A LANDSCAPE OF BROKEN CERTAINTIES
Looking at the conduct of economic and related affairs in recent years, it would be all too easy to conclude that the world’s leadership cadres have (in the quaint English phrase) ‘lost their marbles’.
For the most part, they haven’t. But they have lost their bearings.
Policy and evaluation operate within parameters. These are determined by paradigms, which are based partly on experience, and partly on theory. When theory doesn’t work out as expected, the validity of these paradigms breaks down. What results is a vacuum in which literally almost anything can happen.
The aim here is a tightly-focused examination of paradigm breakdown. Put simply, have crucial formulae, supported both by logic and by prior experience, ceased to function?
If they have, much of the basis of policy, and of economics itself, loses validity.
We can cite several examples of where exactly this seems to have happened. Most important, policy responses to the 2008 global financial crisis (GFC) followed a tried-and-tested Keynesian formula, but they haven’t worked out as theory says they should. Long before now, those policies should have caused the economy to overheat and inflation to take off, setting the conditions for a return to normality. This simply hasn’t happened. This seems to be part of a broader paradigm breakdown which is particularly visible, too, in business and in capital markets.
When astronomers find anomalies between expectation and observation, this often reflects the gravitational pull of an object whose presence is unknown. One way of detecting this object can be to work backwards from the gravitational effects to the object that causes them. At that point, a new influence is posited, and calculations are recalibrated accordingly.
In much the same way, this discussion posits a factor hitherto excluded from mainstream economic theory, and examines whether this can explain the breakdown of theory. That factor is energy, and it is concluded that its gravitational pull has become large enough to invalidate much that has hitherto been assumed about the economy.
First, though, we need to examine the evidence for the crumbling of paradigms – and there is no better place to start with what’s happened to the world economy since the GFC.
Case-study #1: Post-crash policy – a theory overturned
The response of the authorities worldwide to the crisis of 2008 made sense within established paradigms. During late 2008 and early 2009, the authorities reacted by slashing policy rates, and using QE (quantitative easing) to drive bond yields sharply lower. This created a situation in which nominal interest rates were negligible, and real (inflation-adjusted) rates were negative.
This was monetary stimulus on a vast scale.
In the circumstances, it was a text-book response. Received wisdom said that this policy mix would be effective, and that it would be short-lived. Instead, it has mutated into what is known here as monetary adventurism – a seemingly-permanent state of monetary recklessness which can only end badly.
How did this happen?
The thinking behind ultra-cheap monetary policy was clearer than you might suppose, and was derived from Keynesian calculus. When demand weakens, the Keynesian prescription is stimulus, essentially meaning that the authorities inject money into the system. This boosts demand, thereby promoting economic activity.
Most commonly, this stimulus is fiscal. But this was hardly a viable choice in 2008. Fiscal deficits were already enormous – and fiscal stimulus takes time to operate, time that the authorities didn’t think they had.
Instead, then, they opted for monetary stimulus, which, theory tells us, works in much the same way. Access to cheap credit, it is reasoned, boosts demand, countering downwards and deflationary tendencies in the economy.
Of course, there are consequences to stimulus, consequences which will either restore equilibrium, or cause over-shoot. As well as promoting demand, stimulus is likely to push inflation upwards, and can make the economy overheat. That’s when the Keynesian formula calls either for moderation or reversal, including running fiscal surpluses, and raising interest rates.
In 2008-09, the authorities clearly thought that monetary stimulus would act as a short, sharp shock, and could be withdrawn (or reversed) when inflation and overheating showed up.
This goes a long way towards explaining ‘austerity’, too. The logic was that, if you’ve injected huge monetary stimulus, you hardly need vast fiscal stimulus as well. Whilst monetary stimulus was boosting demand, fiscal tightening could be used both as a regulator and as a way of rebuilding sovereign balance sheets. Cheap credit was expected to enable much of the debt that had migrated from the private to the public to be transferred back to where it began.
Yet none of this has worked out the way theory (and prior experience) say it should.
Monetary stimulus has been vast – quite how vast is almost incalculable, but certainly running into tens of trillions of dollars. This should have injected huge demand into the system. Within a year or, at most, two years, inflation should have been rising, and the economy showing unmistakeable signs of overheating. At that point, the stimulus could be withdrawn, or indeed reversed.
But this hasn’t happened. Asset markets have been inflated, but this hasn’t translated into broad inflation. The economy, far from overheating, has remained sluggish. There has been no opportunity for deleveraging the balance sheets of governments (and remember that deficit reduction simply slows the rate at which debt keeps growing).
At a point which – statistically, at least – is nearer in time to the next recession than it is to the last one, growth remains fragile, real wages remain depressed, both public and private debt are higher than ever, and some of the really nasty by-products of cheap money are showing up in forms that are as disturbing as they are unmistakeable.
So, does this experience prove Keynes ‘wrong’? Hardly. The Keynesian model, taken in its objective sense rather than in its political form, is mathematically demonstrable. It would have worked in the Great Depression of the inter-war years, and it ought to have worked now.
That it hasn’t worked tells us that something new must have entered into the equation.
Conventional theory cannot tell us what this new element is.
It is baffled.
The paradigm has failed.
Case-study #2: Britain – a productivity paradox
A further, briefer example underlines the breakdown of paradigms. In the years preceding 2008, British productivity grew at a trend rate of 2.1%. Ever since its inception in 2010, the Office for Budget Responsibility (OBR), which advises government, has expected this pre-crash trajectory to resume.
It hasn’t. Instead, it has remained obstinately low, at just 0.2%. This has confounded OBR forecasts and calculations, and has contributed to policy failures. Only now, seven years on, has the OBR conceded that it isn’t going to happen. The results have been sharp downwards revisions to growth projections, and acceptance of the grim (and, to some, “astonishing”) reality that real wages will remain lower in 2022 than they were back in 2008.
This does not, it must be stressed, make the OBR idiots. Rather, they are extremely able people, and their expectations were soundly rooted in theory. As we have seen, productivity, being based on the GVA subset of GDP, is a proxy for growth. Stimulus, both fiscal and monetary, has been enormous. This should have pushed demand sharply upwards, driving up growth and, therefore, productivity. The problems that chancellor (finance minister) Philip Hammond should be facing now ought to be an overheating economy, and a spike in inflation.
But this is exactly what hasn’t happened. Instead, growth (after necessary statistical adjustments) has become negligible, and the only source of inflation has been currency weakness.
Once again, the theoretical paradigm, within its own parameters, and reinforced by prior experience, is demonstrably correct. The divergence of outcome from theory can only mean that some new element has entered into the equation.
It’s a fair bet that the authorities have no idea what this unexpected, paradigm-busting element is. The pursuit of explanations for a non-existent “puzzle” around productivity is a textbook example of groping blindly in the dark.
To be quite clear about this, weak productivity is a symptom. Locally, as globally, the malady is the failure of the economy to react to enormous fiscal and monetary stimulus.
Policymakers don’t know why this happened – and their advisers are powerless to tell them.
Asset markets – accumulating disconnects
Governments and central bankers are by no means the only consumers of economic interpretation. It has a huge role to play in business and finance, too. In financial markets, most participants have enjoyed the fruits of monetary largesse, a policy which has inflated asset prices to giddying heights. Only the most astute, however, are likely to have pondered the implications of economics, and markets, failing to behave as theory says they should.
For those willing to look, there is no shortage of anomalies in asset markets. An obvious example is property, where inflated prices have become all but impossible to square with falling real incomes. This, at least, can be explained away by reference to cheap money and expanding multiples. These explanations may seem satisfying, even though they are very likely to prove wrong.
Bond and equity markets offer more intriguing anomalies. In equities, there are at least five phenomena which should be causing the wisest to wonder.
In no particular order, the first of these is cash-burn. Whole sectors, as well as significant individual companies, are characterised by rates of cash-burn reminiscent of the dot-com boom – yet these stocks and sectors are often amongst those most cherished by investors.
Second, some highly-rated stocks depend for their revenues on sectoral income streams which, locally as well as globally, are both comparatively narrow and potentially vulnerable.
Third, there is the phenomena of stock buy-backs, a highly influential trend in which cheap debt is used to deliver accretion (reverse-dilution) for stockholders, to the particular benefit of anyone owning options. Though the metrics seem to work well with debt so cheap, it’s most unlikely that the large-scale replacement of equity with debt is a positive trend. Any cessation of the practice could take a big buying presence out of the market – and rate rises could cripple companies which have loaded up on debt.
Next, there is the ongoing migration of client funds from active to passive management. This may or may not be a positive trend for clients, but the subtext seems to be one of giving up on analysis – and giving up on analysis doesn’t seem all that far from giving up on rationality.
Finally, there is real-world disconnect, where asset prices seem increasing difficult to square with the realities of customer circumstances.
To be sure, there is nothing new about ‘negative’ economic news being seen positively by markets. A deterioration in growth can be seen as a market positive because it softens the outlook for rates. The same can happen in reverse, where good economic news can be interpreted negatively by markets.
But inverse responses shouldn’t cancel out logic to the extent that now seems to be happening. Beyond some embattled retailers (whose woes are customarily explained away by technological disruption), the stock prices of most customer-facing businesses are high, even (or especially) in the case of stocks whose sectors are intrinsically risky. This seems impossible to reconcile with the all-too-obvious travails of the average consumer, faced, as he or she is, with stagnant or deteriorating real wages, increasing insecurity of employment, rising indebtedness, and growing uncertainty over pensions.
In the bond markets, British government debts (“gilts”) are an instructive example. Sovereign debt yields are supposed to include, where appropriate, a risk premium. In the British instance, this risk premium component ought, logically, to be pretty hefty – this is a sovereign borrower with rising debt, acute political uncertainty, a vulnerable currency and an economy in very big trouble. Yet the British government remains able to access funds at rates historically associated with ultra-low-risk, robust borrowers.
Missing in action – consequences of paradigm failure
Both in macroeconomics and in capital markets, then, the list of disconnects keeps growing, meaning that the validity of theory seems to be breaking down. Numerous demonstrable, historically-referenced ‘truisms’ have gone ‘missing in action’.
The landscape of economics and policy is littered with the corpses of dead paradigms.
The implications, both for policy and for commercial and financial strategy, can hardly be overstated.
Following the failure of stimulus to conform to theory, macroeconomics has moved into a new abnormal. Some of the numbers make this abnormality strikingly obvious, a point underlined by the following chart.
Since 2008, and expressed in constant (2016) PPP dollars, GDP growth of $24 trillion has been accompanied by an $84tn net increase in debt, meaning that $3.50 has been borrowed for each $1 of growth.
This is a lot worse than in the pre-crash borrowing bubble, when the ratio of borrowing to growth was 2.2:1. One reason for worsening of the ratio is that emerging market economies (EMEs) – and most obviously China – are now doing what the developed West alone was doing before 2008.
Meanwhile, the crushing of returns on investment has created a vast shortfall in pension provision worldwide. Globally, these deficiencies probably total around $125tn, and are growing at a real annual compound rate in excess of 5%.
There’s every reason to suppose that much, perhaps most, of the apparent “growth” in GDP has been nothing more substantial than the simple spending of borrowed money. A person does not become more prosperous by running up an ever bigger overdraft, or by pillaging his or her pension fund. Yet, globally, that’s exactly what we’re doing.
Apparent improvements in per capita GDP simply aren’t showing up in prosperity, quite aside from the rapid increases both in households’ own debt and in their share of government and commercial indebtedness. Anyone – and this includes far too many policymakers – who thinks that inflated asset values provide a cushion is guilty of naivety on a breath-taking scale, because we cannot monetize the notional ‘value’ of assets by selling them to each other.
Politics and business – cut adrift from paradigms
The purely political consequences of deteriorating prosperity have long been obvious to virtually everyone (except, apparently, the self-styled ‘experts’). “Brexit”, the election of Mr Trump, the defeat of all established parties in France, the travails of Mrs Merkel and the rise of “populism” have all been entirely predictable events. Even in countries like Britain, the public seem to be giving up on “capitalism”, within polls revealing striking levels of support for nationalisation even amongst erstwhile centre-right voters.
Though the political Left has failed to capitalise on this so far, it is now busily positioning itself for success by purging itself of a generation of “centrists” who bought in to the economic logic of the centre-right.
Commercial behaviour seems equally at odds with the reality of consumer deterioration. In business, as in economics and government, logic suggests that strategy should be framed by awareness of deteriorating consumer discretionary incomes, rising debt and the approaching implosion of pension provision, with all that that logically means for customer behaviour and sentiment.
Self-evidently, it is not. Businesses appear to be throwing ever-bigger advertising budgets at consumers who are getting ever poorer. There are strong reasons why consumers are likely to become a great deal more cautious. The biggest single factor is likely to be the impending recognition of the pensions “time-bomb”, which ought to push savings ratios back up from historic lows, to the detriment of consumption. A second strong possibility is that inflated property markets might crash if the law of gravity reasserts itself in income multiples.
The gravitational pull – energy
What we are witnessing, then, is an economic, political and commercial landscape in which players have been cut adrift from past paradigms without, yet anyway, finding any new ones. As regular readers will be well aware, the ‘gravitational pull’ which is wrecking past paradigms is the energy basis of the economy.
It should be unnecessary to stress that energy is the basis of all economic activity. This was true back in an agrarian economy which depended on human and animal energy, and is every bit as true now, when extraneous sources (and principally fossil fuels) have taken over almost entirely from human energy.
Energy is central to a resource chain which, most obviously, supplies food, water, minerals and chemicals. Add in the critical importance of electricity and it becomes apparent that economic activity is entirely a function of energy availability.
Over the comparatively short period between 2001 and 2016, consumption of primary energy increased by 40%, or by 18% on a per capita basis reflecting the increase in the world population over the same timeframe. It is a moot point as to whether this rate of increase can be sustained, and a logical certainty that the economy cannot continue to deliver genuine growth if it is not.
Absolute quantities of energy, however, are not the critical issue. Whenever energy is accessed, some energy is always consumed in the access process, and the real driver of economic activity is the surplus energy available after this access cost has been deducted.
Access cost is measured here using ECoE (the energy cost of energy), expressed as a percentage of the gross amount, and measured as a trend. The main driver of ECoE is depletion, moderated by technology.
According to SEEDS (the Surplus Energy Economics Data System), worldwide trend ECoE has risen from 4% in 2001 to 7.5% last year. Put another way, this means that, in order to have access to 100 units of energy for all purposes other than energy supply itself, we needed 108.1 units in 2016, compared 104.2 units back in 2001. That number is projected to reach 110.1 units in 2020, 112.2 units in 2025, and 115.3 units by 2030.
In measuring this impact, the key metric is surplus (net-of-ECoE) energy availability. Whilst gross access increased by 40% between 2001 and 2016, the increase at the net (“surplus”) level was only 35%. In per capita terms, surplus energy was only 13% higher in 2016 than in 2001.
Most important of all, this per capita number has now started to decline. This is something which, almost certainly, is wholly unprecedented. Even more importantly, it is likely to be irreversible, because ECoE is now rising a lot more rapidly than we can hope to increase gross energy supply.
To understand the implications of this trend, we really need only two charts, which are set out below. If these are compared with the GDP and liabilities chart shown earlier, the role of energy in the paradigm-busting process becomes entirely clear.
The question now is whether economists, government and business can become aware of what has been destroying their certainties – and can find new paradigms to replace the old.
Another good article Tim. I can add a comment or two. The Failure of paradigm 1 was due to it being a lie, untruthful and deliberately engineered by Neo liberal policy to be that way, allowing benefits to accrue to the wealthier sections of the community. There was not too much stimulus, but too little. GDP growth requires more spending than the government takes with taxation. It’s a fact not a theory.
Paradigm 2, the productivity conundrum, is simply a product of the world economy peaking in productivity by 1970 and then having to fake progress with credit growth. The age of productivity has passed, forever. We disguise it with credit expansion thus energy we will need for the future is being consumed today. This is a diabolical mistake.
