#163. Tales from Mount Incomprehension

THE FALSE DICHOTOMY CLINGS ON

There was more than a grain of logic in the observation by US treasury secretary Steven Mnuchin that climate activist Greta Thunberg should save her advice until “[a]fter she goes and studies economics in college”. If the authorities were to consent to her demand for the immediate cessation of the use of fossil fuels, the economy would crash and, quite apart from the misery that this would inflict on millions, we would have abandoned any capability to invest in a more sustainable way of life.

This said, taking a course in economics, as it is understood and taught conventionally, would not enhance, in the slightest, her understanding of the critical issues. Conventional economics teaches that economics is ‘the study of money’, and that energy is ‘just another input’. These claims cannot be called ‘contentious’. They are simply wrong.

Worse still, her audience at Davos – the Alpine pow-wow of the world’s political and economic high command – are almost wholly persuaded by a false interpretation which states that action on climate risks carries a “cost”, meaning that doing what she asks would be costlier than carrying on as we are, with an economy powered by oil, gas and coal.

This is a folly every bit as absolute as the argument that we must immediately cease all use of the energy sources on which the economic growth of the past two centuries has been based. Continued reliance on fossil fuels might or might not destroy the environment, but it would certainly condemn the economy to collapse.

A commonality of interests

Because I have an extensive ‘to-do’ list – and in the hope that readers might appreciate some brevity on this issue – let me be absolutely clear that neither side of the debate over the economy and the environment understands how these processes really work. Worse still, it seems that neither side wants to understand this reality.

There’s a hugely damaging false dichotomy around the assumption that there’s some kind of trade-off between our environmental and our economic best interests. If “Davos man” thinks that the economy can prosper so long as we cherry-pick the profitable bits of the environmental agenda (like carbon trading, and forcing everyone to buy a new car), and pour bucket-loads of greenwash over the rest of it, he (or she) could not be more wrong

Because literally none of the goods and services which comprise the economy could be produced without energy, it should hardly be necessary to point out that the economy is an energy system. Equally, it should be obvious that, whenever energy is accessed for our use, some of that energy is always consumed in the access process. This access component is known here as the Energy Cost of Energy (ECoE), and it forms a critical part of the equation which determines our prosperity.

The third part of this ‘trilogy of the blindingly obvious’ is that money has no intrinsic worth, and commands value only as a ‘claim’ on the products of energy. I make no apology for repeating that air-dropping cash (or any other form of money) to a person stranded in the desert, or cast adrift in a lifeboat, would bring him or her no assistance whatsoever.

Money is simply a medium of exchange, valid only when there is something for which it can be exchanged.

The complexity trap

The modern industrial economy is not only enormous by historic standards, but is extraordinarily complex as well. Scale and complexity make the modern economy high-maintenance in energy terms. Output grew rapidly in the period (roughly between 1945 and 1965) when trend ECoEs were at their historic nadir, but has struggled since then, as ECoEs have risen.

Analysis undertaken using SEEDS (the Surplus Energy Economics Data System) indicates that prosperity in the Advanced Economies (AEs) of the West ceased to grow when ECoEs hit a range between 3.5% and 5%. Less complex Emerging Market (EM) economies have greater ECoE tolerance, but they, too, start to become less prosperous once ECoEs reach levels between 8% and 10%. Both China and India have now entered this ‘growth killing ground’.

Back in the high-growth post-War decades, ECoEs were between 1% and 2%. By 2000, though, global trend ECoE had reached 4.1%, which is why the advanced West was already encountering something which bewildered economists labelled “secular stagnation”, though they were at a loss to explain why it was happening. By 2008 – when ECoE had reached 5.6% – efforts at denial based on credit adventurism had achieved nothing other than an escalation in risk which brought the credit (banking) system perilously close to the brink.

Since then, and whilst futile exercises in denial have segued into monetary adventurism, ECoE has continued its relentless rise. Last year, world trend ECoE broke through the 8% threshold at which prior growth in EM prosperity goes into reverse. This, ultimately, explains why global trade in goods is deteriorating, and why sales of everything from cars and smartphones to chips and components are sliding.

The average person in the West has been getting poorer for more than a decade, and, increasingly, he or she knows it, whatever claims to the contrary are made by decision-makers who, for the most part, still don’t understand how the economy really works.

Something very similar now looms for EM countries and their citizens – and, when evidence of EM economic deterioration becomes irrefutable, the myth of “perpetual growth” in the world economy will be exploded once and for all.

When that happens, all of the false assumptions on which a bloated financial system relies will crumble away.

Tenacious irrationality

The irony here is that, far from avoiding economy-damaging “costs”, continued reliance on fossil fuels would be a recipe for economic oblivion. The destructive upwards ratchet in ECoEs is driven by fossil fuels, which still provide four-fifths of our energy supply, and whose costs are rising exponentially now that depletion has taken over from scale and reach as the primary driver of cost. Far from imposing “costs” that will push us towards economic impoverishment, transitioning away from fossil fuels is the best way of minimising future hardship.

This means that economic considerations, when they are properly understood, support, rather than undermine, the arguments put forward by environmentalists.

But we should be equally wary of claims that renewable energy (RE) can usher in some kind of economic nirvana. The ECoEs of REs are highly unlikely ever to fall below 10%, a point far above prosperity maintenance thresholds (of 3.5-5% in the West, and 8-10% in the EMs), let alone give us a return to the ultra-low ECoEs of the post-1945 era of high growth.

Critically, transition to REs would require vast amounts of inputs whose supply relies almost entirely on the use of FFs. The idea that we can somehow “de-couple” economic activity from the use of energy, meanwhile, is utterly asinine.

The only logical conclusion is that we should indeed transition towards REs, but should not delude ourselves that doing this can spare us from deteriorating prosperity, or from other processes (such as de-complexification and de-layering) associated with it. The one-off gift of vast surplus energy from fossil sources is fading away, which, from an environmental point of view, might be just as well. What matters now is that we manage, in a pragmatic and equitable way, the transition to lower levels of energy use and gradually eroding prosperity.

It’s a disturbing thought that our economic and environmental futures are trapped in a slanging match between green fanaticism and Davos-typified cynicism. It’s a truism, of course, that people tend to believe what they want to believe – but this is a point at which the reality of energy as the critical link between prosperity and the planet needs to force its way to the fore.

If there’s cause for optimism here, it is that reality usually triumphs over wishful thinking. The only real imponderables about this are the duration of the transition to reality, and the scale of the damage that protracted delusion will inflict.

791 thoughts on “#163. Tales from Mount Incomprehension

  1. Plagues and Viruses
    *Ugo Bardi on weakened populations and die-offs
    https://cassandralegacy.blogspot.com
    *Robbie and Cyrus interview on the Rich Roll Podcast discussing the plague of insulin resistance, especially in the US, the consequences, and the unbelievable ignorance of the medical profession and the public

    Briefly, almost everyone in the US has insulin resistance. The results come in various forms, including auto-immune disorders where the body is fighting against itself. Science has shown over the last hundred years that insulin resistance can be treated with a diet of sugar and water (at the extreme), yet current Standard of Care is low sugar and high fat. So the US is poisoning itself, weakening the population, and perhaps setting up a replay of the Spanish virus??? Besides bankrupting ourselves.

    Don Stewart

  2. The problem is Financial centralisation and Bailing out Zombie Banks and Corporations.
    The Sub story to the centralisation stems from the Uni Polar bid for Full spectrum dominance of the PetroDollar Hegemony post-collapse of the Soviet Union.

    The system has several layers of faults which have exacerbated the MAin street problems and problems have been fabricated in non-compliant economies.

    The Prescription of the Cure absolutely involves restoring the coupling of the finance system to the real economy. SEEDS as a means of analysis and basis for future Monetary metrics based upon energy resources but also Raw materials and both Human Labour but also the Needs of Citizens and the polity rather than just one very small cohort, That is The Billionaire Class and its henchmen of the Military-Industrial Complex and the Surveillance State.

    ECOE is incredibly important to prosperity potential, of course, the degree of Mispricing inherent in the broken financial and political systems exaggerate the extent of the problem as not all of the available solutions have been pursued as they conflict with the vested interests of the Corporate Monopoly State.

    • “The problem is Financial centralisation and Bailing out Zombie Banks and Corporations.” Isn’t this what the Soviet union (SU) did before its demise. A warning!

  3. Good Essay on Green New Deal
    http://unevenearth.org/2020/02/a-post-growth-green-new-deal/

    Whether you think that a Green New Deal is required to deal with Climate Change or Resource Depletion or Rising ECoE, this essay pulls a lot of strands together. It makes it pretty clear what governments should be doing and how Neoliberalism cannot solve the problems. A key insight, not stated exactly the way I will, is that the concentration of production drives consumption…not the other way round. This is the Gospel According to Edward Bernays, who got his start producing propaganda for the British in WWI. My previous post featuring Robby and Cyrus and Rich Roll is evidence that a huge momentum can be generated which is entirely headed in the wrong direction, given a concentration of production capacity.

    Of course, pessimists will point out that The Madness of Crowds is always a threat, also.

    Don Stewart

  4. This from Ambrose in today’s Telegraph who is arguing for a spending spree

    The Treasury has overseen and encouraged the worst kind of austerity over the last decade: the collapse of public investment. It has been slow to understand the post-Lehman economic landscape of secular deflation, global savings gluts, and the world of zero bond yields.

    • They will not understand, ever. Neoliberalism is a deflationary economic ideology. If money is taken from the middle class, working class and the poor and given to the rich, demand will go down, even the rich can only eat so many meals, wear so many clothes, drive so many cars, or sleep in so many beds. Neoliberalism = deflation, current supply exceeding current demand. What has kept the economy alive is the continuous blowing of asset bubbles since the early 1980’s by industrial scale debt/money printing by the financial system which has kept demand up until we reached debt saturation in 2008. But every new Dollar/Yen/Euro/Pound is matched with a debt instrument, which on the other side of the balance sheet is an asset which is counted as a saving i.e. China’s saving glut is the USA’s Treasury note debt bubble, bubble bursts (default) no savings glut! Boris’s spending spree is founded on more of the same money printing, and keeping the dogma of neoliberalism alive a little longer, and give a little money back to the working class. Currently the industrial scale debt/money printing is just about keeping the western economies stagnant, any less and the financial system goes down. Could the system be rejigged to send more money to the bottom 80%, yes, and? Inflation as demand goes up but there are not the energy and material resources to support the increased demand, and rising interest rates to curb the inflation will crash the system. Will the system crash, Yes, its barely surviving now. What happens when it crashes, the asset bubbles vanish, along with most of the assets, the saving glut vanishes along with most savings, liquidity in markets vanishes, so the markets mostly vanish, along with most of the tax base and the money supply as most of the money in use is debt money i.e. credit. Will we survive? many will, many won’t, were on our own and will have to shift for ourselves as best we can. But after the crisis many things will never be believed in again and society will change and the old virtues will come back.

      Regards Philip

    • Hi your post is very similar to one I made a while back.

      When Trump gave a massive tax giveaway to people who are already billionaires what do they do with it?

      Inflate already over inflated asset prices – demand gets reduced because they just hoard it.

    • Though tax cuts (in the US and elsewhere) have favoured the richest, the real reason for asset price inflation has been cheap (i.e. subsidized) money.

      We’re now in a situation where asset prices have gone in one direction whilst prosperity has gone in the other.

      This surely implies that equilibrium has to be restored. Preventing that right now is the market belief in the Fed (and other CBs) safety-net. But this safeguard has its limits, and, when these are reached, asset markets might not just correct but over-correct. My hunch is that this isn’t all that far off, but you’d have to be very brave (or foolhardy) to try to call it!

    • Well our new Chancellor seems to about to open the floodgates of expenditure – but the floodgate which holds required energy seems to have got jammed – what could be the problem? It’s not empty is it?

  5. Saving The World
    Here is an interview with the neurologist David Perlmutter, one of the authors of Brain Wash. The focus is on how the modern world conspires to disconnect our decisions from our pre-frontal cortex, so that we can be persuaded to act in ways which are not in sync with our own best interests.
    https://www.drkarafitzgerald.com/2020/02/12/episode-77-the-secrets-to-improving-patient-compliance-with-dr-david-perlmutter/?mc_cid=819813dcf9&mc_eid=2acc7a1c09

    Since these are two doctors talking, the initial entry is through the question of why patients don’t do what the doctor tells them to do…but it quickly branches out to everything from how doctors make a living to why people continue to destroy the planet. I wish I could say that they offer some magic bullet, but I think that when the subject finally comes down to what an individual doctor or anybody trying to move a mass of people can actually do, they don’t offer much. For example, people should be exercising outdoors for an hour or so every day. But if people can’t do that, then more wishy-washy suggestions are offered until finally it comes down to brining a picture of nature with one to the office. I seriously doubt that a picture on the desk is going to fix any problems. ‘Understanding and empathy’ may buy something, but I don’t think it is very much. It’s important to have empathy in order to understand WHY the patient or neighbor or politician or business is behaving the way they are…but the behavioral advice has to be grounded in science and be very straightforward. People need to understand the consequences. Just before this conversation, I listened to a female urologist talking with a scientist and a dietitian about getting men with erectile dysfunction to eat more veggies. And the moral there was…if you want to get it up, then eat more veggies….not the wishy-washy ‘I feel your pain, so maybe just think about eating a carrot’.

