#149: The big challenges


As regular readers will know, this site is driven by the understanding that the economy is an energy system, and not (as conventional thinking assumes) a financial one. Though we explore a wide range of related issues (such as the conclusion that energy supply is going to need monetary subsidy), it’s important that we never lose sight of the central thesis. So I hope you’ll understand the need for a periodic restatement of the essentials.

If you’re new to Surplus Energy Economics, what this site offers is a coherent interpretation of economic and financial trends from a radically different standpoint. This enables us to understand issues that increasingly baffle conventional explanations.

This perspective is a practical one – nobody conversant with the energy-based interpretation was much surprised, for instance, when Donald Trump was elected to the White House, when British voters opted for “Brexit”, or when a coalition of insurgents (aka “populists”) took power in Rome. The SEE interpretation of prosperity trends also goes a long way towards explaining the gilets jaunes protests in France, protests than can be expected in due course to be replicated in countries such as the Netherlands. We’re also unpersuaded by the exuberant consensus narrative of the Chinese economy. The proprietary SEEDS model has proved a powerful tool for the interpretation of critical trends in economics, finance and government.

The aim here, though, isn’t simply to restate the core interpretation. Rather, there are three trends to be considered, each of which is absolutely critical, and each of which is gathering momentum. The aim here is to explore these trends, and share and discuss the interpretations of them made possible by surplus energy economics.

The first such trend is the growing inevitability of a second financial crisis (GFC II), which will dwarf the 2008 global financial crisis (GFC), whilst differing radically from it in nature.

The second is the progressive undermining of political incumbencies and systems, a process resulting from the widening divergence between policy assumption and economic reality.

The third is the clear danger that the current, gradual deterioration in global prosperity could accelerate into something far more damaging, disruptive and dangerous.

The vital insight

The centrality of the economy is the delivery of goods and services, literally none of which can be supplied without energy. It follows that the economy is an energy system (and not a financial one), with money acting simply as a claim on output which is itself made possible only by the availability of energy. Money has no intrinsic worth, and commands ‘value’ only in relation to the things for which it can be exchanged – and all of those things rely entirely on energy.

Critically, all economic output (other than the supply of energy itself) is the product of surplus energy – whenever energy is accessed, some energy is always consumed in the access process, and surplus energy is what remains after the energy cost of energy (ECoE) has been deducted from the total (or ‘gross’) amount that is accessed.

This makes ECoE a critical determinant of prosperity. The distinguishing feature of the world economy over the last two decades has been the relentless rise in ECoE. This process necessarily undermines prosperity, because it erodes the available quantity of surplus energy. We’re already seeing this happen – Western prosperity growth has gone into reverse, and progress in emerging market (EM) economies is petering out. Global average prosperity has already turned down.

The trend in ECoE is determined by four main factors. Historically, ECoE has been pushed downwards by broadening geographical reach and increasing economies of scale. Where oil, natural gas and coal are concerned, these positive factors have been exhausted, so the dominating driver of ECoE now is depletion, a process which occurs because we have, quite naturally, accessed the most profitable (lowest ECoE) resources first, leaving costlier alternatives for later.

The fourth driver of ECoE is technology, which accelerates downwards tendencies in ECoE, and mitigates upwards movements. Technology, though, operates within the physical properties of the resource envelope, and cannot ‘overrule’ the laws of physics. This needs to be understood as a counter to some of the more glib and misleading extrapolatory assumptions about our energy future.

The nature of the factors driving ECoE indicates that this critical factor should be interpreted as a trend. According to SEEDS – the Surplus Energy Economics Data System – the trend ECoE of fossil fuels has risen exponentially, from 2.6% in 1990 to 4.1% in 2000, 6.7% in 2010 and 9.9% today. Since fossil fuels continue to account for four-fifths of energy supply, the trend in overall world ECoE has followed a similarly exponential path, and has now reached 8.0%, compared with 5.9% in 2010 and 3.9% in 2000.

For fossil fuels alone, trend ECoE is projected to reach 11.8% by 2025, and 13.5% by 2030. SEEDS interpretation demonstrates that an ECoE of 5% has been enough to put prosperity growth into reverse in highly complex Western economies, whilst less complex emerging market (EM) economies hit a similar climacteric at ECoEs of about 10%. A world economy dependent on fossil fuels thus faces deteriorating prosperity and diminishing complexity, both of which pose grave managerial challenges because they lie wholly outside our prior experience.

Mitigation, not salvation

This interpretation – reinforced by climate change considerations – forces us to regard a transition towards renewables as a priority. It should not be assumed, however, that renewables offer an assured escape from the implications of rising ECoEs, still less that they offer a solution that is free either of pain or of a necessity for social adaption.

There are three main cautionary factors around the ECoE capabilities of solar, wind and other renewable sources of energy.

The first cautionary factor is “the fallacy of extrapolation”, the natural – but often mistaken – human tendency to assume that what happens in the future will be an indefinite continuation of the recent past. It’s easy to assume that, because the ECoEs of renewables have been falling over an extended period, they must carry on falling indefinitely, at a broadly similar pace. But the reality is much more likely to be that cost-reducing progress in renewables will slow when it starts to collide with the limits imposed by physics.

Second, projections for cost reduction ignore the derivative nature of renewables. Building, say, a solar panel, a wind turbine or an electrical distribution system requires inputs currently only available courtesy of the use of fossil fuels. In this specialised sense, solar and wind are not so much ‘primary renewables’ as ‘secondary applications of primary fossil input’.

We may reach the point where these technologies become ‘truly renewable’, in that their inputs (such as minerals and plastics) can be supplied without help from oil, gas or coal.

But we are certainly, at present, nowhere near such a breakthrough. Until and unless this point is reached, the danger exists that that the ECoE of renewables may start to rise, pushed back upwards by the rising ECoE of the fossil fuel sources on which so many of their inputs rely.

The third critical consideration is that, even if renewables were able to stabilise ECoE at, say, 8% or so, that would not be anywhere near low enough.

Global prosperity stopped growing before ECoE hit 6%. British prosperity has been in decline ever since ECoE reached 3.6%, and an ECoE of 5.5% has been enough to push Western prosperity growth into reverse. As recently as the 1960s, in what we might call a “golden age” of prosperity growth, ECoE was well below 2%. Even if renewables could stabilise ECoE at, say, 8% – and that’s an assumption which owes much more to hope than calculation – it wouldn’t be low enough to enable prosperity to stabilise, let alone start to grow again.

SEEDS projections are that overall world ECoE will reach 9% by 2025, 9.7% by 2030 and 11% by 2040. These projections are comparatively optimistic, in that progress with renewables is expected to blunt the rate of increase in trend ECoE. But we should labour under no illusion that the downwards tendency in prosperity can be stemmed, less still reversed. Renewables can give us time to prepare and respond, but are not going to take us back to a nirvana of low-cost energy.

This brings us to the three critical issues driven by rising ECoE and diminishing prosperity.

Challenge #1 – financial shock

An understanding of the energy basis of the economy puts us in possession of a coherent narrative of recent and continuing tendencies in economics and finance. Financially, in particular, the implications are disquieting. There is overwhelming evidence pointing towards a repetition of the 2008 global financial crisis (GFC), in a different form and at a very much larger scale.

From the late 1990s, with ECoEs rising beyond 4%, growth in Western prosperity began to peter out. Though “secular stagnation” was (and remains) the nearest that conventional interpretation has approached to understanding this issue, deceleration was noticed sufficiently to prompt the response known here as “credit adventurism”.

This took the form of making credit not only progressively cheaper to service but also much easier to obtain. This policy was also, in part, aimed at boosting demand undermined by the outsourcing of highly-skilled, well-paid jobs as a by-product of ‘globalization’. “Credit adventurism” was facilitated by economic doctrines which were favourable to deregulation, and which depicted debt as being of little importance.

The results, of course, are now well known. Between 2000 and 2007, each $1 of reported growth in GDP was accompanied by $2.08 of net new borrowing, though ratios were far higher in those Western economies at the forefront of credit adventurism. The deregulatory process also facilitated a dangerous weakening of the relationship between risk and return. These trends led directly to the 2008 global financial crisis.