There are no plans for a new paradigm, or set of them. Another diabolical mistake.
Thank you. I’ve long suspected that bailing out the ultra-wealthy, and preserving a system to which inequality is fundamental, might have had something to do with responses to the GFC. For instance, there was no attempt, anywhere that I know of, to put in place taxes designed to recoup some of the QE windfall to asset owners.
But I’m pretty sure that Keynesian calculus was at the root of it. 2008-09, if you remember, was when the arch advocates of private ‘animal spirits’ and small government suddenly decided that they liked the idea of state intervention after all!
As for there being no plans for a new paradigm, this surely reflects a blinkered refusal to consider energy as being fundamental to the economy. To accept that might involve accepting, also, some kind of ‘limits to growth’, anathema to many in positions of influence.
The rich like Socialism, Tim. The version that they privatise profits and socialise losses Is their model!
Yes- to the lack of forward planning. They are probably correct to think that making plans, it it got out, would be death to their positions. Nobody wants to know and no politician can countenance it. Politicians are not our leaders. They are our followers. They’ve also rigged the public service so public servants are dependent on these people for their jobs. Labour started that in Australia under Keating, which shows how far to the right the left has shifted since the 1970’s. So the public service can no longer give fearless advice. So they refrain.
The central bankers know their national (sovereign) government can never fail to pay its bills in it’s own currency. No matter how big it is the Central Bank can always send a cheque. They already do so, but just don’t tell us (cue disaster relief for one example, plus they could buy Brexit costs with a single cheque if they wanted to). We wouldn’t notice a difference.
It’s Tweedledum or Tweedledee here now. Just a different coloured tie between them. The Greens are nearly as bad, being as equally clueless on economics as are the major parties. It’s a worldwide problem with no solution in sight.
You’re absolutely correct about the Left – but I think that’s changing, pretty quickly. I’ve wondered if this might be worth an article to itself.
On what basis are you claiming “The Greens are nearly as bad, being as equally clueless on economics as are the major parties”
They are the only party that recognises that there are resource limits, that infinite growth is impossible, and that we need a different economic paradigm based on sustainability and a richer definition of prosperity.
They may say that Colin, but they are still neo-liberal in their economics policy.
They had a chance to catch up a few years ago in Australia when they hosted a talk by economist Steven Hail;
There was no follow up, although it did show someone was willing to consider modern economics.
I love the Greens – they are a source of constant amusement – they scream about resource limits – then they insist that we drive electric cars – made in factories — from … scarce resources!!! — and powered by electricity provided by …. coal electricity plants!
These same Greens also want us to use more solar – made in factories in China – of dwindling resources – which are powered by coal of course!
Then these Greens fly around the world in jets (often private ones!) to attend conferences where they urge countries to cut back on carbon burning ….
And it is these same Greenies who enjoy high salaries — who would never turn down a stipend increase — because they enjoy buying more ‘stuff’
And one other thing the Greenies do not understand is that there is no way to shrink — we either grow or we collapse.
And because growth is reliant on cheap fossil fuels …. we must burn more and more every year — or we collapse.
Oh these Greenies are so amusing …. world peace, renewable energy, Koombaya!
They have not the slightest realization of just how ridiculous they are!
I don’t know about the Australian Greens.
I’ve selected some relevant Green Party of England and Wales principles, objectives and policies (these are out of sequence but give you a flavour):
“NR200 Supplies of natural resources on Earth are finite or require suitable land, which is in limited supply, for their production. Increasing productivity of biologically renewable raw materials is generally coupled with a decrease in genetic diversity and an increased dependence on high high-energy inputs such as fertilisers and pesticides.
NR301 To minimise the consumption of all natural resources and, in particular, non-renewable resources for which supplies are reaching the limits of availability, whether for environmental, technical, physical or political reasons.
NR316 To ensure that the transition towards sustainable resource-use occurs in such a way as to achieve and guarantee social justice, equity and economic stability.
EN001 This policy aims for a complete transformation of the energy system to one based on efficient use of energy supplied mainly by electricity from renewable sources. The policy will ensure an affordable and reliable energy supply for householders, commerce and industry in a prosperous and productive economy with excellent employment prospects. It will bring energy bills down; strengthen community control of energy use, supply and costs, and help to eradicate fuel poverty.
EN003 We can enjoy comfortable homes and a thriving economy using a third of our current energy demand by improving the energy performance of new and existing buildings and by re-thinking industrial processes to reduce the ‘energy intensity’ of products. Innovation in energy usage will save costs and enable a rapid change to clean renewable power from sources within the UK. Electricity from renewables will replace existing polluting energy sources, ensuring stable prices and removing dependence on foreign fuel imports.”
I don’t think you will find any other political party that explicitly states that there has to be a reduction in energy and resource use.
I’m not saying they are a total loss, but that they still are neo-liberal in economic understanding.
They are very much mainstream in that, and it’s a big issue they are not facing up to
To be fair, by making uninformed statements you make yourself look ridiculous.
I’ll start with my own track record.
– I’ve never owned a car;
– I’ve used renewably generated electricity for c. 12 years;
– I’ve used renewably generated gas for c. 6 years;
– I’ve massively up-insulated our house (triple glazing and extra insulation), installed solar PV and at the end of life of an appliance I’ve made sure the replacement is highly energy and/or water efficient, resulting in significantly reduced utility bills;
– I’ve only flown once every two years on average over the last decade;
– I minimise my purchase of consumer electronics, e.g. I replace my mobile phone on average every 4 years;
– I eat a primarily vegetarian diet and organic produce.
So I walk the walk. What do you do?
No other party even begins to get the need for degrowth, efficiency and sustainability, as I’ve demonstrated in my response to ejhr2015. There is clearly a long way to go, but there is no other game in town.
So next time, try analysing the facts rather than simply advertising your prejudices.
You are not walking the walk at all – you are completely plugged in
So what you minimize – you still fly – you are using the internet — you are using a computer to post that comment – surely you use health care — you must have received an education – think of the monumental amounts of fossil fuels that made the infrastructure possible for you to enjoy all these things.
I assume you use roads — and public transportation – even if you have a bicycle that was made in a factory in China using coal electricity.
As for renewable energy – THERE IS NO SUCH THING. How is solar energy renewable when the elements that go into one come from mines and are smelted using massive amounts of coal generated electricity?
You are deluding yourself.
You want to walk the walk?
Of course not. Too difficult right.
You are living very large compared to these people.
Great article. Thanks Tim.
You are very welcome. As this might be the last article (or one of the last) of 2017, I did try to put extra effort into this one.
Another great article, thank you.
I was discussing this blog on another forum and a poster posited what I thought was an interesting thought experiment:
Imaging a source of energy is discovered which has a much higher Energy Cost of Energy than currently used energy sources, but can provide vastly more energy per annum than is currently consumed by the world’s economy and can do so for a significant period of time. How would this be described by Surplus Energy Economics?
I suppose the *price* of energy would fall, although as you’ve demonstrated there is little, if any, direct relationship between energy price and ECoE, but I’m not sure what would happen to the relationship between Energy Return on Energy Invested and global economic growth.
I’d be very interested to read your thoughts.
This is a very interesting idea – and could prove more than simply hypothetical. In a sense, this describes a much bigger version of some of things we already have, such as shales. Shales, in aggregate, have produced a lot of volume, but have never generated positive free cash flow (that is, cash flow from operations has never been enough to fund capital investment).
If we discovered an abundant, but very costly, new source of energy, the implications would be interesting.
As things stand, ECoE is growing at rates faster than we can grow gross energy supply. This is pushing down surplus energy per capita, and could push down surplus energy in aggregate, should we hit limits to gross energy supply.
In the situation you describe, the size and cost of the industry supplying this new energy would be very large, and very costly. Activity and investment in this sector might make GDP look good, but it would not benefit prosperity, since V (volume) X (1-ECoE) would remain weak. The share of investment (and of day-to-day expenditures) going into this new industry would carry on displacing other activities.
Thanks for your reply. I hadn’t considered how a higher ECoE might improve the financial measure of GDP even as EREI falls.
GDP is based on activity, and doesn’t/cannot make judgements on its value. The dividing line is known as “the production boundary”. Some countries differ on where this boundary lies (apparently, drug dealing and prostitution are included in the UK but not in France). The most obvious activity excluded is caring, whether for children or family members.
Some have suggested that financial services shouldn’t be included, or even that they should be deducted, as they don’t add value, but just move around the proceeds of other activities, or are simply a cost to these other sectors.
GDP includes some items which are “imputed”, meaning that no money actually changes hands. The biggest is “owner occupied rent”. This refers to people who own their homes, thus paying neither mortgage interest or rent. The sum attributed (“imputed”) to owners and part-owners in the UK is about £125bn per year. Imputations (also including employer-provided benefits, “free” banking and so on) account for about 16% of US GDP.
It’s a moot point as to whether this non-monetary GDP component actually exists, or is simply statistical jiggery-pokery – it certainly cannot be taxed, for instance, which makes tax as % of GDP look lower than it really is. I included a chapter on this sort of thing in my book Life After Growth.
More to the point, deteriorating ECoE won’t allow indefinite “growth” in GDP, because non-energy sectors would, eventually, diminish. “Eventually” is the operative word here, though……
I suppose prosperity can be thought of as ‘useful’ energy and in theory economies could be measured by their energy conversion efficiency: the ratio of energy used usefully to total energy used.
Thanks for the new article
You are very welcome.
Yes, thank you so much!
Your final paragraph naturally leads on to a more fundamental critique of the current authorities:
‘If the current authorities, institutions, and their advisors cannot develop a sufficient consensus model of the world around them (including ECoE) – allowing them to develop appropriate policy and legislate effectively. Then what use are they, and what legitimacy do they have?’
Jared Diamond’s book Collapse provides two historical case studies where systemic issues were dealt with and risk of societal collapse mitigated. These were through radical policy change and severe legislative penalties for those who did not comply, including immediate execution. This was the doing of dictatorial regional governors in Japan and the Dominican Republic.
Diamond then raises the question: ‘Is western democracy an inadequate system for addressing systemic yet exponential trends which risk collapse?’
Would we be better off in the long term with a coup by an ‘aware’ dictator?
1/ The institution of dictatorship has its uses, certainly, as an instrument.
Unfortunately, it can turn very easily into despotism and tyranny, maintained by lawless violence, even if the original dictator was put in place through popular demand.
It is therefore, not something to contemplate: there is far too big a downside. It lacks all checks and balances, and is a perpetual offence to human dignity.
2/ It is certainly true that the mechanisms of modern democracies in industrialised states tend to militate against an honest and accurate public appraisal of the energy predicament that faces us, and the taking of certain policy paths: no one in any electorate would want to hear the truth, for one thing! Quite frankly, no one in charge would wish to do so as well.
However, there is no indication that a dictatorship would, in principal, be any more effective: they are just as prone to wishful thinking, delusion and corruption. See Stalin, Mao, Hitler, etc.
There is even less speaking truth to power in dictatorships than in modern democracies. The Chinese leadership can certainly do more or less what they please, and all they have really done is wreck the ecology of China and build infrastructure which will very soon fail and be impossible to maintain: as a case study, it is not encouraging!
3/ The assumption that an accurate understanding of the energy predicament would suggest policy routes happily leading out of crisis is quite probably wholly mistaken: an accurate cancer diagnosis supported by tests and perfect scans will tell you what is happening, that no cure is possible and when -sooner or later – you are going to die. Our civilisation, after 200 years of heedless growth, is much like a late-stage cancer.
A new economic paradigm might, therefore, only amount to much the same thing: clever, accurate, impressive, but fundamentally useless. It might, I would concede, buy us a few more months or years of existence, if it suggested better policies, as with the cancer sufferer, and I suppose that might seem worthwhile.
Nonetheless, the endeavour to arrive at a paradigm that approaches more nearly to the real situation is worthwhile, if only intellectually.
I prefer to understand, rather than live in a world of delusion: but it is itself a delusion to imagine that most, or even a minority, human beings share that trait to even a limited degree, even if they have the intellect, and even if they were not naturally guided by immediate self-interest.
Moreover, even when something is pretty well understood, it is a fact of common experience in all fields of life that knowledge often cannot be translated into effective and beneficial action.
Circumstances overwhelm us: sheer complexity, the burden of past investments, the physical limits of past construction, geography and natural limits, and human (animal) nature itself – even if we imagine enlightened unselfish human citizens, ready for self-sacrifice and any necessary austerity, united behind a wise and well-informed leadership acting impartially on the best available information. Wasn’t that meant to be the Soviet Union?
The bitter curse of life has often been to know what is good, true and useful, and to see that it cannot be realised, even to a limited degree. It’s not a consoling thought.
Thank you, Kevin
What I’m describing, I think, is a world of politics and governance cut adrift from its moorings. This really requires a “Paradigms lost, part 2”, which I might yet do.
Though I don’t really subscribe to “right” versus “left” – preferring “corporatists” versus “libertarians” – let’s use these labels as shorthand.
Back in the 1990s, it looked as if the Right had won the argument – socialism had failed in Russia and (it seemed) was being abandoned in China, whilst the prosperity of “the great moderation” seemed to vindicate the Right. This is why the Left either (according to one’s point of view) “sold out” or “embraced reality”. This, from my perspective, was the nightmare triumph of corporatism, both private and public.
The big change since then is the perceived failure of “capitalism”. In the UK, as in the US and elsewhere, hardship since 2008 has seemed to bear out the failure of the market economy. So, put simply, both “capitalism” and “socialism” have failed (this is simplistic, of course, ignoring nuances). Two-thirds even of Tory voters want widespread nationalisation, and 50% of the UK public would nationalise banking.
One obvious consequence might be a revival of the Left. The Left has lost out to “populists” because of the “sell-out” narrative. The Left has to purge itself of the Blairs, the Clintons and so on, to succeed. That’s why some of its leaders (i.e. Corbyn and Sanders) are far from young – they reflect a pre-“sell-out” continuity. It’s noteworthy, too, that Jean Luc Mellenchon did so much better than the established Socialists in France.
On this reading, the Centre-Right is finished – unless it can reinvent itself, which looks unlikely – with “populists” and “the traditional Left” vying for popularity. I’d say this favours the former, because ditching (say) Blair and the Blairites is easier than getting rid of the perceived taint of “Blairism”.
Officialdom (though you’d know better than I) and the media are baffled, but then, they’ve been behind the curve for a long time. Neither saw Trump winning, or “Leave” winning, or Mrs May losing her majority, though all were predictable (I predicted them here). I’d guess there were no plans in Washington to cope with Trump, or in Whitehall to cope with “Brexit”, because these things “just couldn’t happen”. The BBC is a near-hilarious example – I cannot remember a single day since his election when the BBC website hasn’t led with an anti-Trump storyline.
This is all, to me, fascinating – the “establishment” is bewildered, the old verities aren’t working, and there are both intellectual and self-interest obstacles to their developing an understanding.
Over to you?
Corbyn for all the publicity heralding a revival of Labour, is completely ignorant of modern monetary mechanics and whilst he waffles on with trying to tell where will the money to pay for his reforms, he cannot answer. This just sets him up as a know nothing and will tear down his position.
Sanders in the US has destroyed his aim of single payer health care by not knowing how to find the $trillion needed to fund single payer healthcare. Worryingly his supporters, rusted on as they are, are also utterly clueless and in fact oppose the realities of modern fiat money. The right takes advantage. The Left cannot get far without a fundamental rethink on money creation, etc.
I’m sorry Tim, I do not see labour changing which you seem to think is in the offing.
I think there is a fundamental problem with dictatorship which condemns it as a solution to our problems.
The very notion of progress means going beyond the present; that is its essence, indeed its definition. In my view in order to achieve progress there has to be freedom to think and a freedom to change; this is a necessary condition for progress. A dictatorship cannot allow either of these and is condemned to ultimately fail. If you allow free thought one day someone will think that we would be better off without X as dictator!