    A good discussion about how the modern world is designed to seduce us into bad behavior. Not so much in terms of doing something about it. Relevant to anyone who thinks that rising ECoE and environmental degradation are serious problems, and who aspires to do something relevant in response.

    Don Stewart

  6. The Slogs at the end of the day column last night. I am cross-posting this to the Slog.
    “Collectivist corporoctratic Phlogiston, they know for sure, is the missing link.

    Christine Lagarde has this week gone from being the architect of IMF incompetence to being the Head of European Central Bank incontinence.

    Here’s a selection of what she has had to say so far….example 1:

    ‘Declining trend growth on the back of slowing productivity growth and an ageing population, and the legacy of the financial crisis have driven interest rates down. This low-interest rate and low inflation environment has significantly reduced the scope for the ECB and other central banks worldwide to ease monetary policy in the face of an economic downturn. And structural challenges, such as new threats to environmental sustainability, rapid digitalisation, globalisation and evolving financial structures, have also affected price developments and, therefore, the environment that central banks monitor, forecast and need to factor into their policies.’

    https://hat4uk.wordpress.com/2020/02/18/at-the-end-of-the-day-931/

    John Ward who writes the Slog and has been for 15 years one of the most influential UK Bloggers has commented here in the past, and I know that John is an admirer of Dr Morgans, empirical approach to Political Economy.

    One of Johns observations of “Gloabist Process” is the Interests of Texas Big oil in the US geopolitical Mix. Perhaps the Apeothesis of this entanglement was Rex Tillerson’s brief sojourn into the Cabinet of Donald Trump. Others would probably argue that Dick Cheney and Donald Rumsfield were the High/Low watermark in the First Bush (The Second) administration.

    The reason I bring Johns Column from last night to this discussion is that it focuses on the Mismanagement aspects of the current failed system. The precariat has been snatched from the Jaws of Victory? depending on your view as to how much is incompetence and how much are Plausibly deniable unintended( Intended) consequences masquerading as Incompetence or the plain Unknown Unknown Black Swans.

    http://www.lietaer.com/images/Integral_Money.pdf

    https://surplusenergyeconomics.wordpress.com/2020/01/24/163-tales-from-mount-incomprehension/

  7. Companion to Perlmutter Interview
    https://www.greeneuropeanjournal.eu/rational-hope-connecting-hard-truth-with-climate-solutions/

    Katherine Hayhoe is one of the leading US scientists studying climate and what we can do about it at the practical level. She advocates for Reality coupled with Action Plans. She thinks that the activism of young people is the only thing which will blast people like Trump and Mnuchin out of their determination to continue fossil fuel subsidies.

    She would apparently disagree that putting financial well-being at the top of the importance list is a good thing to do…social relationships (and probably a sense of purpose and alignment with spiritual goals) are the most important.

    Just as she rejects ‘recycling’ plastic which is simply burned, I think she would reject Perlmutter’s pictures of Nature on the desk.

    Don Stewart

  8. Ancillary Note on Perlmutter
    During the conversation, the two doctors talk about the remarkable discoveries in the last decade or so in terms of epigenetics. Whereas, at the turn of the century, most scientists expected a deterministic relationship between genes and the functioning of the body, the data are now something like 92 percent of gene expression governed by environment (the air you breathe, the food you eat, the relationships you have with other people, your thoughts and emotions) while 8 percent is determined by the chemical structure of the gene.

    This should be a source of hope, since it IS possible to imagine a different environment. Some of it, like the food we eat, is largely under our personal control. Some other parts (EMF pollution, if that is a problem) have to be solved by the whole society. So there is no fixed ‘human nature’ and we do not have to suffer from chronic diseases. And we do not have to get our mental stimulation from tiny electronic devices.

    Don Stewart

    • Don S
      Re “There is no fixed human nature “

      There are boundary conditions set by our biology, and and ‘principles’ like MPP and MEPP (maximum entropy production principle) which apply to all living systems according to many scientists. As to the 92% ‘nurture’ 8% heredity mix, please direct me to the source. That is most interesting!
      Thanks

    • @Steven Kurtz
      I do not have a citation for the 92/8 split. Dr. Russell Jaffee quotes it a lot. The two doctors in this conversation talk about the steady erosion of the notion that our genes are in control, and the steady rise in the notion that it is the epigenetics which are in control. Amanda Archibald has recently published The Genomic Kitchen, which is a prescription for how foods (as well as exercise, stress, social interactions, sleep, etc.) control gene expression.

      There is no question that humans can express both love and hostility. WHICH is expressed depends on how the genes are triggered. And triggers are controlled both by random circumstances but more often by the general environment. The genes can express both ‘elevated’ free radicals and ‘just right’ free radicals, and ‘high inflammation’ and ‘just right’ inflammation. The Archibald book is all about getting the gene expression ‘just right’. In one of my previous posts, I linked to a Kara Fitzgerald remark about her reluctance to use high-potency drugs and supplements because food is more likely to trigger ‘just right’, while high-potency drugs and supplements can trigger ‘too much’.

      It is true that the genes can express a lot of different conditions, usually in a cascade of multiple genes, but it is also true that, most of the time, the initiation of the cascade is under control of the environment which is subject to human influence.

      Don Stewart

    • I hope these tangential posts are OK to follow-up but I too find this a very interesting and controversial area along with all the other ones.

      I’m probably wrong but as I understand it there is generally a high level of genome inheritance which essentially creates the genetic foundation of a person. It is within this context that epigenetics makes a difference. Not usually by enhancing gene expression as such but by avoiding turning on bad genetic information. In this respect, epigenetics is useful in so far as making best possible use of inherited genomes.

      https://www.nature.com/articles/s41398-018-0222-7

      That said, the ‘missing heritability’ dilemma (between 80% found in twins and 40% in unrelated people) could also be explained by rare genetic variants which also affect gene expression.

      https://www.newscientist.com/article/2137926-dna-variants-that-are-bad-for-health-may-also-make-you-stupid/

      https://www.newscientist.com/article/2163484-found-more-than-500-genes-that-are-linked-to-intelligence/

      In this respect, there seems to be two contesting strands of research. The former focused on epigenetics which invariably leads to social interventions and the latter which invariably leads to genetic interventions.

    • @Steve Gwynne
      There is a whole field devoted to G time E, or the mixture of genes and environment. Since the environment is impacting genes, and since there is one effect with two different contributors, the debates can get somewhat detached from reality. For example, if a tiny enzyme is missing, a whole chemical process can be derailed…so is the rest of the process the most important part, or is the enzyme the most important part, or is it a single process with a missing piece, or other fruitless ways of trying to state what is happening. The 92/8 split comes from observations about the biology. When a SNP is present, there are usually other ways to get around the ‘defect’. In fact, the ‘defect’ might be an advantage in a different environment. Many scientists now think that amyloid plaques in the brain (associated with Alzheimers) are defensive mechanisms…not the cause of Alzheimers. The Alzheimers patient may be better off with the amyloid that without the Amyloid, given that they have Alzheimers. (Pharmaceuticals aimed at the amyloid have tended to kill people more quickly). But in a different environment (i.e., absence of Alzheimers), the patient would obviously be better off without the plaques.

      We can look at the ‘environment’ issue with respect to things like chronic disease in China. The China Study, a huge undertaking back in the 1960s, looked at cancer specifically but also at other things such as heart disease. Cancer was rare in China at the time, which led to the Chinese government being interested when the second in command in the Communist party died from cancer. The study found that almost all of the cancer was in urban areas, with higher incomes and more meat in the diet. In rural areas where meat consumption was low, there was practically no cancer. There was a big province in China which had no fatalities from heart disease at all during the study year. But fast forward to today, and a much richer China has abundant diabetes, cancer, and heart disease and a very different diet than the rural diet so heavily dependent on rice and wheat.

      Twin studies tend to give a large share of the ‘causation’ to genes because both of the twins are usually living in the same environment. But if we look at one twin who remained in an Asian country while the other twin was adopted in the US, we begin to see large differences. But the largest difference would be in the descendants, since epigenetics can be partially inherited. The grandchildren of the Dutch Hunger Winter still bear the marks 75 years and 3 generations later.

      Nobody doubts that eye color is a pretty simple function of genes. But the influence of a single gene, such as the supposed BRCA gene and breast cancer, is frequently overstated. A woman with the BRCA SNPs transplanted to the environment or rural China in 1965 would be very unlikely to develop breast cancer. So we can make 2 true statements:
      *Given one’s environment in 2020 in the US, a BRCA SNP is a serious issue
      *In 1965 in rural China, a BRCA SNP was not an issue anyone should have worried about

      Don Stewart

    • @Dr. Morgan
      If you think that energy and the economy is not part of the larger field of Life Sciences, I think you are mistaken. But it’s your blog.
      Don Stewart

    • Given that the medical treatment and autopsy history in rural China over the past 50 years is highly spotty, I’d not trust the statistics. Also, eating mainly rice and some wheat is not thought to be a nutritious diet.

    • Steve

      As per my reply to Don, anything off the main subjects of energy and the economy needs to be infrequent, and brief. I think we have to consider those who are interested in our central topics, but have only limited interest in, for example, matters of biology.

  9. @Steven Kurtz
    I should also have addressed the Maximum Power Principle. The mistake in assigning primacy to the MPP is that it assumes that maximum power is the ONLY goal that the human has. A human can hold multiple goals in mind at the same time. Any parent both wants to survive, but will also risk their life to save a child. To talk glibly about ‘looking out for Number 1’ is to trivialize human experience and capabilities.

    There are, however, real limitations on humans and pre-frontal cortex. The well-known phenomenon of ‘decision fatigue’ is an example. And peering 30 years into the future in terms of climate change is a challenge to everyone except, perhaps, very good scientists. But to deny that humans have the capacity to care about the environment their children and grandchildren will have to live in is very short-sighted.

    Don Stewart

    • @Don S. “The mistake in assigning primacy to the MPP is that it assumes that maximum power is the ONLY goal that the human has. A human can hold multiple goals in mind at the same time. Any parent both wants to survive, but will also risk their life to save a child. To talk glibly about ‘looking out for Number 1’ is to trivialize human experience and capabilities.”

      This response seems to be to a straw man. Nothing I wrote claimed that humans were only concerned about themselves. We are like all life forms in that perpetuation of our “genes” is wired in us. Whatever behavior abets that is what most dominate, as otherwise the individual’s line would tend to peter out, disappear.

      What I wrote was that there are boundary conditions set by heredity, just as there are in all life forms/living systems. That MPP and MEPP exist is widely accepted by scientists, but they are not the only principles at work.

  10. Over at Energy Skeptic, Alice Friedemann’s website, I read that “Recently the IEA 2018 World Energy Outlook predicted an oil crunch could happen as soon as 2023. Oil supermajors are expected to have 10 years of reserve life or more, Shell is down to just 8 years.”

    How is this not a 4-alarm fire everywhere and especially here among us? Given the long time it takes to bring the oil production on line, this means that the government CapEx subsidies to insure that the oil keeps flowing that Tim predicts will happen in the near future need to be happening right now, given that private equity, banks and pension funds are no longer funding oil production for the rest of us out of their loans and “glut of savings.” (Thanks, 0.1% Percenters! for carrying the average Joes and Janes the last decade or so. We know you thought you’d make a killing from high oil prices instead losing it all to subsidize the poors, but we’ll tip our hats to you nonetheless!)

    Seriously though, if this is true, and the IEA seems to be a pretty sober group, then we are facing a really serious economic dislocation from an actual decline in available energy, not just increasing ECoE, within 3 short years, worsening into 2028 and beyond.

    • This is a complex topic, to put it mildly. But what we are facing is an energy viability crisis, and it links directly to ECoE.

      OIl production has for some years been carried by US shale, itself, being non-viable, carried by investors and lenders. I made the (admittedly radical) case here last year that the US has a national interest case for subsidizing shale, from which production could otherwise slump rapidly, because the “drilling treadmill” and ultra-rapid decline rates from individual wells. Similar arguments could be made for oil production more broadly.

      On the other hand, RE needs subsidy as well. In the past, wind, solar and other REs have been subsidized. This has ceased to be affordable as take-up has increased. This is why, in 2018, capacity additions were unchanged from 2017, whilst capex was lower in real terms than it had been back in 2011.

      These are threats to energy supply, and I would remind you that the IEA and EIA central case numbers show the world needing about 11% more oil and about 32% more gas in 2040 than in 2018, with coal use roughly the same.

      So it seems that, unless we subsidize energy supply, there are going to be large and worsening shortfalls. Ultimately, subsidy comes from ‘us’.

      An existing example is the UK, where every electricity customer has to pay about £185 annually in a ‘climate change levy’ used to subsidise RE (I believe it pays for just over half of all RE investment in Britain). Because this number is expected to increase, there are debates about transferring it from electricity bills to general taxation.

      In this example, the customer is left with £185 less to spend on everything else. This would remain the case if it was funded from taxation instead. This, in microcosm, is ECoE at work. With ECoE at 2%, we have 98% of output to spend on other things, but with ECoE at 8%, that falls to 92%.