Responses to the GFC had the effect of hard-wiring a second, far more serious crash into the system. Though public funds were used to rescue banks, monetary policy was the primary instrument. This involved slashing policy rates to sub-inflation levels, and using newly-created money to drive bond prices up, and yields down.

This policy cocktail added “monetary adventurism” to the credit variety already being practiced. Since 2007, each dollar of reported growth has come at a cost of almost $3.30 in new debt. Practices previously confined largely to the West have now spread to most EM economies. For example, over a ten-year period in which growth has averaged 6.5%, China has typically borrowed 23% of GDP annually.

Most of the “growth” supposedly created by monetary adventurism has been statistically cosmetic, consisting of nothing more substantial than the simple spending of borrowed money. According to SEEDS, 66% of all “growth” since 2007 has fallen into this category, meaning that this growth would cease were the credit impulse to slacken, and would reverse if we ever attempted balance sheet retrenchment. As a result, policies said to have been “emergency” and “temporary” in nature have, de facto, become permanent. We can be certain that tentative efforts at restoring monetary normality would be thrown overboard at the first sign of squalls.

Advocates of ultra-loose monetary policy have argued that the creation of new money, and the subsidizing of borrowing, are not inflationary, and point at subdued consumer prices in support of this contention. However, inflation ensuing from the injection of cheap money can be expected to appear at the point at which the new liquidity is injected, which is why the years since 2008 have been characterised by rampant inflation in asset prices. Price and wage inflation have been subdued, meanwhile, by consumer caution – reflected in reduced monetary velocity – and by the deflationary pressures of deteriorating prosperity. The current situation can best be described as a combination of latent (potential) inflation and dangerously over-inflated asset prices.

All of the above points directly to a second financial crisis (GFC II), though this is likely to differ in nature, as well as in scale, from GFC I. Because “credit adventurism” was the prime cause of the 2008 crash, its effects were concentrated in the credit (banking) system. But GFC II, resulting instead from “monetary adventurism”, will this time put the monetary system at risk, hazarding the viability of fiat currencies.

In addition to mass defaults, and collapses in asset prices, we should anticipate that currency crises, accompanied by breakdowns of trust in currencies, will be at the centre of GFC II. The take-off of inflation should be considered likely, not least because no other process exists for the destruction of the real value of gargantuan levels of debt.

Finally on this topic, it should be noted that policies used in response to 2008 will not work in the context of GFC II. Monetary policy can be used to combat debt excesses, but problems of monetary credibility cannot, by definition, be countered by increasing the quantity of money. Estimates based on SEEDS suggest that GFC II will be at least four orders of magnitude larger than GFC I.

Challenge #2 – breakdown of government

Until about 2000, the failure of conventional economics to understand the energy basis of economic activity didn’t matter too much, because ECoE wasn’t large enough to introduce serious distortions into its conclusions. Put another way, the exclusion of ECoE gave results which remained within accepted margins of error.

The subsequent surge in ECoEs, however, has caused the progressive invalidation of all interpretations from which it is excluded.

What applies to conventional economics itself applies equally to organisations, and most obviously to governments, which use it as the basis of their interpretations of policy.

The consequence has been to drive a wedge between policy assumptions made by governments, and underlying reality as experienced by individuals and households. Even at the best of times – which these are not – this sort of ‘perception gap’ between governing and governed has appreciable dangers.

Recent experience in the United Kingdom illustrates this process. Between 2008 and 2018, GDP per capita increased by 4%, implying that the average person had become better off, albeit not by very much. Over the same period, however, most (85%) of the recorded “growth” in the British economy had been the cosmetic effect of credit injection, whilst ECoE had risen markedly. For the average person, then, SEEDS calculates that prosperity has fallen, by £2,220 (9%), to £22,040 last year from £24,260 ten years previously. At the same time, individual indebtedness has risen markedly.

With this understood, neither the outcome of the 2016 “Brexit” referendum nor the result of the 2017 general election was much of a surprise, since voters neither (a) reward governments which preside over deteriorating prosperity, nor (b) appreciate those which are ignorant of their plight. This was why SEEDS analysis saw a strong likelihood both of a “Leave” victory and of a hung Parliament, outcomes dismissed as highly improbable by conventional interpretation.

Simply put, if political leaders had understood the mechanics of prosperity as they are understood here, neither the 2016 referendum nor the 2017 election might have been triggered at all.

Much the same can be said of other political “shocks”. When Mr Trump was elected in 2016, the average American was already $3,450 (7%) poorer than he or she had been back in 2005. The rise to power of insurgent parties in Italy cannot be unrelated to a 7.9% deterioration in personal prosperity since 2000.

As well as reframing interpretations of prosperity, SEEDS analysis also puts taxation in a different context. Between 2008 and 2018, per capita prosperity in France deteriorated by €1,650 which, at 5.8%, isn’t a particularly severe fall by Western standards. Over the same period, however, taxation increased, by almost €2,000 per person. At the level of discretionary, ‘left-in-your-pocket’ prosperity, then, the average French person is €3,640 (32%) worse off now than he or she was back in 2008.

This makes widespread popular support for the gilets jaunes protestors’ aims extremely understandable. Though no other country has quite matched the 32% deterioration in discretionary prosperity experienced in France, the Netherlands (with a fall of 25%) comes closest, which is why SEEDS identifies Holland as one of the likeliest locales for future protests along similar lines. It is far from surprising that insurgent (aka “populist”) parties have now stripped the Dutch governing coalition of its Parliamentary majority. Britain, where discretionary prosperity has fallen by 23% since 2008, isn’t far behind the Netherlands.

These considerations complicate political calculations. To be sure, the ‘centre right’ cadres that have dominated Western governments for more than three decades are heading for oblivion. Quite apart from deteriorating prosperity – something for which incumbencies are likely to get the blame – the popular perception has become one in which “austerity” has been inflicted on “the many” as the price of rescuing a wealthy “few”. It doesn’t help that many ‘conservatives’ continue to adhere to a ‘liberal’ economic philosophy whose abject failure has become obvious to almost everyone else.

This situation ought to favour the collectivist “left”, not least because higher taxation of “the rich” has been made inescapable by deteriorating prosperity. But the “left” continues to advocate higher levels of taxation and public spending, an agenda which is being invalidated by the erosion of the tax base which is a concomitant of deteriorating prosperity.

Moreover, the “left” seems unable to adapt to a shift towards prosperity issues and, in consequence, away from ideologically “liberal” social policy. Immigration, for example, is coming to be seen by the public as a prosperity issue, because of the perceived dilutionary effects of increases in population numbers.

The overall effect is that the political “establishment”, whether of “the right” or of the “the left”, is being left behind by trends to which that establishment is blinded by faulty economic interpretation.

The discrediting of established parties is paralleled by an erosion of trust in institutions and mechanisms, because these systems cannot keep pace with the rate at which popular priorities are changing. To give just one example, politicians who better understood the why of the “Brexit” referendum result would have been better equipped to recognize the dangers implicit in being perceived as trying to thwart or divert it.

The final point to be considered under the political and governmental heading is the destruction of pension provision. One of the little-noted side effects of “monetary adventurism” has been a collapse in rates of return on invested capital. According to the World Economic Forum, forward returns on American equities have fallen to 3.45% from a historic 8.6%, whilst returns on bonds have slumped from 3.6% to just 0.15%. It is small wonder, then, that the WEF identifies a gigantic, and rapidly worsening, “global pension timebomb”. As and when this becomes known to the public – and is contrasted by them with the favourable circumstances of a tiny minority of the wealthiest – popular discontent with established politics can be expected to reach new heights.

In short, established political elites are becoming an endangered species – and, far from knowing how to replace them, we have an institutionally-dangerous inability to appreciate the factors which have already made fundamental change inevitable.

Challenge #3 – an accelerating slump?

Everything described so far has been based on an interpretation which demonstrates an essentially gradual deterioration in prosperity. That, in itself, is serious enough – it threatens both a financial system predicated on perpetual growth, and political processes unable to recognise the implications of worsening public material well-being.

