THE POLITICAL ECONOMY OF DE-GROWTH
Two broad sets of ideas have shaped the practice and philosophy of political economy during much of the Industrial Age. One of these is collectivist thinking, which argues for state or communal ownership of “the means of production”. The other is the market philosophy which advocates the primacy of private ownership.
These are ultra-broad-brush categorizations, useful because they correspond to a duality in the human psyche – a duality comprising the desire for collaborative effort and the ambition for self-betterment. These, in their myriad forms, have been the polarities of debate since the onset of industrialization in the 1760s. They have often been labelled “left” and “right”, but these labels are so vague, and their applications have been so varied, that they cannot serve as useful terms in the current context.
That context is involuntary economic de-growth, caused by a deterioration in the dynamic which has powered economic activity for well over 200 years.
The Industrial Age began when the first efficient heat engines enabled us to access vast reserves of energy contained in coal, petroleum and natural gas. This triggered parallel expansions, exponential in nature, in human population numbers and in the economic means of their support.
It cannot be emphasised too strongly that the economy is an energy system, not a financial one. Anything that has economic utility is a product of energy. The various monetary systems used over time have served primarily as media of exchange for the goods and services made available by the use of energy.
Energy itself has never been “a free lunch”. Whenever energy is accessed for our use, some of that energy is always consumed in the access process. This ‘consumed in access’ component is known here as the Energy Cost of Energy, or ECoE.
ECoEs have been rising relentlessly, and have already passed the thresholds at which, first, advanced Western economies start getting poorer and, latterly, the same thing starts happening to less complex EM countries.
Much of today’s uncertainty and contention can be traced to this process itself, and to our inability, or our unwillingness, to recognize this reality.
The onset of “de-growth”
With these points understood, the long-range interpretation of the economy devolves into a series of equations, comparatively straightforward in principle, though complex in application.
Prosperity is a function of how we convert surplus (net-of-ECoE) energy into economic value. The quantitative variables are the amount of energy available, the proportion of that energy ‘lost’ to the economy as ECoE, the efficiency with which surplus energy is converted into economic value, and the number of people between whom aggregate prosperity is shared.
This energy interpretation indicates that economic prosperity cannot be infinite on a planet with finite resources. Environmental and ecological degradation introduce a new ‘infinity fallacy’, revealing that there are limits to the ability of the ecosphere to tolerate our use of energy, certainly when the vast bulk of that energy is sourced from fossil fuels.
Problems with this system have been forced upon our attention only in comparatively recent times. As ECoEs have risen, we have begun to encounter (though not to recognize) the limits to material economic growth founded on the use of fossil fuels. At the same time, there has been widening public recognition of the adverse environmental and ecological consequences of the exploitation of fossil energy.
In essence, neither the reserves base nor the environment can support further economic growth based on the use of fossil fuels. Indeed, even the maintenance of current fossil-based prosperity has become impossible.
This presents us with two possible developments. The first is that we find alternative forms of energy which free us from resource and environmental constraints.
The second is that we come to terms with the ending and the reversal of prior growth in material prosperity.
The best available evidence points to an outcome which is at neither of these extremes. We can, and indeed must, develop alternative energy sources, including wind and solar power. But we cannot assume ‘like-for-like’ replacement of the economic value derived from fossil fuels, so we need to plan on the basis that aggregate material prosperity will decrease.
Cognitive dissonance and ideological luxury
The unfolding failure of the established ‘growth engine’ is causing systemic, cognitive, psychological and political disruption.
We’ve done everything we can to deny the reality of involuntary de-growth. Means of denial have included financial gimmickry, the making of exaggerated claims for the potential of renewable energy and for technology more broadly, and even assertions that we can find ways of ‘engineering’ our way out of environmental constraints.
The lengths to which we’ve been prepared to go to deny the physical reality of the faltering economy have been quite remarkable.
Conspiracy theories have flourished in a context of ignorance (about energy reality), suspicion and mistrust.
Despite the climate of denial, the storm front of de-growth has already thrown systems into chaos. The “market economy” has been abandoned in all but name, transformed into what might best (and most neutrally) be described as the “make it up as you go along” economy. We’ve embraced the fiction that the creation of ever more money can keep the wolf of de-growth from the door.
It doesn’t help that we’ve spent centuries congratulating ourselves on economic ‘knowledge’ that is fallacious. The conventional basis of economic interpretation – which concentrates on money, puts energy into an ancillary role, and insists on the potential for growth in perpetuity – is in the process of being invalidated.
We have an ingrained sense of ownership of growth, amounting to a feeling of entitlement to a current level of material prosperity that, we believe, can only increase over time. If this isn’t happening, “somebody else” must somehow be at fault. Political economy has long concentrated on the distribution of economic prosperity on the assumption that this prosperity itself must increase in perpetuity. Our financial system is entirely predicated on “growth” in perpetuity.
Most of us cannot even imagine a system in which politicians, opinion-formers, business leaders and financiers stop talking about “growth” and start discussing contraction. There have always been some people who have advocated “de-growth”, but they have tended to promote this as a beneficial choice, not as an involuntary inevitability.
One definition of “de-growth” might emphasise the loss of luxuries. This applies, not just to the loss of material non-essentials, but to political and ideological luxuries as well. Economic growth has enabled us to indulge in philosophical extremes, including advocacy of wholly-state or wholly-private ownership of “the means of production”. To stand any chance of adapting to involuntary de-growth, we will need to put ideological extremism behind us, and concentrate instead on pragmatism.
From a pragmatic perspective, both the collectivist and the market models have strengths and weaknesses. Pragmatism now decrees that we need to combine the strengths of both, and use each to minimize the weaknesses of the other. The term best describing this pragmatic balance is the “mixed economy” which optimizes a combination of public and private provision. Extreme collectivism failed between the 1960s and the 1990s, and the extreme or “liberal” version of the market alternative has failed now.
Philosophically, the aim now should surely be to seek an optimal combination of systems and ideas which meets the basic needs of everyone, whilst maximising the scope for individual endeavour. One of our greatest assets is our ability to think our way around problems, in the process producing new ideas.
Extremism isn’t wanted, or affordable, on our journey into a post-growth society.
To use a historical rather than a contemporary example, the Puritans of seventeenth-century England believed that theatres, taverns and country dancing were manifestations of evil. The tragedy was that, in addition to exercising their right not to participate in such activities themselves, they also set out to enforce these prohibitions on everyone. Puritan authoritarianism was rooted in religious belief, but there have been, and remain, equivalent schemes of repression founded on secular rather than spiritual persuasion.
Enforced agreement, however it is manifested, would be an even greater handicap in a post-growth than in a growing or a pre-growth society. The finding of solutions to the wholly new challenges of de-growth require the maximised exchange of ideas consistent with respect for the differing ideas of others.
Without entering into the long-standing debate around utilitarian principles, we can take as a starting-point the objective of seeking “the greatest good of the greatest number”. A worthy aim now would be to ensure the well-being of all as the economy as a whole gets poorer.
In the past, political economy has concentrated on the distribution of economic prosperity within the assumption that the aggregate of this prosperity will continue to grow. For political leaders, ‘sharing out growth’ has seldom been easy.
‘Sharing out hardship’ is going to be very much harder.
Our first priority surely ought to be a combination of research, education and the channelling of expectations. To give just one example, the doctrine of perpetual growth has created the assumption that we can tackle the environmental crisis without having to surrender things such as reliance on cars and frequent overseas travel. Once we recognize the economic as well as the environmental dimension of a faltering fossil fuel dynamic, we’ll become aware that pain-free, seamless transition is a hope rather than an assured reality.
Under these conditions, neither “collectivist” nor “liberal” philosophies can meet our needs. Collectivism tends to espouse subservience to the state, whilst the liberal alternative promotes at least the acceptance of greed, and sometimes its validation, or even its encouragement.
When aggregate prosperity becomes at best ‘a zero-sum gain’, various deep-rooted assumptions fail. One is the idea that one person can prosper without another suffering. Another is that the state can manage the equitable distribution of everything.
Neither should we obsess about “the rich”. Traditionally, the “left” has favoured ‘taking from the rich to give to the poor’, whilst the “right” has validated inequality as a reward for talent and effort. Historically, the widening of the gap between the wealthiest and “the rest” can in reality be connected to growth, both in prosperity and in social and economic complexity. As both prosperity and complexity decrease, this gap can be expected to narrow.
As prosperity per person decreases, the probability is that the cost of essentials will absorb an increasing proportion of prosperity. This is likely to be asymmetric, in that some people will continue to enjoy substantial (though diminishing) discretionary prosperity whilst others will find it ever more difficult to afford the necessities.