If you look at Russia in the 1930s the study of biology was effectively controlled by the state and led to various blind alleys which were inimical to the progress of that science, a distortion brought about by the political system.
And what would you suggest the ‘aware dictator’ do that would improve upon what the current dictator (the Federal Reserve and its franchises around the world) are doing?
As someone long associated with the centre-right in Britain, I’m familiar with the shortcomings of “Corbynomics”!
The real problem is that his opponents’ grasp of the economy is fatally flawed as well. Many of them either don’t understand (or don’t want to understand) their own ideology.
I can respect, even if I disagree with, all honest points of view. I think Corbyn is, as I would put it, ‘sincere, but wrong’. The people I disliked far more were the “Blairites”, who did more than anyone to put the UK into its current parlous state.
I do need to write something about the political Left.
No problem agreeing with you, Tim. My issue is there’s an open goal in front of Corbyn, yet he’s unable to kick it. It won’t be there forever for him. what we don’t want is a Sanders type blunder which took single payer health care off the agenda in the USA. The question for both men is and was “How do you pay for it?” Sanders said a tax hike for a $trillion. I am not sure about Corbyn, but he is unable to answer so far as I know.
The answer is of course obvious. The federal government can pay for it. The fed is part of a monetary sovereign entity and can meet all and every invoice for as long as the resources are there. As I have written before, the Central Bankers already understand [but are reluctant to let us in on it] as already they pay for disaster relief, and military overspend, and pensions, and wars etc, off budget. This is a huge sum, (especially if you think about the $29 Trillon spend 2008-10 on the GFC bailout in the USA). It should be a no-brainer, but people have difficulty coming to terms with it. Corbyn and his group need to get up to speed FAST!
What would I do if I was the dictator?
I would be realistic and realise that ultimately I cannot take responsibility for fixing everything, but am now in a position of influence to extract as much fiat currency as possible from the current system. While this fiat is perceived to be of value I would try to transfer it into tangible ‘more collapse-proof’ assets for myself, my tribe and those I want to be my allies. This might be land, commodities, and maybe critical infrastructure.
I certainly wouldn’t be trying to legislate for a new paradigm. There is too much much risk in doing that. I might outwardly pay lip service to it while I implement my own agenda as outlined above.
(Hmm. This sounds familiar 😉)
There are no collapse proof assets.
When we hit the wall — and BAU is starved of cheap oil — the financial system collapses — trade collapses — you won’t even be able to buy a toothbrush.
There will be no electricity – no petrol – no fertilizers – no food — no police — no courts — no medicine.
There will be no commodities because there will not be the means to extract them. For instance – people believe there will be some coal available — coal mines and open pits will fill with water — there will be no way to pump the water out…. no electricity – no diesel – no spare parts for the pumps… no factories… no ships … nothing.
There will be famine – violence – pandemics.
And then there are 4000 spent fuel ponds that will NOT be managed. The computer systems will stop – the pumps will stop – the cooling will stop … and they will burn up releasing massive amounts of radiation — unstoppable – and that will get into the food chain .. into the air… and anyone who is unlucky enough to survive the famine and disease and violence — will be killed off.
There is no hedge – no way to prepare for this.
The people pulling the levers and pushing the buttons that keep BAU staggering on — understand this — that is why they do absolutely anything — to delay the end game.
They know that when they start to push on a string — and at some point no matter what they do — we are going to run out of tricks to keep the hamster running — all hell will break lose.
And nobody survives.
This is worth reading.
When an important building is on fire, all the gapers and molesters are removed or eliminated by the police, army and firefighters. There will be no discussions.
We now can observe, that this analogously happens, if our energy-driven “civilsation” is threatend seriously. Strong men with pretened “easy solutions” get right of way.
Might it help if some of us get to the right solutions to busted paradigms before the authorities do?
Another good article Tim.
I thought this might interest you.
If a speculative bubble can be built around oil like it’s been built around Bitcoin it might delay the inevitable market collapse.
Good point. Mr. Chilton certainly is capable to implement such a scam.
Well well, a finite currency after all, to pay for a finite commodity. That is, until it becomes unaffordable. OilCoin won’t help, but perhaps delay things a little.
Wouldn’t it be likelier to leverage a crash – I can picture Bitcoin and fiats in a race to the bottom, to the sound of popping bubbles everywhere from property to capital markets, cars, student debt, pensions…….
We already have a speculative bubble around oil… it’s called shale…. and like BC… it is based on nothing but pure hype….
These hype based investments can however go on for a long time — see Tesla….
The little boy famously observed that the Emperor had no clothes on.
What our host is saying is analogous to the Emperor having indeed been well-dressed (the old paradigms, valid in their day), but being now inappropriately dressed for a different season, and likely to catch his death.
What the story never told us, of course, is what happened to that bold little boy.
You know, I’m beginning to wonder if the Bitcoin Bubble bursting might be the catalyst for the unfinished 2008 crash.
It quacks like a duck to me . . .
+ 1 for the “Paradigm Lost” title, Dr T.
You have an eye for great blog post titles that manage to encapsulate the meat in few words of instantly resonant crackling.
Well.. a biz partner was Skyping this morning about a few issues — and I mentioned how he had suggested a month or so back that I buy Bitcoin — at 3000 – and of course I didn’t because I think it is digital tulips…. and now it is approaches 20k….
He is still suggesting I buy at the current price — he continues to buy more…. expecting 50 or even 100k….
The problem I see with this is that he — and any other punters who believe this is a ‘new paradigm’ — as opposed to a speculative play that will end badly…. and who do not understand that the end is nigh for BAU —- watch those 20% gains rubbing their hands in glee…. believing they are going to retire at 45 on this ….. and never take anything off the table and enjoy it….
I no longer invest – because investing assumes there is a future.
Tim … my take is that the central banks are not unaware of the disease… and I don’t think the fight against the impact of expensive energy kicked off in 2008 rather it began in 2002.
I firmly believe that the subprime crisis was orchestrated as a response to the lift off of oil prices as we began the final approach towards peak conventional – and the end of cheap to produce oil.
Banks have never in history relaxed lending standards like we saw after the turn of the century. It was common knowledge that ‘Liar Loans’ were being signed off in large volumes.
Surely the Fed was aware of this – surely a decision had to be made to allow this. Packing them into CDOs was obviously never going to turn lead into gold — but it did keep the game going for years.
And that buoyed the economy — people bought stuff to fill these homes (on credit) — they were given loans in excess of the value of a property ‘to go buy a new SUV’ —- this was powerful stimulus….
Then as expected, what could not continue stopped in 2008 — then I believe Plan B was launched – monumental stimulus …. and here we are … in a situation that cannot continue so it will stop.
A few supporting articles and thoughts:
A good friend of mine was a partner in a global engineering firm (retired 2008) and was spending a great deal of time in the oil patch in the 2000’s. We were discussing these issues and the bells started to ring — just after 2002 clients demanded that new projects be accelerated — there was a massive push to ‘get that oil out of the ground’ —- as he stated — we had never been so busy … and there was no reason given …. pedal to the medal….
I think this indicates that the decision makers understood the problem was energy related. A bottleneck was forming.
Drill Baby Drill – remember that? I wonder if there was not some contention at the highest levels regarding shale — perhaps some dissented because it was too polluting – or more likely because they did not think it was viable due to the costs – or perhaps it was just a PR campaign to get the public on board…. anyway — it happened — and it addressed the bottleneck that formed at $147….
Further — by rights shale plays should not be happening – not at $60 – not at $100+ — they have been cash flow negative from the very beginning. So why are they happening? Why would Wall St be investing — surely it is obvious to them that these will never make money – because they didn’t make money when oil was over $100…..
I see the hidden hand of the Fed in this — shale gets designated TBTF – as it most definitely is — the Fed drops a note to the investment banks — send cash this way because we have your back – we will support this industry —- the Fed rings Don Draper and says Don – we need a catchy line or two for this new project — Don responds with ‘Saudi America’ —- and the MSM pour out articles claiming that the US is/will be energy independent blah blah blah
Someone with a lot of power has to be behind this — has to be the Fed.
Note this article — the Fed surely understands the disease:
The Beginning of the End
JUNE 13, 2003 – There is increasing evidence that massive economic stimulus — monetary, courtesy of the Federal Reserve, and fiscal, thanks to the president and supply-side minded lawmakers — is taking hold. The magnitude of the policy turnaround, which caps a constructive, multi-year reflation process, should overwhelm the economic negatives — including the drag from expensive oil and poor finances at the state- and local-government levels.
Expensive oil and its impact on other energy costs remains a concern.
The current level of U.S. monetary stimulus is massive. Real interest rates have fallen 5.2 percent from December 2000 to March 2003, reaching -1.2 percent. A swing of this magnitude may be historical.
Read more at: http://www.nationalreview.com/article/207227/reversal-fortune-david-malpass
And then we have this extremely detailed research:
The Impact of Higher Oil Prices on the Global Economy
Prepared by the IMF Research Department1
Approved by Michael Mussa
December 8, 2000
Recent Developments and Outlook in Oil Markets
Current Market Conditions and Near Term Outlook
Energy Intensity of Consumption and Production
The Impact on the Global Economy
The Impact on Industrial Countries
The Impact on Developing and Transition Economies
Major Emerging Market Economies
Oil Importing HIPC and CIS Countries
Conclusions and Policy Implications
Annex: Lessons from previous oil price hikes
Impact of an Oil Price Increase of $5 per barrel on Oil Exporting and Oil Importing Countries
Permanent $5 per Barrel Increase in the Price of Oil: Baseline Scenario
Comparison of the Baseline Scenario with Outside Simulations
Permanent $5 per Barrel Increase in the Price of Oil: Alternative Scenario
Emerging Markets-Estimated Effects After 1 Year of a $5 Oil Price Hike
Selected HIPC and CIS Countries-Preliminary Estimates of First Round Effects of an Oil Price Increase and IMF Quotas
OPEC – Preliminary Estimates of First Round Effects of an Oil Price Increase and Global Slowdown Effect
Selected Oil-Exporting Developing and Transition Countries: First-Year Impact of a 20 Percent Increase in Oil Prices on Public Sector Revenues
Consumption, Production and Price of Oil, 1990 – 2001
Crude Petroleum, Heating Oil, and Gasoline: Commercial Stocks and Prices
World Primary Consumption of Energy, Selected Years, 1973 – 1998, and Real Price of Oil, 1970 – 2000
Primary Consumption of Energy by Region, Selected Years, 1973 – 1998
Prices of Crude Oil, Natural Gas and Coal
Impact of a $5 per Barrel Oil Price Increase on Current Account Balances
a) Oil Prices and Equity Markets: Industrial Countries
b) Oil Prices and Equity Markets: Emerging Markets
Yield Differential Between Nominal and Index-Linked Government Bonds
a) Oil Prices and 10-year Government Bond Yields
b) Oil Prices and Emerging Market Spread
Over the past two years, oil prices have increased very sharply, with the Fund’s reference price rising from a 25 year low of $11 per barrel in February 1999 to a peak of close to $35 per barrel in the first week of September 2000.2 After easing somewhat in early October, oil prices increased again in late October and November to an average of about $32 per barrel. At the same time, futures markets indicated that average oil prices in 2001 would be about $5 per barrel higher than projected in the most recent World Economic Outlook (WEO) published in late September.3
The recent World Economic Outlook contained an extensive discussion of the potential impact of higher prices.4 The purpose of this paper is to expand on that discussion in the light of developments since then. The paper is divided into three sections. Section I reviews the causes underlying the recent oil price increase and the outlook for 2001. Section II discusses the potential impact of a sustained $5 per barrel increase in the price of oil on the global economy, focusing on the key channels through which it operates, and the effects of differing policy responses. Section III provides a summary and includes a discussion of main policy implications for developed and developing countries. An Appendix reviews lessons from earlier oil price increases.
I cannot help but conclude that the Central Banks (who are the ultimate power on the planet) understand the nature of the problem we are facing — I also believe they have teams of experts who are monitoring the situation 24/7 doing ‘whatever it takes’ to try to keep the symptoms from overwhelming and killing BAU.
The situation is in constant flux. Literally by the minute… the front lines would involve plunge protection teams that put out fires in the bond and stock markets — and make sure TBTF businesses are not allowed to fail.
I am certain that there would be teams dealing with the macro picture — others that deal with the geopolitical issues — for instance — if Brexit is determined to be a danger to the continuation of BAU — then nothing gets implemented — it gets tangled up in the courts for years — in purpose.
This is all hands on deck. This is not a recession — not even a depression — it is not even a war.
It is literally the end of the world we are facing.
And the Central Banks are doing ‘whatever it takes’ — which means literally anything goes — no matter how absurd it may appear — IF it keeps the train on the tracks awhile longer.
They will at some point fail. They will at some point push on a string.
Of it may be more simple than that — the cheap oil supply drops — BAU does not get enough oxygen to its brain — and civilization asphyxiates. The central banks do a lot of things to keep BAU staggering on … but they cannot conjure up more cheap oil/resources.
I agree in principle but differ in motive. The central banks are filled with academics who truly believe economy is built in currency flows. They have never been able to comprehend that the real economy is not built on money and valuations.
So the central bankers feel that their efforts are for the good of society. They truly believe that energy can and will be available based on supply and demand principles. In a sense they feel that they are omnipotent benefactors within the economic crisis.
Unfortunately they have convinced 99.9% of humanity to believe the same thing.
Rather then a conspiracy it’s blind leading blind.
Manufacturing Consent by Chompsky and Propaganda by Bernays help to identify rather than a coordinated effort a subtle overall guidance that is reinforced by self interest.
Meaning we deceive ourselves.
The IMF is one of the core branches of the Central Banks…
This demonstrates that they understand that there are limits to how high the price of oil can be — without destroying the economy…. which would confirm that they recognize that this is not just a supply and demand thing…
The Impact of Higher Oil Prices on the Global Economy
More evidence that they know…..
According to the OECD Economics Department and the International Monetary Fund Research Department, a sustained $10 per barrel increase in oil prices from $25 to $35 would result in the OECD as a whole losing 0.4% of GDP in the first and second years of higher prices.
Click to access high_oil04sum.pdf
Oil prices still matter to the health of the world economy. Higher oil prices since
1999 – partly the result of OPEC supply-management policies – contributed to the
global economic downturn in 2000-2001 and are dampening the current cyclical
upturn: world GDP growth may have been at least half a percentage point higher in
the last two or three years had prices remained at mid-2001 levels. Fears of OPEC
supply cuts, political tensions in Venezuela and tight stocks have driven up
international crude oil and product prices even further in recent weeks.
By March 2004, crude prices were well over $10 per barrel higher than three years before.
Current market conditions are more unstable than normal, in part because of
geopolitical uncertainties and because tight product markets – notably for gasoline
in the United States – are reinforcing upward pressures on crude prices. Higher
prices are contributing to stubbornly high levels of unemployment and exacerbating
budget-deficit problems in many OECD and other oil-importing countries.
The vulnerability of oil-importing countries to higher oil prices varies markedly
depending on the degree to which they are net importers and the oil intensity of
According to the results of a quantitative exercise carried out by the
IEA in collaboration with the OECD Economics Department and with the assistance
of the International Monetary Fund Research Department, a sustained $10 per
barrel increase in oil prices from $25 to $35 would result in the OECD as a whole
losing 0.4% of GDP in the first and second years of higher prices. Inflation would
rise by half a percentage point and unemployment would also increase. The OECD
imported more than half its oil needs in 2003 at a cost of over $260 billion – 20%
more than in 2001.
Euro-zone countries, which are highly dependent on oil imports,
would suffer most in the short term, their GDP dropping by 0.5% and inflation rising
by 0.5% in 2004. The United States would suffer the least, with GDP falling by 0.3%,
largely because indigenous production meets a bigger share of its oil needs.
Japan’s GDP would fall 0.4%, with its relatively low oil intensity compensating to
some extent for its almost total dependence on imported oil. In all OECD regions,
these losses start to diminish in the following three years as global trade in non-oil
goods and services recovers. This analysis assumes constant exchange rates.
