#213. A moment of truth


Some of us have long understood that the economy is an energy system, and is not – as orthodox economics insists – wholly a financial one.

We’ve identified credit and monetary adventurism as futile efforts to deny this reality, efforts which, whilst not ‘fixing’ low and reversing “growth”, have exacerbated financial risk by driving a wedge between the ‘real’ economy of goods and services and the ‘financial’ economy of money and credit.

We’ve highlighted relentless rises in ECoEs (the Energy Costs of Energy) as the process by which expansion in economic output peters out, and prior growth in prosperity goes into reverse.

Recent sharp rises in the price of energy might look like just one aspect of the current worsening economic predicament, a predicament which is ‘a crisis in all but name’. Other adverse factors can be cited, but all of them, ultimately, are traceable to a fading energy dynamic.

We’ve built a large, complex and increasingly inter-dependent economy on the predicate that money can drive ‘growth in perpetuity’.

We’re now in the process of discovering that this predicate is false.

From here on, prosperity will continue to deteriorate, whilst rises in the real cost of essentials will leverage this decline into a more rapid erosion of discretionary prosperity.

The good news is that these processes can be understood and modelled, projected and managed.

The bad is that, so far at least, this reality is not being grasped.    

It has to be said that no ideology is more rooted than ‘neoliberalism’ in the doctrine that the economy is a financial system, with limitless capability for growth.

This is why those economies most wedded to the ultra-liberal ‘super-fallacy’ are being hardest hit by the harsh reality that neither ‘demand’ nor ‘incentive’ can create low-cost resources.       

A new model crisis

Despite the most lacklustre of recoveries from the pandemic-induced downturn, the global economy has collided with the reality of energy constraint.

Natural gas, in particular, is in short supply, but the effects of supply shortages are rippling, too, across the markets in electricity, oil and coal. Almost unthinkably, China – widely regarded as the powerhouse of the world economy – is having to ration supplies of energy to its industrial sectors, whilst grappling with the fall-out from exuberant financial expansion.

Consumer energy and fuel prices are surging, a process as adverse for industry as it’s uncomfortable for households. Though the rise in domestic energy costs is the most conspicuous aspect of energy price escalation, deeper consequences will be felt through sharp increases in the costs of supply to businesses.

All inputs, from minerals and chemicals to food and water, are functions of the energy used to extract and process them. If the supply of energy tightens, and its costs rise, the same happens across the entirety of economic activity.  

This, in short, looks like the moment when the reality of energy and broader resource constraint makes itself felt, and the conceit of perpetual growth on a finite planet is revealed as fallacy.

We need to be clear that, insofar as this is an “energy crisis”, it has nothing in common with previous such crises. Neither can it be blamed on after-effects of the pandemic crisis, on gamesmanship (by Russia, or anyone else), on ‘little local difficulties’ (like “Brexit”), or even on the distorting effects of gargantuan financial stimulus, harmful though that has been. Least of all can it be ascribed to ‘brisk economic growth’, since the global economy is unlikely to be any larger in 2021 than it was in 2019.

Rather, what we are experiencing is a predictable – though, in general, not a predictedcollision between resource limitations and a desire for never-ending “growth”.  

The economy has hitherto experienced two energy crises (or three, if we include the oil price spike experienced in the American Civil War), but what’s happening now is profoundly different.

During the 1973-74 embargo crisis, and the 1978-79 Iranian revolution, there was no physical shortage of oil, or of energy more generally. These were crises of management, and of trade imbalances and international relations, not of supply fundamentals. Fossil fuel ECoEs remained below 2% in the 1970s, but are nearly 10% now. Even if renewable energy sources (REs) can take over fully from fossil fuels in the future (and this is unlikely), they certainly can’t do so now.

A moment of truth

From an economic perspective, this is a watershed. What we are witnessing is decisive proof that the economy is indeed an energy system, and is not – as orthodox opinion has so long insisted – wholly a matter of money. Pouring yet more money – in econo-speak, demand – into the system isn’t going to create huge new supplies of oil, gas, coal or any other form of primary energy. 