In policy terms – and beyond the prerequisites of education, research and the ditching of false notions about the economy and the environment – a primary objective surely needs to be to ensure that the necessities are available and affordable for all. The priorities for would-be leaders have to be (a) to learn about economic and environmental reality, and (b) to plan ahead to preserve and promote both economic well-being and social cohesion in a post-growth society.
For political leaders, ‘sharing out growth’ has seldom been easy.
‘Sharing out hardship’ is going to be very much harder.
Oh yes – and very difficult to explain. I am glad that I am not a politician, they will be the most hated and despised segment of all and we will cry out for a ‘benevolent dictator’ once again.
I forgot to thank you for your willingness to share your insight with us, your readers.
A thought-provoking “manifesto”, Dr. Tim. Common-sense is a rare commodity, unfortunately. It’s OK for the guilt-ridden middle-classes (and I’ll hold my hand up there!) to only invest on an “ESG” basis, but few appreciate either the risks involved, or the element of “Greenwashing” that unfortunately occurs.
I come back to my belief that individuals and families will have to embrace those Victorian concepts of “Self-Help”, “Thrift”, “Character”, and “Duty” (the titles of crusty old Samuel Smiles’ books) in order to psychologically survive the inevitable transition into a world of mild disappointment. Professionally, I’m seeing this more and more with the dashed expectations of those about to retire as their pensions have much-reduced income outcomes today (because of QE/ZIRP/SFR, etc), leading to the unspoken belief in the inter-generational inheritance of assets on a relatives death, something one should simply never count-on.
Society will have to adjust to different work patterns. I know plenty of people who have now realised that commuting, say, 20 miles to work and back in a car is, effectively, an additional tax on their disposable income. Just this morning, I was talking to a chap about this as he stood next to his brand-new car – “It’s only a 1.5 litre engine” he said apologetically. I told him that I thought that was a very sensible choice, in fact, and perfectly adequate for a lower fuel consumption commute. “Yes, he said, I get 15 more miles per gallon”. Tiny steps, tiny steps!
You raise some interesting points, Mark, which I would like to embellish, namely the attitudes of the middle-class and the idea of thrift.
The current slogan of ” Build Back Better ” and the ideas of replacing fossil fuels with a whole new infrastructure and economy based on wind / wave / electricity bears scant close scrutiny, as it involves scrapping the current infrastructure, along with all the sunk costs involved, replacing them with new types of vehicles and transport systems, electricity/ hydrogen grids, etc. all at huge costs in natural materials, and consuming enormous amounts of fossil fuels in their manufacture and upkeep ( half of the energy cost of a motor car is in it’s manufacture, for example, so phasing out and replacing existing fleets will consume huge amounts of materials and energy ) Then, electricity / hydrogen production then, again, relies on the consumption of huge amounts of FFs to generate them.
Therefore, apart from being misleading in its reality, it seems more like a way to continue business as usual for the industrial society establishment, as the Green New Deal will continue the old production and growth model under new clothes.
Rather, the idea of Thrift would consider that there is a whole system already in place, there has been a huge investment in the infrastructure and this should not be scrapped, but maintained and shepherded through the decline as a less costly and wasteful alternative. For example, instead of mandating the scrapping and replacement of vehicles, rather the refurbishment and reuse of them and their parts to extend the life of the existing FF fleet. ( the extreme example of this was seen in Cuba ) However, the make do and mend attitude is deeply unfashionable, smacks of austerity and does not allow the industrial society establishment to continue it’s growth model. However, it would be a more efficient use of resources and energy, and allow a society to maintain more utility and smoother transition during decline.
Part of this comes down to “how much do they know?”, and “how far can they persuade the voters?”
In terms of sunk costs and infrastructure, switching over to EVs makes far less sense than requiring all-hybrid model ranges, and limiting engine sizes. When we take power supply, abandonment of existing infrastructure and the environmental effects of battery-mineral extraction int account, it seems likely that 1.5-litre hybrids make a lot better environmental and economic sense than EVs. Come to that, how many people really need a car bigger than a Smart anyway?
I heard a pandemic expert say yesterday that re-opening foreign travel is a risk that he wouldn’t be minded to take, in part because we don’t yet know the full risk of mutations.
Thrift and the other ‘Victorian virtues’ might fall into a similar category of ‘sensible, prudent but unpopular’ ideas.
“Thrift and the other ‘Victorian virtues’ might fall into a similar category of ‘sensible, prudent but unpopular’ ideas.”
That’s an understatement! I think you overestimate the intelligence/wisdom of the bulk of the species. Most are on autopilot, and practice groupthink.
Voluntary Simplicity is an exception (along with suicide) of the Maximum Power Principle. It is a very hard sell. (nearly impossible except in emergencies like wartime) There are billions presently in INvoluntary Simplicity doing all possible to increase their energy-matter throughput. Who can blame them? Seems to me that most degrowth will be involuntary. Politicians are unlikely to get elected if they propose it.
ecologycenter dot us/ecosystem-theory/the-maximum-power-principle dot html
interesting article by another Tim (i.e. Jackson): Modelling energy transition risk: The impact of declining energy return on investment (EROI) available from https://doi.org/10.1016/j.ecolecon.2021.107023
Two short comments, Tim. First is that nuclear isn’t mentioned. It is likely, in my opinion, that as the energy squeeze is increasingly recognized, plans for next generation nuclear plants will be quickly started. Between electric vehicles and hydrogen possibilities, electricity will rise in importance. Hydrogen can be obtained by splitting water with electricity. It is an energy loser, but if nuclear, it won’t matter much.
Second: As many leaders are corrupt, a cooperative effort for the well-being of the populace will likely be implemented only for self-preservation of political power. Enlightened, benevolent leadership is an exception, not the rule as I see things.
Nuclear fuel is far from limitless, building nukes takes a very long time and public opposition is considerable. The US, for instance, would need a very large increase in plants to make a serious dent in FF reliance. Nukes are very expensive, and ECoEs aren’t all that low. Fusion, if achieved, might change the equation, but fusion is likely to remain ‘ten years from now’ for a long time.
I share your low opinion of political leaders (there are plenty of decent people in politics, but they seldom, if ever, get the top jobs). But what we’re discussing here is game-changing. Severe hardship and associated anger are powerful solvents for apathy and ‘just grumbling’.
Also, people have been suggesting I have a go at the political economy of our de-growth future, so here’s my shot at it – let the debate begin!
Well, it’s going to be an interesting time as well as an extremely uncomfortable one, but I see the reaction of the young (millennials and younger) as being the deciding factor. Boomers are already retiring now and their destructive power in elections for the status quo will ebb away with them, the amount of damage they can still do is only huge in the demographically old countries which are not the majority globally. Gen X-ers are jaded and compromised by trying to inherit the reins of power.
This will differ everywhere according to local conditions, so I’m guessing a patchwork over the planet of different outcomes will result. Countries like Bulgaria have never had the ‘ideal totally wasteful’ lifestyles considered a birthright by the ‘Old West’ and adapting to austerity and declining resources over the last generation, the population has collapsed from ~7 to 5.5 million, in a peaceful manner between emigration and a far-below-replacement birthrate. They can continue relatively slowly downwards to what the land and a more sustainable economy can support within their borders if left alone, to live probably as their grandparents did. Most places though, at whatever state of ‘technological development’ will dissolve into wars until the population is viable with respect to the carrying capacity of the local environment.
Generally, minorities will be annihilated unless they have some protective or competitive advantage, while global trade will shrink to ancient levels, mainly due to the chaos even before considering lower energy options to drive the process. I think this will be the most common outcome, so the default, look at Yemen right now, bombed back to a medieval state and as soon as the dust settles they continue fighting neighbours with whatever they can use, while all starve.
This evening we hear that the UK is ‘sending a gunboat’ to see off the French scallop fishermen from the coast of Jersey. It is reported that the French have ‘threatened to cut off Jersey’s electricity supply’. Jersey might need to fire up the two oil-fired power stations. On the 200th anniversary of Napoleon’s death, too!
You could not make this up. It is, however, an interesting mix of an energy problem, foodstuffs problem, cocked-up treaties post-Brexit, a prosperity problem for the French fishermen (several Jersey fishermen support the French, according to press reports). Hopefully, a ridiculous storm in a teacup.
The words which occur to me about this are “childish” and “petulant”. Let’s indeed hope it blows over.
Mr Johnson gets a gunboat moment on election day. And we paid for their redecoration, so that neither speed nor direction is easily discernible.
With such confections, we can have every hope that our prospects are generated in a calm and social rationality.
I have no idea why anyone would prefer Mr Johnson, and his “Brexit” deal, to Mrs May, and hers.
Well done. You lay out the most likely possibilities clearly. It is possible that some dramatic “black swan” economic failures will happen with the advent of perpetual degrowth, but even if they do not, some really difficult political sorting out of who gets what will still have to happen.