The adverse economic impact of higher oil prices on oil-importing developing
countries is generally even more severe than for OECD countries. This is because
their economies are more dependent on imported oil and more energy-intensive,
and because energy is used less efficiently. On average, oil-importing developing
countries use more than twice as much oil to produce a unit of economic output as
do OECD countries.
Developing countries are also less able to weather the financial
turmoil wrought by higher oil-import costs. India spent $15 billion, equivalent to 3%
of its GDP, on oil imports in 2003. This is 16% higher than its 2001 oil-import bill. It
is estimated that the loss of GDP averages 0.8% in Asia and 1.6% in very poor
highly indebted countries in the year following a $10 oil-price increase. The loss of
GDP in the Sub-Saharan African countries would be more than 3%.
World GDP would be at least half of one percent lower – equivalent to $255 billion
– in the year following a $10 oil price increase. This is because the economic
stimulus provided by higher oil-export earnings in OPEC and other exporting
countries would be more than outweighed by the depressive effect of higher prices
on economic activity in the importing countries. The transfer of income from oil
importers to oil exporters in the year following the price increase would alone
amount to roughly $150 billion.
A loss of business and consumer confidence,inappropriate policy responses and higher gas prices would amplify these economic effects in the medium term. For as long as oil prices remain high and unstable, the economic prosperity of oil-importing countries – especially the poorest developing countries – will remain at risk.
The impact of higher oil prices on economic growth in OPEC countries would
depend on a variety of factors, particularly how the windfall revenues are spent. In
the long term, however, OPEC oil revenues and GDP are likely to be lower, as
higher prices would not compensate fully for lower production. In the IEA’s recent
World Energy Investment Outlook, cumulative OPEC revenues are $400 billion lower
over the period 2001-2030 under a Restricted Middle East Investment Scenario, in
which policies to limit the growth in production in that region lead to on average
20% higher prices, compared to the Reference Scenario.
I have wondered if the authorities at national levels, particularly in the developed globally integrated nations, are aware of these trends or not.
I worked in an HMG organisation which had ‘Resilience’ research programme who provided advice up to UK Cabinet Office, but often for FCO, Home Office, and MoD. At times my research projects crossed paths with their, or some analysis was fed in
I had access to a lot of their publications on the intranet but never came across any published work that had considered ‘slow-burning systemic’ issues such as increasing ECoE. The resilience research community seemed to be more concerned with specific short-term events. ‘Systemic shocks’ was the term I believe and the only energy event considered in such studies was a very sharp shock rise in energy cost due to a geopolitical crisis.
The research focus was mostly determined by the concerns of higher levels of HMG. The lack of commissioned research on these issues suggests that:
1. That they aren’t aware, so aren’t concerned.
2. They are aware, but don’t believe it is their concern.
3. They are aware, are concerned, but don’t know what research questions to ask.
4. They are aware, are concerned, and use some other special research task force to look at these issues – that isn’t shared widely even at high security clearances.
5. They are aware, are concerned, and have commissioned Tim to do it all in secret….and Surplus Energy Economics is really a HMG research programme masquerading as a fringe community of ‘doomers’ to mitigate the risk of wider panic.
Excellent article Dr Tim as always and excellent comment Thomas, I have come to the same conclusion. If we on this blog site and other blog sites have worked this out (I am no genius) hence why we are all here and there, it is surely inconceivable that TPTB at the highest levels haven’t. Of course we could all be wrong but as the years go by and more reading, observation, thinking and experience occur, my conclusions are reinforced about the why Surplus Energy decline, TPTB must also have worked it out? When you comprehend the issues and have studied ‘systems’, you can see the desperate levers that have been pulled and are being pulled, IMO they are walking tightropes with a hurricane ahead, JT your comment that they are doing this blindfolded concerns me immensely, surely the penny must be dropping? Thank you to everyone here, you keep my aging brain cells firing with your polite varied comments, points of view, very interesting links and reading suggestions. I am keeping my book supplier busier than ever, just need to make more time.
I am fully in the camp that says our present day Politicians and Central Bankers do not have a clue as to what is going on in the real world. They live in a world of models and ideologies, and when things do not work out as planned, then it was reality that was at fault, not their models.
I believe that these people are so convinced of their own omnipotance and infalability that they simply block out reality.
Do you remember Gordon Brown ?
He truly believed that he ( and his cabal in the City ) had “usher in a new Golden Age of Economics, having abolished Boom and Bust !”
The man should really be sharing a padded cell with Napoleon by now ! ; but anyway …
So, although I fully concur with JT Robert’s excellent comments above, I would suggest that it is not a case of the ‘Blind leading the Blind’, but more akin to the ‘Misguided leading the Apathetic’.
However, there is also a touch of the Ostrich going on in the higher echolons of power, in that the sheer scale of the problems facing humanity in general, and the Western Economies in particular, are too daunting to be accepted as reality. Couple that with Political Correctness, where it is perfectly acceptable to brush any uncomfortable discussions under the carpet, and we have the perfect explanation of modern society.
Nobody can imagine anything other that BAU; and nobody wants to imagine anything other than BAU. So there will be no further discission, regardless of what the facts say !
The conclusion to all this is that our illustrious leaders will just bumble on until the SHTF moment brings it all down, with disastrous consequences for us all.
I think that we here on your blog, Dr. Tim, by using factual evidence and rational, can see to which conclusion this is all leading, it is now really just a discussion about through which mechanisms and also the timetabling, of how we actually get there.
My hope is for a slow decline over the next 20-25 yrs. although I do see the dangers of the state imposing Martial Law throughout most of Europe, ( and Gun Law prevailing in the usa.)
What do you think would have happened in 2008 if the central banks had not stepped in to back stop the global financial system?
What do you think would happen if today the CBs made a joint statement that they were going to stop all stimulus measures — stop intervening in the stock and bond markets — and allow interest rates to be determined by market forces?
Thomas, I read your very informative first posting above, thank you for sharing your insights; your comments made fascinating reading.
That central banks are in the thick of things really goes without saying, and there will be some of these people who do see the dangers, and these people will be navigating accordingly. I am not so sure about there being the equivalent of Central Bank Swat teams waiting to jump into action though. That would require a much more coordinated structure within the CB’s and much political collussion. That would mean that a great deal more people within the CB’s and within the upper echelons of government are fully aware of our situation, and that there is a plan of sorts which would essentially include a post -collapse scenario.
I do not credit these people with that much intelligence. Don’t get me wrong, we are dealing with some very clever people, but I do believe that many of them are blinded by their own persona, and that they buy into a narrative which misleads them. I also see these institutions dogged by squabbling and in-fighting and therefore unable to act on such a well orchestrated and elaborate plan.
So maybe Dr. Tim here is a government / CB plant, who’s role is to soften up the public to its inevitable fate ?
As to your question about 2008 ? Well I don’t know to be honest, and I won’t speculate on it now anyway.
The only open question that I do have relating to this is, and it is academic now, was the system even savable back then, or did the CB’s already know that the game was over, and their only option was just to play for time ?
How many people do you reckon the CIA employs? When do you ever hear of any of these people leaking classified information?
How many people does the NSA employ? I am aware of only one major leak — and a couple of minor ones.
It is not difficult to keep a secret — you only hire people who test well for loyalty — you explain to them that a leak would only bring down BAU sooner – so they die sooner — you pay them well.
Another thing you do is you only give them the info they need to know to manage their part of the project – you compartmentalize – they then have no idea of what the overall picture is.
Here is an example of just one of what would be many teams operating to fight for the daily survival of BAU:
DEFINITION of ‘Plunge Protection Team – PPT’
A colloquial name given to the Working Group on Financial Markets. The Plunge Protection Team was created to make financial and economic recommendations to various sectors of the economy in times of economic turbulence.
The team consists of the Secretary of the Treasury, the Chairman of the Board of Governors of the Federal Reserve, the Chairman of the SEC and the Chairman of the Commodity Futures Trading Commission.
Read more: Plunge Protection Team (PPT) https://www.investopedia.com/terms/p/plunge-protection-team.asp#ixzz515elPp2D
It’s right out in the open — but the rationale is hidden — even those working on a PPT would not likely be told the real reason why they exist… they would not be told that we are in the dying days of BAU — that growth is dying — and that we cannot allow the markets to reflect that reality….
They are likely told that we are in turbulent times — and that we need to calm the irrationality of the markets when they take a turn for the worse (of course there is no irrationality – the markets by all rights should crash to zero — if they were allowed to operate without interference)
I suspect most people working on this Project would not be much more aware of the overall situation – only those at the very top would be given all the pieces of the puzzle — those who ‘need to know’
That would be why research such as Tim’s Perfect Storm would be ignored —- dismissed — it would be like one of the top brass losing a secret file outlining the Project —- and Tim picking it up reading it — then taking it to someone at a high level in the machine….
They would never acknowledge it — they would dismiss and discredit it —- they would make it quickly go away.
There is absolutely NO value in having anyone other than those pulling the levers and pushing the buttons know what they know….. there are no solutions — if there are ways to delay the inevitable then they already would have the best people working around the clock — with assistance from the fastest computers — running scenarios…. if we do this – how does it impact that — and so on….
The public must remain unaware — because if they got a whiff of this — that would bring on the end very rapidly indeed. The cattle must remain calm.
I wonder what they call this Project — I doubt it even has a classification — it is beyond classifying… it is beyond top secret…
How about ‘The Thomas Malthus Project’ 🙂
This article by Caitlin Johnstone starts off on the probe into Russian influence but goes on to put it in context relevant to the scenario here by TH. Have a read of the DOD assessment of “Post Primacy” risk
Caitlin’s work is worth following. Proper Journalism.
You make a very compelling argument !
I have spent a great part of my days for nearly a decade now thinking about this … 🙂
Hello Dr Tim. Loved the article; loved the title. So I guess mankind is about to be ejected from the Garden of Eden.
There’s a definite direction to comments here – are the powers that be more in control than they appear to be, or are they just as baffled as they look? This doesn’t just mean politicians, of course, but officials, leaders in business and finance, and, perhaps, influential figures behind the scenes. It seems to me that bafflement is a common factor across the board – TPTB really don’t know what’s happening.
Clearly, this is something I need to write about.
We’re in something of a vacuum ideologically. It’s fair to say that, whilst socialism has failed wherever it’s been tried, “capitalism” is now failing on a huge scale. In fact, we could be witnessing capitalism’s version of socialism’s “Russia, 1989” moment. It’s like a 200-year argument ending with two losers and no winner. Bizarre.
Of course, ideology isn’t everything, but ideas and assumptions are extremely important. Some of the proposed “solutions” offered by the centre-right – in summary, “even more of the same” – strike me as either counsels of despair or evidence of insanity.
They know. Its their power base, they have to keep up their political correctness. Because if they don’t, and start telling people real facts, people will vote different, hard right or left. People won’t pay into the pension system anymore. They’ll start burning mosques, quit spending, won’t buy new houses, trade will suffer.
And the trillion euro, yen, yuan, dollar paper economies will die within 2x 24 hours. And with that, the jit economy.
They know. They’re not stupid. But only in higher ranks they know.
Hey doc, WE know. So why wouldn’t they know? Its their core business.
In the UK we have a choice of ideologies pushed by different groups. However, for those of us paying attention we can see that those ideas are invalid relative to the situation we’re in. There is a vacuum of ideologies with utility. I like to think of it as socio-cultural software. We could implement a new operating system, but the ones on offer just aren’t up to the job.
This leaves aware people in a bit of a dilemma:
1. Which of the existing ideologies should I back with my vote? If they’re all unsuitable then it becomes a choice of the least worse.
2. Should we start my own ideology, rooted in a acceptance of the realities. But how do we promote these ideas in competition with others based fantasy and ‘return to greatness’ promises?
John Michael Greer’s latest project Ecospohia seems to be his attempt to create an ideological framework for the future. I am watching this with interest – but I fail to see how it can gain traction in the competition of ideas. Especially when it is up against ‘Make America Great Again’ and other ideas like that.
In the absence of useful society wide ideologies to embrace, my own personal strategy is simply to manage my family’s expectations about the future. Since that is all I can really do within my sphere of influence. When it comes to my children I actively manage expectations of higher education, home ownership, retirement, free healthcare, and even ‘flying the nest’. I even go so far as to stop them being exposed to ‘myths of continuous progress’ – such as Star Trek and other science fiction with prosperous futures. If we have missed some critical factor, and the trajectory for prosperity in the UK changes, then at worst they will be presently surprised.
Even the MSM has covered the problem of high oil prices…..
“As a general rule of thumb, every $10 increase in the price of a barrel of oil reduces the growth of the gross domestic product by half a percentage point within two years.”
Further on this subject of what they know…
Shale also makes ZERO sense – it lost money with oil over $100 – it loses money now.
Yet it not only exists — we keep hitting new records in terms of oil pumped — with every single barrel losing loads of money.
How can that be?
Why would Wall St fund a business that will forever lose money?
Some entity has to have be controlling this… some entity has to know that without shale we are doomed….
The Fed wants that oil to come out of the ground – no matter what the cost — so it comes out of the ground.
You do not do such things…. if you are not aware of the fact that we are running low on oil.
If you type in peak conventional oil to Google – you will get a load of results that indicate pretty much consensus that conventional oil peaked in 05/06
To think that the Fed is not aware of this — and is responding to this — is just absurd.
You do not control the world — for over a century now — by stumbling blinding in the dark….
You know everything — you plan for everything … think of how the US military plans for every possible scenario – no matter how remote….
The US military takes its orders from the Fed. To think that the Fed is not thorough — again – absurd.
I’d have to agree. Do you remember when Hank Paulson addressed the U.S. Congress behind closed doors back when the GFC was in full swing, back in 2008? How people were angry and baying for blood and their politicians were listening? He had to beg Nancy Pelosi on bended knee for a bailout of big money.
Basically he spelt out, in no uncertain terms, what the result would be if Wall St. and the financial sector generally didn’t get bailed out, and soon. Complete collapse and tanks on the streets, once the just-in-time monetary system crashed for lack of cash. Congress suitably horrified at the disaster about to unfold, bowed its head and agreed to pass the bail out bill that day.
It could have gone the other way, we were that close to complete economic meltdown. Next time we won’t be so lucky, so it’s pedal to the metal until we crash, or crash through, as far as TPTB are concerned.
The politicians understand who calls the tune … and like when there are votes on war…. both sides line up with yes votes…. so that was just a rubber stamp … to convince the people that they have the power through the vote….
Of course that was chump change…. trillions came after… with no debate… no discussion … no … nothing…. the edict was issued… and the money tap was opened
The “leadership cadre”, or “TPTB”, may be aware of the trends, and inevitabilities.
However, that does not mean that institutions can change course, implement motivation measures, and so on.
We see this almost daily. You can have a conversation between individuals at any level within a large organisation and they can agree on the issues. Everybody seems to know, but somehow the organisation as a whole continues on the same trajectory.
I would say we need to recognise that there is a distinct difference between individual awareness, and ‘institititional awareness’.
Even if we achieve institutional awareness then it still doesn’t mean we can alter trajectory easily. There seems to be a certain amount of momentum which means it that takes time to change course, even if every crew member agrees that the course.needs to change.
Also, the capacity of humans to delude themselves is amazing. Past readings suggest that self-delusion is actually a useful tool for psychological survival. A very difficult thing to act against.
I guess what I’m saying is that humans, and the groups they form, generally just aren’t well equipped by to deal with these types of predicaments. We’re generally ‘kneejerkers’ rather than ‘trend-sensers’.
(Sorry – Severe typos when using phone keyboard)
Yes, exactly, the points I made above – you can see, taste it, have a sense of what needs to be done – and be unable to achieve anything much due to all those factors, both human and institutional.
Summarised in traditional thinking as….. Fate.
One consolation is that we still, within our faltering democratic industrialised systems, have some room for manoeuvre, personally – unlike say, in the former Soviet Bloc – to maintain emergency food stocks, change location without a permit, set up food gardens, acquire or gain access to woodland for fuel, etc. Even down to buying useful clothing – quite impossible under the Soviet system.