      Now let me take you back to some SEEDS analysis. Western countries’ prosperity starts falling once ECoE hits 3.5% to 5%. The threshold for less complex EM economies is 8-10%. As ECoE rises, we have to do without other things in order to maintain energy supply – and ‘have to do without other things’ equates to having less prosperity.

  11. @Dr. Morgan
    I don’t think that this SRS Rocco article has been previously referenced here:
    https://srsroccoreport.com/u-s-shale-oil-industry-swindling-stealing-energy-stay-alive/

    If one takes the negative free cash flow and adds new stock issuance, the numbers are very large. So, apparently, shale is already being subsidized in the narrow sense of financial subsidy, and, of course, Katharine Hayhoe would argue that failure to pay for the collateral damage they do is an even larger subsidy.

    SRS Rocco has separately described the US as a “Leech and Spend” economy.

    Don Stewart

    • I can’t see why you would add negative free cash flow to equity issuance.

      Rather, negative FCF is the total outflow. Equity issuance is one of two ways of filling that gap. Debt is the other. So (equity issuance + borrowing) = negative FCF.

      Shale has always been subsidised from two sources – investors and lenders.

      The problem here is at the interface between the energy and money systems. Shales are high-ECoE. Our economies are built on, rely on, and can only “afford” low-ECoE energy. Shale could be financially viable, if we were prepared/able to pay for it, by doing without other things.

      We’re still trying to run our economies as though ECoE was still 1-2%, when it is now far higher. Some lifestyles and industries are simply not affordable in a high (and rising) ECoE context.

      Failure to pay for collateral damage is what economists call an “externality”.

      There are positive as well as negative externalities, a positive example being a farmer and a neighbouring bee-keeper. The farmer’s crop feeds the bees, and the bees pollinate his crop.

      A negative example might be a developer who puts up a large ugly building in an attractive neighbourhood – this makes a profit for the developer, but reduces amenity quality for other residents.

    • IMO Don, the USA can keep doing this, printing and subsidising energy, as long as the dollar reigns supreme and inflation is kept under control. They have an amazing economy which drives the rest of the world. The risk now is a slowdown in China which rebounds on to America. This however may not be a bad thing, because as the supply chain contracts there will be a stimulus to manufacture inside USA. They will of course call this ‘the Trump effect’!

      This happened in South Africa when Apartheid restricted all kinds of goods and services and this stimulated local manufacturing. In 2003, I was contracted to a company in Cape Town whose origin was precisely invoked by this effect: https://www.megalite.co.za/ We installed an ERP system which improved and automated much of their manufacturing activities which were previously done by hand.

    • The old saying Peter that necessity is the mother of invention.

      When the crunch comes be it financial – energy but probably both – I’m sure most people won’t lay down and accept it – they’ll look for solutions.

    • I agree that so long as the dollar is the only real reserve currency, the US will be able to ‘tax’ the rest of the world to cover its deficits.

      As for repatriating manufacturing. I’m not so sure about that, since our ECoE is well above the level that Dr. Morgan identifies as permitting growth. Aren’t new factories, by definition, growth?

      I also tend to see negatives where many other people see positives. I am always surprised to learn of a new product which has been outsourced to Asia, and particularly to China. My wife weaves baskets out of reed. Her reed supplier just sent out a letter to everyone stating that, due to the Coronovirus, they can’t get reed from China so resupply will be slow or non-existent. Who knew that China was taking over the reed for hobby basket making business? Even these very small businesses have left the US.

      Don Stewart

    • New manufacturing capacity isn’t necessarily growth, if it replaces previous capacity now closed down. Before the virus muddied the waters, manufacturing around the world was already shrinking – cars, computers, smartphones etc – as was world trade in goods.

      Our economies evolved when ECoE was less than 2%, but ECoEs now are over 8%, and rising. That means, amongst other things, that we have to put more resources into energy supply, at the expense of other activities. So far, we’re neither recognising this reality, nor implementing it in a managed and rational way.

      There are, in this context, too many of us, we travel too much and we have too many cars. I don’t know what will happen about population numbers, but travel and car numbers seem certain to decrease. Neither is a rational way of putting dwindling resources to best use. I don’t give investment advice, but I wouldn’t want to own a cruise liner, an airliner or a car factory right now………

    • Chris Martensen calls it a “Landfill economy” Very apt. We produce stuff just for the sake of creating work Stuff from China to fill $2 shops. Cheap junk fills market stalls.The waste is phenomenal. There are a million people in the air at the same time all day and night. It’s not totally waste as so many of us [australians]arrived from overseas and travel to see their relos. How much longer will this carry on.That’s the big question, But when it happens we can be sure there will be no low hanging fruit to help us get back to our feet.

    • WOW Don , that is a revelation. I assumed, wrongly, that it was engineering mainly and base materials like steel and cement. Surely there must be suitable reeds somewhere in your massive country – we have plenty here in Somerset where much weaving takes place. Maybe we can source some for you on the Somerset Levels?
      https://www.willowgrowers.co.uk/
      https://www.visitsomerset.co.uk/things-to-do/activities/adventure/coates-english-willow-(willow-and-wetlands)

      We should be OK here when the manure hits the ventilating apparatus; at least we will have plenty of baskets!

  12. @Steven Kurtz
    As we discussed before, my view is ‘Yes, And…’. Of course we want to do everything with as much ease as possible (Adrian Bejan’s principle). Which means we will try to minimize friction, maximize speed, use less fuel, run over fewer people, and so forth and so on. Exactly how ‘ease’ gets defined is tricky part. Certainly even Donald Trump would like to see fewer CO2 emissions…at least he has promised that the US will decrease the CO2 cost of growth. But Hayhoe and Trump put different values at the top of the pyramid. Hayhoe would sacrifice growth to reduce CO2, and Trump will not. Hayhoe recognizes population as a risk factor, and has one child. Trump does not and has many.

    As a rule, humans can make instant decisions balancing these sometimes conflicting objectives by just projecting into the future and weighing the emotional response we anticipate. But education (in the broad sense) has a lot to do with our projections. We learn, for example, that touching a hot stove is not a good thing to do. The problem with issues like climate change is that the learning is very abstract science and mathematics…which most people aren’t very good at.

    Don Stewart

  13. Once again comments here are taking a long view. My point was that given that subsidies are not already taking place and CapEx are declining as investors and lenders now see shale as a money burner, an energy shortage in 3 years is already baked into the cake and with it a pretty dramatic economic dislocation and discontinuity. Even if that shortage is the wake up call prompting government subsidy of oil production it will take years to bring the oil to market
    The situation may not be conducive to rational social planning despite the fact it will be needed more than ever

  14. @Austrian Peter
    Do I detect a note of sarcasm about the pitiful US which has to import reed?

    Norfolk Broads reed cutters keep ancient craft alive – BBC Newswww.bbc.com › news › uk-england-norfolk-47725967
    Mar 28, 2019 – The waterways provide about 10% of materials to thatch roofs in the UK – the rest is imported.

    Don Stewart

  15. Consider the possibility that instead of long-term rational planning, we will get perpetual triage – decision after decision of who can be saved / is worth saving and who not; those not necessary or deemed salvageable, will be summarily cut off and “left behind.” Similarly, I would expect more wars waged with the intent of “destroying demand,” a/k/a “bombing countries into the stone age,” in addition to domestic internal policies with the same intended effect.

    After the GFC and the crushing of Occupy Wall Street, the great (American) Indian activist Russell Means presciently said that the U.S. government had finally arrived at the point of treating its own citizens as “Indians” – i.e., to using its model for treatment of a conquered, eviscerated, subjugated nation on its own people on its own soil. This is the sort of thing I would expect.

    Given the fact that diesel fuel is the absolute prime mover of our modern civilization, I suppose that an oil shock will first and foremost lead to the rationing of diesel. I think the recent ham-fisted attempts of Macron to “incentivize” the French rural population to move away from diesel cars is interesting in this way — we need to save diesel for more important uses than you people in the countryside driving 50 kilometers to and from work and to get groceries. I don’t think the Yellow Vests were wrong to draw the conclusion that the complete absence of any other State measures to transition to a different form of life implied that the State was ready to leave them behind. That’s a pretty clear message here in the rural U.S. as well.

    • Tagio,

      Would you tell us the region of the US that you are in? I’m in semi rural northern Massachusetts. Short distances away from the town center and university campuses are farms and hilly forests.

      Most cars here are gasoline powered, with electric and hybrid outpacing diesel. European cars are likely more diesel powered than the other. Large trucks are exclusively diesel globally I think.

      Rationing would seem to vary in detail depending upon location.

      Steve

      Sent from my iPhone

      >

  16. I live in Boston, Steve. Not all that far from Amherst, which is pretty idyllic as far as American towns go. If ever you come to Boston, hit me up, I’d love to have coffee or drinks. Jsnyder62ATgmail

    I grew up in rural PA, a coal mining town north of Harrisburg, and still have relatives in that area. I went to high school with kids from farm families including Mennonites. Tough buggers on the football field.. The PA Dutch have since moved in as they ran out of room in south central PA. I am shocked to see its and its people’s decline every time I go home. There’s a rural apocalypse happening right under our noses.

    • Thanks for the tip re Darlingside.
      I’ve asked our son if he knows them. He’s head of the Sound Recording Dept. at U of Hartford, Hartt Sci. of Music. One grandson plays cello, the other violin. (both 7- fraternal twins)

      They remind me of:

      The Incredible String Band were a British psychedelic folk band formed by Clive Palmer, Robin Williamson and Mike Heron in Edinburgh in 1966. The band built a considerable following, especially in the British counterculture, notably with their albums The 5000 Spirits or the Layers of the Onion, The Hangman’s Beautiful Daughter, and Wee Tam and the Big Huge. Wikipedia

    • For anyone interested, Darlingside combine remarkable vocal harmonies with virtuoso accoustic musicianship and extraordinarily innovative composition. They first started gaining notice with rave reviews for the album “Birds Say” (2016).

  17. Since gasoline can be produced from shale i suspect gas cars have a longer shelf life in the US than elsewhere. I was thinking primarily about the rest of the world.

  18. Future Scenarios
    Jim Kunstler interviews the architect Nir Buras on the loss of beauty in the built environment and the prospects for the future of cities. This is a good back and forth between a very pessimistic Kunstler and a Renaissance oriented Buras, envisioning a future where we learn more about how to live in the world as humans. Probably one of the few discussions you may hear between two people who recognize that things will not go on as before, but that absolute collapse is not necessarily in our future.
    Don Stewart

    https://kunstler.com/podcast/kunstlercast-325-chatting-with-nir-buras-architect-and-urban-planner-about-truth-beauty-and-the-future-of-cities/

  19. There’s a research report out from JP Morgan apparently warning about the “catastrophic consequences” of climate change. I’ve not seen the report, but I see no reason to doubt the conclusions as they’ve been reported. What I don’t know is whether they incorporate ECoE-type interpretations into their analysis.

    Of course, institutions like JPM get frequent flak from those well-meaning people who call for no investment in fossil fuels (and who would, if they got their way, deny us any chance of transitioning to REs).

    It does prompt one other question, though – if we take this as seriously as we should, why are we not taking some obvious actions now (such as stopping sales of SUVs, and acting to reduce air travel)?

    • We are not geared to distant threats,Tim. We’ve got to see the ‘whites of its eyes before a threat gets our attention. That’s so we keep alert to what matters nearby, not years off. I doubt we will do anything until it’s staring us in the face. Then panic.’

    • Excellent comment, thank you John, exactly my thoughts. During training as a counsellor in the 1990s I discovered that I had to find the serenity to accept those things I cannot change, the courage to change those things I can, and to find the wisdom to know the difference. (St Francis of Assisi prayer).

      I eventually discovered a knowledge and truth in the Bible as being the most believable source of all the books I had reviewed when I was on retreat with the Franciscan Friars in Cerne Abbas, Dorset. This was part of our ‘experiential training’ in the syllabus.

    • Thanks,Peter, I have looked at your blog and mostly align with it. I just don’t agree with dissing Counterpunch and MMT. I do approve of your including Caitlin Johnstone’s blog.
      MMT is a cast iron framework for explaining what the economy really can do. The “economy” is an extremely excellent construct and functions very well, except when distorted by vested interests and their minions.Capitalism is troublesome because it is self regulating and its supporters like to cut away safeguards to let the market run the show. that’s like putting a fox in the hen house thinking it will look after the chickens. MMT can deal with it. The mainstream is not concerned.

    • I understand where you are coming from but I have difficulty believing in a fiat money system which tends to corrupt government by allowing them to avoid prudent financial management using bond issuance to exceed what otherwise would need to be raised through taxation. Our little group have a political solution: http://harrogateagenda.org.uk/ but lacks an economic offering.

      I have been working closely with my friend Gerry Brady http://boomfinanceandeconomics.com/#/ who has formulated his solution using our present system of money management:
      https://boomfinanceandeconomics.wordpress.com/2019/12/15/boom-as-at-15th-december-2019/
      Perhaps this is a version of MMT which you suggest? Gerry does say this in his latest email:

      From: The Editor BOOM Finance and Economics [mailto:gerry@boomfinanceandeconomics.com]
      Sent: 21 February 2020 11:24
      To: Peter Underwood
      Subject: Re: Negative yielding bonds
      Hi Peter,
      A good article. Continued dis-inflation and deflation are our destiny. Forget CPI inflation. If the yield curve is positive, the time value of money is preserved. The whole yield curve can be negative (!)