For context, SEEDS concludes that the average person in Britain, having become 11.5% less prosperous since 2003, is now getting poorer at rates of between 0.5% and 1.0% each year. EM economies, including both China and India, continue to enjoy growing prosperity, though this growth is now decreasing markedly, and is likely to go into reverse in the not-too-distant future.

Is it safe to assume, though, that prosperity will continue to erode gradually – or might be experience a rapid worsening in the rate of deterioration?

For now, no conclusive answer can be supplied on this point, but risk factors are considerable.

Here are just some of them:

1. The worsening trend in fossil fuel ECoEs is following a track that is exponential, not linear – and, as we have seen, there are likely to be limits to how far this can be countered by a switch to renewables.

2. The high probability of a financial crisis, differing both in magnitude and nature from GFC I, implies risks that there may be cross contamination to the real economy of goods, services, energy and labour.

3. Deteriorating prosperity poses a clear threat to rates of utilization, an important consideration given the extent to which both businesses and public services rely on high levels of capacity usage. Simple examples are a toll bridge or an airline, both of which spread fixed costs over a large number of users. Should utilization rates fall, continued viability would require increasing charges imposed on remaining users, since this is the only way in which fixed costs can be covered – but rising charges can be expected to worsen the rate at which utilization deteriorates.

4. Uncertainty in government, discussed above, may have destabilizing effects on economic activity.

There is a great deal more that could be said about “acceleration risk”, as indeed there is about the financial and governmental challenges posed by deteriorating prosperity.

But it is hoped that this discussion provides useful framing for some of the most important challenges ahead of us.



401 thoughts on “#149: The big challenges

  1. Skripal; CIA; Trump; May; Daniel Ellsberg

    Nothing has changed. Governments make up lies to persuade the public to do something they would otherwise choose NOT to do. The US public (as well as Britain and Australia citizens) would not have supported a war against Viet-Nam (and eventually Laos and Cambodia) without the faked attack on the US ship in the Gulf of Tonkin. I was in the US Army at the time (with a rank somewhere below Private) and the whole thing made no sense to me…except that some people in the military looked at it as wonderful news to increase the chances for promotion in what was a stagnant, peace-time Army. There had been US Advisors in South Viet-Nam since the Kennedy administration. We had a Sergeant who had gotten a purple heart when a terrorist attacked a whore-house in Saigon and he got a very small shrapnel wound on his arm. He got a Purple Heart and an instant promotion from Private to Sergeant. The Lifers were salivating at the thought of such career opportunities.

    When Lyndon Johnson and the military and intelligence officers decided they wanted to go to war, and that a fake attack was the way to bring the media and the public into line….it changed the world in profound ways for a lot of people….most especially the people of southeast Asia. Even the invention of Agent Orange and its post-war conversion into Round-Up and the current crop of cancer trials and the potential that Bayer-Monsanto might go down unless they are rescued by the very same governments. What goes around, comes around.

    I worked for a time with a former Intelligence Officer. Without ever telling me any Secrets, he made it clear that one should never trust anything these people say. It’s best to ignore the media buzz and look directly at the Game they are playing. You won’t know for sure, but you are much more likely to understand.

    Don Stewart

    • Greta Thunberg
      I saw a picture yesterday of Greta speaking in the houses of Parliament. She told them ‘My generation has no future…you sold it’. She took a shot at fracked gas and the new airport. Thunderous applause.

      So she spoke directly to the Lear Jet crowd in Davos, met the Pope, and gets applause in London. What is really going on?

      My guess: The people playing the Game understand that the Game is Up, and something has to change. But sacrificing so that Donald Trump and Mrs. May and the Davos Crowd can survive along with their Institutions will not rally the troops. And so they have found a spokesperson (an autistic teenager from Sweden) who is saying something which resonates.

      Does the public understand that doing anything about climate change involves:
      *Sacrifices on the part of the ordinary people?
      *Transferring money to the already rich?
      I don’t know if Ocasio-Cortez understands it, but I am pretty sure that Chevron, BP, Exxon, Trump, Mrs. May, and the Davos Crowd understand it very well. And if Greta Thunberg can grease the skids….

      Don Stewart

    • Dr. Morgan
      If by ‘these people’ you mean the Military/ Industrial/ Intelligence people:
      *The prosperity pie is shrinking
      *Their piece of the pie is getting bigger

      If by ‘these people’ you mean Chevron/ BP/ Exxon
      *The stage is set for subsidies to Carbon Capture and Storage
      *These ‘oil’ companies have very active chemical initiatives and they have investments in the CCS companies. Exxon makes a lot of money in chemicals.
      *Oil is going to decline anyway…They can make money during the oil decline AND with CCS due to government subsidies
      *They can GreenWash with approval of the political and media elites

      (There are a few, mostly British, pesky guys with calculators running some numbers….maybe we can catch them sitting on park bench feeding some ducks?…maybe the doctors won’t be so successful this time????)

      Don Stewart

    • Tim,

      I agree that they won’t fold their tents and walk away, why would they when they can sit and applaud at lectures about doing stuff for the environment.

    • Well Tim, you know fine well that there are laws against causing inconvenience. Destroying the potential for future life on this planet…not so much.

    • Agent Orange can’t be converted into Roundup, the two are completely different chemicals and act on plants in different ways. The former is a selective herbicide used on broadleaf plants while the latter is a broad spectrum herbicide often used to kill annual grasses and weeds in agriculture.

      I’m just a former gardener who used to apply the stuff (2,4-D from Agent Orange is still widely used) so I apologize for the unscholarly reply.

      Carry on !

  2. And…to be fair seriously doing something that would have any impact on our changing climate and the reducing surplus energy that powers our way of life is going to be pretty inconvenient.

  3. Greta Thunberg; Bill McKibben and Jared Diamond
    For the text of Greta’s speech:

    I am told that she believes her autism enables her to concentrate on a single issue. That is clear in her speech and actions.

    A related matter. Bill McKibben (of 350.org) has written a new book about the prospects for human extinction and hopes for avoiding it. Jared Diamond, the UCLA scientist, reviews it in the New York Times Book Review. Diamond agrees with McKibben’s assessment of the dangers. But he encourages activists to court those powerful people who control the money and the politics with examples of progress. For example, he recounts a recent conversation between a right-wing billionaire and an ecologist from UCLA. The ecologist says that ‘we have to change our way of living’ and the billionaire is hostile. (are you surprised???). Then she recounts how UCLA was able to make its energy consumption more efficient. The billionaire becomes more friendly.

    Now the sticky point that Diamond is evading is that if UCLA saves some money, where does the money go? And the answer is that it will be diverted to the consumption of something else which requires energy to produce….such as server farms or more vacations to the tropics or whatever. The sad fact is that if we want to reduce emissions, then one of two conditions must be present:
    *we run out of affordable fossil fuels
    *we legally restrict fossil fuel consumption
    There is a third alternative, which is that we either learn to sequester more carbon in the soil with smarter farming (my favorite…but denied by the Establishment) or we subsidize Carbon Capture and Storage (the favorite of BP and Chevron and Exxon). And the subsidy should be funded by taxes on people who are not billionaires. The sequestration option does not restrict emissions, and so permits unrestricted growth by the energy companies, but its prospects for success are questionable.

    Don Stewart

  4. “Greta Thunberg
    I saw a picture yesterday of Greta speaking in the houses of Parliament. She told them ‘My generation has no future…you sold it’. She took a shot at fracked gas and the new airport. Thunderous applause.”
    WTF! How do the people NOT doing anything about the problem, who have just been charged with selling humanity’s entire future, sit there and applaud? It’s like they are spectators instead of the very people responsible for so-called government. Completely revolting.
    Does anyone even have the capacity for action any more, or is it virtue-signaling “all the way down”?

    • “So then I, too, am striving towards the exalted goal of being greeted with acclaim – unless I am ridiculed, or maybe crucified; for it is quite likely that everyone who shouts bravo shouts also pereat, item, ‘crucify’, and does so even without becoming untrue to his character, since on the contrary he remains true to himself – qua shouter.”