Government might be destined to fail, but we can take mitigating action on a personal and family , if not very poor and living pay day to pay day.
It’s not much, but it’s something.
Just to add my penny’s worth to this. In my own dealings with government and the civil service it’s noticeable just how short institutional memories are – especially so nowadays. People are appointed young and don’t stay in the system very long. The older ones who used to be around for advice have long gone and as a result one gets the sort of kneejerk reaction as above. Another well-recognized response is to hunker down in the face of difficulty and do your job with dead-handed diligence. I’m reminded of the scene from the film of Rorke’s drift where soldiers desperately short of ammunition were made to stand to attention in an orderly queue while the quartermaster carefully unpacked the new ammunition boxes. So I don’t think the problems are that of conspiracy rather the structure of our institutions not being up to the job.
My own experience as an analyst within the Civil Service was exactly as you describe.
At times I wondered if their was conspiracy to inaction, there was evidence supported that hypothesis, Thomas presents some compelling arguments to support this.
However, a brief foray into psychology, neuroscience, and group behavioural studies (to understand why there was no traction on important issues) made me conclude that it was individual/group cognitive barriers, and structural barriers that reduce likelihood of needed action.
(I’ve not ruled it out conspiracy completely. It is a good argument supported by evidence and in some institutions may be the cause: Petroleum industry regarding Climate Change is an example)
As for the sheer dumbness of Homo Sap. Civ., (the most useless version of our species?) I floated the question to German readers on another website as to how Germans in general had reacted to Merkel’s suggestion that they acquire foodstocks, bottled water, etc, for likely ’emergency situations’. the answer was more or less that they had done nothing, but that the elderly had got rather stressed and the government had been censured for that. A very poor response to an unequivocal warning signal…..
The failure of the food paradigm.
If any of you have some time to watch 3 videos over the holidays, I suggest looking at this page:
I suggest the two videos by Gabe Brown and the one by Christine Jones. Between them, they largely demolish the paradigm of industrial agriculture.
Another nail in the coffin:
‘Emerging evidence indicates that plant miRNAs can present within human circulating system through dietary intake and regulate human gene expression. Hence we deduced that comestible plants miRNAs can be identified in the public available small RNA sequencing data sets.’
If you paid attention to Christine Jones data on the degradation of the nutritional value of agricultural crops, under the assault from industrial methods, and you paid attention to her explanation that one has to consider the complex system of not only the plant but also its symbionts (such as fungi), then you will not be surprised to learn that we have to pay attention to the human body proper and also its symbionts (such as gut bacteria and the RNA in the food we eat).
And if you paid attention to Gabe Brown’s first talk, you will clearly see that industrial agriculture is both deadly and a dead end.
So what can we do about it? Gabe’s talk on restoration of degraded land is a beginning. My previous references to the work of David Johnson in New Mexico are also relevant. But please note the question from the audience in Kansas about the inability of many modern plants to actually form symbiotic relationships. We CAN do it, but we are in great peril because the dominant paradigm is that genetic engineering and ever bigger machinery is going to solve the problems.
Regarding competing ideologies, what J M Greer is doing with Ecosofia is certainly interesting, and it attracts all kinds of interesting and thoughtful (and delightfully bats) people, but it always has more than half an eye on the Other World, which means it’s a dead duck in terms of wider adoption.
One great virtue of his is that he does exhort people to do something for themselves, instead of simply waiting for government.
So, uneducated 1970’s-style revolutionary town councillor Corby and breathtakingly ill-informed Mc Connell, or the ghastly, unspeakable Tories? – that’s the choice in the UK!
Or the SNP, with their absurd wind and wave power fantasies and hatred of a laird class that lost their real power decades ago.
PS At least Gove is taking issues such as soil-depletion seriously, which is wonderful. So I exempt him from being a ghastly Tory.
But, alas, the Left hate him whatever he does – judging from the Guardian – and haven’t the slightest interest in agriculture.
And famously the attempts by the tobacco industry to cover up the health effects of smoking. But these all had skin in the game. Most people I met in the system were paid to do the job and by and large didn’t want hassle – any contrary opinion was not welcome. I’m not sure this was always the case. Mrs T certainly weakened the civil service and the current cuts must make it a much more difficult environment.
Tim, this article is brilliant summary of the current situation and an overview if the understanding you have developed.
It begs the question: What next?
Do you continue to analyse different regional specifics in SEEDS?
Do you continue to track the accuracy of forecasts against historical data?
Now you have identified the root cause, do you move into developing strategy to solve or motivate risks associated with increasing ECoE?
How do you want this causal knowledge to be used? Is it to understand what happened? Or is it to help develop options? Who is it for?
(P.S. I trawled through previous work if yours that I have to hand but couldn’t find a definitive mission or goal statement you had made, indicating your agenda)
Motivate = Mitigate (damn phone!)
You raise some very pertinent questions, some of which I often ask of myself.
This all started with Perfect Storm when I was head of research at Tullett Prebon. Then I published Life After Growth in 2013.
It struck me that there was a glaring gap where a data system, relating energy concepts to the economy, ought to be. Discussing concepts, as I and others were doing, is all very well, but data is needed to back this up, analyse past and recent performance, and make reasoned projections.
I developed SEEDS (taking four years) to fill this gap. To start with, it was about ‘seeing if it could be done’. (It really has taken four years to get it working properly). It covers 22 national economies plus a world overview. It uses energy/ECoE and economic modules to support these 23 models.
I do track accuracy, and it comes out pretty well (which is more than can be said for conventional economics these days). For instance, if it was wrong, there would have been a big economic rebound, improving prosperity and reversal of the debt binge since 2008 – SEEDS says this couldn’t happen, and it hasn’t. The UK economy (which, frankly, is falling apart) also conforms to SEEDS.
There’s no mission statement because, during development, I didn’t look far beyond “can it be done?” I need now to decide what use(s) to put it to, but am at the “what if?” stage on this. (Any suggestions much appreciated).
Tim, thanks for your reply. Perfect Storm was my first encounter with your work, and I’ve forwarded it many times over the years to curious colleagues. I have come back and forth to your work over the years, since the subject matter challenges on so many levels and can feel like a heavy burden of knowledge at times.
At the time I encountered Perfect Storm and Project Armageddon I was working in the policy development area. The initial value I saw in your work was to help develop scenarios which would then inform policy development. I would still hope it can be informative for policymakers and you receive the deserved recognition/reward for your risk taking and unique insight.
After leaving this work area I still find your work of value, but in an entirely different way. It helps me to make sense of things, to understand why being prosperous is harder to achieve, and to stop me beating myself up about not being able to achieve the same things as quickly, or as easily, as my forebears. It is far bigger than just me, and some of these things are inevitable trends which we can just manage, not solve. Importantly, as discussed in another comment, it helps me to manage my expectations. Which I believe is critical for many Gen-Yers like me, and especially our children, to help us achieve some level of contentment in the futures you describe.
I am trying to demonstrate that your work has value in multiple ways for multiple audiences, and maybe in ways that you didn’t initially envisage.
Keen to follow where you go with this.
‘our children, to help us achieve some level of contentment in the futures you describe’
Future…. what future?
Several questions to try to answer here:
Short term responses to Tim’s currency crisis; much longer term responses to declining surplus energy; personal responses; national responses; global responses…
So far I’ve only really focused on my own personal response – which has only really got as far as keeping enough cash and food to cover short term crises; establishing veg gardens of perennial root crops; and free range poultry.
I’ve also got the means for cooking, lighting and drinking water; basic clothing and footwear – and basic hand tools.
These are somewhat comforting – but do nothing more than offer a little immediate personal help in hard times.
I produce more than I can actually eat at the moment – so I give most of the excess away to my neighbours.
How we as a society will cope on the way down – or what those of us who have a chance to influence the government’s response can actually do about it – is an interesting question.
I’m all ears!
It’s probably important to try to envisage the way the next crisis might hit.
I try to cover for a short term personal cash and food crisis.
So what should the country (the UK in this instance) do at a national level.
Much though I have derided ejhr and his MMT – the conjurations of MMT may well be essential here.
It seems to me that, if a currency crisis is the next step-down, we may have to back our promises to pay (interestingly we seem to have just been forced into depending on LNG from Russia that we are supposed to be sanctioning against) with actual, real commodities.
Fortunately one of those actual, real commodities seems to be the entirely fictional ‘value’ of the GBP.
You really couldn’t make this up, could you?
I had better just go back to my veg and chickens!
I am not making MMT up Mr D/O . It just fits like a glove all the gyrations of modern economics.
Have you seen some YouTube efforts by say Steve Grumbine? He interviews MMT supporters.
MMT is not a theory. It describes reality. It says things like the federal Government is not a household and that we will never have a problem paying pensions and other entitlements into perpetuity. The Federal G can never go bankrupt while ever there are goods and services available. Etc
Just as a reminder on where I’m coming from with these comments:
I see us gradually descending, with stair-step sudden crises and plateaus, to a common 3rd world economy and lifestyle over many decades.
This need not necessarily be an altogether bad thing.
The future is, after all, not just what we make it – but what we make of it.
A shrinking economy will collapse – very quickly
And a collapsed economy looks like this
This new study by David Korowicz explores the implications of a major financial crisis for the supply-chains that feed us, keep production running and maintain our critical infrastructure. He uses a scenario involving the collapse of the Eurozone to show that increasing socio-economic complexity could rapidly spread irretrievable supply-chain failure across the world.
‘Tim, thanks for your reply. Perfect Storm was my first encounter with your work, and I’ve forwarded it many times over the years to curious colleagues.’
Did anyone follow it up with you? I must admit I have been spectacularly unsuccessful in spreading the word on LAG or SEEDS.I realise they’re profoundly depressing but even so.
Interest is certainly increasing, and I’ve been developing the thesis and building the capacity to demonstrate, explain and predict using SEEDS. I now need to give serious thought as to where to go with it next. Back in 2011, few people actually wanted to believe it – but it’s much harder to ignore it now.
I certainly hope so – but time is not our friend here. Firstly I don’t think I’ve thanked you yet for making Seeds (worrying as they are) so freely available – so thank you.
As someone once said (it was Ayn Rand-I’ve just looked it up) ” You can avoid reality but you can’t avoid the consequences of avoiding reality” As far as it is possible I think SEEDS lays out our future reality without taking into account a miraculous new energy technology or some black swan catastrophe- both of which are by there nature unknowable. Great achievement ,
Those of us who understand the energy-based economy and its implications are faced with truly enormous resistance.
Government, for starters, is about continuity. That’s one reason why many things are “unthinkable”. We’ve lived through the failure of “socialism”, with the collapse of the USSR. But living through the failure of “capitalism” as well is too much to contemplate.
Business and finance are predicated on perpetual growth. So business cannot consider – meaning ‘has a mental block about’ – theories which question the validity of growth.
This said, business/finance is where a breakthrough is likeliest – if SEEDS is correct, there’s a big competitive advantage in being the first to adopt it
Professionals are loathe to accept any interpretation which invalidates much of what they take for granted.
Finally, we live in very unequal societies. Attitudes towards inequality of wealth and income would be much, much less tolerant in an ex-growth economy.
Consider the following to be half-baked suggestions rather than crisp arguments.
I have been reading The Wood for the Trees by Richard Forty, which contains his thoughts about some property he bought in the Chiltern hills west of London. We learn about the economics of bricks:
’40 pounds was paid to Michael Warwick for the contract to supply the bricks, but another 15 pounds had to be added to transport the load by cart a mere three miles to Stonor.’
We also learn that, once the planned town of Henley-on-Thames was constructed and wharves built, goods could be brought to the Chilterns from Normandy chapter than they could be brought from a few miles away in England.
I think it pays to look back at this considerably simpler economy to try to figure out exactly how economic and financial growth happened. It’s not exactly about energy alone. For example, the Lord who bought the bricks used them to build a mansion, and the mansion had to be heated. But building a mansion and burning wood for heat do not ‘increase productivity’.
The mansion was built around 1415. Bricks had been made in Roman times, then the skills were lost, and then rediscovered. In 1415 there were no Henley wharves to unload bricks shipped by water. Now if we fast forward to Henley’s boom years as a transit point for goods moving toward London and as a point of entry for goods coming into Wessex from the world by water, we find that transportation costs have fallen dramatically. The agricultural surplus which was being generated by the farmers on the estates would now go father in terms of buying both necessities and frivolous items such as mansions. If we move ahead to the era of railroads and trucks, we find yet more advances in transportation, so that whatever surplus is being generated by any sector of the economy can be used to purchase more goods and services.
We could look at ‘surplus’ in a number of different ways:
*How much agricultural surplus was being generated and did that surplus increase or decrease over time?
*How much did transportation cost, and was that cost increasing or decreasing over time?
*How much energy did it cost to produce, for example, bricks? And was that energy increasing or decreasing over time?
*How was standard of living increasing or decreasing over time? For example, did a cold mansion become intolerable and increased use of wood or fossil fuels for heat become part of ‘basic living expenses’?
Models such as the Keynesian model assume that a lot of things are either not changing, or else are changing slowly in predictable ways. But the first 20 years of the 21st century may be a time of sea-change, when certain basic relationships are changing rapidly in unanticipated ways. For example, if fossil fuels lose their thermodynamic efficiency in actual use, then we may be back to confronting the issues that were important economically in 1415 in the Chilterns. It’s not exactly correct to say that ‘economics has failed’, it’s more correct to say that ‘certain simplified models of economics are no longer useful’. Economics still works, as we can see by studying the symbiotic relationships which exist in Nature. We have just forgotten those lessons in symbiosis while we were awash in fossil fuels.
I think you made Tim’s argument. Energy is behind affordability which creates markets.
I think at least part of the “something new” that has entered the equation is the ageing of the population and the current demographic profile in most developed countries. Typically, demand is created by younger workers who are busy establishing homes, buying furniture, sending kids off to school and then college, and so on. As workers age, their expenditures eventually begin to fall off — the mortgage is paid, the kids are gone, they’re still driving the same old Honda they’ve been driving for the last twelve years, and they’ve started saving for their elder years in a big way. Add to this the experience of 2008-9 and the non-existent returns on their savings, not to mention the uncertainty in their pension provisions, and many seniors are focused on saving as much as possible.
Business thrives when spending is robust. But we now have a situation where the group responsible for a large share of the spending is relatively small as a percentage of the overall population, and the group of savers is enormous. Thus “stimulus” — unless it reaches the spending group — just can’t work in this paradigm. That hasn’t happened and isn’t going to, given the “trickle-down” philosophy that still dominates economic thinking and policy.
Thomas said: “Future…. what future?”
Thomas – I’m interested to know what you are actively doing in the present to face up to your vision of no future.
Things have not yet come to the end that you expect – so, it seems, there is still a little time for you to do so many things; either purely for yourself, or for others.
If, for example, you expect imminent financial and social collapse you could max out your credit and get a fairly substantial amount of ready cash which you could use either to pamper yourself and your family – or do a great deal to alleviate the suffering of those of those in pain or poverty in these, as you see them, ‘last days’.
However short a time you think we have left – taking some positive action towards either of these ends would cost you nothing (if you think the collapse would come before the debt became due) and would make the most of the time remaining.
Or is yours simply a counsel of despair?
If you are willing to admit the truth — then yes despair is one option.
However I look at it another way
I purposely chose not to have children for two reasons — I have no interest in dealing with the screeching infant stage — but primarily because I understood the fate that awaited them (horrific suffering – and an early death)
So I can face the truth – because I do not fret about my genetic material living on.
And then of course – nobody lives forever — unfortunately I will expire quite prematurely — but I can live with that…
Because the one thing I will not say when all hell breaks lose post BAU is — damn I should have done that!
I am coming into the 10th year of bucket-listing…. that is one of the benefits of understanding that there is no future. That when BAU ends — if you are not dead within the first month – you will wish you were…
Fortunately 4000 spent fuel ponds have your name on a rod or two…
No one gets out alive here.
