” any promises that offshore drilling could make the U.S. “oil independent.” Even if it could somehow insulate itself from the ups and downs of the global oil market, he notes, the U.S. would have to make a huge leap in domestic oil production to replace what it buys from overseas.

    “At its peak in production, which occurred in 1970s, the U.S. produced about 10 million [barrels of oil] a day,” Kaufman says. “Now, after 30 years of fairly steady decline, we produce about five million barrels a day,” whereas we consume 20 million barrels daily. “Whoever talks about oil independence has to tell a story about how we close a 15-million-barrel gap.”<<<<<

    (Granted, Kaufman was providing a rough estimate. For more precise data, see the EIA data below.)

    Wikipedia article citing optimistic industry estimates for oil production from the Athabasca tar sands in Alberta:

    >>>>>If all these plans come to fruition, these five companies will be producing over 3.3 Mbbl/d (520,000 m3/d) of oil from oil sands by 2028.<<<<<

    Here are two web pages with up to date data from the United States Energy Information Administration. That first link leads off with this summary:

    >>>>>The United States consumed 19.1 million barrels per day (MMbd) of petroleum products during 2010, making us the world’s largest petroleum consumer. The United States was third in crude oil production at 5.5 MMbd. But crude oil alone does not constitute all U.S. petroleum supplies. Significant gains occur, because crude oil expands in the refining process, liquid fuel is captured in the processing of natural gas, and we have other sources of liquid fuel, including biofuels. These additional supplies totaled 4.2 MMbd in 2010.

    In 2010 the United States imported 11.8 million barrels per day (MMbd) of crude oil and refined petroleum products. We also exported 2.3 MMbd of crude oil and petroleum products during 2010, so our net imports (imports minus exports) equaled 9.4 MMbd….<<<<<

    I find this 20 page section of the BP Statistical Review of World Energy pdf interesting to look through. Unfortunately it doesn’t have 2011 data.

  22. Morocco Bama permalink
    February 21, 2012

    Whoever talks about oil independence has to tell a story about how we close a 15-million-barrel gap.

    What cracks me up about projections such as these is that they assume demand will follow the trajectory it’s been on for the last 100 years. It won’t. The way you make up that gap is to destroy demand, wittingly, or unwittingly. By wiping out the Middle Class in ten to fifteen years, you can cut that demand in half, easily.

    There’s one sure way to oil independence. Stop eating.

  23. Morocco Bama permalink
    February 21, 2012

    EPA? You mean there is still an EPA? You wouldn’t know it from recent events. Here in Atlanta, respiratory compromise is currently epidemic, and the pollen count the last week, or more, is low. My theory is the weather patterns. It’s dumping, and concentrating, pollution from the Southwest, to include refinery emissions, on our heads, and compromising our health. This article talks about refinery emissions, which is pertinent to the discussion, since it’s been decided the U.S., undemocratically, is going to be the refinery to the world. By the way, the article is from a pro-nuclear site. I am not pro-nuclear, but that doesn’t preclude the cogent analysis of the article.