      Soren Kierkegaard, with his customary irony, from Concluding Unscientific Postscript, his phenomenal critique of Hegel and exploration of the difference between existence and acting, on the one hand, and the so-called movement of world-history, dialectic and logic, on the other.

    • A circus, and she is being passed on around the world as she is rather useful to certain interest groups. The Holy Maid of Orleans of Climate Change……

      And how nice and cosy about their virtues the MP’s must have felt.

      But, practically speaking, how useful is it really to talk about a ‘stolen’ future? And to blame only one generation? When we are surely reaping the harvest from centuries of errors, and perhaps of our own deepest nature?

    • Hello Xabier,

      You ask, “But, practically speaking, how useful is it really to talk about a ‘stolen’ future?” Isn’t that exactly the point

      When you attend these events you get to both feel good and look good. You are part of change and the future. There are no doubt questions at the end and no one asks “But, practically speaking, how useful is it really to talk about a ‘stolen’ future?

      Can we suggest that the previous generations give it back?

      The future is what it will be.

      We would do well to spend more time on preparation for it both on a personal level and as groups.

      What will the future look like, how can we be better placed for it these and many more questions would be a better use of the time now and then Action this Day.

  5. Gold flows from the west to the east, this gold doesn’t stay in the UK….

    The fiat currency powerbase is in a severe decline, as a rather logical consequence of diminishing returns as ECoE rises.

    What is happening on the physical plane? And what is happening on the monetary plane?

    Both should be on your radar.

  6. Quite agree, Ladydog.

    If any generation ‘stole the future’, it is that which embraced the drive to industrialisation in early 19th century Europe, and acted on Lord Bacon’s maxim that ‘we must prise open the secrets of Nature so that we can bend her to our will.’

    Our host, some other astute commentators, and the environmentalists, show us what we are facing and likely to have to confront; while archaeologists – even more than historians – indicate what humans have faced in terms of ecological and social Collapse and how, and offer many lessons in psychology as conditioned by culture and biology.

    Having absorbed this, we can attempt as individuals and families to formulate sensible plans – if at all feasible. Realising all along that the follies and mistaken policies of governments in crisis might well simply blow them away. At the very least, we can fortify ourselves with an appropriate philosophy – not mere material preparations – rather than give in to despair.

    I read today in The Guardian that the school climate strikes ‘have been a success’: how exactly? The industrial system will grind on until it fails. Fostering unreal expectations of total transformation in the young is hardly an achievement.

    All Greta Thunberg can do is abuse politicians as ‘corrupt liars’ who stand between us and The Transition: well, that’s been the case since election slogans were scrawled on the walls of Pompeii. An autistic child pointing it out repeatedly changes nothing, and begs the question as to whether anything can be done on a societal scale at this stage of over-reach.

    Another article in The Guardian discusses the collapse of rural life throughout Europe: vast polytunnel farms manned by near-slaves from S. America, N. Africa and E. Europe, other regions with not many real farmers but plenty of luxurious third ‘homes’ for the rich, and the continued expansion of car-dependent city-sprawl (happening right here in Cambridge, and it’s hideous and shoddy).

    I’ve been watching with dismay a lovely century-old house being demolished in this village: so well-built in brick, and charming: a demolition which is a pure product of cheap credit. All the trees around it have gone, too. It could have been sympathetically extended if the owners wanted more so-called ‘living space’, but there was no chance of that. Every house is being gutted if not demolished. This is the real face of our economy. It’s as if those who cared for that house and the trees over 100 years had never been.

    Thank god that we, some of us, still have some personal room for maneouvre, and are not merely powerless elements in a totalitarian system waiting to be directed to the next state project like the Roumanian Death Canal unable to make plans for ourselves and try to implement them.

    If we have ‘prised open’ Mother Nature, she hasn’t enjoyed the experience one bit and is about to give us a mighty slap in the face, or perhaps just throttle us slowly.

    It will put all economics, and all politics, into the shade.

    • @Xabier

      That “stolen the future” has brought billions out of grinding poverty; eradicated disease and has given untold numbers a better future than they could ever have envisaged even fifty years ago. “Stolen” is a prejorative term; hardly.

  7. Who, or What, is to Blame?
    If we are trying to blame some politicians or intellectuals, then those who have done nothing since the Rio conference are the prime suspects. One can argue that we already knew the principles behind climate change a hundred years ago. But it all came into focus in Rio.

    What went wrong? In no particular order:
    *Politicians who want to follow rather than lead. The bleating that the children aren’t giving the politicians a detailed program to follow. Diane Feinstein insulting the children and pointing to her million vote victory. Trump declaring that he can defeat the Green New Deal with just one word: Socialism.
    *Peak Oil theorists. Peak Oil was confidently proclaimed to have happened in 2005, and it was all downhill from there…at about 5 percent per year. It didn’t happen that way. One can argue about ‘peak prosperity’, but the fact is that emissions have continued to grow. Maybe economics has distorted things. At any rate, ASPO bears some responsibility.
    *Failure to understand Peak Empower. The ecologists told us that humans will use all the fossil power they can get their hands on. Yet the ‘Green’ camp continually pursued more efficient ways to use fossil energy. That response would have been appropriate if Peak Oil predictions had come true, but are wildly unproductive if emissions are rising. Save fossils in one place and they will be spent somewhere else.
    *Military Industrial Complex. This Deep State powerhouse wants only one thing: to be the last humans standing. The US is now spending more than the rest of the world combined, and it still isn’t enough. And any modern military is entirely dependent on fossils.
    *Fossil fuel corporations. Tobacco all over agains. Enough said.
    *NeoLiberal Economics. The Economists told the politicians that letting everyone do whatever they want to do is not only the easiest thing to do, it is also the most moral thing to do.
    *Humans. Humans are exquisitely adapted to living in a world of scarcity. We are not adapted very well to excess. Thus, all those fossil slaves are producing disease and surplus humans and ecological disaster. Humans are also smart without being wise. Most animals can just go with the flow, but humans armed with their opposable thumbs and other accouterments can destroy the world.

    I’ll also single out one more item. We frequently say that ‘the economy is based on energy’. I’ve probably said that many times. But it is also true that ‘money directs assets and human work’. Thus, if Europe is losing its farmers, we have to look at the monetary incentives created by the ECB and governments tax and spend policies. If young people perceive that there is more money to be made with ‘digital innovations’ than in growing crops, then money has spoken. The money may be an illusion, but it is a powerful illusion capable of moving humans.

    Don Stewart

  8. Your view of the energy situational of humanity and its trends is clearly written and agrees with the consensus in what I regard as the best of the energy descent literature. However, I find it strange that you coin new terms – surplus energy, ECoE – for critical concepts that are in general use among energy descent writers as net energy and EROEI. Why create different ways of saying the same things? Your terms add nothing new to the concepts. I think you writing would achieve more visibility if you adopt the language of the consensus.

    • Eroei is energy vs energy. Ecoe is currency vs energy.

      A very much needed view on our current situation.

      No one understood, to me, SEEDS was the missing link. It exposes what the rest was trying to hide.

    • Your own definition of ECoE is the energy cost of energy. Currency/money is not in the equation. Some people use monetary cost of energy as a quick and dirty way of calculation, the dirty part being that monetary values fluctuate in ways that have no necessary relation to energy cost.

      Who are this “rest” that was “trying to hide”? Howard Odum with his concept of emergy (that’s with an M) and his intellectual progeny such as Charlie Hall’s group have been making the same calculations as yours for decades. Knowledgeable energy descent writers have adopted their methods and terminology. Where have you been hiding?

    • Thank you, and I do endeavour to make my work readable and interesting.

      I think the difference is that I come at this from a background in finance and economics. That, rather than any wish to be different, probably accounts for differences in terminology.

      I’m a huge admirer of Charles Hall, but beyond him I’m not aware of a consensus as such, not least because consensus has a specific meaning in finance and economics (consensus earnings, consensus growth forecast, etc.). (In fact, to me the word ‘consensus’ describes the flat-earth brigade who think that the economy is all about money, and energy is ‘just another input’!).

      So, I’m aware of some superb scientific work in this field, by Charles Hall and others, but my main interest is less in the science of the energy/cost equation itself than in what it can tell us about the economy.