I do think that there are numerous options for collectivist responses (which I personally favor) that do not involve state collectivism. The original collective is the family and the home economy. I can see some real benefit from expanding the sentiments of intra-family mutual support to the level of the small town or rural community. I think it will be more difficult to organize in larger towns and almost impossible in cities. My small community has seen a significant increase in ad hoc collective effort toward supporting those who were most adversely affected by pandemic job losses. I can only hope that we can hold it together and support each other when even tougher times come calling.
One of the reasons I’m an agrarian prepper is that I believe that families that can provide most of their own support will be able to do more to support others. Direct family to family assistance may also be a lot easier to organize than waiting for assistance from underfunded governments.
I do wonder about your belief that “historically, the widening of the gap between the wealthiest and “the rest” can in reality be connected to growth, both in prosperity and in social and economic complexity. As both prosperity and complexity decrease, this gap can be expected to narrow.”
It will take a great deal of effort by “the rest” to prevent the wealthiest from using their influence to maintain their wealth. As growth has slowed and prosperity has declined over the last few decades, inequality has actually increased. I fear that degrowth may actually accentuate inequality by incentivizing those with wealth toward even greater control of government policy. Perhaps you could expand on why you think degrowth will result in more equality (especially without the pitchforks coming out)?
I wholeheartedly agree that “a primary objective surely needs to be to ensure that the necessities are available and affordable for all.” I fear that as that task becomes harder and harder with degrowth, the environment will take a back seat to immediate needs. It may be that because it still has a relatively low ECoE, dirty old coal will come roaring back to support electric grids and perhaps even home heating. It will be a brave government that will encourage people to do with less electricity and heat because we need to save the climate. It’s true, but it will be a very hard sell. On the other hand, if we don’t save the climate, industrial agriculture will fail and it will be very hard to find enough food for everyone. Some really tough choices are coming our way.
On the gap between “the rich” and “the rest”, sharp falls in stock prices would/will, in themselves, do a lot to reduce the theoretical (paper) wealth of the richest. These valuations are one of the very many excesses in the current situation. Cheap money, plus mistaken faith in perpetual growth, have inflated stock prices far beyond any realistic appraisal of value. Unless the reality of de-growth can be hidden indefinitely behind denial and monetary gimmickry, this situation will correct.
Historically, wealthy elites have had a habit of over-reach, and there have tended to be corrections to this. One of these does involve ‘pitchforks’, of course, though reform, rather than revolution, is preferable. Elites have always assumed that wealth plus information plus the muscle of the state will entrench their position in perpetuity. The Ancienne Regime thought this, and so did the Tsars.
I agree enthusiastically with the idea of non-state collectivism. This seems particularly important in countries like the US and the UK, which are amongst the worst-placed to adapt to de-growth and the invalidation of prior assumptions.
@JeremyT, well spotted, I had naively wondered what the point of navy gunboats in Jersey was, given its against international law to blow away protesting fishing vessels, a step even Johnson might consider too salty. (Hard to tell given he has previous in illegally shutting down parliament)
Yup, foreigner-bashing on all the tabloid frontpages should see him get a landslide in todays vote, it reminds me of Tony Bliar sending tanks to Heathrow back in the day when muslims were still the main minority of choice for vilification. (Never fails, first they came for the West Indians, etc., etc.)
I feel sorry for any CO in this situation. He can’t, even conceivably, use force. His Rules of Engagement are likely to be strict, assuming Boris hasn’t over-ruled the professionals tasked with this gimmick. If he’s in collision with a fishing boat he comes off as the aggressor, whatever the actual circumstances.
This seems a bit like a re-run of the Cod Wars with Iceland, ‘plucky’ little fishing boats seen to be taking on ‘bullying’ warships, even if this time these are only OPVs rather than frigates.
one would hope that any RN presence is actually as peacekeepers and mediators,
meanwhile the media and political opportunists frantically ride their nationalistic hobby horses trying to win clicks or votes,
as always the armed forces are expected to step in and rectify matters after the politicians have failed abominably,
Indeed. It’s interesting that, according to the media, France has sent “patrol vessels” whilst Britain has sent “gunboats”. I seem to recall that the last “gunboats” in RN service were the “Insect” class, decommissioned circa 1941.
It does seem rather more than coincidence that this happens during elections in the UK…….
I can’t recall every feeling less motivated to participate in an election,
I trudged down to the polling station with a heavy heart, lacking any confidence in any of the major parties and was glad of the opportunity to vote Green on all counts as a protest,
I’m paying very little attention to the media at present because it has to be taken with such a large pinch of salt it makes me gag every time.
What I didn’t quite understand from today’s BoE MPC report was that the UK economy, with its dependency on services and imports, was to have growth of 7.25% but that inflation would only peak at 2.5% before falling back.
I was scratching my head to understand and was hoping that they would try harder to explain it so that I could believe this report rather than the one they put out a few short months who which didn’t survive the test of time very well.
Could it be that believing in fairy tales is more comforting than the story of degrowth?
As I understand it, the QE programme is intended to total £875bn, making the projected growth actually look quite a small return on such huge stimulus. After all, UK GDP is circa £2tn, so that stimulus is enormous.
The govt. ran a deficit of c£300bn in calendar year 2020. The UK economy has become stimulus-addicted, especially in the pushing of mortgage and business debt. The assumption has long been that household spending supported by credit can carry the economy, but that this needn’t push inflation upwards. Nuts.
If you don’t mind me asking, what would your growth and inflation estimates have been?
For GDP itself I use consensus numbers – what interests me isn’t whether these targets are hit, but how much stimulus it takes to get there!
SEEDS works off underlying or ‘clean’ growth (C-GDP). For the UK I have -12.3% in 2020 and +8.0% in 2021, then settling back to just below 1% thereafter. Broad inflation numbers are all over the place right now, but last year’s GDP-deflator was 5.7%. My feeling is that UK broad inflation is running at 5-6%.
With so much manipulation/stimulus going on almost everywhere, my view is that GDP is becoming ever less meaningful, and C-GDP ever more important.
I probably ought to write about the UK and/or US economies here.
I see the other Tim (Watkins) has a new article up that casts doubt on current economic opinion based on the lack of prosperity to afford it.
I saw Tim’s article – good, as usual.
Did somebody say “dieoff”? https://news.yahoo.com/us-birth-rate-falls-4-230720426.html
One complicating factor in any adjustment to economic contraction would be the recent burgeoning of identity politics. Members of “disadvantaged” groups would not easily abandon their ambition of securing a larger slice of the (shrinking) pie, and probably would demand vociferously that all sacrifices should be made by the “privileged”.
Can democracy survive the combination of identity politics and economic contraction? These are interesting times.
Playing devil’s advocate here: Why should young people accept austerity applied evenly across the board? From the standpoint of a millennial it would be understandable to blame our economic and environmental problems on older generations who both failed to act and benefitted from doing so. Perhaps they should bear the brunt of the consequences and allow future generations a little less horrible prospect.
It’s like a young person being asked to care for an abusive parent who squandered their wealth.
It seems to me that the elderly as a class have lived much better lives than millennials and Gen-X can hope for. Boomers and the elderly are also in general to blame for having done nothing about overshoot and collapse since at least the 1970’s. Finally, the financial woes of the young are the result of a system which is in part designed to prop up the wealth and retirement of these same older generations.
It seems to me that there is a strong case for placing an outsized burden of austerity on older generations. Why have a 1-child program when you could cut off government services and healthcare to those generations who benefited from causing our problems? Cap medical care at age 65, for instance. Cut pensions, seize 401k’s? Force the abandonment of 2nd residences, etc.
Of course it is more complicated than this, I just predict this will be one of the likely political trends. And I think there is at least some merit to it. Older generations expecting the young to make sacrifices to solve these problems seems to be a final insult.
Hello again blond beast,
I suspect that you have an incorrect picture of the global elderly. In general they are living rather simply and spend far less money than when they were working. There’s no way, in my view, that governments would severely cut health benefits for them, as they are a huge voting bloc.
Because generally the young don’t vote, while the old do, on a sliding scale of age group, pro rata with how much you benefit at the expense of others in this current system. So the oldest would crawl on broken glass in winter at dawn to keep their privileges while the young sleep in. In the UK, millions slipped off the voters register back in ’92 to avoid being taxed simply for existing in a poll tax (even if without any income) and the loss of that habit benefited the perpetrators. Unless the young learn fast to fight tooth and nail for every crumb, they will continue to get jack sh*t. The ruling elite are generally the descendants of someone ruthless who committed some profitable injustice in the past and once they have that initial advantage of the power of serious money, they only have to not lose the original capital over the generations to stay on top.