    Carcinogenic Oil Refinery Emissions

    In a disturbing reversal of a positive trend in earlier years, emissions of carcinogens from U.S. refineries actually went up between 2004 and 2006, according to a new study by the nonprofit and nonpartisan Environmental Integrity Project (EIP). Based on an analysis of Toxics Release Inventory (TRI) emissions data reported by refineries to the U.S. Environmental Protection Agency (EPA), the EIP study found that a handful of U.S. refineries accounted for more than a third of the total emissions of carcinogens. EIP concluded that total OSHA carcinogens emitted by U.S. petroleum refineries climbed from 3,090,521 pounds in 2004 to 3,164,460 in 2006, an increase of about 74,000 pounds, or more than 2 percent. Nine of the top 10 refinery sources are either in Texas or Louisiana. (See list below.) The Environmental Integrity Project report also cautions that millions of pounds of carcinogenic formaldehyde and benzene emissions by refineries are likely underreported by the industry. For example, only six of the nation’s 150 refineries reported releasing a total of 142,995 pounds of formaldehyde in 2005. But according to EPA methods of estimating emissions, industry-wide emissions could exceed 4 million pounds a year. In addition, new “remote sensing” technologies that directly measure air emissions show that refinery releases of carcinogens can be as much as 100 times higher than industry estimates based on outdated EPA emission factors. The city of Houston filed a petition on July 10, 2008, asking EPA to replace outdated and inaccurate emission factors that are used to estimate refinery emissions with newer and more accurate methods of measurement. Eric Schaeffer, director, Environmental Integrity Project, said: “Petroleum refineries are a major source of air pollution, and it’s disturbing to see so little progress made in reducing emissions of carcinogens. Also, the evidence continues to mount that this toxic pollution is grossly underestimated, or not reported at all. In this case, what you don’t know can hurt you, since most refineries are within breathing distance of where people live, work, and go to school.” “This report and the work EIP is doing is invaluable to refinery communities,” said Kathy Andria, president of American Bottom Conservancy, which is based in downstate Illinois where the ConocoPhillips Wood River refinery is located. “We have very high rates of cancer and heart and lung disease here, so we are alarmed that toxic emissions from refineries can be 100 times higher than what is being reported. We are fortunate, though, that with EIP’s help we negotiated an agreement that will require ConocoPhillips to use the cutting-edge DIAL laser monitoring technology discussed in the report. That should result in accurate monitoring and reduced emissions that will benefit not only citizens, but the company, as well.” “It’s shocking that these numbers actually increased during this two-year period,” said Matthew Tejada, director of the Galveston-Houston Association for Smog Prevention (GHASP). “The lack of significant progress and now an actual reported increase in emissions totally negates any excuse not to do everything in our power to reduce industrial emissions. We need to use every available tool, including new measuring and monitoring technologies, to get at the real source of these emissions and get these pollutants out of the air we breathe.”

  24. Bolo permalink
    February 21, 2012

    @Morroco Bama:

    Yep, the EPA still exists. If Obama’s FY2013 budget goes through as he wishes, then our total funding cut from FY2010 to FY2013 will be about 20%, uncorrected for inflation. I no longer have a travel budget (though travel is moderately important for my job) and, if trends continue, in a few years I won’t have any contractor support and will end up either doing the work of 9 people or doing my work at 1/9th speed. Or just doing 1/9th of the work that my team currently accomplishes. There is already talk of slowing down our work due to a lack of funds for contractor hours (contractor staff make up roughly 5x the permanent staff in my department).

    @The Raven:

    I actually agree with Tony on this. The planet is very much capable of supporting the current population, and this is not a statement being made in a “nature vs. man” sense. We have a responsibility to maintain and invigorate the planetary systems that we are currently damaging. We can maintain the current human population and likely make room for even more people while simultaneously improving the natural environment. However, doing so requires a great deal of effort in new technologies, economic reforms and redistribution, better industrial development, and changes to legal and ethical systems. The current configuration of human political, cultural, and economic arrangements is highly resistant to these changes–as Ian pointed out above.

    There are solutions to our problems, but they are not being worked on because the ultimate winners will likely not be the current ruling elites. Instead, we are given two choices: (1) Deny there are any problems and assert that the planet’s carrying capacity is infinite even given our current consumptive lifestyles, or (2) assert that the planet’s carrying capacity is very finite, that we’re at or past the point of no return, and that the only viable solution is to manage a decline as gracefully as possible. (1) is just insane and will result in a sharp, shocking global catastrophe. (2) is probably just as insane in terms of the amount of potential life and prosperity that it gives up on, as it advocates a slow reduction in human welfare guided by benevolent technocrats at the helm of international and state apparatuses. Plus, I think (2) converges to (1) in the mid- to long-run, as many people and states will ultimately resist being crammed down on, leading to civil unrest, resource and ideological wars, and quite a number of nasty horrors that will shift the end-result toward (1).

    Option (3) would be to acknowledge that the carrying capacity of Earth and the relative wealth of its inhabitants (human and non) have become very much a product of human efforts and decisions, and that we can expand these things if we so choose. Certain resources are very finite, while others are nearly infinite. We need to begin very rapidly shifting the basis of our material existence from the dangerously finite to the nearly infinite. We need to acknowledge our dependence on evolved “natural” systems while also understanding that we are increasingly able to alter them to suit both our needs and the needs of the greater biosphere.