      In finance, ‘net’ and ‘gross’ are used in a myriad of ways, and I’ve found that ‘surplus’ is a better way of putting my meaning across. As for ECoE, I treat the cost side of the EROEI equation as an economic rent, which in modelling works best as a percentage, whilst the emphasis needs to be on cost. Also, ROI has a specialist (and wholly monetary) meaning in finance and economics.

      Also, I’m not that bothered about visibility. I find this stuff fascinating, and I built the SEEDS system on the Everest Principle (“to see if it could be done”), though I do think it’s a valuable methodology. I like feeling that I’m finding things out, and relish the debate with readers.

    • The missing link was, imho, a constant finger on the link between energy and finance. What is exposed here is the huge amount of manipulation in the financial system, to hide what is happening due to declining net energy. Facts about declining prosperity while GDP is rising, numbers. We’ve seen some of these numbers before, but not in a way dr Morgan does; a much needed exposure of manipulation in the system, and why they do this. A beautiful mix of the monetary plane and the physical plane, in one chart. Not two different charts on different websites. Two gigantic tidal waves approaching eachother, live footage at Surplus Energy.

  9. Hiding in Plain Sight
    Yesterday I had the privilege of touring a beautiful local beef farm. The sun was shining, the creek was tumbling over the rocks, the cows were chattering to gather their calves to move to the next paddock, and the farmer (a retired MD) was giving us a few facts about the beef industry. It’s a tale of fossil fuels and humanly degrading work to produce cheap burgers which kill people. On this particular farm, in contrast, the cows use very little in the way of fossils. They never get more than 20 miles from the place they were born, they walk everywhere they go except for that single, fateful trip to an Islamic law butcher. The meat is served by a local restaurant, about 10 miles from the farm. The water in the creek could be drunk by humans with cupped hands, in a pinch.

    But 96 percent (approximately) of the beef consumed in this country tells a very different story. A story which makes beef consumption a criminal act which is destroying our stable climate and stealing Greta Thunberg’s future. Calculations show that substituting beans for beef would go a long way to solve two problems: climate change and the epidemic of chronic disease.

    Mitch McConnell may consider it beneath his dignity to deal with ‘cow farts’, but any sane person who aspired to be a ‘leader’ would surely zero in on the beef industry. The farm I visited yesterday occupies some worn out tobacco land. It is regenerating the environment. But, sadly, it is a rare exception which proves the rule.

    It’s not that humans are not smart enough to see the obvious. It’s that humans, and particularly our politicians and business leaders, are just too self-centered to give a ‘cow fart’. And our Economists are insane enough to consider the costs as ‘good for business’.

    Don Stewart

  10. Could There Be Any Hope
    George Mobus gives us his take on what a remnant needs to do to survive. He doesn’t think teenagers from Sweden are going to be able to shake the power structure profoundly enough to do anything at all useful:
    ‘Bear in mind, I do not believe these actions will actually be taken because the extent of true sapience, and the wisdom it entails, in the population, especially the ruling class, is at an absolute minimum.’


    Don Stewart

    • In regard to the continuing depopulation of rural areas in Spain, etc, apart from low wages – and in the Pyrenees a fall in the consumption of lamb, the traditional dish, among the young (cost or Veganism?) – we must not forget that life there is inherently physically harder than in the towns with more exposure to the elements, something people seem to dislike, less convenient in every way, and much less entertaining as far as the young would understand it – unless you are like me and greatly enjoying watching the clouds pass by, bad weather, getting snowed in, etc.

      People have got dreadfully soft, on the whole and like everything in easy reach, with no planning.

      Many more mating opportunities in town, too, which might be relevant……….

      I would like to see the Thunberg movement utilised as a catalyst for some teaching in schools of how our world really works: resources, transport, processing and manufacturing, and how all of this has been transformed over the last 300 years. I recall drawing some lovely pics of mountains an volcanoes, but nothing about the nuts and bolts of our world, and the one we left.

      Maybe then some informed public discussion about any Transition can take place, and the tired mantra of ‘YOU stole my future’ could be binned: generational conflict and scapegoating is going to help no one.

  11. Here’s another attempt at summing up our predicament. Tim, the presenter, Dr. Smith is a mathematician and a demonstrates excellent pedagogy. Would love to read your comments.

    • Thank you very much – this is quite brilliant, better than any other such presentation, and I urge everyone to put aside an hour to watch it.

      On content, first, I heard nothing at all with which to disagree. On the energy, economics and finance material, I think most of us know most of this – indeed, it felt at times as though I was hearing my book and blogs read to me! Where I learned a lot was (a) systems interpretation, and (b) the cyclical process with which he concluded.

      I take from this a number of points in particular:

      – There are processes at work that we recognize, that are incontrovertible, and that are playing out logically.

      – The collapse is already well under way (n.b. the emphasis on how the use of easy debt and, latterly, cheap money are disguising a slump)

      – That our systems for making decisions are breaking down, something that he puts in a big context where I tend to concentrate on the politics of deteriorating prosperity.

      My work now is concentrated on GFC II, and political change. This lecture reinforces how important it is to understand both of them.

    • Excellent presentation.

      He talks near the end about ‘the necessary cycles of growth, destruction and renewal.’

      How wise were our ancestors when they prayed to the Great Mother ‘who makes all things to grow, and all things to rot’ in the words of the Anglo-Saxon pagan prayer?

      Very, I should say.

      And how wise our politicians, forever promising unlimited growth?

  12. @Xabier
    I applaud her for telling the truth. The time for mouthing words while taking the exact opposite behavior tracks is long gone. I think Greta sees with clarity…and the autism may have something to do with that.

    As for blaming a generation. I don’t think it is helpful. I would prefer that it take the form of blaming governments. The governments try to hide behind the notion that voters will not support what needs to be done. But it is up to people running for office to demonstrate that they have LEADERSHIP ability. As Harry Truman said, ‘If you can’t stand the heat, get out of the kitchen’. Government officials who think that nothing can be done should resign!!!

    Mobus would, he says, do his best to mobilize the whole world to use nuclear power to take carbon out of the air…a method used in nuclear submarines. If that is the best method anyone can think of (and it is not my favorite), then elect somebody like George and let’s do the best we can.

    I have spent the last two days touring local farms. I have met 80 year olds and 20 year olds, black, white, and brown, doing amazing work. I don’t give a damn what generation they represent…I look at what they are doing. Some will fail, but some will succeed. We all need to focus on success…not the fluff that the media and governments use to divide us.

    Don Stewart

    • While I am Ranting and Raving
      *The US spends 2.5 times as much on health care, per person, than any other country in the world
      *That equates to 18 percent of all expenditures
      *We have the worst rates of chronic disease in children in the world
      *We have the worst rates of dementia in old people in the world
      *Our life expectancy at birth ranks 42nd in the world, behind a number of countries who spend less than 10 percent per person that we spend.
      *Most of this can be prevented through proven methods pertaining to diet and lifestyle.

      i suggest that every politician should face a Greta Thunberg moment…this is a tragedy…what do you propose to do about it? And if the answer is ‘well it’s complicated…or ‘we can’t do anything about it because that would mean Socialism’…or any other ‘we can’t’ excuse….then that politician should resign.

      I’m not willing to see the politicians hide behind ‘we will spread the cost more equitably’. I DEMAND that they put forth a program which will remedy the horrible situation. If they can’t do it, then they need to be evicted from office, or resign voluntarily.

      I am, this evening, sick unto death of politicians and their excuses.

      Don Stewart

  13. Australian Politicians Zero; Australian Farmer One

    First, I admit to having a weakness for Australian accents. If he were speaking OxBridge I would likely be more critical. If he was posed in front of an American flag, I would probably seek out the weak points in his talk. But just as he is, he is a very appealing character to me.

    But, second, the main point is that he is DOING something. Even while the politicians dither and mostly just do nothing. It makes no difference what generation he is from, whether he emigrated to Australia generations ago or on a refugee boat in the last couple of decades. I really don’t care if he has benefitted from ‘male privilege’.