A brief history of what I have been doing …
Initially I was in the doomster preppie phase — I bought land in a village in Bali — moved there — set up a permie farm — self sufficient and all that…
Then I realized – holy cow! — all the villagers grow food using petro chemical fertilizers — I was informed by the trainers here http://www.idepfoundation.org/en/ that this was the case — and that it would take years to wean off the chemicals and grow food.
In fact in the run to $147 oil the trainers told me that farmers were panicking because the chemical costs were dramatically impacting their meager incomes — they wanted to switch back to organic but were informed the only way to do that was to allocate small sections of their paddies to this and intensively attempt to rejuvenate them — while continuing with chemical farming on the rest.
I thought about that for a moment … then concluded ‘we are f789ed’ — when BAU goes into the village pot goes the white man.
So we decided to shift to New Zealand – south island nice climate blah blah blah — set up a big garden and orchard here — thinking this would be a great deal better – not many people — good climate — lots of farms blah blah blah….
Then I started to research the spent fuel pond thing. And I realized that there was not getting out of this alive… disease, violence, famine — and now spent fuel contamination of the oceans and soil guaranteed death.
Basically I escaped from Delusional Thinking.
In the meantime my wife and I have been travelling frequently … since 2008 we have averaged 4 major trips per year. We bought a shack on the coast last year so spent a lot of time there – so fewer overseas trips now — I also get to Queenstown a few times during the winter to ski….
Next trip is Uzbekistan in April — possibility of the entire winter in Queenstown this year.
I do ZERO prepping. Most of my beds are empty — some potatoes — some garlic … tomatoes… that’s about it…. because I recognize prepping is futile — it is a waste of time that could be better spent mountain biking … or paddling … or fishing or playing fetch with my dog.
I do not recommend running up the credit card — you never know how long this could go on …
A better option is to see if you can get a loan of this nature if you want to Live Large during the time we have remaining
Sounds good Thomas!
You like it?
I wasn’t referring to the loan!
I find it useful to try to reconstruct things from the bedrock when trying to figure out what may lie in store.
For example, in David Johnson’s talk at Chico, CA, he shows a pie chart of CO2 emissions. Soil microbes account for 28 percent, plant respiration accounts for another 28 percent, ocean microbes account for 41 percent, and the burning of fossil fuels accounts for 3 percent. David’s question is: shouldn’t we be trying to tweak the microbial parts before we jump to the conclusion that we have to sacrifice the benefits of fossil fuels?
That’s a pretty fundamental question. Many people staunchly resist asking the question. David thinks he has an answer.
If we look at plant societies, we find a very complicated mix of competition and cooperation. Just as it is impossible to really understand a fox without understanding the rabbits, it is impossible to understand a rabbit without understanding both the plants it eats and the foxes which prey upon it.
When we look closely, we see that practically nothing in the world can be understood without also understanding symbionts. For example, humans cannot be understood without also understanding the mitochondria in our cells, the microbes in our guts, and dietary plant RNA which seems to influence the expression of our genes. All of these symbiotic relationships seems to have logical explanations in terms of energy efficiency. ‘Differentiation with linkage’ seems to be an excellent rule….even when talking about human psychology, according to Dan Siegel.
If we begin with the husband/wife/family bond and extend that to the medieval manor, we see a symbiotic relationship in a largely self-sufficient ecology. The humans, the plants, the animals, the microbes, the insects, the birds, and the trees were all ‘differentiated but linked’.
What water transportation, and then fossil fuels, made possible was extending the symbiotic relationship to people we do not know and will never meet. The operating system changed from feudalism to capitalism.
If we are looking at climate change as the systemic challenge, then we should be asking David Johnson’s question and looking carefully at his solution. If we think that soil degradation is the critical problem, then we need to be looking at David Johnson’s solution. If we consider the end of fossil fuels as the systemic challenge, then we need to look very carefully at how both very local feudalism worked, but also how trading societies functioned with sail. If we consider debt to be the systemic challenge, then we need to be looking at how revolutions come about and how we might minimize the destruction. If we consider that our debt problems are caused by the decline of fossil fuels, then we need to be looking at both localization and sail based trading systems, along with revolutions.
There’s no question that agricultural practices that degrade the soil are major contributors to carbon dioxide increases in the atmosphere, among many other ills. There is actually a growing community of small scale farmers who are rethinking those practices “from the ground up”, so to speak. Returning carbon to the soil in relatively stable forms is a major focus of this community.
However, it is a mistake to think that burning fossil fuels isn’t a major factor. The reason is that the carbon in fossil fuels is not part of the carbon “surface cycle” until the fuel is extracted and burned. At this point, the carbon in the fuel is added to that already in the atmosphere and indeed in the not just in the total surface cycle — a carbon complement that simply had not been there for hundreds of millions of years.
Thinking that the solution to climate change is sequestration of carbon in soils and the soil biome is, in my opinion, a little delusional. The experience of those who have actually applied themselves to this task are instructive. In “Advanced Biological Farming”, Dan Zimmer reports that intensive composting of his fields for over ten years resulted in an increase of soil organic matter from 2% to only 2.5%. While this is a significant improvement, it is still a very long way from what we’d expect to find in undisturbed forest soils. When you consider the additional carbon sequestered by forests in, for example, tree mass as opposed to that of cleared farmland… well, you get the picture. It’s going to take some seriously heroic measures to sequester significant carbon through agricultural practices.
My guess? It ain’t gonna happen, at least not at a rate that will have a significant impact. Nor are we going to stop burning fossil fuels as long as it’s economic to extract them. That’s not going to happen for decades, perhaps even centuries. So I’m thinking we’re just going to deal with the consequences of climate change. Sad perhaps, but that’s the way humanity as a whole deals with it’s issues. Individuals just take their best option at the moment, which for most people in developed countries comes down to driving their cars to work, buying food produced by industrial agriculture at the grocery store, and heating (or cooling) their houses using energy provided by fossil fuels. And humanity deals with the consequences later.
If you will take the time to look at David Johnson’s talks, you will find bar charts showing his results against previous attempts at soil carbon restoration. For example, you mention putting lots of compost on the soil surface. That only works if one continues to add large amounts of compost every year. The Singing Frogs Farm in California is a good example. That farm is adding motte compost than is permitted by the Organic Regulations. Whether what that farm is doing is a good thing or a bad thing is a subject of dispute. The arguments about it mostly demonstrate to me that much of the Establishment has not a clue what is going on.
David Johnson’s method is NOT compost based. It is based on restoring fungal health to the soil and allowing the hundreds of millions of years old symbiotic relationship between plants and fungi to once again function smoothly.
So…no question, a lot of well-meaning people simply got it all wrong. That’s why it is important to look carefully at David Johnson’s work. David, of course, gives a lot of credit to others such as Gabe Brown and Christine Jones.
One more thing. You talk about the importance of the fact that fossil carbon is a net addition to the planet. That’s a true statement.
However, look at David’s bar charts of primary productivity. David can exceed, on desert land in Las Cruces, NM, the primary productivity of the Amazon rain forest. And he doesn’t do it with heroic measures such as tons of synthetic nitrogen or mined phosphorus. He just uses intelligent management to maximize the microbial impact on photosynthesis.
Which tells us that we can do ‘better than nature’, IF we have some fossil fuels to use at leverage points. It may very well be possible to do ‘better than nature’ with digging sticks, but I can’t imagine digging sticks coming anywhere close to feeding 8 billion people.
So the audacious question Johnson is posing is, in my words:
Do we know enough to utilize the symbiotic relationships which are endemic in Nature, by operating at selected leverage points, to increase primary productivity beyond what unaided Nature would achieve, thereby sequestering more carbon than we are emitting from fossil fuels plus natural emissions from microbes in the soil and ocean and plants on the land?
And his answer is: Yes we can.
Not sure this comment will appear in the right place, but….
Well, you know when something sounds too good to be true, it probably is.
Actually, I am somewhat familiar with David Johnson’s work. It’s highly regarded in biological agriculture circles and some of his techniques are now more or less mainstream in this admittedly rather small but growing sector of the agricultural community.
I also did not mean to imply that Dan Zimmer’ only method of enhancing soil carbon is (tilled-in) application of compost. He uses many other techniques endorsed by David Johnson, including seed inoculation, cover crops, application of micro-nutrients, and so on.
The difference is that Dan Zimmer makes his living from farming, whereas David Johnson makes his living through research. The bottom line is that Dan’s operation must turn a profit in the real world or else he loses it, and farming is a pretty tough business. He has only so much time, money, and energy that he can sink into soil fertility enhancement, and he must balance these activities with crop production. David, on the other hand, can spend four hours filling up his compost bin, which, if my back-of-the-envelope calculation is correct, will cover only a small fraction of a single acre when the composting is completed. To give an idea of the scaling up that would be required, a 160-acre corn field would require, using David Johnson’s figures, 160 x 4500 / 2000 = 360 tons of compost, made up of 120 tons of manure, 120 tons of leaves, and 120 tons of yard waste. Where is Dan going to get any of these, and how much carbon is going to be burned getting it into his cornfield?
So the contention of my original post was not that carbon sequestration in soil couldn’t work from a technical point of view. It was that from a practical point of view, Implementing David’s techniques at an industrial-scale agriculture level is a pretty tall order.
First off, there is abundant room for confusion over the usage of the word ‘compost’. Sometimes David calls his substance compost, but he clearly states that what it actually is is a source of spores. It is not intended to be used as a nutrient to be spread on a broad acre field.
The most economical way to use the spores is to inoculate seeds. The combination of seeds and spores increases germination rates to near 100 percent, as is described in David’s talks. When the seed and the spores begin life together, they grow together. Your calculations are wildly wrong if you look at inoculating seeds with spores. You need to forget what you think you know about spreading compost.
David has also stated a couple of different methods of inoculating. For example, a market farmer planting a row of beans may want to inoculate a furrow with the ‘compost’. Starts in greenhouses can be inoculated and they will carry the fungi with them into the soil. In the Sonoma talk, David describes a method used on a wheat farm in Australia involving sprays at very economical rates per hectare. The sprays have been effective in producing wheat on 4 inches of rain.
Crucially, once the fungal network is in place, it is important not to kill it. Among other things, that means long periods of fallow cannot be tolerated, because the fungal net will die if it isn’t fed sugars by living roots. And so David recommends rapid replacement of harvested crops with new crops. Since the fungal network has not been destroyed, there is no need to reapply any ‘compost’. You will see how David’s results get better each year, despite the fact that he is not doing anything to them in terms of fertilizers, herbicides, pesticides, minerals, or additional ‘compost’.
There are four ways to keep fungi alive in the soil:
*Keep existing fungal networks alive and well by feeding them from plant roots, while abstaining from synthetic nitrogen and other fertilizers, herbicides, fungicides, and deep tillage. Maximize photosynthesis to keep the sugars flowing.
*Use chopped plant parts to carry fungi on to the next crop. Which is one reason David uses a flail mower.
*Inoculate with spores to replace a fungal network which has died. Which is the purpose of the Johnson-Su bioreactor.
*Choose plants which are adapted to fungal synergy. This implies that repair steps will be required if, for example, a field is dedicated to brassica for a long time (David does plant arugula for about 60 days as part of a rotation). Additionally, some new seed varieties have been selected to be highly productive with abundant synthetic nitrogen, at the cost of letting the mycorrhizal symbiosis atrophy. So selecting older seeds may be necessary.
It isn’t clear to me whether it is a good idea to inoculate seeds every time they are planted. I believe David is not doing so, but I have seen pictures of seedling trees being planted into existing forest land which do benefit from inoculation.
It is not clear to me exactly how inoculation should be approached on grasslands. Perhaps the same way the Australian wheat farm is handling their land. It also isn’t clear to me how forest lands might be handled. Some forest soils are pretty degraded. There is also a distinction between endo and ecto mycorrhizae.
In summary, it is not surprising that your friend has not had good luck with bacterial compost. David says in some of his talks that he believed in bacterial compost…until he read the literature. I worked on a farm for a number of years, and I could see that tilling in a cover crop was not increasing soil carbon appreciably, and that spreading bacterial compost was either expensive or a pain in the neck. When I left that farm, I remarked to my wife that I had never seen an earthworm on it, despite the fact that the farmer considered himself ‘organic’. The rototiller and tractor made sure that there weren’t any fungi, either.
David seems to me to have put a lot of pieces together, and achieved success where there has been a string of failures.
Yep. I got that part about fungal spores. By the way, so does Gary Zimmer, Dan Kittredge, and other actual farmers who, believe it or not, do keep up with the research and use the techniques touted by David Johnson. Seed inoculation, by the way, is an established technique and you can obtain inoculated seeds commercially. They’re expensive, but the consensus is that they’re worth it if you can afford them. Some people in the biological food production sector think it’s better to inoculate their seeds with local materials (AKA compost, already-inoculated soil, etc.), since the fungi, bacteria, nematodes, and other microbiota so obtained are better-adapted to local conditions.
Regarding spreading of compost (as opposed to using it to inoculate seeds), the fact is that it is indeed necessary. Crops removed from fields remove the mineral incorporated within them. Paradoxically, “mineral-rich” foods — a goal of the biological farming community — are the worst offenders. These minerals must be replaced or we very quickly arrive at a Liebig’s Law bottleneck where growth is limited by lack of a vital nutrient. Spreading compost returns a large fraction of the removed minerals back to the field. In addition, compost does represent organic matter, and organic matter functions to retain water and soluble minerals in the soil. Better back on the field than… wherever else it would go.
I think you and I are in agreement on the efficacy of the techniques promoted by Prof. Johnson. I think where we disagree is the ability and willingness of commercial farmers to adopt these techniques to the degree necessary to significantly impact climate change. Especially under current economic conditions. Don’t get me wrong — I’m 100% certain that these techniques will, in fact, be adopted — eventually. Indeed many small growers have already started experimenting with them. But commercial farming will have a far different face at such a time as that happens on an industrial scale. My guess is it won’t happen as long as fuel and commercial fertilizers are cheap and bank credit is abundant. It’s going to take a while…
I think we’ve both expressed our opinion here. Thanks, Don, for a stimulating and informative discussion. Please chime in with any other relevant comments.
Relative to the loss of nutrients as crops are removed.
In one experiment, Johnson is removing everything. After 5 years, his yields are still increasing. His stated intention is to see if the supposed mineral depletion actually occurs. Elaine Ingham has always claimed it would take at least a hundred years, if you have healthy microbes. Wes Jackson found a field which had been hayed for a hundred years, with no fertilizers or mineral amendments ever applied, and it was still going strong. Which doesn’t necessarily mean corn would have the same effect.
As for Johnson making his own fungal compost, and whether other farmers including commercial farmers would do likewise. Johnson has said from the beginning that he would like to see the process mechanized. It grew out of a low budget project to demonstrate feasibility. It was not intended to be commercial. I cannot see any reason the commercial composters doing wind row bacterial composts couldn’t do it, if they thought there was a market for it. By putting it on pallets, Johnson specifically addressed the issue of portability. A fork lift could put it in the back of a pick up.
I don’t think Johnson is opposed to bacterial compost. He told me that he talked to Paul Kaiser of Singing Frogs when he talked in Sebastopol. They are not using the same methods, but they don’t have any big disagreements. I think Johnson agrees that Kaiser can use municipal waste bacterial compost in huge quantities on his 3 acres of vegetables, but that the vast wheat farm in Australia is going to do a lot better with the liquid inoculant from a fungal compost.
If push came to shove, I think Johnson might dispute that Kaiser is actually taking any carbon dioxide out of the air. Kaiser’s retort would like be ‘better producing food than methane in the dump’. A big initial impetus for Johnson was CO2 ‘farming’. But when he is talking to the small farmers and climate warriors in Sebastopol, he gears his talk more toward practical farming issues.