“The ruling elite are generally the descendants of someone ruthless who committed some profitable injustice in the past and once they have that initial advantage of the power of serious money, they only have to not lose the original capital over the generations to stay on top.”
Warlords indeed became lords of the manor and then landlords in England and parts of Europe I believe. Similar events in Asia built dynasties. The numbers involved at the top (nobility) were tiny % wise. As far as the bulk of the elderly in the developed world, they are not in the league of wealth by might or inheritance. Again that is a tiny minority. In many cases, the children of the successful blow the inheritances. Easy to try to vilify all who worked their way up in professions or small businesses. Humans strive to better themselves everywhere. In your logic, only those who don’t succeed are good guys.
@Steve, you’re right about that. It’s just a thought experiment, not my actual position, but I should have clarified perhaps the 55-65 yo population in developed nations who in the US have about a third of all wealth.
I think the general point remains worth considering. Given that the group mentioned above has already enjoyed outsized benefits of industrial civilization it would not surprise me if they receive outsized blame for its consequences. I of course personally believe these things are systemic and should not in reality be blamed in this manner. But it would not surprise me if the subtle nature of inevitability of decline is missed by the masses.
It’s also not necessarily “living large.” My granparents passed at the age of 93 and 95. My grandmother never worked. Grandfather worked a blue collar job and retired at 60 with a full pension that allowed them to stay in their family home, afford a vacation trailer on a small lake, and travel. I’m glad for them that they had this opportunity – and am personally resigned to an austere future as a father in his 40’s – but can image trying to sell austerity to the young who realize that previous generations appear to have “drank their milkshake.”
And yes, the state will attempt protect the interests of their voting blocks. Which is why I doubt anything at all will be done.
@FI – agreed. The young don’t vote, but the old don’t fight. So we’ll see how this goes! Once it’s clear the young will never get to partake in the excesses of past generations I suspect the deference to democracy will not hold.
Among the lessons of COVID I see that when governments are allowed to decide what is “essential” they bugger it up, as my friends across the pond would say.
“It’s like a young person being asked to care for an abusive parent who squandered their wealth.”
Because we need to be better then those that came before us, otherwise we’ll just keep repeating the same mistakes over and over again. You ever watch the movie Looper or watch True detective? We must act differently then those that came before us to break out of the “loop”. Humanity likes to think it isn’t an animal, but in my eyes until we don’t act like animals that is all we are.
Excellent piece Tim. I’ll be sharing this on my degrowth networks and perhaps the other Tim when I have read it.
Understanding declining surplus energy (the law of diminishing energy returns) is obviously key to understanding our present predicament and how peak surplus energy is associated with peak prosperity.
In that vein, a recent UK government white paper entitled ‘Build Back Better: our plan for growth’ https://www.gov.uk/government/publications/build-back-better-our-plan-for-growth/build-back-better-our-plan-for-growth-html
is clearly shifting UK policy towards a mixed economy with an emphasis on “significant investment in infrastructure, skills and innovation, and to pursue growth that levels up every part of the UK, enables the transition to net zero, and supports our vision for Global Britain”.
Yes of course degrowth is not made explicit however the emphasis on productivity (efficiency of energy transfer), levelling up spatial inequalities (route of energy transfer) and transitioning to a post carbon economy is (rate of energy transfer). Along with the emphasis on fulfilling import dependencies through trading agreements.
I think at the moment, the priority is skill up and invest in ingenuity with the hope that available work will provide individuals with the monetary basis to fulfill essential needs.
In this respect, it is too early to politicise universal basic needs until such time as the Opposition makes involuntary degrowth an issue which will also require admitting that the effects of involuntary degrowth will be much more striking for the middle classes since unlike the working class, a large proportion of middle class jobs are not essential but non essential in terms of providing the basic needs of food, water, shelter, clothing and heat.
So yes whilst the white paper does highlight growth, growth is actually shrouded in the levelling up agenda so that growth is more synonymous with growth in the provinces in order to reduce spatial inequalities.
“Yes of course degrowth is not made explicit however the emphasis on productivity (efficiency of energy transfer), levelling up spatial inequalities (route of energy transfer) and transitioning to a post carbon economy is (rate of energy transfer). Along with the emphasis on fulfilling import dependencies through trading agreements”.
This is a very interesting, perceptive and positive way of looking at things, if I may say so.
Even in conventional – GDP – terms, the UK has long been a slow-growth economy, and it’s interesting, furthermore, that proportionate exposure to the world financial system has decreased markedly in recent years, though it remains dangerously high. There’s been a lot of discussion about a ‘productivity puzzle’ which is no puzzle at all. It wouldn’t surprise me all that much if Mr Johnson was more aware than most politicians of the issues that we discuss here.
A big problem, it seems to me, is in the field of ideas. Mrs Thatcher’s pro-market, small-state agenda was a necessary corrective to a lot of what had gone wrong in the 1970s. Unfortunately, a lot of the ideas flowing from it have become deep-rooted, unchallenged (except by Jeremy Corbyn) over a very long period. There is, for me, too much emphasis on striving for personal success, and too little on communitarian values such as caring for the well-being of others.
Yes I agree Tim and that corrective is already in play. Since 2016 I and others have been lobbying hard for a sustainable, resilient and sufficient future for Britain which requires a mixed economy, an emphasis on economic and social productivity with the latter especially important in order that we work better together as a national population.
The last month saw a step change towards a more ecological/energy perspective across all my networks with national sustainable, resilience and sufficiency slowly being embraced by Thatcherites.
I have consistently argued that UK society needs to be understood as three overlapping sectors. Domestic infrastructure which needs to be supported by the State in cooperation with industry. Domestic production which needs to be underpinned by the energy quadrilemma of energy availability (energy security), energy affordability (energy cost) energy decarbonisation (energy pollution and fossil fuel depletion) and energy efficiency (energy surplus) with an emphasis on technological, economic and social productivity which I have argued can be organised via national capitalism and the last sector being international markets which are required to satisfy import dependencies. The first two sectors are more important to the working class with both providing opportunities for middle class management and industrial expertise whilst the last sector and of course domestic markets too can be the outlets for Thatcherites.
In this respect, we have sought to build an allegiance between the working class and the capitalist class with each having their own sphere of influence and interests rather than one seeking to dominate the other.
In the main this strategy seems to be working with some old Thatcherites like John Redwood now being very vocal about national resilience and sufficiency.
Hopefully we can keep the balance right when the realities of involuntary degrowth really do start to express itself beyond monetary stimulus. This is why I am so concerned about monetary stimulus being invested in future sustainability, resilience and sufficiency and not just being poured into the black hole of individualised profitability.
My limited perceptions in terms of the Market is that on the one hand, the correct sort of investments are being made but on the other, as a species we literally are entering the unknown of decreasing net energy availability, affordability and efficiency.
As we reflect on these issues, it seems to me that we can find strategies of change which enable governments and households to adapt. None of this would be easy, but it’s not impossible. Along the same lines, I can see a future, albeit a very different one from now, for small businesses. But it’s hard to see any kind of future for big business in a post-growth situation.
@theblondebeast, I think your violence by the young guess will be mostly culture-dependant, in that where it is more socially accepted to protest, even violently, I could see it happening. But in the UK for example, protests are rare mainly due to strong social conditioning from birth, the English protest the least in Europe, about half as much as the Germans who are the next most culturally conformist. Added to this is the new variable of tech these days that didn’t exist before, social media is now known to be addictive and a constant distraction. The young today are the first generation for whom it is entirely normal to have the temptation of a powerful distraction in your hand all day long in the smartphone, that has to have a numbing effect on reality.
@Mr Kurtz, the need for brevity in comments here leaves more room for misunderstanding. It looks like you are assuming I am saying the vast majority of the boomer generation have/had a better quality of life because they also acted badly at some point in their lives, while the following generations are ‘the good guys’ because their having less is proof they didn’t act venally.
If I had meant that I would have written those words, I know the ruling elite currently from that generation is tiny which translates to the vast majority having simply done their best in life to do well, which any generation would have done exactly the same as, given the same chance. All I am saying is consciously or otherwise, they were the pivotal generation who collectively made the series of choices that got us here. I don’t care about blame, it doesn’t help anything at this point.
As you say, it’s ”easy to try to vilify”, which is why I try to look at the facts, not assume.
Violent protests by those who are in material economic decline are emotional and often irrational actions. Since you agree that the vast majority (95+%?) of the elder (boomer?) generation are not very wealthy nor were doing crooked things, then the whole scenario is dysfunctional. Revolutions are like that. Nowadays TPTB have high tech methods of suppressing them.
Looks to me like overshoot has largely run its course, with negative feedback increasing rapidly. Momentum will take population levels higher for some decades barring catastrophic events, but dystopian conditions look to continue to slow fertility rates.