    I AM interested in the geeky parts of the carbon cycle, BUT I will tolerate mistakes so long as somebody is DOING SOMETHING.

    Don Stewart

  14. Doing vs. Consuming; Grandma knew how to do stuff so she survived
    Yesterday I visited 3 urban farms. One has been carved out of the desert of an Ag School property. The contrast between the Ag School ‘dead zone’ and the life evident in the ‘eco-ag’ section, even in just a couple of years, is astonishing. I recommend the experience to everyone.

    Another urban farm is just an acre or so, and is being built next to a ‘new urban’ type shopping center with trendy food and food trucks and tables with happy people with babies sitting in the sunshine. The farm part got just a handful of visitors. The farmers face daunting challenges, including concrete under about 6 inches of imported soil. In addition, the soil was severely degraded in its previous incarnation as a ‘city farm’ by poor gardening practices. One problem of many is water…6 inches is not enough to stabilize a water supply. So the farmers are using innovative water harvesting and storage methods. But it is very clear that this acre cannot remotely supply all the people who came to celebrate at the shopping center.

    A third farm is an offshoot of a local vegetarian restaurant. About 10 years ago the owners of the restaurant decided to purchase an old house with an acre and a half of land. They rehabilitated the house and turned the land into an extraordinarily productive farm. 80 percent of what the farm produces goes to the restaurant while 20 percent goes to community needs. A very critical point…since the restaurant is vegetarian, the only animals involved were half a dozen laying hens who are fed scraps. This small property can feed a lot of people, but not even a single cow.

    People who want to be like Grandma need to get busy.

    Don Stewart

  15. Hello Tim,

    I had a meeting with the financial adviser that I’ve used for years and know quite well.

    Prior to the meeting the issues we discuss here, and the recent debate about climate change were in my mind.

    It made for an “interesting” discussion around the issues of funding income in old age and long-term care, should that be necessary. It’s something I want to reflect on some more both in terms of what I do with my current provision but also what I do from now on.

    Without giving personal advise obviously, do you intend to discuss the issues that people will face in addressing these issues in the future?

  16. @Dr. Morgan
    ‘My work now is concentrated on GFC II, and political change. This lecture reinforces how important it is to understand both of them.’

    I don’t know whether this will sound profound or simply stupid. I was listening to an interview with George Lucas (Starwars creator) talking about Akira Kurosawa (7 Samurai and other films). Lucas mentioned two interesting points:
    *There are a couple of dozen possible plots
    *The story can be told from unconventional angles
    For example, the original Star Wars is told by the two lowest status participants…the two droids…which idea Lucas stole from Kurosawa’s Hidden Fortress.

    The 7 possible archetypes, from Wikipedia:
    *Overcoming the Monster
    *Rags to Riches
    *The Quest
    *Voyage and Return

    Dr. Smith seems to have chosen Rebirth as his archetype, but time limitations did not let him develop that theme satisfactorily. It does seem to me that simple disaster is not enough. James Cameron, in Titanic, makes the disaster the clear result of human hubris. Which takes us into the realm of Tragedy.

    The story could possibly be told as a Quest to understand….how a brilliant scientist (that would be You) broke through the veil of ignorance woven by Economists and discovered the real truth. But I think Quest stories are best when the thing discovered is something good…not a disaster.

    The story could be told as a Comedy…Resilience.org is trying that. I find it off-putting.

    Which leaves us with Rebirth, Dr. Smith’s choice. And here it seems to me that telling the story from the standpoint of ordinary people and perhaps non-human characters might get interesting….Yes, the kings and queen all died….but what became of the peasants? Max Keiser and Stacey sometimes take this tack…yes, all the usual Wall Street suspects got their comeuppance, but then what??? Did the peasants rejoice in the removal of the yoke? Did people pull together to jointly solve their existential problems? Lucas said that Kurosawa’s typical question was ‘why can’t people get along together?’. Maybe the collapse leads to rediscovering community in ways that global capitalism very nearly destroyed?

    Don Stewart

    • As one who trained as an anthropologist but became a farmer, I think the Rebirth approach has a lot going for it. In all my encounters with peasants – living in West Africa and the French Pyrenees, and in visits to Latin America – I have been impressed with the wholesomeness of both their material and cultural lives. I saw villages in Africa where almost everything from farm tools to houses to sophisticated art and musical instruments was made locally from local, renewable materials. What can be a better model for rebirth after the oil age than that?

      My small, horse-powered farm in NY State could not attain that ideal, but my encounters with semi-subsistence communities turned me into an aspiring peasant. In all my experiences with peasant communities I found that the weaker the influence of the market economy, the stronger the gift economy, the network of long term obligations that knit neighbors together. This is the glue that has been the strength of traditional agrarian communities all over the world.

      So, paraphrasing scripture, blessed be the peasantry – let’s hope they inherit the earth!

    • Heroes come, eventually, to disaster and the limits of strength and cunning. In some mythologies, so do the gods themselves.

      Seers discern looming disaster, or drop heavy hints. If they are the counsellors of kings, they can make things happen, too.

      Excellent studies of real European peasant life, with all the antagonisms and power plays, feuds and personality defects, plus the intrusion of the higher levels of society – Church and state – can be found in the literature on Montaillou and the Cathars, which is easily found.

      Certainly the old English kings and chiefs were judged by their gift-giving (‘That was a Good King!’ – Beowulf) : question was, how far did you enter into the magic circle of distribution?

      Peasant societies need warriors, the world being as it is, and the warriors will get the most, quite reasonably -you want them to be tall and strong. Who else will protect you from marauders, and other peasants displaced by famine and drought, pestilence, etc?

      The institution of kingship may mean survival for the group through a higher stage of organisation, as Phillip of Macedon saved the border tribes of his kingdom from raids by Thracian savages by teaching them to be well-drilled soldiers.

      But the sword has two edges. The good king may become a tyrant.

      And gift-giving implies also hierarchies: neither good nor bad in itself, it all depends how they are deployed……

  17. @Northsheep

    “I found that the weaker the influence of the market economy, the stronger the gift economy, the network of long term obligations that knit neighbors together. This is the glue that has been the strength of traditional agrarian communities all over the world.”

    If you read David Graeber’s book: “Debt: The First Five Thousand Years” he discusses the early communities. And he says that economic intercourse was not on the basis of a crypto market economy – barter – but on “running up a tab”. People trust each other and support each other and don’t deal with each other as mere economic agents. In fact if you think about it it’s the only way to go in a small community that aims to be self sufficient.

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  19. Scariest statistic one can glean from Sid Smith’s talk
    Historical agricultural communities produced 10 units of food calories using 4 units of energy (excluding the sun and gravity). Now, in the US, we produce 10 units of food using 100 calories of mostly fossil fuels. Which implies that we need to reduce our calories in from 100 to 4….a 96 percent reduction.

    At the Eco Farm at North Carolina State, I saw a Raised Bed Keyhole Garden. These have been copied from Africa. BUT…it was missing the hole in the center where one recycles the garden waste, thereby recycling nutrients and especially water. Even on an Eco Farm, the students are not being taught the fine points of saving energy and nutrients. The biggest solutions on display are high tunnels and cover crops and walk in coolers. The high tunnels and the walk in coolers are not affordable on a ‘4 calorie’ budget, I think. I’m not being too critical, just thinking about the challenges. The students have to learn how to survive in 2019 and also begin to imagine what 2050 might be like.

    Don Stewart

    • Don – you’d have enjoyed a series on British television – BBC2- called America’s biggest fibs with Lucy Worsley. Very eye opening about decades of lies and half truths by successive Governments and outright lies (Russian military supremacy in the 50’s and 60’s and the Cuban missile crisis to name but a few)

    • @Donald
      At one time Curtis LeMay, the commander of the Strategic Air Command (as I remember), believed that the USSR had 1000 ICBMs. They actually had 4. If LeMay had known the truth, I am pretty sure the US would have used its ICBMs to destroy the USSR, while suffering some damage itself.