      I often say “This is an end game. The only doubt is the timing — it could be 6 days, 6 weeks, 6 months, 6 years or 6 decades. We ain’t seen nuthin’ yet. The politicians and the bankers will pull their levers over and over and over again. They know nothing else. QE so far is very, very inadequate (tiny amounts of money). Interest rates will fall and fall while they keep the slope positive. And they are buying assets — it is not going into the real economy. US Dollar strength should continue — up and up and up, causing disinflation inside the US.

      They will keep doing that as we slide down the deflationary slippery slide. Assets will surge to unimaginable heights. The Dow Index will probably go to 50,000 (maybe more). Yields will fall and fall and fall. A great collapse in asset prices will eventually occur — but there does not appear to be any sign of that yet. We must be ever vigilant. Talk Sunday? QB is the only hope.

      Cheers,
      Gerry

      On Fri, Feb 21, 2020 at 7:41 PM Peter Underwood wrote:
      Hi Gerry,
      I thought this article worth a read. What does QB say about this? Surely NYBs are destroying the time value of money?

      View at Medium.com
      Cheers
      Peter

    • thanks, Peter..No financial system can survive a deliberate attempt to destroy it. Whatever you propose will never be foolproof either. MMT is robust and credible user of the data that works in an economy.
      Here is a blog on tax NOt being used for revenue; It will inform you.

      http://bilbo.economicoutlook.net/blog/?p=9281

    • Thanks for the link John, Phew it’s a big one and will take me time to study, so please bear with me. I am always willing to learn and find the differences in my received knowledge to date.

    • Believe it or not, but he writes one of those 6000 word blogs nearly every day It only takes an hour to type it up. He’s doing it even when travelling, in Europe at the moment.
      Extraordinary ability.
      You can find any topic in the index he includes.. He also does a 3 question weekend quiz which I hardly ever get right. I don’t know anyone who does actually.

    • Hi John,
      I have a full response from my great friend Gerry Brady in Australia who understands MMT and has his own suggestions about how to increase the money supply in America. He says the problems is not enough money supply but China has solved the problem and his many charts seem to prove his point. http://boomfinanceandeconomics.com/#/

      Gerry says that MMT would work in the short term but, as it puts money creation in the hands of politicians, it will end in disaster much like the USSR because it is what they did and we know how that ended. His email will explain his thinking.

      Have a look at his own “Quantitative Boosting” (QB) which he describes here:
      https://boomfinanceandeconomics.wordpress.com/2019/12/15/boom-as-at-15th-december-2019/

      If you would email me at: peter@underco.co.uk I will forward Gerry’s email to you which is too long to put up here.

    • That’s great John, your compatriot Gerry is a great chap, a retired doctor and a wonderful expert on economics. He has helped me no end with my book and I have learned much from him.

    • The BOOM approach certainly makes more prudent sense but problems remain.

      How will QB cap energy and material consumption in order to remain within planetary boundaries.

      Clearly QB is designed as an alternative to QE in order to stimulate growth, depending of course if there are willing borrowers. So debt saturation within the context of rising ECOE and reducing discretionary income will surely affect the willingness of borrowers.

      Lastly, once the general public become familiar with the concept of QB, how will the three key finance institutions restrain the race to the top in terms of expectations vis a vis the democratic political system in which political parties can effectively offer (or sell most convincingly) the most free money.

    • I’m sure you’re right there, John. Historically, the democracies could have stopped Hitler in his tracks in 1934 or 1935, but dithered until their hands were forced in 1939.

      But, taking the UK as an example (with much the same applicable elsewhere), sales of non-electric cars are to be banned in 2035 (with, for no obvious reason, hybrids banned as well).

      Meanwhile, though, SUVs are the largest (and largest-growing) section of the car market. Nobody (other than farmers) needs big engines, and even F1 now has a 1.5 litre engine limit. So a policy of limiting engine sizes to 1.5 litre, and requiring all-hybrids, could be implemented quickly, probably within five years. One way to do this would be by imposing very large sales taxes on all vehicles outside these limits. I think a sales tax of £5,000 on all new non-qualifying vehicles would fix this.

    • Excellent proposal Tim, thank you. I wonder why, whilst most of us can see the obvious, common sense answers to our problems, those in power arrive at totally ridiculous solutions that cause even more problems? Perhaps it’s the way we select our masters?

    • It is indeed bizarre, particularly given the combination of climate change AND rising ECoEs. I think delusion, rather than hope, “springs eternal”.

      I permitted myself a wry smile a few days ago when I read about how airlines think they can be ‘carbon net zero’ by 2050. They’re far likelier to be passenger net zero by that date, I believe.

    • “Meanwhile, though, SUVs are the largest (and largest-growing) section of the car market. Nobody (other than farmers) needs big engines, and even F1 now has a 1.5 litre engine limit. So a policy of limiting engine sizes to 1.5 litre, and requiring all-hybrids, could be implemented quickly, probably within five years. One way to do this would be by imposing very large sales taxes on all vehicles outside these limits. I think a sales tax of £5,000 on all new non-qualifying vehicles would fix this.”

      Regulating the credit adventurism that is Personal Contract Purchase car finance would achieve much of this too.

    • This JP Morgan report is rather good
      Mountains and Molehills. The Green New Deal mandates zero net emissions for the US by 2030 for the entire energy sector (not
      just from electricity generation), and does so while phasing out nuclear power and relying heavily on carbon sequestration by
      forests. This sets a goal that cannot be achieved. At best, the Green New Deal is a slogan to galvanize support for change; at worst,
      it’s a sign of how little work its proponents have done. This year’s paper gets into the details of where energy comes from, how it’s
      used, and the de-carbonization challenges facing the world’s industrialized and emerging economies. Additional topics include the
      latest research on wildfi res, and Trump’s War on Science.

      http://vaclavsmil.com/wp-content/uploads/2019/03/JPM.2019.pdf

      There is every reason to doubt the BBC’äs report on the new report, The BBC and Roger Harribin are alarmist extremists, there’s no sugar-coating that pill or indeed the same conclusion of Mr Monbiot at the Guardian.
      Jamie Dimons Report last Spring (2019)

      https://www.jpmorganchase.com/corporate/Corporate-Responsibility/document/jpmc-cr-climate-report-2019.pdf

      https://www.fsb-tcfd.org/news/#

      Mark Carney and Michael Bloomberg are photographed at the top of the news page of The Producers of the report the BBC are dishonestly referring to as JPMorgan, the group is independent of JPM apparently.
      That the Central Banking cartel is pushing carbon credits and a carbon-based taxation/Debt system to replace the current Broken system is undoubted, This is Green Washing, Clive Spash is the go-to on the impossible contradictions engendered in this new elitist fix to keep the rest of humanity in debt bondage.

      https://www.fsb-tcfd.org/about/#

      This is about saving the Big Banking cartel not about saving the environment or indeed prosperity.

    • My understanding – though I’d welcome correction or further information – is that trees don’t start absorbing carbon until they are 30 years old. So a tree planted now won’t do this until 2050. Yet tree-planting seems to be every industry’s “get out of gaol free” card.

      As well as tree-planting, airlines seem to think that biofuels will help save their bacon – which might make sense if we didn’t (a) have 7.5 billion mouths to feed, and (b) already face water shortages.

      I suspect that, long before 2050, the only “frequent fliers” will be birds.

    • A lot of things, Don, in the ‘New Econom’ will be only for the richest of us IMHO especially personalised transport systems using electric cars which is the well-established way that governments change the people’s aspirations – price them out.

    • Makes me think that the science fiction dream off a tunnel under the Atlantic might come true.

      Perhaps two lines in both directions. One for 250mph passenger trains a mile long leaving every 10 minutes – meaning that 18000 passengers could be transported each hour. The other for frieght.

      All powered by electrity generated by tidal waves.

      Now you must excuse me because some men in white coats have arrived at my door.

    • Don, they carried me away to the happy farm in 1990 but I escaped! IMO nobody is sane – it’s just degrees of insanity, especially those working at the Fed.

    • Well it has been thought of before – a section in Wiki states that it would cost around $168bn – in your dreams – $2.5trn I would have thought even if feasible.

      However if feasible it would solve many future economic problems.

      Revenue before running costs for the passenger train could reach $362bn a year

      (Full trains 18,0000 – 4 an hour running 12 hours a day – 350 days a year – at $400 return – down periods are for maintenance.

      Perhaps I should make a pitch for the Department of Transport

      https://en.wikipedia.org/wiki/The_Tunnel_(1935_film)

      Donald

    • Whilst you’re at it, could you persuade them that building a bridge from Scotland to Northern Ireland would, by comparison, make HS2 look almost rational?

    • There would have been a sort of beauty to it though and the estimated cost if £20bn looks good value.

      However this is from BBC news regarding the construction….

      Concerns have long been expressed about the area known as Beaufort’s Dyke – a deep submarine trench where it has been estimated more than one million tonnes of weapons have been jettisoned.

    • Well coal and wood are being banned for home heating – so some people maybe being priced out off keeping warm

      Not a good day for the company that makes Zip firestarterd

    • Peter,
      Is firewood being banned in rural, non dense areas? And just England?

      Thanks
      Steve

    • Hi it appears to be nationwide but it’s rural hones that use the most smokey fuels as they have fireplaces.

      This is the actual ban

      What is being banned?
      All sales of traditional domestic coal for domestic use, and smaller amounts of wet wood.

      What is not being banned?
      Any non-bituminous coal, which is considered “smokeless” and has a very low sulphur content. This can include manufactured solid fuels or mined anthracite. Dry wood, and wet wood in large quantities, can also be sold, but will have to include advice on drying before burning.

      Yet the Government has authorised a deep coal mine to be developed. Their policy seems muddled

      Donald

    • We dry our wood in a covered shed with slatted walls. It is already split or arm diameter, and is not used until at least a year of drying. It gives great heat in wood stoves.

    • you do realise that coal saved the forests of England? It’d all be like the middle east, etc., today. The problem will return if coal is banned.

    • Yes I do know but coal is a fossil fuel which are collectively destroying our planet.

      It’s a truly filthy source of energy at any level and should be banned completely – although try telling that to China and Australia.

    • Well with China dependent on it for future growth I can only repeat the words of Michio Kaku.

      ‘We are so primitive that we still have to burn long dead trees – plants and animals to power our civilization’

    • In all parts of England, but it will mostly affect people in rural areas. Cities often already have bans or tight rules on solid fuel use, indeed London started this in the 1950s to combat notorious smogs (the “pea-soupers” and “London particulars” so evocative in Victorian novels).

      Wales, Scotland and Northern Ireland have devolved powers, but I’d guess they’ll follow suit.

    • Yes, just England it seems Steven and rural areas too – all over i guess. But how they are going to police it is another matter. Our locals don’t take kindly to government dictats:

      “Owners of wood burners, stoves and open fires will no longer be able to buy house coal or wet wood, under a ban to be rolled out from next year. Sales of the two most polluting fuels will be phased out in England to help cut air pollution, the government says”

      Dry and matured wood is OK apparently and I suppose that charcoal will work.

    • ‘If you want use a wood-burner, you must use kiln-dried wood [a process requiring the use of energy] – but feel free to buy an SUV’. Idiocy in action.

    • Well Tim you might already have read the report from JP Morgan about the climate and how it threatens to wipe us out.

      This wet wood burning ban – compared to banning SUVs – is akin to giving someone a water pistol to fight a forest fire while allowing someone else to pour petrol on it.

    • I hadn’t ever thought about Zip, Don – an interesting company and now a sustainable product apparently as it’s no longer made from oil (kerosene). I think we might be safe with this in the new economy!
      “The company was founded in 1786 and incorporated as Kay Brothers Ltd. in 1877. Various pharmaceutical and chemical products were developed over the years, including anti-malaria tablets, flycatchers, and firelighters. In 1936, the first “Zip™” firelighter debuted to the public. It was an innovative idea and gained immediate success.

      Our Irish factory was constructed in Castlebellingham in 1956 to support manufacturing centers in the UK and on the European continent. In 1959, the Castlebellingham factory was expanded for the production of brown firelighters consisting of wood flour mixed with Kerosene and bound with a chemical agent. In 1960, Reckitt & Colman purchased the business and began producing white firelighters.

      These new production methods were groundbreaking at the time, encapsulating kerosene within a solid substance. In 1999, Reckitt & Colman merged with Benckiser NV. The new entity was renamed Reckitt Benckiser. In 2001, Standard Brands (Ireland) Ltd. purchased the business from Reckitt Benckiser.

      Standard Brands launched the new Croína Tine Firelog in Ireland. Raw materials such as Irish-grown willow and natural waxes are delivered directly to the Castlebellingham production area where the logs are made and packed by hand.

      In 2013 Zip™ launched a new innovative cooking fuel made out of naturally derived, sustainable biofuel, winning the Best New Product Award from Soldier Magazine. Zip™ launched a new line of Boilex lightweight and durable cooking stoves designed for individual cooking needs and for larger groups of soldiers or families.