In response to
Not exactly sure what the argument is here. Continued electrification of the UK especially via electric cars, metro transit systems and the electrification of the rail system will require considerably more electricity as well as an increase in fossil fuel use to upscale and manufacture a post carbon infrastructure.
At the same time, the energy cost of energy or the energy return on investment is increasing or decreasing respectively which will feed into production costs.
Thus the energy trilemma of availability (energy security), affordability (energy cost) and decarbonisation (energy pollution) is accompanied by efficiency (energy surplus) with the latter determining the availability, affordability and decarbonisation of the net energy for generalised material prosperity.
As long as environmentalists and political ecologists fail to appreciate that the economy is predominantly driven by energy not money, then the energy quadrilemma will fail to get the attention it deserves.
My response to Jonathon Porritt’s article. I doubt very much they will post it on the ‘Green Aaliance’ web page. People with a strong ideological bent will happily suppress information that does not validate their worldview.
This article is simplistic in that it fails to account for the truly unprecedented economic conditions that we have lived through over the past decade. Never before in history have interest rates been effectively zero and they have been maintained that way for over a decade. It would have been unthinkable before the global financial crisis and it has turned the economics of investment upside down.
McKay drew an obvious conclusion – the low power density of most renewable energy sources make them unsustainable, because of the enormous amounts of embodied energy and materials that must be invested in renewable infrastructure compared to fossil or nuclear plants with the same net power output. For wind power, total required investment of steel is roughly an order of magnitude greater than that required for the same average MWe from light water reactors. For solar power, the difference is two orders of magnitude. Neither estimate says anything about the required materials budget for energy storage. McKay’s conclusion would have been obvious to anyone with the figures in front of them. Neither wind nor solar power are sustainable as industrial sources of power in a world in which surplus energy is shrinking. It takes impressive powers of self-delusion to convince oneself that a world of shrinking surplus energy from fossil fuels can sustainability transition to an energy base in which embodied energy is 1-2 orders of magnitude greater.
What McKay failed to account for was the effect that very low interest rates would have on renewable energy investments. When interest rates are beneath inflation, a manufacturer can sell a product at or beneath cost and still make money by doing so, because debt degrades due to inflation faster than interest can accumulate. Provided that the company sales are increasing, they can continue borrowing against future income streams, even though their debt appears to be ballooning on paper. The real capital costs of the project no longer impact the price of power in the way that they would have done back when interest rates were 5%. Projects that would have been impossible in ordinary interest rate environments, become temporarily feasible when interest rates drop beneath inflation. This is how tight oil companies in the US have managed to produce huge amounts of oil from resources that would never have been profitable before 2008. Notice that almost all of the UK’s wind and solar power capacity was installed during a period of near zero interest rates.
The problem with perpetual low interest rates is that they effectively steal from the future. Pensions twenty years hence will be pitifully small as funds will have remained static and inflation will have eaten their value. I suspect that David McKay will ultimately be proven correct. When interest rates eventually rise above inflation, as they eventually must, the high capital costs of wind and solar power will be apparent once again. Very little has changed in the way these technologies work that will alter their fundamental profitability when interest rates return to positive values corrected for inflation. We are likely to find that the dash for renewable energy, like the dash for gas before it, was a diversion into a dead end.
They did Tony 😊 and what a corker 😊.
Didn’t post mine though but yours is far better so not to worry.
An excellent essay by Joe Brewer giving his thoughts about the only way to survive the debacle:
View at Medium.com
People frequently state on this blog that the economy is an energy system. That is true…but there is a corollary: much of the energy spent is wasted. Therefore, one can state ‘the economy is a system of waste, and GDP measures the waste’. An economy based on essentials and ‘more than essentials but producing life instead of death’ will look very different. We can find fragments of such surviving economies among indigenous peoples and perhaps among some religious groups…but the mainstream is a dead man walking. Whether humans will be able to flourish ‘under new management’ remains to be seen. The scale of destruction makes the task daunting. Joe and his wife are optimistic enough to have a 4 year old child. That child may live to see the complete exhaustion of fossil fuels and life in the oceans and the seas rise by 15 meters and much of the earth become uninhabitable to humans. To their credit, their eyes are apparently wide open.
Tagging on to my 2 recent posts:
Here are the details which flesh out Jay Forrester’s model.
according to the wikipedia entry on wet bulb temperatures;
“Study results indicate that limiting global warming to 1.5 °C would prevent most of the tropics from reaching the wet-bulb temperature of the human physiological limit of 35 °C”.
so that implies going over 1.5*C could turn the tropics into a death zone,
according to the National Geographic Society; “The tropics account for 36 percent of the Earth’s landmass and are home to about a third of the world’s people.”
apparently we are already at 1.3*C of warming,
will it take 2.5 billion people fleeing or dying and the loss of a third of the planets landmass before politicians and big business start taking this matter seriously?
and if things get this bad is there any hope of halting or reversing it?
“Q. The sixth IPCC report is due in 2021, so what do you expect?
A. At the moment they were supposed to release it in April and they have extended it until June. They are in trouble. Successive reports have gradually worsened the forecasts, but of course, now the changes are very substantial. The difference will be bigger and therefore more difficult to justify. So far the Paris Agreement, among others, have been based on the 2013 report, so the update is important.”
As we know, the IPCC reports have to be vetted by the politicians. We are not getting the unvarnished truth. If the above is accurate, then what the politicians are confronting at the moment is the conclusion that disaster is already baked in. And they don’t know how to massage that to make it acceptable to people. During the course of my lifetime, the population of the world will have increased by at least 6 billion people. The physical load on the ecosystem will have multiplied much more than that. Am I shocked that it is all ending badly? Not at all.
I know you are over 80, Don, but 6 billion people ago was back in about 1913, which would mean you would have to be about 108. I’m only 72 (73 in two weeks), but even I can say the population of the world has increased by over 5 billion (more than tripling) in my lifetime. In any case, to paraphrase the late Senator Everett Dirkson, “a billion here and a billion there, and pretty soon you’re talkin’ real overpopulation”.
And I’m not shocked that it is all ending badly, either. I have expected it since the 1970’s when the very convincing “Limits to Growth” was released.
There is a wise old physician named Dr. Jaffee, who delivers homilies in his Jewish headgear (I don’t know the proper name for it). He has a list of items which determine your risk of death in the next 10 years. If one puts it all together, I have about a 5 percent risk of death before the age of 90. That, of course, assumes that the world won’t reach out and kill me prematurely. So add another 10 years and 6 billion may not be a bad number. On the other hand,, the multiple disasters which we are baking into the cake could well result in cataclysms which kill not only me but all my reasons for living at all. What started me thinking about it was calculating the number of people in the world when Jay Forrester was born and the number in the world when I was born, and thinking that his world as a child was not very different from my world as a child, even though we were a generation apart. But the acceleration of change really took off in the 1950s…and I think I never really accepted it as the ‘new normal’. I have kept thinking ‘everything will go back to normal’…but it never did….so far.
You are off by around 4 Billion (or 3/4 century) Joe. 6B was hit in 1999.
World Population by Year
2020 7,794,798,739 1.05 % 81,330,639 52 4,378,993,944 56 %
2010 6,956,823,603 1.22 % 84,056,510 47 3,594,868,146 52 %
1999 6,064,239,055 1.33 % 79,445,113 41 2,808,231,655 46 %
1987 5,052,522,147 1.85 % 91,954,235 34 2,118,882,551 42 %
1960 3,034,949,748 1.86 % 55,373,563 20 1,023,845,517 34 %
Apologies. Early morning fog. I missed the word “ago” in your post. You are very close. We are 7.8B now, so 1.8 B would have been around your estimate.
According to the EAT–Lancet Commission on healthy diets from sustainable food systems
their sustainable reference diet can potentially feed 12bn.
However, the most affordable EAT–Lancet diets cost a global median of US$2·84 per day (IQR 2·41–3·16) in 2011, of which the largest share was the cost of fruits and vegetables (31·2%), followed by legumes and nuts (18·7%), meat, eggs, and fish (15·2%), and dairy (13·2%). This diet costs a small fraction of average incomes in high-income countries but is not affordable for the world’s poor. We estimated that the cost of an EAT–Lancet diet exceeded household per capita income for at least 1·58 billion people. The EAT–Lancet diet is also more expensive than the minimum cost of nutrient adequacy, on average, by a mean factor of 1·60 (IQR 1·41–1·78).
This of course does not include other basic needs but it will require unprecedented global cooperation to adequately and sustainably satisfy the needs of 12bn that will involve global frameworks of mutualism???