  25. February 21, 2012

    Interesting talk with Richard Wolff & Gar Alperovitz, FWIW (transcript or listen to broadcast):

    Economic Alternatives to Capitalism

  26. February 21, 2012

    @Bolo -

    I have some problems with your analysis, and hopefully you do not find it a wholesale rejection of what you are saying.

    You presented, if I may excerpt & paraphrase:

    Instead, we are given two choices:

    (1) Deny there are any problems and assert that the planet’s carrying capacity is infinite even given our current consumptive lifestyles…

    (1) is just insane and will result in a sharp, shocking global catastrophe.

    Fair enough, with a minor quible over your qualifier “even given our current consumptive lifestyles.” It is a privileged minority of the Earth’s population that is indulging in such excess. Of course, if a China or an India were to ramp up to the American-style middle-class lifestyle (the one that’s declining here), you sure have the recipe for the sharp and shocking.

    One could argue that if the privileged minority downgraded to a lifestyle that “leveled the waters”, then we would have a sustainable population. I’m not sure if you understand what that level would look like, especially without petroleum fueled industrial agriculture (but I’m getting ahead of myself with that last bit.)

    (2) assert that the planet’s carrying capacity is very finite, that we’re at or past the point of no return, and that the only viable solution is to manage a decline as gracefully as possible.

    (2) is probably just as insane in terms of the amount of potential life and prosperity that it gives up on, as it advocates a slow reduction in human welfare guided by benevolent technocrats at the helm of international and state apparatuses. Plus, I think (2) converges to (1) in the mid- to long-run, as many people and states will ultimately resist being crammed down on, leading to civil unrest, resource and ideological wars, and quite a number of nasty horrors that will shift the end-result toward (1).

    Oh, well… you make my point regarding (1).

    Option (3) would be to acknowledge that the carrying capacity of Earth and the relative wealth of its inhabitants (human and non) have become very much a product of human efforts and decisions, and that we can expand these things if we so choose. Certain resources are very finite, while others are nearly infinite. We need to begin very rapidly shifting the basis of our material existence from the dangerously finite to the nearly infinite. We need to acknowledge our dependence on evolved “natural” systems while also understanding that we are increasingly able to alter them to suit both our needs and the needs of the greater biosphere.

    The only resource that is of any importance is energy. Energy is what sustains life, and there is only one type of energy that we are gifted with – which could be called effectively “infinite” – and that is what the sun shines down on us every day. (Even that’s not infinite, but I don’t think we can take the blame for when that orb blinks out, well on down the road.) :)

    Wind energy is pretty much solar energy as well, it’s just another way of wringing it out. The calculation is how much sun can a given population extract per-annum for food without running down the ecosphere. Other uses, such as transportation and artificial environments at the extremes of the Earth should be under even more severe scrutiny – as in, where’s the tradeoff of number of humans vs. what those humans can do (long-distance transportation, living in exotic environments, etc.) Of course, I’m not suggesting some master planning on these questions, only that regardless of how they are organically worked out, the limits will be there for all to see.

    Geo-thermal is sort of effectively infinite, but it has a shorter life-span than the sun, and I’m not sure things would be very pretty if we even came close to exhausting it. Not an immediate problem – but then again neither was petroleum 300 years ago (setting aside the vastly different time scales and the carbon release issues with fossil-fuels.)

    My point is that the only, only infinite resource is solar, and what is shone upon us is a fraction of what we have used to pump our population to this level (fossil-fuels being millions upon millions of years of stored sunlight.)

    From your first paragraph:

    We can maintain the current human population and likely make room for even more people while simultaneously improving the natural environment. However, doing so requires a great deal of effort in new technologies, economic reforms and redistribution, better industrial development, and changes to legal and ethical systems.

    “New technologies” and “better industrial development” are particularly affected by this energy ration situation that we are in. You can’t just throw them out as solutions without addressing the energy.

    In conclusion, if we are talking about establishing an equilibrium, a sustainable level of population (to be arrived at organically, of course – I am not a Malthusian (not to malign a misunderstood man) , and I think that’s what we’re talking about, then we have to respect our limited energy inputs.