      Maybe they are right to ban crude wood and coal and now we can use a Firelog!

    • “why are we not taking some obvious actions now (such as stopping sales of SUVs, and acting to reduce air travel)?”

      I suppose those actions are not taken because from a non-SEE perspective they are seen as reducing economic growth, although of course SEE shows us how they are needed to sustain what growth there is!

  20. I think that something we really need to get to grips with here is the pattern (and pace) of degrowth, so far as we can anticipate it from where we are. This is something that I’m working on now. I mention this because the JPM report, as summarised on the BBC, predicts all sorts of consequences that, because of rising ECoEs, would happen anyway, even if we didn’t (as most certainly we do) have to factor climate change into account.

    At the moment, I’m trying (and failing) to see how the financial system as we know it today survives degrowth. Stock valuations become meaningless, and debt becomes unrepayable, if growth is taken out of the equation. I’m not even sure if the market economy itself can survive (though I hope I’m wrong about that), because there’s an argument which says that only centralised/collectivist planning is going to work. We certainly need to design a smarter form of capitalism if it’s going to have a decent chance.

    • Honest money that is not created as debt is the start of an answer. It will not solve the ECOE issue but it will allow proper Market pricing. Dishonest money excludes the possibility of Free markets and indeed a form of competitive capitalism or/and indeed Liberty in the conservative political sense.

    • Debt is claim,no? You can call it lots of other things, like IOU’s, tokens etc, but it all comes back to there first being a debt. Congress authorises spending to provision itself and the Fed marks up the customers’ reserve account in the bank. It’s still numbers up until the customer transfers the money to his local branch.then it can be spent.
      Money must be owned by an entity other than the entity that created it. That’s a cast iron rule.

    • Presumably, a recession will reconfigure the economy with perhaps more underlying acknowledgement of ECOE.

      Recriminations will fly, then abate. In time, the more productive firms that survived will think of ways to invest money profitably. That will lead to new jobs, then economic growth, then exuberance—and the cycle will start all over again. https://www.economist.com/business/2020/02/20/business-and-the-next-recession?cid1=cust/ednew/n/bl/n/2020/02/20n/owned/n/n/nwl/n/n/UK/407529/n

    • Yes – though the way I would put it is that ‘de-growth will start looking like a recession, then start looking like a depression, before its reality is understood’.

    • Tim. I think the problem is how to frame systemic prosperity degrowth and how to profit from it.

      Carbon credits and the like are a potential way of transitioning to a low carbon economy which obviously considers fossil fuel depletion and climate change.

      The latter is probably more an ingenious narrative to facilitate the transition from the former but also provides an contextual framework in which to invent financial transactions on the basis of natural capital.

      In this respect, I would imagine we’ll be having ecosystem service payments to help farmers transition from fossil fuel dependency but at the same time, alternatives to ff dependant pesticides and herbicides will need to be invented.

      This will no doubt bring online genetic engineering of plants and possibly animals to be more resistant to pests in particular.

      Other natural capital transactions may well link with biodiversity enhancement and ecosystem regeneration.

      For me, the real trick and therefore the real dilemma is how to ‘conveniently’ reframe the next recession as the transition towards a low carbon economy.

      This is where climate change narratives work really well. Since rather than instill panic in what can be a highly triggered culturally conflicted world, climate change seems to be able to create some level of harmonic resonance. That is, it deploys a cognitive/emotive framework of cooperation, collaboration and hopefully a consensus regarding the deployment of energy and materials.

      The truthful alternative is ff depletion but there is a real danger that this might deploy a cognitive/emotive framework of competition and conflict of which there is enough already.

      Ultimately from my perspective, we are already in an economic and ecological recession and things haven’t fallen apart yet.

      I think there is plenty of scope for optimism as long we focus on the solutions not the problems.

      This includes recycling technologies, hydrogen technologies, fusion technologies, possibly genetic technologies and learning to live with less by enhancing community life through enhanced community values, enhanced community ervices and enhanced multifunctionality.
      In other words, as aspects of our lives experience de-layering and de-complexification due to ff depletion, other areas will experience layering and complexification by transitioning to a low carbon economy.

    • Steve G: I’m glad that you are focusing on real world bottlenecks, and not on money, which is merely power to access the natural wealth you discuss. Your elaboration is a sensible goal for communities/regions/countries/continents with common values. Given the increase in mass migration in many areas of the planet, cultures are being added together without much success in blending values. It used to take 2 or 3 generations for newcomers to blend in, to adopt the values of their new location. It seems that now there are concerted efforts by immigrants in some countries to fight blending in. This looks to make cooperative adaptations increasingly difficult.

    • It doesn’t help integration when the destination country is in the process of closing down the right to hold and express different opinions.

      What is a person supposed to do when arriving somewhere in which expressions of many of his or her fundamental beliefs, be they secular or religious, is treated as criminal?

    • The difficulty in mixing in is not new. It has always been the case as far as I know. When Irish, Italian, Norwegian, Swedish, Chinese, Japanese, East Indian, African (after slavery ended), Islanders, S. Americans, Mexicans…first came to US & Canada, they encountered severe discrimination. Britain did well in mandating that English should be the only language taught at schools. In the US, many places taiught school in other languages thinking that helped immigrants. It is now thought that was the opposite result, as it delayed integration into the main economy and society.

    • Incorrect assumption. How did you ever get that idea? I am a supporter of biophysical economics.

    • Non sequiturs are your specialty. Read about that question if you need information. There are many sources.

    • It is a straight out question to which you cannot answer. so you fail. the non-sequitur is all yours. fail again. you are dudding yourself.

    • Second thought:
      If a country has laws which criminalize things like female genital mutilation (FGM), wife beating, child brides, coerced child labor, amputations of limbs as punishment for crimes like theft,…why should newcomers be exempt? There are open calls for Sharia Law to apply to some, and also open claims that it should eventually replace the current system…if the demographics change sufficiently over time.

    • I agree 100% that such practices should be prohibited for new arrivals, just as they are for existing residents. Immigrants must accept the laws of the country – for example, if you like alcohol, don’t emigrate to Saudi or Iran.

      But I was referring to the criminalisation of opinions. Western “liberalism” all too often means that the state decides, pretty arbitrarily, what can or cannot be said, and this infringement of free expression may be a particular problem for incoming migrants.

    • Free speech is being targeted in a mob-like fascist manner in the US, Canada, England, France, AU, NZ and more. Both extremes (left & right) have been doing it, but recently I think it is more the Antifa like left. Rather than engage in rational debates, angry people shout down and block speakers. Some universities have intervened, dieting the noise and encouraging debate.

      If governments try to squelch whistleblowers and dissenting views with intimidation/force, they are guilty of violating free speech. There have been examples of this in the 21st C as I see things. Note that humanity doubled in 50 years, but government representatives stayed constant (US, Canada at least) That = 50% reduction in average p/cap feedback to reps.

    • You are so right Tim, to wonder about an alternative system which will accommodate degrowth and failing prosperity. Our whole attitude to life style and ‘happiness’ has to change and the first thing to do IMHO is to encourage our young ones to completely alter their values and belief systems.

      Part 2 of my book deals with this issue and the Introduction is aimed at young ones based on my counselling experiences. I recently spent some time with my 21 year old granddaughter and was horrified at her focus on ‘celebrity’ and ‘money’ as a life objective. I am hoping that she will read my short 22 page Part 2!

    • Peter. Can you summarise in bullet points the values and belief systems you articulate in your book. Thanks.

      I personally find it encouraging that Vaclav Smil had been brought in on the JPM report. He has a clear energy dependant perspective on the economy which he clearly articulates in his recent book.
      https://www.nature.com/articles/d41586-019-02716-z

      The unwritten conclusion of the report, accompanied by Victor’s inclusion, is that growth is going to fall into rapid decline unless there is a degrowth transition.

      Although the report clearly expresses the view that the Green New Deal is not a feasible transition programme, considering that 3/4 of carbon emissions are from industry, it was surprising that fossil fuel depletion wasn’t mentioned. Unless I missed it.

      Does this mean the report concludes business as usual whilst alternatives are invented???, or that decline is inevitable or that alternatives with much lower levels of energy return on investment will need to be subsidised.

    • John, Money represents an IOU. When I refer to Debt-based money I refer to money created at interest without the Interest component, this story and my use of the phrase Debt-based money is told in letters parable of the 11th round.

      http://www.lietaer.com/2010/09/the-story-of-the-11th-round/

      A credit-based money of commerce is very different to a Debt based money of commerce and the use of Tims all money is a claim is a good starting point.

      The second question that arises is that of asymmetric risk or skin in the game.

    • Very true.

      The people who advocate centralised planning in a collectivist society are those who have always done so, now they see their chance.

      It is plausible, as a stop-gap measure on the way down.

      But the corruption inherent in such a system will eventually destroy it; and they persist in the fantasy of maintaining industrialism with a good standard of living – all collectivists are materialistic and want a good life, just without nasty Capitalism….

      De-growth is an evasion -maybe a necessary one – of the word ‘collapse’ , to make it palatable: just as we might tell a grieving tell a child that ‘Daddy has gone to Heaven, we say of a dying economic structure that it is ‘in de-growth’.

      It’s probably all we can take at the moment, psychologically. It even sounds quite cool.

      The question must be: ‘What, of traditional commerce and markets, can survive collapse? ‘

    • @Xabier
      ‘collectivism’ and ‘top down’ are currently thriving in Silicon Valley and in Costco. People figured out decades ago that economies of scale were the key to success in the sorts of businesses that thrived in Seattle and San Jose. And Costco (a big box retailer) is thriving by offering a single brand of any product, served up on pallets. Both Costco and the Silicon Valley models are about as far as one can get from the ‘many competitors’ models used by Economists to prove that Pollyanna was right. If I recall the numbers correctly, Costco sells 5000 different items, while a typical US supermarket sells 30,000. That is the difference between one brand and many brands. Among other effects, the labor involved in restocking 30,000 brands on shelves is vastly different than using front end loaders to move pallets around. Costco’s revenue per employee is multiples of Walmart’s comparable number. Therefore, Costco can pay more and get better employees. And Costco has developed a loyal customer base.

      Jim Kunstler and the architect Nir Buras would be horrified.

      Don Stewart

    • It’s arguable that there is also something that we might call “notional money”.

      For instance, “the US stock market is valued at $xxxx trillion”. Well, it isn’t, in the sense that it could somehow be sold for that sum. Apple, Amazon, etc is “worth” X amount – fine, but does anyone actually have the X amount (in money) to buy the company?

      Likewise, “the UK housing stock is worth £8 trillion” – again, meaningless, especially since the only people to whom it could be sold are the same people to whom it already belongs (and, even if so minded, they couldn’t lay their hands on £8 trillion).

    • https://t.co/JpnpSPCQ8g?amp=1

      This thread on Twitter has Professor Richard Werner, In my opinion, the leading expert on Money and Finance in the world and Author of the Prices of the Yen.

  21. My understanding – though I’d welcome correction or further information – is that trees don’t start absorbing carbon until they are 30 years old. So a tree planted now won’t do this until 2050. Yet tree-planting seems to be every industry’s “get out of gaol free” card.

    Where did you get this idea from Tim, It makes no sense. Trees Synthesise many minerals from the ground but also Carbon from the air, the more Carbon there is in the Air the less water plants need in general.

    https://www.britannica.com/science/photosynthesis

    https://www.britannica.com/plant/tree/Tree-structure-and-growth

  22. What constitutes happiness is pretty much a constant, as it is rooted in our biological nature: good shelter, appropriate clothing, abundant food, satisfying status and lots of mating opportunities.

    There is not much more to human beings than that – we should not delude ourselves – as creatures within the eco-system, and this is the base once short-lived mass consumerism, and industrialism, have died.

    A better, wiser, more far-sighted, human race is simply not going to emerge from all of this.

    This may seem pessimistic: I at least do not see it as such, merely transparent reality.

    But, on the whole, humans do nor care to see themselves as they really are: we have daily proof of that, and the whole of history and pre-history to show it.

  23. Regrowth Becoming a Depression
    Recommended reading:
    https://www.damariszehner.com/post/barrels-buckets-and-bottles-adventures-in-low-water-living

    The author gives a first-hand account of what life feels like when there is no reliable and abundant and warm water available. Now, before you consign this to the ‘useless’ category, read her concluding statements about it being much better food for the soul to grapple with water issues than to play video games. I’ve lived with lack of running water for short periods, so I know a few things. But reminding oneself really IS good practice. Recently, we lost water for 3 days. 3 days is long enough to find once again what you learned a long time ago. And reminding ourselves while we still have plenty is probably a good exercise to prepare for the time when the emergency may never end.

    Don Stewart

    • Until recently, the greater part of the life of an average woman was taken up with humping buckets of water from the well or pump; even into old age – just look at 19th century paintings of ‘picturesque’ Italy. Of course, a good chat could be had at the town fountain or village pump.

      It’s a valuable experience to live with such shortages and the labour involved.

      We lead, on the whole, delusional lives played out in a comfortable bubble of very recent creation.