Re “In one experiment, Johnson is removing everything. After 5 years, his yields are still increasing. His stated intention is to see if the supposed mineral depletion actually occurs. Elaine Ingham has always claimed it would take at least a hundred years, if you have healthy microbes. Wes Jackson found a field which had been hayed for a hundred years, with no fertilizers or mineral amendments ever applied, and it was still going strong.”
This does not square with my own experience. I also took over one of those “been hayed for a hundred years” fields. A thorough soil test showed that several trace minerals had been severely depleted. After applying a trace mineral mixture to the field I harvested over 200 bales of hay per acre off the field, more than double my previous yield from that field.
So I don’t know the basis of Elaine Ingham’s claims, but I remain skeptical. Simple logic suggests that if you continue to remove a mineral from the field and never return any, it will become depleted. While I’m sure that having a healthy biological soil community will make what is there more available to plants, the fact still remains that making withdrawals without deposits eventually results in depletion. It’s only a matter of time before that depletion results in sub-optimal growth.
The issue is that the standard mineral test uses chemicals that the soil never sees. So that is problem number 1. The second problem is that the standard test measures only soluble minerals. BUT, the whole purpose of building up fungi is to PROVIDE minerals from the soil matrix. In his scholarly article, Johnson referred to a scholarly article showing that soils generally have plenty of minerals, if you just have the means (e.g., fungi) to extract them. Elaine Ingham also refers to a scholarly article. Possibly the same one.
If you add enough phosphate to the soil that the plant doesn’t see any economic benefit in making carbon to trade to the fungi, then the fungi will die.
So, most all experiments have involved either:
*the fungi had been killed by the agricultural practices (e.g., tillage or herbicides or pesticides or synthetic nitrogen)
*the experiment involved first ‘building up the soil minerals’
What Johnson is testing, and showing, is that bare bone farming can work:
*You don’t have to haul urban waste onto your property as compost
*You don’t have to use any additives (at least for 5 years on his soil)
*You do need to begin with a fungal inoculant, but you don’t have to renew it every year.
And I would add:
*It still may be a good idea to inoculate seeds (because it costs so little) and use inoculated soil or seed for vegetable starts (because it costs so little). As evidence, I have seen pictures of tree seedlings which were inoculated and showed about twice the growth in forest land which presumably already had fungi in it.
So what Johnson is doing is a profound challenge to both organic and conventional agriculture. In his Sebastopol talk, Johnson first showed the reduced production of ‘organically certified’ as compared to control, and then commented that it is a shame because just by tweaking their system they could do so much better.
One additional observation to perhaps make more sense out of Johnson’s work.
He began with the simple charge to develop a proof of concept of dealing with saline dairy cattle manure. Then he moved to ‘carbon farming for profit’. Mow he is at least paying some attention to ‘farming for profit’. He is also paying attention to ‘is it really necessary to kill fossil fuels in order to reduce carbon dioxide?’ These are all different questions. But the answers he proposes all arise out of his initial invention, along with his wife, of the fungal compost.
So…if you are trying to be ‘carbon negative’, you can’t afford a lot of trucks running around town collecting refuse which is then taken to a commercial compost operation which uses wind row techniques to make compost which is then hauled to a farm and spread with a manure spreader. So, in contrast to Singing Frogs, he restricts himself to what can be made on the farm with refuse and microbes. He would probably say that a farm cannot be ‘carbon negative’ if it is importing compost from urban areas. Consequently, can’t get paid for carbon sequestration. The question of how long the fungi can continue to mine minerals from the soil is also relevant.
If he were starting from the standpoint of Singing Frogs….’how to be profitable with a small farm?’, then he might very well do what they have done: import very large quantities of compost from the nearby urban areas. And, indeed, Singing Frogs grosses almost a hundred thousand dollars per acre. But they are also very labor intensive. For example, they have a full time employee who just manages the greenhouse which produces their starts. If I remember correctly, they employ 5 people on their 3 acres.
I think it is necessary to keep in mind what he was trying to do, at each stage of his experiments. A straight ‘carbon farming’ operation would be very reluctant to employ industrial mining of nutrients, or even hauling seaweed from California to New Mexico. It would be a spartan operation, very much like what he demonstrates.
Very interesting point. So desertification is just as big a contributor as fossil fuels.
I’m not a big study of CO2 more about energy supply but I’m interested now.
In a previous article, surplus energy (as calibrated by SEEDS) was applied to climate change and the assumption that “sustainable development” is a viable course.
@Dr. Morgan and J.T. Roberts
How does the work of David Johnson relate to the notion of Sustainable Development? Mostly they are not comparable because they use different units. GDP and derivative concepts such as sustainable development are overwhelmingly concerned with something that can be financialized. Thus, if you floss your teeth, it may do wonders for your dental health, but it can’t be financialized and so is worthless from a GDP or sustainable development perspective.
David Johnson is looking at ways to increase the primary production from soil, sun, water, and photosynthesis. The production of financial value will almost always require a financial economy of some sort (omitting family and barter economies). So if we want to evaluate an increase in primary production, we have to apply some sort of Transformity calculations. And, as it turns out, a considerable part of what Johnson is using photosynthesis to provide is never sold in the marketplace. For example, his cover crops are used to put carbon and microbes into the soil and to provide nitrogen for the succeeding cash crop (oversimplified). While Johnson has pursued the idea of farmers making money by ‘carbon farming’, that is still not a very common way for a farmer to behave…it might change due to nations trying to fulfill their Paris commitments…but it hasn’t happened as yet. Johnson is actually SUBTRACTING from GDP by replacing fertilizers which have to be purchased with fertilizers grown by the combination of soil, sun, water, and photosynthesis. By most people’s definitions of ‘sustainable development’, Johnson is headed in the wrong direction. Johnson’s actions are more akin to flossing one’s teeth and avoiding a trip to the dentist.
Johnson’s work IS related to the notion of Energy Return on Energy Invested. Johnson’s output can be measured in terms of food and fiber output and compared to energy purchased either as fossil fuels, as electricity, or as embodied energy (e.g., a tractor). At the present time, agriculture is generally believed to have an energy input of 3 units for every 1 unit exiting through the farm gate…all the processing and transportation and refrigeration and so forth have to be added on to that so that we get a total energy in of about 10 for each 1 unit of food calories. Johnson has nothing to say about all the energy spent beyond the farm gate. But he is making a significant dent in the energy spent on the farm itself. The soil, sun, water, and photosynthesis are replacing a lot of purchased inputs, such as nitrogen fertilizer. If Johnson is successful, many Big Ag corporations will simply disappear. That is not what most people want to hear in terms of ‘sustainable development’.
A side issue is how the economy will respond to continued increases in Energy Cost of Energy. For example, the Ellen MacArthur Foundation estimates that private automobiles in Europe are a terrible way to move humans from point A to point B. The amount of work done (weight times distance) is extraordinarily low compared to the work potential in a gallon of diesel or gasoline. Now contrast that with David Johnson pulling a disc behind a tractor. The tractor/disc combination enables the production of food which can then be burned to perform work. And the disc and tractor are pretty efficient. If the future holds some necessity for triage, then the automobiles may vanish and the tractors and discs may survive. And the notion of buying nitrogen fertilizer may follow the automobiles into oblivion, replaced by photosynthesis and microbes.
(Those who look at the petroleum and natural gas and coal businesses as essentially indivisible may object to the notion that there might be survivors. E.g., Depletion causes the thermodynamics of production to turn negative.)
If Johnson’s methods were adopted at scale, then agricultural land would go from an emitter to a net sequestration activity. I don’t know exactly how the ratio of GDP to emissions might change, but it is clear that both emissions and GDP would decline. The world would be a better place, according to some people’s ideas, but others will say that Hurricane Maria and the California fires were wonderful because look at all the destruction that has to be fixed up, creating GDP. It all just underscores how ridiculous GDP is as a measure of well-being.
The short answer is Johnson’s work doesn’t relate to sustainable development. Sustainable development is an oxymoron. Carbon sequestration of soil won’t save the system because the immediate problem isn’t pollution the immediate problem is net energy decline. That leads to economic collapse.
What’s fascinating is that everyone’s attention is being wasted on a problem which may not be primarily caused by the use of Fossil Fuels. In the meantime Tim’s seeds is demonstrating that the present economic system is collapsing and few are paying any attention.
Even Limits to Growth world 3 model was never limited by pollution. It was limited by resources.
The fact that the increase in CO2 may be primarily caused by biological changes in the soil is increadably ironic. The transition to alternative energy is actually consuming are most valuable resources for a unnecessary reason.
Amazing I’ll have to organize my thoughts more on this but it’s pretty profound.
Gail Tverberg told me a number of years ago that some of the insiders at The Oil Drum thought that Climate Change was put into the spotlight to divert attention from the real problem, which was energy.
Also, for anyone who cares, here is a link to Johnson’s talk in Sonoma County earlier this year.
He demonstrates with statistics from experiments that he can put more carbon into the soil than respires from the soil…which violates the dogmas which have been promulgated around Climate Change. Then, in response to a question at the 49 minute mark, he says that ‘there is some limit to how much carbon we can put into a unit of soil, but there is no effective limit on how much soil we can create’. In other words, we have an effectively infinite supply of degraded soil at this point….all of which can sequester carbon.
Conventional oil peaked in 2005…. guess what conveniently happened in 2006…
Tim – another really good article.
If you have time what do you think of Trump’s massive giveaway?
Will it reenergize the US economy with the benefits trickling down to the poorest or
will it just benefit the richest and give them ‘one last party’ before the harsh realities of EROI kick in and the economy explodes in a more spectacular way than a supernova.
I know which one I’d put my money on (before it becomes worthless)
It looks to me like a giveaway to the wealthiest. The same was true of QE and related monetary policy which, in America as elsewhere, handed big gains to those already owning assets without even any countervailing increases in capital gains taxation in order to recoup some of these gains for the taxpayer.
It’s ironic that the closing chapter of “liberal” economics is being accompanied by hand-outs to the already-wealthy. It is indeed as though the elite are partying on a luxury ocean liner already holed below the waterline.
The broader picture is that, just as “socialism” was discredited after the fall of the USSR, “capitalism”, too, is now fast losing credibility. This leaves us with no political paradigms still standing.
In Europe, the likeliest outcome is that the Left, after purging itself of Blair-style “centrists”, will win electorally, though how much their “victory” will be worth to them in a floundering economy is a moot point.
America is different, but I felt that Clinton was a classic “centrist” of the Blairite type, and – having made a lot of money – couldn’t stand up for “poor” or even “middle class” voters against the rich, so put all her bets on identity politics instead. I’m no Trump fan, but I’m glad she lost. The recent election in Alabama was the worst case of identity politics I can ever recall seeing (helped, too, by a 10-1 ratio of ad expenditures).
Essentially, “populism” has taken the place where “the Left” ought to be, because the Left is deemed by voters to have sold out.
In a nutshell, it’s a mess – politics is very different in a post-growth environment!
Its not about right/left. Its about what’s for dinner. When there’s not enough, sharing is a dead end.
Thank you for your reply – with your ‘luxury ocean liner already holed below the waterline’ analogy that points to the Titanic in terms of there not being enough lifeboats for the poorest
Political terms need to be refined a little, I would suggest.
Belief in Socialism is certainly alive and well, and growing, in Britain and Europe – and I notice from my little sister’s Twitter account that it is also becoming rather cool to be ‘socialist’ among the young in America -Trump is galvanising this.
But in Old Europe, Socialism -however understood – is still fundamental for many.
It has by no means been discredited – whether the easy non self-sacrificing Socialism of the ‘champagne’ type, (Blairism) or any of the more doctrinaire, ‘radical’ varieties. (maybe one should call them ‘Cannabis Socialism’? )
And remember, it is as much an irrational, almost tribal, badge as anything else. My family are among the richest people in our home town of Pamplona, living in a very large house in the most exclusive street, by the private golf club, and yet persist in self-identifying as Radical Socialist (except yours truly)……
The assumption in both groups is, of course, that growth and prosperity are a given, and all that is needed is altruistic legislation and progressive tax policies to redistribute, either gently (‘champagne’) or aggressively (‘radical’).
I have never really met an ardent believer in Capitalism, even among the very rich (friends who made it in the City of London). The world of money is not really a world of believers.
Self-interest in defending what one has and might have, a desire to own private property (freedom) and to put one’s back into making a go of things, (see Kevin above, being frustrated at his retarded economic progress, slower than for previous generations) and not be a beggar with a hand out to the State, yes, but not a belief in Capitalism as such.
This is why May’s recent ‘defence’ of Capitalism was so very inept, in the British context.
As such, the failure of Capitalism (it’s a dead duck, I would agree) will not hit people like the failure of the Communist ideal, in which there were millions of ardent believers, ready to make any sacrifice -people really did die with the name ‘Stalin’ on their lips in WW2.
But how to explain to Socialists, of every flavour, that their social programmes are also, like the great god Pan,dead ? And that the flow of chamapagne might well be interrupted?
“But how to explain to Socialists, of every flavour, that their social programmes are also, like the great god Pan,dead ?”
If they are champagne socialists, then asking them to forgo the champagne for the sake of socialism. On the other hand, if the belief in socialism derives from a real need, one might as well give up.
At 47:40 in the Sonoma talk, Johnson indicates that as little as one pound of his fungal compost can inoculate one acre, according to the results from Australia. He also mentions the slurry form of application. Separately, he said that he had visited the U of California at Chico to examine their work on planting wet rice seed, to save the step of drying the slurry on the inoculated seed.
In terms of your ‘practical farming’ objection. I think you should listen as David talks about the Australian farm. The farm which has adopted fungal biology is succeeding, while the neighbors are failing. While I wish everyone well, Darwin sometimes cannot be avoided.
Good to have you, and ejhr, to overcome a multi trillion economic collapse with 7 billion people involved.
Before anyone assumes that feeding 7 billion is a slam dunk just because a few people know how to do it, I suggest a quick perusal of this article:
The situation is somewhat similar. A lot of oil can be produced in Alberta. However, a critical piece of the puzzle is missing: transportation. The same can be said of food produced in the large agricultural belts in the world: food on the farm does not translate into food in the mega-cities without transportation.
In fact, food is far more complicated than oil. A lot of food needs refrigeration and cooking. Both are usually accomplished using fuels of various kinds. If fossil fuels collapse, then food in the mega-cities of the OECD countries also collapses. Probably also in China end India. Poor people who use firewood might seem to be better off, but the fact is that much of the very poor parts of the world have exhausted their sources of firewood.
There is also the question of skill sets and willingness to work. Probably not too many people in London and Manhattan actually know how to produce food using microbes as the primary work force. In a collapse, theft may look a lot more promising than trying to learn something which has nothing to do with Facebook. And, as everyone in the US who has had any experience trying to introduce gardening to poor people knows, the specter of ‘slave work’ hangs over anything agricultural in the minds of way too many people.
So I do not mean to make light of the very serious issues around food. But, as with the oil from Alberta, it is probably important to understand where the real issues are.
Thanks Don, agreed. I happen to live about 5 miles from Wageningen University, Netherlands, the place to be for agriculture. Lots of farmland in my region. Emergency food is on my prep list, when i pick up more signals of collapse, i’ll load up on that. After the collapse and die off maybe, just maybe, there’s some kind of future. Knowledge of agriculture in my backyard, not on purpose, just fate. My house 23 meters above sea level. Coincidence? Don’t know. Adapt or die. And lots of luck. When transportation stops, everything stops. Socialism is just another delay. Well, my two cents. Just trying to work, have fun, prep and share thoughts.
A Paradigm Found and then Lost
This may stretch the boundaries a little, but I find it timely. I just watched the Criterion Collection issue of the movie about the Titanic, A Night to Remember. What follows is from an interview with the producer in 1993.
The producer visited the Rank Organization in Britain to try to sell them on the idea of making the movie. The Rank response was ‘it’s just another shipwreck, no big name stars, nobody will pay to see it’. The producer pitches it in terms of ‘the end of an era’.