There are papers that have circulated in the US recently which propose that food production will fail to keep up with pop growth. They doubt we’ll reach 10B as mortality is expected to rise dramatically.
4.3.1 Land with crop production potential for rainfed agriculture.
The land balance (land with crop production potential not in agricultural use) is very unevenly distributed among regions and countries. Some 90 percent of the remaining 1.8 billion ha is in Latin America and sub-Saharan Africa, and more than half of the total is concentrated in just seven countries (Brazil, the Democratic Republic of the Congo, the Sudan, Angola, Argentina, Colombia and Bolivia). At the other extreme, there is virtually no spare land available for agricultural expansion in South Asia and the Near East/North Africa. In fact, in a few countries in these two latter regions, the land balance is negative, i.e. land classified as not suitable is made productive through human intervention such as terracing of sloping land, irrigation of arid and hyperarid land, etc. and is in agricultural use. Even within the relatively land-abundant regions, there is great diversity of land availability, in terms of both quantity and quality, among countries and subregions.
Much of the land also suffers from constraints such as ecological fragility, low fertility, toxicity, high incidence of disease or lack of infrastructure. These reduce its productivity, require high input use and management skills to permit its sustainable use, or require prohibitively high investments to be made accessible or disease-free. Alexandratos (1995, Table 4.2) shows that over 70 percent of the land with rainfed crop production potential in sub-Saharan Africa and Latin America suffers from one or more soil and terrain constraints.
In other words, unless everyone adopts vegetarianism/veganism, national populations with inadequate land will either need to land grab, migrate or pray for another agricultural geo-revolution.
I’d be less anxious if I could see trends improving instead of getting worse,
if you look at the major events of the 21st century so far, 9/11, the GFC, covid, and consider how effective the reactions to them have been it doesn’t give you much confidence in the handling of future challenges,
if you watch Henry Fonda in The Grapes of Wrath, Ken Burns; The Dust Bowl and look at the photographs of Dorothea Lange you can see the impact of careless economic and enviromental policy,
what is life after ideology?
is it what happens after an ideology fails and, if so, is it followed by a period of indifference?
what does it take to generate the resolve to sort out a mess and this time will it arrive in time?
Perhaps the most disturbing thing is the lack of awareness and preparedness.
The fundamentals are simple enough. Our prosperity is a function of fossil fuels, whose ECoEs are rising, whose quantities may decrease rather than grow, and whose implications for the environment are clear. REs might – stress, might – provide a replacement, but there’s no certainty around this, and the probabilities aren’t good. Population numbers are still increasing, whilst economic prosperity isn’t.
We can complicate all this, and of course there are complications and nuances. But at this simplest of levels, everyone ought to be able to understand these basics, in terms of broad principles.
Governments might know about this – they wouldn’t necessarily say so, so we can’t be sure. But they don’t seem to grasp it.
We can be almost sure that the general public doesn’t understand this, and neither do the media, big business or finance.
Does anyone really think that conjuring money out of the ether is a ‘fix’? Are we blinded to the limitations of technology, much of which finds new ways of consuming energy?
I grew up in a farming community in the northern Oklahoma wheat belt. The dust bowl generation had taken conservation to heart and planted shelter belts (trees which broke the wind) around most fields and adopted contour plowing and terracing to control water erosion and carefully rotated wheat and cattle. Everyone was educated, nobody was rich but nobody was living in abject poverty. An astonishing number of my high school class went on to higher education.
Well into the 1950s farmers would come to town on Saturday driving their model A Ford…because nobody threw anything away. I remember talking to a friend whose father owned a car dealership who told me that buying cars on credit was about to revolutionize the business…that was 1955. One of my first jobs was sweeping the floor at a savings bank, where the banker opened an account for me with the first money he paid me and advised me to save 10 cents of the dollar he paid me. So my first bank account had a dime in it at the end of the day. I asked him about the safety (having heard stories about the runs on the banks in 1930). He told me, “we don’t gamble on Wall Street with your money, we invest in good farmland”.
That world has completely vanished, except in my mind. Can we make a facsimile work in a world with 9 billion people and enormous accumulated debt which will keep everyone’s nose to the grindstone…barring revolution or monetary upheaval?
your anecdote brings to mind “A Letter to My Grandchildren” written by Stewart Udall, Secretary of the Interior under JFK & LBJ,
especially the section titled “Two Americas”
he also wrote the foreword to William Catton’s Overshoot,
Overshoot is a magnificent work but Udall’s foreword is capable of standing alone in it’s own right,
it is concise summary of Americas infatuation with eternal progress and technology,
Click to access File:Catton_Jr_William_R_Overshoot_The_Ecological_Basis_of_Revolutionary_Change.pdf
why is it that mankind repeatedly learns lessons the hard way then forgets them in an instant when things start running smoothly again?
I do think humanity is going to get a bloody nose this time.
I understand that your questions are rhetorical but in answer to your question; “Does anyone really think that conjuring money out of the ether is a ‘fix’? The answer is a most definite yes, in fact a considerable number. To your second questions; “Are we blinded to the limitations of technology, much of which finds new ways of consuming energy? again a most definite yes.
I’d probably go as far as to say that I know lots of people who have “believed as many as six impossible things before breakfast” and I don’t even know the red queen.
The questions I’ve never been able to answer is not, do we believe impossible things but why do we believe obviously impossible things and given that we do what can that tell us about the decisions that we are likley to make in the future.
PS. I have a friend who objects to the phrase “going forwards” when the user means “in the future” he has now taken to using the phrase “going backwords” to mean in the future.
I’ve no problem with Mr and Mrs Public not knowing about this – they’ve got better things to do with their time than thinking about economics. I’m not even all that surprised that politicians may not get it – few of them are specialists. But I’d expect somebody in government to tell them about it.
What really surprises me is the lack of understanding in business and financial circles. I look at material from pretty smart, well-informed sources, and the explanation seems to be that they don’t ‘do the economics for themselves’. They find a consensus which says ‘the economy will grow by x% per year’, and then use this to work out what it means for their business, or the sector in which they operate.
Nailed it. “backwords” – the critical ability to fashion an explanation, a convincing myth that holds together our disparate interests in face of decline, the downward slope, the less, the retrenchment, the tightening of belts, the sharing of smaller pies….. in face of everything we’ve been led to believe….
I like that 😊
The big banks, finance companies and international conglomerates must spend a fortune on their research departments. It seems strange that it was only the one that you worked in that not only “got it” but published reports about our situation.
They way I might put it to them is like this. Let’s park the question of inflation and/or default on one side.
There is plenty of evidence that prosperity per person is decreasing, and that the cost of essentials is going to rise. Governments can’t cushion this by cutting taxation, and it wouldn’t make all that much overall difference if they did.
So discretionary prosperity is shrinking. Now, how many businesses and sectors are exposed to that relentless pressure? At the same time, the economy is going to de-complexify, which will have all sorts of negative effects, including de-layering some whole sub-sectors out of existence.
I’ve got a review of my pension provision with my IFA in a few weeks, I may commandeer the statement above and ask her how she’d allocate things based on that.
Charles Hugh Smith and my Food Essay
I promised I would indicate if and when Charles posted my essay on
Why Do We Eat Foods That Are Bad For Us Rather Than What We Need?
He did so this weekend in his letter to subscribers. You can read it there if you subscribe to him.
Thanks again for another fine article, Dr Tim.
The Build Back Better campaign, which I believe has its origins with the World Economic Forum, was brilliantly lampooned by Jonathan Pie last year: https://www.youtube.com/watch?v=VIl-657Kbps
What are we supposed to be “Building Back Better?” What parameters are being used to define “Better?” As other commentators here have pointed out, what about all the current infrastructure?
Are we seeing a declining availability of net energy manifest itself into fading political vision – which is the context of Jonathan Pie’s rant?
Ultimately, what i believe is happening is that we are seeing a rerun of the Julian Simon versus The Limits To Growth debate that raged in the 70s. What is happening now is that Simon’s arguments, which were all fact free nonsense, are being proven wrong at every level.
Thanks Tel, much appreciated.
The point about “better” is polemical, but I think some answers might be found, though not the ones intended in the slogan.
One would be an ambition to ensure that the essentials are available and affordable for all households. This can only become more important as prosperity deteriorates.
A second would be to start discrediting the cult of greed – if we’re moving into the kind of zero-sum situation I reference in this article, then the concept of gain being possible only at the expense of others surely calls for re-calibration of what is considered acceptable.
Regarding the use of new nuclear technologies.
‘Nuclear’ is a bit generic; there are dozens of different nuclear reactor types and even more options when different fuel cycles are included. But ERoEI for light water reactors with centrifugal enrichment of fuel is between 40 and 80, suggesting an ECoE of 1.25-2.5%. And the output is electricity, which converts to usable exergy very efficiently.