  24. @Johndoyle.
    “Debt is claim,no? You can call it lots of other things, like IOU’s, tokens etc, but it all comes back to there first being a debt.”
    https://archive.org/stream/AlexanderDelMar/AlexanderDelMar-TheScienceOfMoney1896#page/n7/mode/2up
    Actually no it does not all come back at first there is a debt. What there is and the condition precedent for trade is a double coincidence of wants, more precisely The requirement to exchange.
    Money is a rain check which allows delayed consideration if the Money token is created so that it comes from Skin in the Game it does not give rise to the asymmetric risk problems inherent in the Creation of Money with the Debt mentality.

    This is not even a semantic point it is a logical point.

    The existing system is such that the Debt = Money axiom holds but that is by no means the only way to do Money.

    This from Alexander DelMar , who correctly showed that Money as an expression of value was an abstract “Convenient posit” ( See Quine two dogmas). And what its true substantive function is and was back then and has been recognised by people down the ages from Aristotle onwards is a Mere numerical ratio. To express a numerical ratio there is absolutely no reason to insist that any component of debt necessarily exists.

    • We might call it ‘Ragnarrokism’ – that myth also envisages a new and regenerated world, both human and divine, after a period of great violence and death.

      I find the Christian Apocalypse rather repulsive, with all its fevered and ghastly imagery, the psychotic delight inplagues and horrid beasts.

      Give me manly Norse myths any day.

    • The four gospels give no support whatsoever for any sort of apocalyptic interpretation. I think it was G.K. Chesterton who said that what people take from the Bible is conditioned by what they are looking for (one of his examples being that, for a professional soldier, the Bible is a record of battles).

    • Our grandchildren will be lucky if a tipping point is reached rapidly (within a decade) such that adjustments will be ongoing while they are young and resilient. Adaptations will be painful and stressful. The % (maybe 1/4) who are involuntary simplistic now may not find much difference. But it is unlikely that they will cease striving for more energy-matter throughput, as they are currently in deficit of sufficiency. Given current global conflicts, I can’t envision the level of international cooperation required to pull off a peaceful resolution. See:
      prosperouswaydown DOT com . There are a few comments, with two by Mary Odum, daughter of Howard Odum who wrote the book: _A Prosperous Way Down_

    • Personally, I’m in no doubt that if, say, vast new oil resources were discovered now, nothing would stop us destroying the environment. In this sense, “de-growth” and environmental trends are in sync (and are, as per my main theme in this article, opposite sides of the same coin).

      Industrial society, with its enormous scale and complexity, have been with us for less than 250 years, a ‘blink of the eye’ on an evolutionary timescale, and a brief period in terms even of social adaption.

      The challenge now is to adapt to “de-growth”. It’ll be the toughest challenge that we’ve faced in many centuries.

  25. “Much of this can be difficult to come to terms with. The idea that money is simply created out of thin air is alien to our way of thinking. I doubt this is accidental. My feeling is we’re schooled this way deliberately so our thoughts won’t stray towards grasping the true nature of the society imposed upon us. I have read the suggestion from (Professor Henry C. K. Liu) that when this gets properly understood it’ll be as significant as grasping that the Earth isn’t flat or that it goes around the sun.

    I agree. I think the true dark ages are those we’re living in now.

    Bill Kruse – http://www.economania.co.uk/various-authors/various-authors.htm
    – Permission granted to freely distribute this article for non-commercial purposes if attributed to Bill Kruse, unedited and copied in full, including this notice.

    http://bibocurrency.com/index.php/downloads-2/14-english-root/105-passive-bibo-currency-distinguishing-claims

    View at Medium.com

    • SEEDS numbers for ECoEs in 2019 are as follows:

      – China: 8.2%

      – United States: 9.0%

      – AE-16 (SEEDS group of advanced economies, including US): 9.2%

      – World: 8.3%

  26. Religion and The Parable of the Talents; MMT; Central Banks; Meaning of Life

    This will be about Life Sciences, but no explicit references to Biology. Is the economy a monetary system or an energy system or is it something deeper than energy? What started me thinking about this was the reference above to the lack of Christian Gospel commentary on the supposed ‘End Days’. And the perpetual discussions about money, with the tension that this blog is mostly about the energy basis for the economy. And it occurred to me that the Parable of the Talents might be relevant…namely, that money is meant to increase, and if it doesn’t increase, the person who fails to make it increase will be punished by God and lose even what little he has.

    Which led me to consult Dr. Google, which led me to this article:
    https://redeeminggod.com/the-parable-of-the-talents-revisited/

    If you don’t want to read it, I will summarize: The Parable was delivered in an Honor society, not a society built around the accumulation of money, but which was threatened by the emerging Money Society. The speaker was on his way to his death, but before that he drove the money-changers out of the temple. The solution to the paradox the article proposes is that the emphasis on growing money was added later, and was not in the original text. Leaving out the money angle changes the meaning of the parable to something like ‘using your God-given talents for good’. And ‘doing good’ isn’t the same sort of hoardable thing which can be put in the bank or buried in a secret place or inherited by your children. In fact, it is very similar to the psychologist Alfred Adler’s conclusion that life is about serving your fellow man (see the recent book The Courage to Be Disliked).

    Now, if it is a true statement that we are nearing the end of the Money society, then the question becomes “are we re-entering an Honor society?”. And the follow on question is “Does the Sermon on the Mount”, or Alfred Adler’s psychology, take on renewed urgency?

    Don Stewart

    • Excellent observations Don, thank you, and close to my heart because I believe that a New Economy will emerge out of the chaos to come and, as you say, it may well be based on an honour society as opposed to our ‘money-based’, consumerist arrangements that we have today.
      This is what I understand to be the message in the parable of the talents:

      “When Jesus told the parable of the talents, he told three other parables that were also part of the sign of the time of the end. All these parables describe specific qualities that his followers must have. We can read these parables at Matthew 24:45 to 25:46. The first parable is about the faithful slave, the small group of anointed ones who have the responsibility to teach Jehovah’s people. They need to be faithful and discreet. The following parable is about the ten virgins. In it, Jesus warned all the anointed ones that they would need to be prepared and watchful because they would not know the day or the hour when he would come. Next, Jesus told the parable of the talents to teach all the anointed ones that they would need to work hard in caring for their Christian responsibilities. Then, Jesus told the parable of the sheep and the goats, which focuses on those who would have the hope of living on earth. He emphasized that they must be loyal and do all they can to help his anointed brothers.”

      “Jesus said that the man in the parable had eight talents. That was a lot of money. Before the man went away, he gave this money to his slaves. He told them to use it to make more money for him. Just as the money was very valuable to that man, there was something that was very valuable to Jesus. What was that? It was the work he did while he was on earth.”

      What do the talents refer to?

      “The preaching work was very important to Jesus. As a result of his preaching, many became his disciples. (Read Luke 4:43.) But he knew that there was more work to do and that more people would accept the good news. In fact, he told his disciples: “Lift up your eyes and view the fields, that they are white for harvesting.” (John 4:35-38) A good farmer would not abandon a field that was ready to be harvested. Jesus had the same attitude. So just before he returned to heaven, Jesus commanded his followers: “Go, therefore, and make disciples.” (Matthew 28:18-20) In this way, Jesus gave them a precious treasure, the important responsibility to preach.—2 Corinthians 4:7.

      I hope this helps – it is but one interpretation of the Bible which is indeed an enigma and is multi-layered, almost 4 dimensional, IMHO.

  27. Jung’s discussion of the Book of Revelations in ‘Answer to Job’ pretty much nails the odd, lurid and rather sadistic psychology of the author.

    Speaking of which, I recommend everyone consult the latest two posts by the very sober and circumspect Dr John Campbell on Youtube, regarding the development of the Wuhan virus.

    We must assume ourselves to be entering a phase of global pandemic now, with self-sustaining infection among those with no direct link to China.

    Good luck to everyone.

    • There is most certainly a similar discourse happening in the UK via UnHerd amongst other online magazines and forums.

      Conservative economics and Catholic Social Doctrine are coming back into vogue as part of the endeavour to enhance, relayer and recomplexity the community sphere.

  28. Cultural Ilintegration and cooperative adaptions to a low carbon economy is indeed being actively thwarted by cultural segregationists who are specifically using colour/race/doctrine narratives to shut down the exploration of ideas and perspectives.

    The main perpetrators of this segregationist strategy is the middle class liberal cultural elites who are using a culture war as a proxy for maintaining their economic privilages that have been largely acquired through the public sector but obviously within acedemia too.

    In other words, these liberal middle class elites are unwilling to economically share their economic privilages. As such they are very attuned to building up victimhood narratives and constructing minority sympathies. In other words, they have a huge personal and economic investment in preserving cultural segregation, multiculturalism and moral relativism which they do by actively perpetuating problems rather than actively seeking solutions

    Clearly the solution within an increasingly resource scarce world is integration and deconstructing socially constructed group divisions. People generally understand this but there is an entrenched cultural elite within our public institutions that seek segregation over integration.

    Quite possibly, these ‘liberal’ elites are themselves highly racist, highly xenophobic and highly prejudiced towards cultural change and find that segregation allows them to live in their gated cultural communities without notice.

    The next layer down are the Left identitarian militants who have a strong career investment in perpetuating problems which can only be sustained through segregationist narratives. Hence white privilege etc etc.

    Despite their prolific cultural hegemony in the last 30 years which was facilitated by the Liberal bias in the EU Treaties, Brexit has fractured that hegemony and despite being a lot of hard work, the hegemony is quite rapidly breaking down.

    The crux of the matter is what set of social values to transition to away from radical individualism and ones that can trump the deployment of colour/race/doctrine narratives. This endeavour is one shared across many existing social boundaries including colour and is largely positioned in the centre right camp of post liberalism and post traditionalism. However for me the answer is straightforwardly the Common Good towards which we should aim.

    My feeling is that as long as the population is stabilised then most people in Britain are happy to cooperate, consider one another, collaborate and find a mutually beneficial consensus to help build integrated communities across Britain.

    The Home Secretary is doing well in terms of facing off the liberal elites and their demands for low wage unskilled labour to keep them in the economic privileges they are accustomed to.

    But the battle is far from won so any ideas would be truly welcome.

    • This issue seems to me to have its roots in the 1990s, when it was believed by many that history was ‘over’, and had ended with the triumph of two forms of ‘liberalism’, the social and the economic.

      These two ‘-isms’ made common cause. In economics, the Left dropped its historic commitments to redistribution and nationalisation. In Britain, ‘New’ Labour described itself as being ‘intensely relaxed’ about people becoming ‘filthy rich’. It became, in a sense, no longer the party of the ‘working classes’, but of the ‘petits rentiers‘.

      Both of these ‘-isms’ are now on the ropes. Economic ‘liberalism’ was discredited in 2008, whilst deteriorating prosperity is likely to change voter priorities back towards economic issues such as redistribution. In the UK, John McDonnell (opposition finance spokesman) probably got closest to articulating this change.

      It will be interesting, from this point of view, to watch the Sanders campaign in America. He is probably the only candidate who could give Mr Trump a run for his money, but that doesn’t mean he’ll get the nomination.

    • Excellent overview Tim, thank you. My take on Labour is that it is trying to return to the 1970s which has long gone, for there are no ‘workers’ in the 20th century sense. They need to move into the 21st century and understand that your SEEDs describes the energy economy, the real economy, and design a monetary and fiscal policy to match the degrowth process which is now inevitable IMO.

      We must continue to press these issues until, per force, TPTB will recognise the need and eventually redesign our societies – we may well experience catastrophe in the meantime as events are forced upon us. The COVID19 pandemic might be that incentive.

  29. Don’s most recent post and his link contains a post https://www.washingtonpost.com/news/powerpost/paloma/daily-202/2019/05/14/daily-202-meet-the-senate-s-new-culture-warrior-josh-hawley-fashions-a-right-wing-populism-for-the-trump-era/5cd9a1c81ad2e544f001dcf6/
    which tells a similar story about the rise and fall of double liberalism.

    Obviously the Johnson government is a manifestiion of the shift towards social conservatism and a leftward shift in terms of a redistributive state but with more of an emphasis towards infrastructural investment and a levelling up agenda.

    The most recent iteration being the purchase and potential development of a huge site in Redcar in the North East with the prospect of reestablishing a steel works using electric arc technologies. Ie recycling steel of which the phase out of petrol/diesel/hybrid vehicles will no doubt play a part.

    National strategic economic interests are being deployed which plays a key part in conservative economics as opposed to tax driven redistribution which is still an anathema to many middle and upper class Tory voters judging by the Guardian like reactions within The Times and The Telegraph in recent weeks.

    This may well leak votes to the LibDems who are surging in recent by-elections but the Tories are still holding strong with 20 points clear as ex Labour voters continue to leak to the Tories.

    As mentioned, the interregnum is a post liberal and post traditional turn which both the Left and the Right are trying to navigate. The Left are clearly rutted in identitarianism and are increasingly falling behind whilst Conservatives (as opposed to Tory Libertarians) are simultaneously looking back in order to move forwards.

    Sanders is the Left’s last hope but I think people want enhanced community life, not top down socialism infused with incredibly divisive identity politics. In other words, in general, I think people want integration not segregation and the ability and freedom to create the Common Good for themselves rather than one imposed by an ideological State.