      I have come around to the conclusion that virtually all of the congresspeople understand that the US has to maintain military supremacy in order to maintain financial supremacy in order to maintain ‘The American Way of Life’. When our new Ambassador to the UN says ‘we will never be friendly with Russia’, I think the statement springs from that belief. I recently read some speculation that Trump has reversed his dovish statements as a candidate and his early behavior as President because the Military/ Intelligence have enough evidence to hang him. And the Military/ Intelligence community is dead set on a certain trajectory. To rise in the ranks of those organizations, one has to be a psychopath.

      I think our situation is extraordinarily dangerous. I don’t think Russia will either collapse or blink.

      Don Stewart

    • Hi Don yes Lucy mentioned that Russia only had about 4 ICBMS at on point and (like you) also pointed out that it was in the military’s and big businesses interests to keep on constructing more and more weapons.

      I remember one case where a basic tin ash tray for a B52 cost the Government several hundred dollars.

      The current situation is dangerous especially as Russia holds many of the energy cards. Perhaps if the US had been much kinder to them in the 1990’s (Remember the ‘New World Order’ speech by Bush snr ) then Putin might not have risen to power.

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  21. It’s interesting to see the reverses for both established parties in the British local elections. The media are trying to spin-this as “Brexit” related, but I suspect there is broader discontent here, including deteriorating prosperity (though “Brexit” might have more influence in the Euro elections, if these take place) and a general sense of shambles.

    Personally, I think it’s regrettable that the Liberal “Democrats” (“let’s try to thwart the referendum result, since we don’t like it”) are doing fairly well, but hopefully that’s nothing more than picking up disaffected Conservative and Labour voters.

    • Hi Tim I did cast a vote yesterday and had a word with the two polling officers.

      I actually said that there were far greater forces at work than Brexit and was asked what they were.

      I said EROIE to which one of the officers said ‘I just knew you were going come up with something energy related’

    • I didn’t vote.

      No voting in Scotland.

      It seems that Labour are doing badly in the north of England and better in the South.

      To win a general election they need to hold on to their traditionsl vote in northern areas.

      The stall brexit approach on many of Labours southern MPs may result in them being kept out if power.

  22. Sid Smith and Systems Based Analyses; Rising ECoE
    Wandering in the bookstore, I run across Losing Earth by Nathaniel Rich. Stewart Brand writes a blurb:
    ‘In this book, Nathaniel Rich demonstrates exquisitely how shallow debate of a deep problem,,, exacerbates the problem.’

    I have come to think that the Internet excels in fostering shallow debate.

    Don Stewart

  23. “Shallow debate of a deep problem exacerbates the problem”

    Please tell me more about that.

    • @houtskool
      I haven’t read the book, from which I took the quote from Stewart Brand. I had a chance to read the first few pages last evening as I was waiting for a meeting to start. The situation the book explores is how the scientific and political class knew in 1979 that climate change was an existential threat…but nobody did anything. It turns out that the scientific work since 1979 has been just adding a few decimal points, not doing anything fundamental in terms of models. Why were Democrats and Republicans united in their determination to do something 40 years ago…but nobody did anything?

      The quote resonated with me because I was having a run-in with a prominent blogger who took it upon himself to point to the stupidity of Beto O’Rourke (a US politician) for saying that ‘the world needs a Farm to Fork restaurant in every neighborhood’. I tried to have a serious discussion about that statement. I believe the statement is literally true…whatever may be the state of wisdom or stupidity of Beto.

      The reason I think it is true is that, as I have described on this blog, it is likely that we have to cut exosomatic energy use in the food sector by 96 percent. That includes both energy used to produce agricultural products from the soil, but also the energy used to transport the products and the energy used by industrial food to manipulate them into packages which can be sold in cans, bottles, and wrappings of various kinds. I also pointed out that the epidemic of chronic disease is directly a product of all the industrial manipulation.

      I said that Farm to Fork is basically the elimination of a whole bunch of processing. That a very much more direct eating of agricultural, or garden, produce is likely to be our fate…whether we like it or not. And taking perishables directly from a garden to a kitchen is likely to be one of the ways we go about cutting out the 96 percent of exosomatic energy. I pointed to the energy saving from eating as a group, and said that eliminating regulatory inhibitions on neighborhood entrepreneurs cooking food was one of the best ways to help solve the problems….get the governments out of the way.

      The more I tried to reason with the blogger, the more he turned to reviling me, personally. He just got more and more dug in to his position that Beto, and Democrats in general, are simply engaged in Virtue Signaling….which makes them the enemy of the ‘real people’.

      I am of the generation which thought that exchange of information and models over the DARPA network was going to greatly facilitate the resolution of issues such as the one I describe above. For reasons I certainly don’t understand, somehow the Internet has devolved into a device for people to dig themselves deeper into silos.

      The upshot is that I am now prohibited from submitting any comments on the blogger’s site. And I have grown so disgusted that I have taken his site off my list of bookmarks. IF I thought the man had enough gumption to consider that he could POSSIBLY have missed something, then I wouldn’t let a personal insult deter me from reading. But it now seems to me that he is just another example of what Brand talks about. (Brand is roughly the same generation as me, and had an early relationship with the Internet.)

      Does this offer any perspective on the quote?
      Don Stewart

    • “The more I tried to reason with the blogger, the more he turned to reviling me, personally. ”

      I never bother to engage with anyone who resorts to abuse, which is what happens when their views fail to convince. Anyone who really knows what they’re talking about has the confidence to listen politely and open-mindedly to alternative opinions.

      Moreover, it’s always seemed to me that “we learn from listening, not from talking”. I forget who wrote that, but I’ve never forgotten its wisdom. Every politician should write out that sentence, and “paste it in his/her hat”.

    • ““Shallow debate of a deep problem exacerbates the problem”

      Please tell me more about that.”

      And Don S. takes the bait!

  24. If someone were capable of heeding that undoubtedly wise maxim, to listen rather than just talk and deliver tired old slogans, they probably wouldn’t be a politician…..

    I was rather appalled the other day when I decided to read up on the background of Donald Tusk: he began as a street thug, by his own admission -‘cruising for a bruising’.

    Into such hands are we consigned!

    Very far from the civilised 18th century ideal, to be ‘amiable and civil, polite and full of information’.

    • I agree that the’ farm to fork’ statement is literally true, and it certainly obtained before the spread of industrial civilization. Many cities even had fields and farms within the city walls – thinking of sieges, of course.

      I’m currently reading the diary of an Italian priest who travelled throughout Switzerland, France, Germany and Flanders in 1519, and it’s quite eye-opening. Some cities had stocks of dry foods decades old=

      Much later, he inhabitants of central late 18th-century London were still able to buy vegetables from the market gardens which covered much of the area south of the River Thames: the great map made by Haward shows this – now covered with mile upon mile of concrete and tarmac. There was a proper dairy farm in the centre of the now noxious suburb of Peckham as late as the last decade of the 19th-century.

      The father of the great painter Turner came up to town every day, to open his studio, on a cart coming from the market gardens and farms.

      One of the nuttiest things about ‘re-localistaion’ here in Cambridge -which the College cooks boast about – is that producers some 60 miles away (ie still in the same region) are deemed to qualify! As opposed to being in Tanzania, Spain, Chile one supposes. A step, but…..

      Meanwhile, ye ‘Ancient Universitie of Property Speculation’ is bent on covering all the local fields with shoddy housing and light industrial developments. The only game in town.

    • I enjoyed Cambridge enormously in the six years I spent there, as a student at Emmanuel (BA/MA, PhD). But I doubt if I would enjoy it so much now.

    • @Xabier

      Actually I’m quite impressed with Donald Tusk’s CV; from street thug to the top. If you ask me who I prefer; our milk and water politicians to the Donald Tusk’s of the World I say DT every time!

  25. “the scientific and political class knew in 1979 that climate change was an existential threat…but nobody did anything”

    Hey what about me!! By 1975 all my students (Town & Country Planning) were well aware that it would be a good idea to make sure any new development was walkable with good bike/ public transport links due to energy/climate constaints which would hit within 40 years.

    Did they all think I was crazy? Of course they did

    • Paul – In the Woody Allen film ‘Sleeper’ – made in 1973 – there was mention of Global warming. The joke with him continually slipping over a giant banana skin can be seen as symbolic of our present predicament.