So ECoE for nuclear power plants doesn’t seem to be the problem. The power density of nuclear reactor systems are greater than any competing technology except combined cycle gas turbines. To put it into perspective, the nuclear steam supply system for a 1000MWe VVER pressurised water reactor, has a total coolant volume of 285m3. It would fit inside a modest size building and yet could power a city of 1 million people.
The real explanation for our seeming inability to build nuclear power plants in the western world must lay elsewhere. The French adopted series production of identical design PWRs and were able to construct units with power output 800MWe each for capital cost $2000/kWe in 2011 dollars. The French constructed nuclear capacity equaling the entire existing UK generating capacity in 20 years between 1980 and 2000.
So why do new nuclear reactors appear to have such high price tags? Part of the problem is that nuclear build capability in the UK, US and Europe, was allowed to die off in the 1990s when abundant natural gas and CCGT plants allowed generating capacity to be built quickly for lower capital cost. Anyone building a nuclear powerplant today essentially has to start an entirely new industry from scratch. This is exactly what is being attempted at Hinckley and it is the main reason behind the £20billion price tag.
Another part of the problem is that nuclear power technology never really developed the kind of modular, mass produced factory built systems that now typify the natural gas and renewable energy sectors. The low costs associated with CCGT units stem from the fact that modular systems can be shipped in and assembled in a few months. A large nuclear reactor typically takes 5-10 years to build and commission. It is for this reason that new nuclear development is now focusing on small modular reactor systems, that can be manufactured on a factory assembly line and rapidly assembled at new sites.
Whether or not humanity is able to weather the decline of fossil fuel energy sources and retain high living standards and complex societies, largely depends on our ability to substitute nuclear fuels for fossil fuels in our energy mix over the coming decades. Renewable energy sources have far too high embodied materials budgets and far too low ERoEI to feasibly substitute fossil fuels within the energy budgets that society can spare for new energy capacity. The only reason these energy sources appear to be affordable right now is that: (1) Low interest rates allow real capital costs to be ignored in LCOE calculations; (2) The cost of dealing with intermittent energy sources is not included in these calculations. If interest rates are beneath inflation, then previously expensive infrastructure can be sold cheaply and vendors can purchase it using negative effective rate loans, so what capital costs remains does not need to be factored into the price of electricity sold. Everything will look rosy until we have to return to a positive interest rate environment. When we do, the poor ERoEI of renewable energy sources is going to show up in the form of suddenly unaffordable capital costs. The cost of buying a solar power plant will suddenly be much higher and with interest much greater than inflation, this capital cost will weight heavily on electricity bills. The renewable energy boom will not be sustainable without ZIRP.
capital cost and the build and commissioning time are a factor in nuclear,
with privately raised capital you’d be paying interest for 10 years before you started producing electricity you could sell,
negligible interest rates now shouldn’t be assumed to be forever,
post war nuclear development suffered from commercial pressure to build bigger and bigger reactors,
this undermined the scientists and engineers ability to guarrantee cores could be contained in the event of a melt down, the cores had just got to big to be handled in a bad situation,
the small reactors on naval vessels and icebreakers have a pretty good safety record compared to large civil power plants,
there is a good argument for small modular reactors on a safety and build speed front,
the Russians are building floating power plants using two icebreaker reactors, they can be towed to arctic coastal cities, tethered at the port and supply electric and also desalinated water, they’re ideal because melting permafrost makes siting power plants onshore very challenging,
they can be towed back to the home port for servicing, refurbishment and refuelling whilst another unit can take over power supply on site,
portability of a reactor seems quite a useful factor if sea levels are going to rise in the future and land based installations could face inundation,
the Chinese are building reactors now in quantity, I believe they’re looking at combined power and heat and also salvaging heat from spent rod cooling ponds,
they can build quicker because they’ve rationalised some of the somewhat excessive Western safety standard protocols introduced here to allay public fears that have been generated more by media sensationalism than actual scientific and engineering reality,
all of the promise of eternal progress in the 50’s and 60’s was based on the availability of unlimited energy access from nuclear,
the claim of electricity too cheap to meter was based on the expectation that fusion was only 10 years away,
with enough surplus energy you can use Bosch, Sabatier and Fischer Tropsch processes to extract gases from industrial emissions and the atmosphere itself and synthesise liquid fuels and make elemental carbon,
without that surplus energy you can only reduce emissions and plant a heck of a lot of trees,
we have to choose which route to take, currently we are doing neither,
I’d like to do both!
Jean-Marc Jancovici is a very good source of information on nuclear from a French perspective.
Tony H & Matt,
I’ve mentioned nuclear before as likely where we’re headed. Dr T responded that uranium is finite. I’ve read about other materials including thorium. Living systems (we are one) don’t shrink voluntarily. People want electricity, so I bet nuclear gets ramped up the next few decades.
What an excellent summing up of the situation .
I do believe that Rolls Royce is considering the manufacture of small nuclear units.
Also Seaborg in Denmark has developed small nuclear.
As I commented on a previous occasion , 2 nuclear stations with a tiny footprint generate more than adequate power for my homeland. Whereas acres of land have been covered at great carbon cost with windmills which (as any ‘idiot’ should know) when anticyclonic conditions pertain produce no electricity. Often the case in a British winter.
Disconnection of an economy from its energy requirements and excessively rewarding ‘financial’ engineers ( and educating so many in that discipline ) has led us to where we are. The economic machine has well and truly seized up. The lubricant is not money but energy.
I agree that uranium is finite and if we expand nuclear across the globe it brings forward exhaustion of uranium reserves rapidly,
the ultimate solution is degrowth and lowering our expectations to ones that can be satisfied on a long term basis,
but we’ve not even embarked on managed degrowth or appreciable transition from fossil fuels to alternatives and an energy gap is looming,
I see nuclear as being a way of bridging the immediate energy challenge and keeping us going as we restructure to a lower consumption civilisation,
there is thorium and fast breeders that can extend nuclear and make better use of available fuels,
I can’t help thinking there’s a lot of fissile material sitting on the top of missiles in silos that could be repurposed and put to a much better and more peaceful use too!
if we are going to pile into nuclear we need to get on with it, if it had been steadily researched and developed since the 60’s with the technology evolving and maturing we’d not be in such a sticky position today,
both France and Russia have stayed the course with nuclear and collaboration with them would be helpful,
unfortunately geopolitical machinations block approaches to Russia and I think we cut our noses to spite our faces in this respect.
China seems able to collaborate with both parties and avoids pointless emnity,
but yes, nuclear won’t make the energy problem go away, it can only delay it and buy us time to adapt to lower consumption.
we need long term solutions.
I’d suggest keeping up work on fusion but accept that it may come to nothing,
we can’t count that chicken until it hatches.
I think in the longer term, more than a few decades ahead, there needs to be closure of the fuel cycle. This is desirable from the viewpoint of reducing problems associated with long-lived radioactive wastes, as well as improving uranium utilisation. From this point of view, the most crucial bottleneck is not uranium or thorium availability, but fissile material availability. The sodium cooled fast breeder is often talked about in this context. It is the neutrons that are fast, not the breeding. With a breeding ratio of 1.3, it may take decades for an FBR to breed enough new plutonium to startup another reactor of equal power capacity. Some theoretical FBRs with tube in duct fuel elements have breeding ratio of 1.8 and the lead cooled fast reactor, with its very hard neutron spectrum may ultimately top even this breeding ratio. Electrorefining is expected to provide a cheap reprocessing option that can be deployed far more rapidly than traditional nitric acid based PYREX methods. Unfortunately, research into these sorts of options is proceeding at a snails pace. Most politicians believe that renewable energy will come to the rescue.
The UK is fortunate to possess enough reactor grade plutonium to start a small fleet of FBRs. This material, viewed as a liability by many people, may turn out to be our greatest gift to the future.
The problem that I see with magnetic confinement fusion power is low system power density. At achievable magnetic pressures, with a high enough beta to provide plasma stability, the density of fusion plasma is measured in micrograms per cubic metre. And power output is proportional to square of particle density, with is proportional to pressure. Absent of much stronger magnetic fields than have hitherto been achievable, power density of fusion plasmas will be orders of magnitude lower than a nuclear fission reactor. Even if plasma stability problems were solved tomorrow, nuclear fusion will struggle to compete economically. And remember that almost all energy released by D-T fusion is carried away by hard neutrons, which will irradiate the magnetic chamber, making it highly radioactive and brittle. Inertial Confinement fusion is a more promising approach, as plasma densities in the imploding pellet are about a billion times greater than in a magnetic confinement reactor. There are also hybrid options in which the neutrons released from the fusion reaction can be made to fast fission depleted uranium or thorium. This greatly increases energy yield and provides one way of getting around the inevitable shortage of fissile material that humanity would face in the event of a rapid buildup of new nuclear capacity. It is sometimes considered as a stepping stone to an entirely fusion based energy system, that sidesteps the initial development time. There are also options for using tiny amounts of fissionable material to ignite inertial confinement fusion as well. Fission acts as a detonation trigger, but contributes negligible total energy and therefore little radioactivity.