    • ‘Obviously the Johnson government is a manifestiion of the shift towards social conservatism and a leftward shift in terms of a redistributive state but with more of an emphasis towards infrastructural investment and a levelling up agenda’.

      If you’re right about this – and I think you are – then Mr Johnson has a better understanding of trends than many would give him credit for. It helps him, of course, that all of Labour’s leadership hopefuls seem to be doing the opposite, i.e. addressing the future by looking over their shoulders.

    • Much much worse than that. They are not only disregarding people’s concerns about falling living standards and the relationship between population and economic/ecological capacity but they are instead entirely distracted by transsexual militants who want Labour to remove lawful safeguarding protections enshrined in the Equality Act 2010.

      Like 30 million voters really want transsexual militancy to be prioritised over palpable perceptions of systemic prosperity degrowth.

      We are now calling it the Psychosis of the Left.

    • Here, Here! Well said Steve – but Labour is now an irrelevance IMO. They will spend their time infighting on all sorts of useless identity politics as is their wont. They will not be ready for government for a very long time – if ever!

    • To be fair, when Starmer wins the protracted and virtually irrelevant leadership battle then I think he will consolidate the realignment in our political spectrum and seek a Progressive Alliance with the LibDems.

      The only weakness that I can see regarding the Conservative Party is the leakage of Tory Liberals to the LibDems.

      With Momentum still a power base within the Labour membership, the red wall will continue to crumble and reformulate into the Blue Wall so even though Labour MPs will try to stem that collapse, their only chance of actually winning is through a Progressive Alliance.

      In this respect, the Americanisation of our politics will then be complete which will see us continuing to drift towards a two party system but perhaps with the addition of minority parties emerging to keep the two main parties in check.

      Therefore liberalism will have shifted from its philosophical underpinning to a political identity with democratic pluralism being the new philosophical underpinning.

      Therefore, from my perspective, the intersection between globalisation, national sovereignty and democracy is already changing our politics for good.

      So much for the end of history 😊

    • An excellent comment Steve, thank you and I do agree. We have no way of determining the future of the Labour party but we do know that Corbynism/Marxism is dead for the time being – carried only by the Momentum apparatchiks.

      This article on ZH today says it all for me as a Libertarian:
      https://www.zerohedge.com/geopolitical/why-us-headed-its-fourth-turning

      The crisis of energy must come to a head and until then TPTB will continue to march to their obvious destiny – SEEDs has it dead right IMHO.

    • Thanks Peter. Thankfully the situation in the UK is not so polarised as the US although people I’ve spoken with on twitter from the US think that the polarisation is largely big city based, whether on the West coast or the NE coast. Otherwise small town community life predominates. This makes sense since small is beautiful and all that.

      Interestingly I’d also suggested the supranational USA needs to break up into smaller self governing units. It could be said that is already happening in the UK post Brexit.

      This from another feed.

      Lib-Lab 2.0: Meanwhile, in the Sunday Times, Liberal Democrat acting leader Ed Davey revives talk of an alliance between his party and Labour, telling members they cannot “afford to delay the debate any longer.” He adds: “Working with others when we agree is part of the Liberal Democrats’ DNA. Facing this right-wing Conservative administration, progressive politicians must at least explore how we might work better together, even tentatively.”

      What is TPTB?

    • Oh, sorry, TPTB = ‘The Powers That Be’. The unidentified power elite or shadow government that run things hidden from view behind the curtain of secrecy that envelopes most large organisations. I do agree with you that small is definitely beautiful and our little group promote this move to downsize government in UK:
      http://harrogateagenda.org.uk/

    • I certainly agree that democracy needs to be enhanced. I often feel a much greater sense of democracy could be achieved by allowing communities to shape their own environments. For example, by aligning democratic decision making with local development, planning and licensing decisions. Not necessarily every decision but ones that local communities feel are important to them – much like referenda. In this respect, important decisions are those in which local communities petition local authorities to hold a referenda and if that petition reaches a certain threshold, then the referenda process is activated for that development, planning or licensing application.

    • Yes, Steve, I would run with this and copy a version of Switzerland’s system. I believe that following the next crisis, which may already be upon us, we will see localised economies emerge much along the lines you suggest.

      I describe this at Chapter 11 – The New Emergent Economy, in Part 1 of my book. Part 2 deals with the skills and knowledge needed to prosper is such an economy. Of course it is all my speculation and is probably all wrong anyway – but it’s fun to project the future and gives me something to do!

    • I don’t understand the sort of extremism which says that only one view on any subject can ever be tolerated – after all, parties, unless they are single-issue groups, are necessarily coalitions of different opinions and objectives. If this is reminiscent of anything in English history, it’s probably the appalling rule of the Puritans, who, not content with closing inns and theatres, prohibited folk-dancing as well.

      But Labour’s biggest problem is that they’ve stopped campaigning to better the position of ‘ordinary’ or ‘working class’ people. It’s the millions ‘just about managing’, those relying on food banks, those (especially the young) who can’t find affordable housing, and so on, who should be their main concern.

      Another problem for Labour is that they painted themselves into a corner labelled ‘undemocratic’ when they tried to thwart the voters’ decision over “Brexit”. I was, and am, neither “Brexiteer” nor “Remainer”, but I do believe in democracy.

    • Yes I agree Tim. There certainly are people on the Left who are trying to bring the focus back to traditional Labour Constituencies (Paul Embry and other Lexiters as well as Blue Labour) but they have been marginalised and in some cases de-platformed).

      Starmer is trying to stop the navel gazing but as I mentioned before, Momentum have a stranglehold on the party whose prime interest is segregation and using divisions for personal and cultural power. These are the same people calling Northern voters thick gammons by the way.

      The cyclical fourth turn seems to particularly apply to the Establishment Left and the Cultural Left who after years on the high are now in the unravelling stage with different socialist/Marxist /identitarian factions competing for their preferred policies being prioritised.

      It is vicious infighting which is hardly a good example of how to cope with chaos.

    • For me, the problem with Starmer is that he was one of a number of people, inside and outside Parliament, who never accepted the outcome of the “Brexit” vote, and were determined to prevent it from happening.

      As I see it, both sides were entitled to argue their case until the public decided but, after that, the proper course was to accept the verdict of the voters, and make the best of it.

      Democracy depends on losers accepting the outcome of the process. To do otherwise is to imply that you know better than the voters, and/or that the public are idiots.

    • I agree. I was as surprised as anyone. But it appears that what actually happened was that people did accept the result but then a few months later Tony Blair intervened and made the case for ignoring the referendum result and lobbying for a 2nd which people took up with the help of Soros and Best for Britain.

      https://unherd.com/2019/10/how-tony-blair-destroyed-the-centre-ground/?tl_inbound=1&tl_groups%5B0%5D=18743&tl_period_type=3

      The reality of the intransigent Establishment Left and why we need to get rid of Establishment Left senior personnel from the civil service. Hence the recent attacks against Priti Patel.

  30. Can I just share this as I am sure it will be highly relevant to our discussion.

    The Ecological Citizen: A peer-reviewed ecocentric journal.

    Vol 3 Suppl B 2020
    ‘Ecological economics’

    Contents
    Editorial
    Pages 5–11: Ecocentrism, economics and commensurability
    Dickerson A
    Read now

    Long article
    Pages 13–21: Post-capitalism by design not disaster
    Alexander S
    Read now

    Long article
    Pages 23–33: Green growth: Restorative economics for a post-carbon planet
    Farley J
    Read now

    Long article
    Pages 35–46: Against steady-state economics
    Vettese T
    Read now

    Long article
    Pages 47–53: Elon Musk’s electric planet-suicide vehicle: Automobiles, emissions and degrowth
    Smith R
    Read now

    Long article
    Pages 55–65: Understanding what sustainability is not – and what it is
    Lynch T, Khan T
    Read now

    Long article
    Pages 67–76: Green republican political economy: Towards the liberation from economic growth and work as disutility
    Barry J
    Read now

    https://www.ecologicalcitizen.net/issue.php?i=Vol+3+Suppl+B

  31. Left and Right in the US
    Bernie Sanders won the Nevada presidential nomination vote among the Democrats. The principle deciding factor, according to exit polls, was his support of ‘single payer health insurance’, or Medicare for All. Nevada has a large hispanic population, which he courted, and got strong support in return.

    There is a lot of chatter here about left and right, but the deciding factor in Nevada was something that virtually every other advanced country has had for decades. If I remember correctly, Boris Johnson promised to fix the British system by putting more money into it. The US approach to health care is perhaps the worst that one could invent, as well as the most expensive. The overhead, as compared to Medicare, is enormous. And people who happen to have a job with pretty good health insurance through the employer pay a heavy price when they quit a job to go elsewhere. So the system costs a great deal of money for overhead and reduces job mobility.

    If presented factually, the issue is very much bread and butter. I suppose that issues such as payment for transgender surgery can be created, but for most people, it is a very basic question. Trump has promised several times to replace the current system with ‘a really good system’, but he has never delivered anything. A truly Libertarian approach would have to confront the idea that insurance companies would have free access to things like medical history and laboratory tests…which has been anathema for decades. So the current system is either universal coverage under Medicare or else a crap shoot with high overhead in the private insurance. Since a high proportion of the total expenditures are for chronic diseases, and the public, encouraged by government, believes that genetic factors govern chronic disease so that they are simply bad luck, the US has not been able to develop any approach based in reality.

    Don Stewart

    • One of the odd things about the US health care debate is that proposed solutions always seem to be about funding demand, not increasing supply.

      I wonder whether a better solution might be to expand training, thereby increasing the supply of doctors and other medical professionals? At least in theory, increasing supply reduces costs.

      More broadly, and as with public services generally, decreasing prosperity is going to impose resource constraints on public health systems, such as the NHS in Britain and its equivalents elsewhere in Europe. This means setting priorities, admittedly an emotive subject. I suspect that, because of the mantra of perpetual economic growth, nobody has yet come to terms with this issue.

  32. This is something that I’ve warned about before – essentially, Chinese firms are running out of money, and cannot indefinitely pay people who are not producing. (It’s hard to see, either, how the Chinese corporate sector can carry on servicing its debts under lock-down conditions).

    Secondly, food prices in China seem to be rising rapidly.

    Together, these are huge headaches for Beijing, given their fear of urban discontent.

    They might try to inject liquidity to keep businesses afloat – but, and even if this worked, it could worsen food price inflation.

    Another solution might be to require bank forebearance towards business borrowers, with the PBOC underwriting the banks for this. But that doesn’t solve the problem of ongoing cash outflows, unless banks (again underwritten by the PBOC) are required to carry on lending.

  33. @Dr. Morgan
    increase supply
    My impression is that we actually have a surplus of doctors. But that is based on things like a young female dentist marrying a doctor from Atlanta and they decided to live here in North Carolina and, despite a booming economy, he had trouble finding a job. In general, doctors have not been happy campers over the last couple of decades. The profession has gone from mostly self-employed with a small office staff to employed by giant health care conglomerates with big overheads. The surviving individual practices employ enormously expanded staff in order to cope with the bureaucracy. As a fan of Parkinson, you will not be shocked to hear that the most fecund part of the system is the bureaucracy.

    Another straw in the wind is the rise of the Internet Doctors. An increasing number of doctors are practicing by promoting themselves on social media. Telemedicine is now legal in many states. The results are, as you might expect, mixed. There are vicious disputes, and patients think they know things that the doctors don’t know…and sometimes I think they are correct. The doctors push back with their history of expensive medical training and their harsh board certification experiences. But the internet and telemedicine tend to sort the patients and the doctors so that the patients are getting the doctors they want.

    There is a husband and wife team treating Alzheimers that I happen to like. I recently heard a testimonial from a patient of theirs who has succeeded in reversing the 80ish man’s Alzheimers. The man was put on a 3 month waiting list…which is not shocking when you understand that conventional doctors prescribe polishing your will and thinking seriously about suicide. The man’s wife bought the doctors’ book and started doing the diet and lifestyle practices immediately and with no exceptions. By the time they got a face to face visit, things were remarkably better. On a memory test, the man has improved from scores of 10 out of 30 to 27 out of 30.

    But one can easily find pharmaceutical companies promising new wonder drugs which will overcome the ‘bad genes’ you got from your parents.

    So…it is a confusing terrain. What we do see, incontrovertibly, is that US life expectancy is declining, very young people are showing chronic diseases that used to be confined to those over 45, and that the political response has been incoherent. Bernie promises to attack the bureaucracy, but he has not promised to fix the underlying problems. Trump promises something ‘wonderful’…but doesn’t deliver.

    Don Stewart

    • On wonder-drugs, I think you’d be surprised at how little ‘blue sky’ research is done by the industry, particularly in the US. Getting drug approval is extraordinary expensive, so the numbers game makes it more attractive to develop ‘me-too’ compounds in clinical areas for which treatments already exist, rather than addressing ‘clinical voids’. The genome hasn’t lived up to early promise, mainly because the number of possible permutations is enormous.

    • Genome permutations
      The genetic permutations are part of the reason why ‘personalized medicine’ has not worked. The genes, using permutations in the specifically human genome but also the enormous number of genes in the microbes and fungi and viruses and random bits of floating genetic material can work around most anything given the right lifestyle and diet. The genetic inheritance which is simply unworkable tends to be dealt with by spontaneous abortions..most of which the prospective mother is not aware.