      Incidentally as you mention 1975 / 76- this was the year there was an excellent TV series on called ‘House of the Future’ by Granada TV. I remember the main problem was that it would get too hot.

      Here’s a clip below where you’ll here discussions about energy with Tony Benn talking about ‘when the lights go out and your TV flickers

  26. Blitzscaling and Fracking
    If you have been immersing yourself in thoughts of ECoE rising by half a point per year, leading to economic collapse, along with Antarctic ice sheets adding a few millimeters to ocean levels each year….

    Then you need some radical therapy:

    Max and Stacy discuss the hot new theory: Blitzscaling. The point is to lose massive amounts of money so that all those dumb competitors who are actually trying to be cash flow positive will be driven from the market. Amazon is the poster child.

    This discussion segues into a discussion of the cash drain of fracking. Max points out that once the oil is gone, there is no market left to capture…so the notion of Blitzscaling to Own the Fracking Market is questionable at best.

    But not to fear. Huawei and G5 networks came up for discussion in a recent Max and Stacy show. The point is to have a super fast network using artificial intelligence to look at what one’s eyes are attracted to in order to direct you to different screens without the need for you to execute a search. (I am going to have to train my eyes not to look at all those ads for Asian Women who are anxious to meet me!) Max observes that we will then be in an economy powered by ‘brain waves’, and won’t need to worry about negligible concerns such as transportation fuels (Not to be to dismissive…it occurred to me a long time ago that our present economy tries to move brain waves by moving tons of load. At a minimum, it seems that psychoactive drugs are a lot cheaper than moving sand and gravel.)

    At any rate, if we accept Dr. Morgan’s basic premise that the economy is an energy system, and that the energy system is under threat from rising ECoE, then all this seems crazy.

    Similar to the chart from the Guardian that someone posted above, I wonder if there is some chart which shows ‘how much debt can be repaid with projected future surplus energy’? If that amount is less than the outstanding debt, then collapse could come at any ‘Aha!’ moment. Dead Unicorns may litter the streets???

    Don Stewart

  27. Surplus Energy; Millennials; Burnout
    I read this article from a Millennial and recognize a lot of symptoms I see in my own grandchildren, and people I run into as I go about life.


    I also am acutely aware of how the evolution of the economy has increasingly dumped meaningless complication on consumers and away from corporations and governments.. For example, the bank used to be glad to get my deposit, now I have to jump through hoops to give it to them. The problem I have is that every automated system requires me to stop doing anything I was actually interested in doing and try to decipher what it is that a brainless machine wants me to do.

    I see the Branded Self exhibited in my college age grand-daughter. She has worked so hard to brand herself by jumping through all the right hoops. That worries me. When does she get to relax and be herself?

    Here is another example of meaningless complication:
    Recipe 2: Even Lighter and Healthier Nomelet

    I got this from a very well-meaning woman. The ‘Nomelet’ is made with ground chickpeas rather than an egg….so it is definitely lighter and healthier. But about 15 years ago I resolved to eat whole foods close to their natural state. Suppose I just cook a batch of chickpeas and eat them with whatever veggies I might use to fill the Nomelet? Why am I tempted to copy what a chef would do? I am way too old to fall for all that Branding scam….or at least I aspire to remain aloof. Why do I have to keep reminding myself that simplicity is the answer? Why do people book rooms in monasteries to get away from the ‘real world’?

    Where this all gets me is to try to think deeply about declining Surplus Energy. Is the behavior we can see in Millennials just a response to declining Surplus Energy? Since the world is awash in denial of declining Surplus, people are tempted to think that continual escalation in Optimizing will pay off. Suppose it never pays off? We are left with a faux world of shiny Branding in social media and burnout for those in the real world? And will we ever connect the dots to Declining Surplus?

    Don Stewart

  28. Please note – articles here are closed to new comments after 30 days, but I’ve just extended this because of the time it’s taking to get the next article posted.

  29. Shallow debate of a deep problem…Phase II
    See this article describing the central role of the economist William Nordhaus supporting inaction on CO2 emissions. Nordhaus finds the ‘optimum’ global warming is 4 degrees centigrade.


    Steve Keen will continue his series on the delusions of Nordhaus, and perhaps addressing the strange award of the ‘Nobel’ to him just recently.

    On the right-hand side of the page you will note an opportunity to click through and read about the book Nervous States: How Feeling Took Over the World. I will give you one quote from the review:

    ‘The focus of medicine has shifted from the treatment of disease to the management of pain, because how we feel physically and mentally is perceived as at least as important as the underlying illness.’

    What we have here are two variants of a model of how the world works. Nordhaus’ model of economics and its relation to extinction is one variant of the model, while medicine’s ‘treat the symptom’ model is another variant. Both are derived from a more fundamental model that says that feeling, which by definition happens right now, is more important than homeostasis…sustainability or regeneration or long term thinking of the kind evidenced in The Limits To Growth.

    Consider pain. Pain is a message from the environment to our bodies that something is wrong….we need to make changes in that environment. If we are in an aware, unmedicated state we will expend the work necessary to do our best to change the environment and get rid of the pain. But if we are medicated, we can continue to do whatever it was we were doing and lose the motivation for action. Our current world is awash in medications which attempt to fix the pain without fixing the problem. In medicine, the drugs ALWAYS leave collateral damage. I won’t try to prejudge Keen’s next installments on the errors made by Nordhaus, but I am pretty sure that Nordhaus will try to relieve the pain without addressing the cause of the pain and his medications will leave much collateral damage.

    I will observe that the Internet is perhaps a poor place to discuss such matters. The internet is awash in ‘symptom suppression’. Theoretically, we can all have a deep discussion of just how Nordhaus and Medical Science went wrong….but more time on Social Media and screens in general is likely to be the consensus pick on the Internet. A minority may be attracted to disrupting London as a way to manage the pain.

    Feelings evolved to get us to do the right thing. If you want to understand them in the great scheme of things, I recommend Antonio Damasio’s book
    The Strange Order of Things: Life, Feeling, and the Making of Cultures .

    But, crucially, we evolved our feelings in a very different world than the one we have been given by Fossil Fuels. We are not likely to be able to use rationality to override feelings just because we have science with which to study how the feelings may now be destroying us….although George Mobus will keep thinking about that subject. Instead, the Internet and other Media will find profit opportunities in managing symptoms.

    As a footnote, the history of climate change records key roles for Nordhaus and John Sununu (the Chief of Staff for Bush the First). Sununu recently reflected on his role in changing the aggressive anti-climate change rhetoric of candidate Bush into the stonewalling of any international agreements as President (e.g., The American Way of Life is Not Negotiable). Sununu says that, of course climate change is real, but nobody has any solutions. He says that the European countries of the 1970s were just virtue signaling but had no real solutions. So symptom management is not a new thing.

    Don Stewart

  30. New article?
    I read a new article, and shared it with some people at the coffee shop. Then it seemed to disappear. It is marvelous. What became of it?
    Don Stewart

    • The next article here hasn’t appeared yet (for which apologies), partly because it’s taken longer than I expected to put it together.

      Also, at the moment I seem to be working on particularly demanding subjects – politics, financial flows, environmental issues and China, all of which require a lot of thinking, a fair amount of modeling and a lot of background investigation. I’ve also been doing some other bits and pieces aside from what I do here.

      The next piece will be along in a few days, and looks at the implications for government of deteriorating prosperity – this necessitates covering a lot of ground. After that it’s likely to be GFC II, the environment and China, though not necessarily in that order…………..

  31. Damasio
    For a teaser on his book, go to Amazon and click on the preview button. You start off looking at the usual stuff and then you jump to page 4. They don’t show you 1, 2, or 3…which is a shame because it lays out the foundational thinking succinctly and brilliantly. But on page 6, you can read the first complete paragraph and get a teaser: How is it that humans in a culture behave so similarly to brainless bacteria? Can we trace the evolution of the obvious capability humans have to create a complex culture back to the first living creatures? What might such an exploration tell us about the opportunities and limitations we must confront?

    Don Stewart

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