And in this morning’s business news in the UK, we learn that Copper is now $10,639 per metric ton, Iron Ore futures are up +10%, Steel futures +6%, and residential house prices rose by an average 8.2% in the last 12 months, according to the latest survey from the Halifax.
What can possibly go wrong?
Two Provocations re System Change
First is Dave Pollard’s article appreciating the breath of fresh air which is blowing courtesy of Zeynep Tufecki:
(With my tongue in my cheek, aren’t Dave and Zeynep heroes?)
Second is Dave Snowden’s talk on how executives can change the culture of a system…which is the sine qua non for facilitating changes in individuals:
(I have had a lot of trouble copying the link. If it doesn’t take you where you want to go, search on
Dave Snowden – How leaders change culture through small actions
If you know anything about Dave, you know to expect a kaleidoscopic experience. So have patience. However, I would like to highlight a couple of points. Dave talks about curing his diabetes which the medical fraternity told him was incurable. I suggest that a pretty good rule of thumb is to believe nothing that an obese diabetic tells you about system change…but someone who has successfully changed his own system may have something worthwhile to say. The second point I would like to highlight is Dave’s insistence that raising the level of abstraction is key to solving any problem…put the problem into a larger framework. (Here, he is talking about the ‘biology’ or ‘living system’ or ‘complex system’ or ‘sociological system’…and not a manufacturing system. Manufacturing systems can be managed very minutely, while the complex systems have to be nudged when they are ready to move.)
I will just add my two cents and say that accurate feedback is essential. If TPTB use all their powers to hide the truth, why would we expect the crowd to ever be amenable to change?
Structuration theory and ecological rationality seek more holistic systems thinking explanations and rational choice theory somewhat disembodies the individual from the structural context to seek more binary explanations.
I tend to view the former as a product of non linear ecological thinking that incorporates positive and negative feedback mechanisms (and/both) and the latter the product of linear humanistic thinking that largely focuses on dualism (either/or).
Supposedly the appeal of the latter is that it tags with fight and flight survival mechanisms and the associated adrenaline rush whereas the former tags with the thinking and reasoning parts of the brain.
I think that been mentioned here plenty of times before 😊
As an example, consider the part of Snowden’s talk where he is trying to illustrate the real world of software development in the small Anglo-Dutch company he worked for, which was acquired by IBM. How can he communicate that to a bunch of career IBM Human Resources people? They have no experience of such a world. Appealing to their ‘reasoning’ abilities is likely to yield nothing at all.
Quite detailed analysis here by Lyn Alden on inflation since about 1880.
She identifies clear declining prosperity and rising inequality ….
Overall, this 1990-present period has been a recipe for inflation controversy. Labor offshoring and information technology have suppressed both wages and prices in many categories, while the biggest costs of living that can’t be outsourced or digitized have outpaced CPI. Lower financing costs have kept the monthly cost of some of those big-ticket items like the median house in check even though their actual prices inflated at an above-CPI rate. On the other hand, a bigger upfront investment in student debt is often required compared to previous history in order to earn a decent income. As a result of all of this, broad money supply went up a lost faster than CPI and was collected by folks in the top income brackets, and there is plenty of controversy about the accuracy of CPI.
Also makes the point about transitory inflation only really being transitory if it dips back below the mean, which frequently it doesn’t. Only the rate of increase reverts back and prices remain elevated. Hyper inflation is rare and harms everybody, which is obvious, but inflation is very likely to benefit the poorest and help restore equality as the poorest tend to have more debt compared to the wealthiest, who will see their assets generally underperform. Those on fixed income, typically pensioners, will do worse.
Very interesting analysis, thank you, I wonder though on the final point/line about winners and losers from constant high inflation. Pensioners are the reliable voters and demographically the biggest voting chunk of the population, so their UBI is more liable to be kept genuinely inflation-hedged. On the other hand, general salaries look likely to remain flat due to continuing and accelerated automation and outsourcing. All working people save the elite on dream salaries will steadily lose ground, because even in brexit UK now, a lot of skilled IT workers for example are from the Ukraine and India. With pandemic homeworking normalising remote working, hiring foreigners like these is no longer a visible (and thus politically contentious) issue. So the rich just print themselves more money and the CEO class will award themselves higher salaries to similarly hedge, while the indebted classes will still suffer because nobody will issue them the further debt they need to just stay alive. (Inflating away their past debt becomes increasingly irrelevant with time as they endure a precarious lifestyle of treading water)
Regarding wages, don’t forget the simple supply-demand factor. When there is a shortage of a needed skill, wages rapidly rise. My son is nearing 49. In his lifetime population doubled. Immigration pressures continually increase globally, with people seeking greener grass. Backlashes are increasing as workers see the competition from immigrants and outsourcing overseas.(phone services for ex) Robotics abets this. Labor’s power comes from shrinkage in the skilled workers that are difficult to replace.
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A good article on how and why scams in the UK seem to be increasing alarmingly right now, this might be another indicator of slow-motion collapse as well as a deliberate political choice:
I do know it’s becoming common practice to have to spend at least a little time researching a service if something goes wrong and you need to fix or replace something in your life. The daily experience of trying to not get ripped off is so accurately described, you dread having to battle the bureaucracy in sorting out any problem, even correcting an ordinary bill can turn into an ordeal. Not all aspects of life are corrupt yet, but young people here may not believe that 10 – 20 years ago it really wasn’t like this and absolutely doesn’t have to be so, because it is all they have ever known.
It is very easy for the Federal Reserve to trot out some new electronic device which is way more complicated than the previous device, but costs the consumer no more money, and claim that the hedonic adjustment is reflecting the ‘true’ cost. But the Fed doesn’t recognize the costs of the additional complexity. Yes, it is true that the Colonial Pipeline in the US can now only be operated with computer controls. But is now also obviously true that groups of hackers can bring down the Colonial Pipeline just as surely as the Covid virus and cold weather could bring down the Texas power grid. It is also obviously true that increasing corporate earnings have frequently been generated by offloading administrative chores which were formerly performed by employees of the corporation to the public. This is most obvious when things go wrong and one tries to navigate the electronic bureaucracy to try to fix it. It’s also true that the US has achieved a superficial high standard of living by neglecting maintenance, as evidenced by the current crack in the Mississippi River bridge at Memphis, TN, and the other collapses which have occurred in recent years. Manhattan Island has a severely compromised service tunnel to New Jersey which has been neglected for decades.
I suggest that, in order to assess the true state of the standard of living, it is necessary to take a holistic perspective:
*Are people finding life fulfilling?
*Are people healthy?
*Are government and social norms promoting health or chronic disease?
*Are systemic risks increasing or decreasing.
On those sorts of norms, we old people tend to perceive the state of things negatively. Most young people seem to desperately want to believe that the shiny new stuff MUST be making life better. But I detect an increasing cynicism.
@ Don, Yes, I think we broadly agree, but the problem with being young is that you have no comparison to ‘recent’ normal, so if living standards have been insidiously falling you wouldn’t really know, vs the older generations who know for a fact, having experienced it live. Then for the youth, what next once you know, how do you retaliate against when trapped in poverty? As for us, we know the things that make up quality of life are being lost and no ‘conveniences’ are worth that.
“t is also obviously true that increasing corporate earnings have frequently been generated by offloading administrative chores which were formerly performed by employees of the corporation to the public.”
Don, Ivan Illich described this phenomenon in his short book, “Shadow Work,” published in 1981. This is unpaid work that you have to do in order to avail yourself of companies’ products or services or your own employment. Obvious examples that didn’t exist when he wrote the book are having to pump your own gas and bag your own groceries. However, it also includes commuting to and from work, which obviously benefits the company but is unpaid, and it includes bearing the own cost of your higher education and training before you are employable, despite the fact that you are making yourself fit for their needs.
He argues that it is historically unique to industrialism / “capitalism” and is part and parcel of what he calls the “war against subsistence” and the home-based production, which took off in earnest when land enclosure laws forced people off the land leaving them with the only real option of becoming employees with the burgeoning industries. Turns out that the “free market” is only “free” within the context of people have been deprived of the ability to opt-out through sustainable subsistence.
He examines particularly how this transformed women’s work from productive home-based work work into being “housewives,” a role/form of being that did not previously ever exist .
Worth the read if you haven’t already done so.
Tagio…well acquainted with Ivan..Don Stewart