The producer was from Belfast, where the ship had been built. He pointed out that the monument in Belfast to the Titanic dead listed them in order of importance…lords and ladies first, steerage last. Next to the Titanic monument is a War Memorial, where people are listed in alphabetical order…the war had changed things. The steerage passengers paid 12 pounds, while the first class passengers paid 875 pounds.
The producer said, in 1993, that the Titanic was the end of the era ‘of thinking that by paying money and dressing in fancy clothes you could be superior to someone else. The Titanic represented ‘unbridled arrogance’. In the enlightened age of 1993, the producer notes that many ships are now single class.
Well….the wheel has certainly turned again since 1993 and the era of egalitarianism.
It is an interesting question whether the equivalent of WWI is in store for us, which may change attitudes again. The attack on the Trade Center in 2001 had about a 24 hour impact in terms of recognizing reality. The collapse in 2008 brought us back to reality for a little bit longer. But fantasyland is currently in full swing, in my estimation. Look at the anonymous houses burned in California vs. the potential burning of houses in Bel Air.
Ten percent of corporations survive only because central banks have kept real interest rates negative.
The BIS defines Zombie firms as those with a ratio of earnings before interest and taxes to interest expenses below one, with the firm aged 10 years or more.
In simple terms, Zombies are those firms that could not survive without a flow of cheap financing.
The above chart shows the median share of zombie firms across AU, BE, CA, CH, DE, DK, ES, FR, GB, IT, JP, NL, SE and US.
According to the BIS Quarterly Report one out of ten corporations in emerging and advanced countries is a “Zombie”.
Let’s dive into the report for more details:
Yep, keeping up employment, wages, pensions etc. Treadmills to eternity. They think.
Watch infinite currencies. Board the physical plane.
The breaking point will be when fantasy meets reality for the first time. I think fantasy will throw a tantrum.
Maybe they already have.
Tim – today’s CapX articles has one once called The pessimist’s guide to 2028. Within this is a section ‘Electric Cars End the Oil Era’ which creates a scenario where there is a breakthrough in battery technology in 2018 – paving the way to mass production of electric vehicles leading to oil slumping to $10 per barrel.
What are your thoughts now on your cost of energy based calculations. Thanks
There will be no battery breakthrough —- but imagine what would happen if oil went to $10 due to lack of demand …
Hint – there would be no oil produced at all….
A partial list of products made from Petroleum (6000 items).
Click to access petro-products.pdf
I think it’s Bloomberg, just reported on CapX – and very silly. Even if there was this kind of battery breakthrough – a very big IF – we’d still have to get the electricity from somewhere.
Any idea of abundance presupposes some new, ultra-low-ECoE way of generating electricity. Great – but it isn’t fossil fuels, nuclear or renewables.
This is the season of jollity. I’ve nothing against office parties, but I’m reminded of Churchill’s post-prandial radio transmissions from the Admiralty during the war – fortunately, naval officers knew brandy talking when they heard it….
Yes – it did seem too good to be true – I think – perhaps in their festive states – that they were looking for some kind of reassurance that the World’s energy problems aren’t really that bad.
However – you never know – perhaps Father Christmas will leave the secret to unlocking viable Nuclear Fusion under one of our scientist’s pillows.
I’ll drink to that.
The Acres USA annual farm meeting in Ohio was a month or two ago. Christine Jones, the soil scientist from Australia spoke. There is no video of her talk;. You can buy the audio for 8 dollars. I bought it and listened to it. She reiterates that ‘there are very few soils anywhere in the world that are mineral deficient’.
Here is Christine speaking in Emporia Kansas at Gail Fuller’s School for farmers. If you begin listening at the 25 minute mark, you will hear Christine say much the same thing she says at Acres, only you will save the 8 dollars and you can see her. By the way, the video consistently freezes up near the end.
Her points are:
*Mineral deficient soils are a rare event
*Malfunctioning soils are what we have come to expect
*The damage done by malfunctioning soils is enormous
*We have to extricate ourself from the industrial paradigm, such as in seeking out seeds which were selected in the 1970s or earlier. Seeds are now being selected which thrive in sterile soil with a constant bath of industrially produced nutrients and pesticides and herbicides and irrigation water.
We are in extreme population overshoot, having exceeded the carrying capacity of the Earth to sustain our species by many, many, times. Even if it were possible to voluntarily extricate ourselves from the industrial way of life (a delusional idea), there is no way back without incurring massive suffering. https://i0.wp.com/images.slideplayer.com/16/5025385/slides/slide_7.jpg
That’s why I’m all for can-kicking for as long as possible. Either way, our goose is cooked. Hope you enjoy yours at Xmas.
OVERSHOOT IN A NUTSHELL (MALTHUS WAS AN OPTIMIST)
Here’s hoping we set new records for burning coal and oil in 2018 — because if we don’t — it’s extinction for all.
Regarding the expected future lifetime of Saudi Arabian oilfields, Crown Prince Mohammed bin Salman – the ultimate Saudi insider – has recently bought the most expensive house in the world. A newly built chateau near Paris:
If he is judged by his actions rather than his words, they seem much more like a man who wants a luxury bolthole rather than one who wants to make a statement of confidence in Saudi Arabia’s future prospects.
Just to add context to the spent fuel issue that few understand. And no you can’t just dump them in the ocean. That’s where we dump our plastic.
Click to access ML120970249.pdf
The April 26, 1986 nuclear catastrophe at Chernobyl
in Ukraine illustrated the damage cesium-137 can
wreak. Nearly 200,000 residents from 187 settlements
were permanently evacuated because of contamination
The total area of this radiation-control
zone is huge. At more than 6,000 square miles, it is
equal to about two-thirds the area of the State of New
During the following decade, the population of
this area declined by almost half because of migration to
areas of lower contamination.
I co-authored a report in 2003 that explained
how a spent fuel pool fire in the United States could
render an area uninhabitable that would be as much as
60 times larger than that created by the Chernobyl accident.
It is important to consider that the Chernobyl disaster involved the reactor — not the ponds.
Also Chernobyl was contained by entombing the reactor in concrete. If that had not happened then this would have been a far worse disaster….
Was it this one?
Click to access rAlvarez_reducing_hazards.pdf
The problem is if the spent fuel gets too close, they will produce a fission reaction and explode with a force much larger than any fission bomb given the total amount of fuel on the site. All the fuel in all the reactors and all the storage pools at this site (1760 tons of Uranium per slide #4) would be consumed in such a mega-explosion. In comparison, Fat Man and Little Boy weapons dropped on Hiroshima and Nagasaki contained less than a hundred pounds each of fissile material
See more at: http://www.dcbureau.org/20110314781/natural-resources-news-service/fission-criticality-in-cooling-ponds-threaten-explosion-at-fukushima.html
Assuming a 50-100% Cs137 release during a spent fuel fire,  the consequence of the Cs-137 exceed those of the Chernobyl accident 8-17 times (2MCi release from Chernobyl). Based on the wedge model, the contaminated land areas can be estimated.  For example, for a scenario of a 50% Cs-137 release from a 400 t SNF pool, about 95,000 km² (as far as 1,350 km) would be contaminated above 15 Ci/km² (as compared to 10,000 km² contaminated area above 15 Ci/km² at Chernobyl).
A typical 1 GWe PWR core contains about 80 t fuels. Each year about one third of the core fuel is discharged into the pool. A pool with 15 year storage capacity will hold about 400 t spent fuel. To estimate the Cs-137 inventory in the pool, for example, we assume the Cs137 inventory at shutdown is about 0.1 MCi/tU with a burn-up of 50,000 MWt-day/tU, thus the pool with 400 t of ten year old SNF would hold about 33 MCi Cs-137. 
@ anyone interested in soil depletion and Liebig’s Law
The best test for mineral content in the soil:
x-ray diffraction techniques for soil mineral identification
While Liebig’s Law is a broadly applicable concept, it is not likely to reveal, in concert with an X ray diffraction analysis, that some particular mineral is the critical component. More likely the critical component will be water or air. Water is commonly the limiting component in deserts or in soils with little organic matter. Air is commonly the limiting factor in soils with compaction layers which prevent air from circulating in the soil. Compaction layers frequently take the form of ‘plow pans’, due to repeated plowing. In the Midwestern US, where soils have been severely abused by industrial agriculture, there are many limiting factors. For example, the use of synthetic nitrogen inhibits the formation of sol carbon, which has a myriad of bad impacts.
Eventually, you begin to ask yourself whether the ‘limiting factor’ is a result of some shortage or instead, to borrow from Nate Hagens, is the result of a ‘longage of industrial agriculture’.
Maybe the Molten Salt Reactor can solve the problem of spent fuel rods. We have to give it a try.
Niels – even if we could deal with the spent fuel….. famine is at least as big a problem…. food will NOT grow in soil that has been farmed industrially (with petro chemical fertilizers)…. and well over 99% of all ag land is farmed in this manner….
Violence will also be widespread.
Then of course there is the issue of disease — cholera, dysentery, malaria, dengue, plague, scarlet fever…. and on and on and on…..
7.5 billion vectors … and diseases that are going to hit us with a vengeance…. when the antibiotics are no longer available.
There is no way out of this —- we have set a fool proof trap for our species.
Our extinction is virtually guaranteed. The only humans that have any chance of surviving would be hunter gatherers who are remote and completely unplugged from BAU.
You continually repeat the story that once land has been industrially farmed, there is no way to return it to natural fertility. Your statement is simply not true, as a rule. I will not deny that mine tailings and such extreme pollution is a special case, but most land can be quickly restored to fertility. I suggest you read Christine Jones’ excellent interview with Acres USA.
(By the way, the interview was reprinted by a company I know nothing about, and neither condemn nor endorse their products.)
Jones gives a 3 year transition from chemical agriculture to microbe based agriculture. Which doesn’t mean that the land is not producing anything during the transition period. Beyond the transition period, with good management, the microbial community will continue to evolve in the direction of increased plant health and yields.
I did not say that.
I said you cannot grow anything in soil that has been farmed with petro chemicals. Which is absolutely true.
However … with many years of intensive organic inputs you can restore the fertility of the soil.
Two problems with that:
– where do you get the organic inputs to repair the soil when everything that moves will be killed and eaten — and where would you get the other ingredients for making compost when they are all eaten by the hungry people
– what do you eat while waiting the years to repair the soil
A few more issues…
Where do you get seeds — where do you get irrigation water — in a world filled with chaos – violence – disease – and spent fuel pond radiation.
What do you do about the hungry hordes – including neighbours and extended family — who show up and insist on being fed?
Sing Koombaya and hope that they go away? Good luck with that.
This is all pie in the sky Don.
It is NOT going to happen.
Your right of course but few can handle that reality. People have been conditioned to believe in a limitless future. They have been taught that all this good stuff was by human ingenuity rather than cheap abundant resources. So they naturally conclude that all that is needed is the will power to act. So this has all been some kind of choice and all that is needed are right choices. Likely once the dire situation is front and center everyone will willingly accept totalitarian government who promise change by force. Since this will be the same as what’s created the present conditions things will unravel quickly to personal interest enforced by power.
This somewhat depressing conclusion does seem justified by logic. It’s an area that I’m looking at now, for a forthcoming article.
I suggest that the purchase of the book On Trails, by Robert Moor may be a worthwhile investment. Recommended by everyone from the Sierra Club to the Wall Street Journal.
In Chapter 2, Moor discusses how very simple creatures can adopt efficient foraging techniques (equal to human engineers), build structures which human architects have not yet surpassed (termite mounds), and also go around in circles until they die. For example, a scientist in Montreal has studied some caterpillars and an aspen leaf and a hybrid poplar leaf. The two leaves are at opposite ends of a piece of cardboard. The caterpillars first go toward the poplar leaf which, being a hybrid, they despise. Each caterpillar, nevertheless, follows the trails of the other caterpillars. Finally, some adventurous caterpillar learns that if one goes the opposite direction, then one can feast on an aspen leaf. In the laboratory, it took four hours for all the caterpillars to abandon the hybrid leaf and go to the aspen leaf. The scientist observes that it is usually the hungry caterpillars who venture out on their own.
Moor proposes a spectrum between internalized and externalized intelligence. At the internalized extreme is a human mountain hermit, ‘thoughts swirling about in his lonely head like moths in a bell jar.’ ‘At the other end lies the slime mold. As sprawling, single-celled blobs, slime molds are about as stupid as an organism can be: they lack even the most basic rudiments of a nervous system. However, they have nevertheless developed a very effective technique for hunting food. ‘ (I’ll leave you to read the book to discover how they do it.)
Sometimes following the herd goes badly wrong. Two scientific descriptions:
‘I have never seen a more astonishing exhibition of the limitations of instinct’
‘tired, hopeless, idiotic, and thoughtless to the last’
I was sitting in the coffee shop this morning when I read those words. I began to laugh. Sitting at the table next to me, a physics teacher was grading papers. We began to talk a little. He related exactly to some behavior which he observes all too often in the classroom. I reminded him that it was Einstein who (supposedly) said that the definition of insanity is continuing to do the same thing which got you into your predicament.
I would like to expand a little on the notion that it is the hungry caterpillars that stray from the beaten path. If you read the Christine Jones article, you know that she gives a great deal of credit to Gabe Brown, a North Dakota farmer and rancher, for demonstrating that continuing to do industrial agriculture is not necessary and also loses money. Simultaneously, Christine down in Australia was discovering that soil had to be built with an anabolic process:
‘The decomposers in the soil are doing exactly the same thing — breaking down organic materials and releasing CO2. These processes are catabolic. Conversely, the formation of humus is an anabolic process, that is, a building-up process. Rather than sugar being the end point, sugar is the start point. Soil microbes use sugars to create complex, stable forms of carbon, including humus.’
In a nutshell, Christine has explained why no amount of compost added on top of soil makes much of any permanent contribution to soil carbon. And she also explains why the fungal spores method used by David Johnson actually works.
In the world of agriculture, food, and health, the herd is still headed in the wrong direction. It is circling the drain, as surely as the practically brainless insects circle useless objects. Yet Gabe Brown up there in North Dakota was starving….thanks to industrial agricultural methods and 4 successive years of hail. He knew that nobody was going to loan him any money to continue to try the same dead end again. Following a piece of good advice, he sold his tillage equipment. Things got a little better, but he reached a plateau. Then he got some more good advice, and stopped using synthetic nitrogen and cut back on all ‘icides’ and his soil carbon took off exponentially. Finally….a path away from the hybrid and toward the true aspen leaf. Meanwhile, Chrstine Jones was being ridiculed in Australia for her notions about the liquid carbon pathway. In 2016, Gail Fuller in Kansas was able to lure Gabe Brown away from his farm in the summer (when there is lots of work to be done) to travel down to Emporia and give a talk….by mentioning that he had lined up Christine to also talk. The carrot dangled in front of the mule did its magic.
For more than 50 years the herd of caterpillars has been following the trail to the nutrient-poor hybrid leaf with dollar signs hung above it. Now a few hungry people have found a new trail to a nutrient dense agriculture, food, and health system. How long will it take for the rest of the herd to learn? Will most of them starve before they change direction? Are they as dumb as army ants? Do they still think you can eat dollars?
Or … when BAU ends…. and the pantry is down to the last package of Kraft Dinner …. one could gather the family around… hold hands… and recite The Koombaya…. followed by Imagine … and you’d have better luck surviving than if you followed On Trails…
The Sierra Club…. https://www.sierraclub.org/beyond-fossil-fuels
All I can say is WOW.
Tim and Don,
I have read Don’s comments with great interest finding the videos of Gabe Brown particularly useful, where he demonstrates how he restores degraded soils with the aid of mycorrhizae. I’m now half way through reading my (Christmas present) of Mycorrhizal Planet by Michael Phillips. Thanks to Tim for hosting and for Don for the useful information.
What would one eat when restoring the soil?
How would one keep one’s hoard from being eaten by ravenous violent hordes?
Where would one obtain the manure and other necessary ingredients for restoring the soil when all the animals are killed and eaten by the hungry hordes?
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