    As I think that our current population has been “pumped” by excess solar energy use, I say that means a significant reduction.

  27. Nick permalink
    February 21, 2012

    Funny, in a later post you take Fukayama to task for assuming that the future will be just like the present. Which is pretty much what you are doing in this post. If in 20 years things are different from what you post here, you’ll be as much of an ass as Fukayama. At least he had the balls to have it in print so people like you can check the record. Your post will almost certainly not exist in 20 years, though, so you can post predictions without fear of someone in 20 years going “Hey, remember that post by Ian Welsh about how Americans were going to be peasants in the future? What an asshat.”

    You need to read “Abundance” by Sam Harris, or at least check this out for some balance in your world view. http://www.thedailybeast.com/articles/2012/02/21/the-world-is-getting-better-argues-new-book-abundance.html

  28. February 21, 2012

    Bolo, “The planet is very much capable of supporting the current population, and this is not a statement being made in a ‘nature vs. man’ sense. ”

    Honestly, what leads you to believe this? Yes, perhaps, in grinding poverty and rigid repression (though even there I have some doubt.) But in anything like reasonable comfort? Where does the energy come from? The space? The ecological resources?

  29. Bernard permalink
    February 22, 2012

    the culling has begun and the last 40 years are just a taste of what the next 40 will be.

    arguing who has the definite “facts” is just more Friedman units. a total diversionary tactic while the present situation crumbles and the decay continues.

    what will it take to unite enough of the “others” to actively do something in a united fashion/effort is what all this “thinking”/reflection i hope is all about.

    we are not in a sustainable economy, nor have we been in such a state for such a long time. tearing apart the web of life in the hopes that such a rearragement of the web of life could would work is such a fantasy.

    we are all dependant upon the ecosystems of the planet and our own societies, but the dynamics have all been “refocused” to maintain the status quo.

    that the status quo is collapsing around is evident to a lot. the retreat to a less than “whole” perspective about the situation/reality of our entire world leads only to the hysteria we now have on a mass scale.

    that we have no leaders willing/surviving/ to voice the reality taht we have to work together to find effective solutions is why so many are easily led sheep. after being led to slaughter by Obama/Bush/Clinton et al/ the Elites there is no wonder as to why we are such a splintered people.

    the people i work with are so self oriented adn dismiss most concepts of what reality it will take to find solutions. but then again, in the American Way, collective action other than War on the weaker/ being a Bully, is not in the “conversation.”

    the little Red hen comes to mind here. the Bread being our ability to come together to find solutions for all of us, rather than follow what the PTB want.

    Maybe our descent into chaos is the natural order of things, and i am just expecting otherwise, not cognitively accepting the natural way of our species. Chaos may be our natural state.

  30. Hoarseface permalink
    February 22, 2012

    Ian:
    Your post seems spot-on to me. Part of the effectiveness of the cycle as you described it is the continual re-defining of ‘normalcy’ – which is crucial to degraded standards of living. If too much is taken from too many too quickly, the contrast is clear in the minds of the populace and civil unrest is a real concern. Contrarily, if the baseline is continuously re-established at a slightly lower threshold, for only a segment of the population at a time, a “new normal” mentality can take effect and by the time Group B is outraged over what’s happening to them, Group A will have already gone through the ‘stages of grief’ and moved to ‘acceptance’ – and their once-bright anger will have smoldered, and as such no longer be available to harness for Group B. Later, of course, when Group B becomes Group A…. Group C will have a rude awakening.

  31. Celsius 233 permalink
    February 22, 2012

    @ Ian Welsh
    February 20, 2012
    Guest: if they won’t even tolerate a massage therapist, they’re worthless. One of the changes I would mandate is no performing mortgages in any neighbourhood where it is not legal to have everything up to light industry.
    ~~~~~~~~~~~~~~~~

    Interesting comment; I found out, much to my amazement, there is/was a thriving manufacturing industry scattered through suburban neighborhoods in Oregon.
    Many people were sub-contractors for contractors using CNC mills and lathes in their garages and basements.
    The parts were for major companies across America. Viewing these homes from the outside gave no hint of the activity going on within.

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