      The Azheimer’s doctors I alluded to above practice personalized medicine, outside the insurance model, NOT by starting from a patient’s genes, but from their life situation. They explore the exact lifestyle reasons WHY the person finds it so hard to take a walk, and then come up with a lifestyle solution. One example was a recumbent bicycle while the patient watched his favorite TV programs.

      It’s not surprising that a motivated Jewish mother can read their book and figure out what to do, and her husband says that he is tempted, but she keeps him on the straight and narrow. But you don’t need years in medical school to do what I have just described. It looks more like an Athletic Coach, training an athlete to shave a tenth of a second off his time. I have been very impressed by how much the athletic trainers actually know about the intricacies of the body and the mind. Unfortunately, the athlete and the trainer are willing to sacrifice almost anything to get that tenth of a second. So it is not necessarily a very good prescription for the second half of life.

      Don Stewart

  34. Perhaps the single most important financial issue right now is whether markets will continue to shrug off the virus as ‘something central banks can handle’, or whether participants make a panic dash for the exits. I suspect we’re going to find out the answer to this question fairly soon.

    My view is that, with prosperity deteriorating, and after years of financial gimmickry, markets have become wholly disconnected from economic reality. If that connection is re-established, the correction could be pretty dramatic.

  35. I’ve just seen a very disturbing stat on the daily CapX report.

    800,000 young people in the UK are apparently not in education – training or work.

    Surely this could spell disaster for the future with crime any general social unrest.

  36. Whither the Oil Sands?
    Search on
    Death of Frontier oil sands project highlights Canada dilemma

    The stated reason is Canada’s inability to balance its approval of tar sands projects with its commitments under the Paris accord. (I suspect that the pictures of federal Marshalls arresting First Nations peoples doesn’t sit well with some people). But the deeper issue is probably the inability of the projects to make money at current prices.

    There is also the question of how the heavy oils from Canada blend with the very light oil produced by fracking in the US. Probably increases the likelihood of a direct US attack on Venezuela to get heavy oil.

    Don Stewart

  37. Someone has realised that there is a gap between gdp per capita growth and prosperity per capita degrowth in the US.

    https://americanaffairsjournal.org/2020/02/the-cost-of-thriving/

    The twitter thread

    Not read it.

    • Excellent Link Steve, thank you. I rather like COTI and will apply the principles. Great Info and something dear to my heart as I witness all the financial distress among the 80% here in UK. SEEDs is dead on IMHO.

  38. @Dr. Morgan
    “wonder drugs”
    It is increasingly hard to get drugs which are better than placebo; Some of the drug companies have lobbied the FDA to eliminate the requirement that a drug be shown to be better than placebo. Another thing the drug companies are doing right now is lobby the FDA to require that supplements, which are by definition not poisons, be regulated just as drugs (which are poisons) are regulated.

    Now any person skilled in logic will understand that ingesting psyllium seeds is not the same as taking a drug which is potentially lethal. But the popular conception is that drugs ‘cure’ disease. In fact, it is almost always the body’s innate response which cures a disease. I recently referred to the book The Genetic Kitchen, whose subject is preparing food and eating in such a way that self-healing is promoted through epigenetic influences.

    Don Stewart

    • @Don Stewart The blanket statement about drugs being ineffective and poisonous is overblown in my opinion. I take synthroid daily as my thyroid slowed down around 15 years ago. Untreated, that stresses the heart and other organs. I take an ace inhibitor daily to lower my blood pressure. These work well for me. On occasion, if I have a bad allergy, I take a single benadryl (old style & doesn’t make me groggy like most claim). If I get a bronchitis or sinus infection after a cold – maybe every other year-, antibiotics have worked well. I would not want to be without these drugs, as my life would likely be severely shortened.

    • Some years ago I worked alongside one of the best pharma analysts, and gained insights that were fascinating, and in some cases disturbing.

      One of these is that a lot of old, tried-and-tested medicines are very effective, often moreso than is generally publicised – nobody is going to promote a drug which, though highly efficacious, cannot be patented and monetised. We’re thus in a bizarre situation in which we pursue new products which are less effective (and much costlier) than things that we already have. This might also induce a preference for engineered rather than natural substances.

      A second is that researching “clinical voids” – areas of ill health lacking any effective treatment – is highly expensive, and uncertain. There is therefore a preference for “me too” drugs – a new product which can be patented and marketed, even though effective treatments already exist for the illness or condition in question.

      A third is that world pharma makes the vast majority of its profits in the United States – sales elsewhere, even in prosperous Europe and Japan, are almost irrelevant in terms of profitability.

      Naturally, I see all of this in the context of deteriorating prosperity, of which one consequence is going to be need to set tougher priorities, in health care as in other areas. The logic of this is that need – rather than choice, or ability to pay – ought to become ever more important, but that’s not to say that what should happen necessarily will.

    • @ewaf88
      What we needed to do, but refused to do, was stop feeding 90 percent of the antibiotics we produced to domesticated animals to make them fat.
      Don Stewart

    • Yes that is very serious plus sick people in some parts of the World who think that taking just one tablet of a long course is enough to cure them.

      Donald

  39. @Tim,
    I think that this article from South Africa is a lesson in how we might proceed:
    “Here is a sustainable way to live given to us by South Africa: “It is time for a reality check. If you are between the ages of 30 and 60 today, then in 2050 you will be a pensioner strolling down the road in your golden years. The most likely scenario is that we will continue on our current carbon emissions trajectory which means that a climate catastrophe will be in full force. And as you stroll down the road, the youth of 2050 will be spitting in your face as a representative of the “Generation of Shame” who, despite being given all the scientific evidence, chose to chase short-term economic prosperity at the expense of the planet and future generations. We will be hated like no generation before us. Our golden years will be years of shame as we try to justify to our grandchildren and the hundreds of millions of climate refugees why our social media timelines from 2020 were filled with trivial outrages over who said what about whom.” So, what to do? What does a sensible, ethical person do when faced with a problem of this magnitude? Read on
    https://www.dailymaverick.co.za/article/2020-02-23-a-village-lesson-on-preventing-a-climate-catastrophe

    • the youth of 2050 will be spitting in your face as a representative of the “Generation of Shame” who, despite being given all the scientific evidence, chose to waste trillions of dollars on a hoax this being carbon dioxide causing climate change, when it was a Grand Solar Minimum event. We will be hated like no generation before us for our arrogance in thinking we could simply change the climate. It was the sun after all.

    • But we do have to transition off fossil fuels – especially oil – as they are finite.

      Regarding Global warming there is a direct correlation between temperature rises – glaciers melting etc and industrialisation.

      The biggest rises in average temperatures have occurred since the industrial revolution.

      There have been other periods of temperature rises but they have occurred over much longer periods.

      A glacier in Switzerland I used to walk on has now – just 30 years later – completely gone.

      That to me is definitive evidence that Man – not just Nature – is affecting the climate.

    • Don, it would be very telling and interesting to see an analysis of how much diesel the U.S. is able to produce for its freight trucks, freight railways, farm machinery and big earth machines without the input of heavy oil / tar sands from external sources, since diesel is clearly the choke point for Western Civ. I am sure that U.S. efforts to overthow the Venezuelan government are all about access to the gunk they have down there, in order to mix it with our light “oil” and produce diesel and heating oil. “Peak diesel” is clearly a more telling inflection point than “peak oil.”
      Good discussion and charts at “Peak Diesel or no Peak Diesel” at ReilienceDOTorg , from December 2018.

  40. Slow economic growth is a sign of success

    https://blogs.lse.ac.uk/europpblog/2020/02/26/slow-economic-growth-is-a-sign-of-success/#comment-1035017

    For more information, see the author’s book, Fully Grown: Why a Stagnant Economy Is a Sign of Success (University of Chicago Press, 2020)

    Rather than the rising ECOE, this acedemic is making the argument that growth stagnation is a product of the demagraphic balance shifting to an older society and the balance shift away from goods consumption to services consumption.

    I responded with the ECOE perspective.

    I presume from an ECOE perspective, the shift towards higher service consumption is directly due to the rising costs of surplus energy, especially in relation to energy services which in turn reduces discretionary spending for goods.

    • Economics optimists (from the conventional stable) routinely point at services when endeavouring to shrug off the implications of falling sales of “stuff” (cars, phones, chips, components, commodities etc). More than 90% of recorded US GDP growth over the past decade has been accounted for by services, and virtually nil in thew agricultural, extractive, manufacturing and construction sectors.

      Services are important, obviously, but we need to treat such assertions with more than a pinch of salt. There’s a lot of “taking in each others’ washing” about this. This is where newly-injected liquidity shows up. It’s where cheap credit is likeliest to show up, too, using credit to pay for a holiday, for example. Additionally, rising asset prices, induced by cheap capital, also inflate apparent activity in a wide range of areas (think, for instance, of the income of an estate agent, who sells the same number of houses, at the same rate of commission, but average selling prices have risen).

      Additionally, travel plays a huge role in this, which makes it very exposed to virus fear effects. With the media calling cruise-liners “floating petri-dishes”, people understandably wary about taking flights, and the risk being quarantined either at your destination or on your return (or even both), travel is going to be hammered. The world’s biggest mobile tech conference (in Barcelona) has already been scrapped, the Venice carnival was cut short, and I wouldn’t put a bet on the Tokyo Olympics actually happening. Football and rugger matches are already being postponed, or played in empty stadia.

      If this is, as I suspect, “peak travel”, the service sector is going to be reporting horrible numbers quite soon.

  41. Does Democracy Work?
    Ron Paul writes:
    “Trump loved it when Wikileaks exposed the criminality of Hillary Clinton and the Democratic Party, as it cheated to deprive Bernie Sanders of the Democratic Party nomination. Wikileaks’ release of the DNC emails exposed the deep corruption at the heart of US politics, and as a candidate Trump loved the transparency.

    Then Trump got elected.”

    If you haven’t followed the Julian Assange case, the US in the UK court is taking the position that Assange should be tried for espionage in a US court, although he is not a US citizen, but that he also cannot claim second amendment rights because he is not a US citizen. Trump favors a 175 year sentence.

    All of which might lead one to despair that a vote means anything at all. Scholarly studies have shown that what the public thinks means practically nothing to our elected representatives. One of Bush’s officials proudly stated ‘we make our own reality’. And thinking that democracy makes a difference is assuming that the public is more trustworthy than Washington officials…which may be a wildly wrong assumption.

    I made a little resolution yesterday not to be so cynical. But I think my resolve lasted less than 24 hours.

    Don Stewart

    • This issue occurred to me about the CEO of Huawei, too – since trading with Iran isn’t illegal for a Chinese citizen under Chinese law, what possible case has the US for demanding extradition, or Canada for detaining her? I’ve no idea why the UK ever extradites its own citizens – many other countries never do this.

      The UK has behaved very badly over Assange. When he was holed up in the Ecuadorian embassy, some moron in the government threatened to violate embassy sovereignty to grab him, thereby putting in danger British diplomats around the world. This is the arrogance of power at its worst.

    • Don, I am not blaming America or Trump, unfortunately USA is a police state, a classic example of fascism being the collusion of state and corporations; I expect nothing less from USA.as they will repress just about anything that threatens their hegemony but I rest content that their comeuppance will arrive in due course.

      No, I vehemently accuse our government in UK of being the slobbering poodle to USA that they have always been. Our politicians need to find some backbone, dismiss this case for the crass invention it is, and tell Trump to get lost. We will be facing much more nonsense from America before Brexit is over. I worry much about our NHS as the American healthcare despots are eyeing our wonderful system and any HMG that puts this in jeopardy will have a riot on their hands.

      I am seeing my MP in April to make my point and there are many of Julian’s supporters doing the same. God help Boris if they extradite him.

  42. It’s interesting, in the light of current events, that London Heathrow Airport still wants to add an additional runway, supposedly reflecting future growth in demand. The airline industry, meanwhile, wants us to believe that it can become carbon-neutral, apparently by a combination of using biofuels and planting trees.

    My own view is that we may very well be at “peak aviation”, and perhaps even “peak travel”. Anyone flying abroad on holiday now risks not only quarantine before they can leave their desitination, but after they get home as well, not to mention the actual infection risk. Faced with that, staying at home might have a lot of appeal. As for cruise-liners, the media tag “floating petri-dishes” isn’t a great marketing slogan.

    I’m not basing this interpretation on the virus, which hopefully will be a time-limited event. But, even before this hit, sales of cars worldwide were falling – prosperity, as measured using SEEDS, is already in decline – and then there’s the climate issue.

    We’ve only ever managed to fly courtesy of the ultra-high power-to-weight ratio of petroleum. It might not be too fanciful to wonder whether, in not too many decades from now, the only “frequent fliers” might have feathers….

    • I think there will be still short hops around Europe available on electric planes with advanced batteries with five times the energy density of current ones.

      These will be 100 seaters.

      I do think -as I have mentioned before – that we’ll need a new channel tunnel to cope with frieght.

      Also the new HS2 should be a relatively slow speed frieght and passenger line.

      The Governments assertion that shaving 20 – 30 minutes off travel times will lead to greater productivity is ridiculous.

      But the department that did the sums may still think that computers are room sized and that there is no Internet.

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