All of the world’s decision-making processes – most obviously in government, business and finance – are predicated on an assumption which is turning out to have been fallacious. The economy isn’t, after all, a ‘perpetual growth machine, powered and shaped by money’.

Rather, it’s an energy system, in which material prosperity is a function of the availability, value and ECoE-cost of energy.

With its emphasis on incentive, and its disdain both for government planning and for non-financial motivation, the ideology sometimes called ‘neoliberalism’ is most exposed to the discovery that the economy cannot, after all, be managed in purely financial terms.

This helps explain why those countries most wedded to the idea of ‘leave it to the market’ – and, with it, of accepting inequality as ‘the price of efficiency’ – face the toughest futures. Britain, most conspicuously, is experiencing the consequences of the liberal ‘super-fallacy’ now, but the United States, in particular, won’t be far behind.

Of course, hype – no less than hope – “springs eternal”. But surges in the direct household costs of energy and fuel are now impacting economies, and indirect, second-order effects (traceable to the rising cost of energy to industry) are already making themselves felt in supply shortages and inflation.

For those countries worst affected by energy supply strains, pious promises to “build back better” and to “level up” won’t remove the need to make tough, unpopular decisions. “Green growth” is going to have to transition into “green resilience”. Decades of denial – enacted through monetary gimmickry, and backed up by excessive faith in the alchemy of technology – threaten severe financial and broader consequences.

A rocky road

As the energy interpretation of the economy moves from left-field theory to demonstrable reality, theories and models based on the contrary assumption are breaking down. The economy is moving in directions not anticipated by orthodox theory, invalidating much, and arguably most, of the projections, methodologies, models and policies hitherto accepted as valid.    

Those of us who understand the economy as an energy system can predict some, at least, of the consequences of present trends.

First, material prosperity will deteriorate. Properly understood, this has long been an established trajectory in the West, glossed over – but not changed – by increasingly desperate, illogical and hazardous exercises in credit and monetary adventurism. SEEDS analysis makes it clear that the average person in almost all Western economies has been getting poorer since well before the 2008-09 GFC (global financial crisis), and that an increasing number of EM (emerging market) economies, too, are reaching the climacteric at which rises in ECoEs put prior growth in prosperity into reverse. 

The rates of decline in top-line prosperity itself look manageable. But rising ECoEs are set to drive up the real costs of essentials (including household necessities and public services). Together, the combined effects of falling prosperity, and the rising cost of essentials, are exerting a tightening squeeze on the scope for discretionary (non-essential) consumption.

This downwards pressure on discretionary prosperity is going to be unpopular, with consumers and with discretionary suppliers alike, and this may prompt efforts to prop up discretionary consumption with yet more reliance on credit expansion.

Denial, for the moment, remains unchallenged. In Britain, for example, households are likely to face further and even larger rises in the cost of gas and electricity, and the price of anything (which means everything) made using energy is going to rise as well. Discretionary consumption cannot continue unchecked through this process.

To be sure, wages might rise to accommodate these cost increases but this, if it happens, will simply fuel an inflationary cycle. The task of repairing the public finances will become harder with each worsening twist in the cost cycle.

Despite this, few yet anticipate contraction in the scope for everything from travel and leisure to the payment of subscriptions and the purchase of the latest gadget. Fewer still have grasped the read-across from deteriorating prosperity to the pricing of property and other assets.  

Around the world, these processes in turn imply, not just that inflation will rise, but that the financial system will come under increasing stress. Together, discretionary sectors, and businesses that rely on the ‘stream of income’ model, are going to be in the eye of the storm.

The ‘basics’ of the situation – deteriorating top-line and discretionary prosperity, rising inflation and worsening financial stress – are simply the first-order effects of the deteriorating energy-prosperity equation. More complex processes can be anticipated, some of them identifiable in a taxonomy which sees businesses simplifying their products and processes, de-layering their supply chains, and trying to work around the challenges of falling utilization rates and the loss of critical mass. Popular priorities can be expected to change, intersecting with a deterioration in the affordable resources of governments.

These are issues on which we can reflect and which, to some extent, we can model and predict.

For now though, the imperative is that the realities of resource (and environmental) constraint are recognized, and that plans and assumptions are re-thought accordingly.       



326 thoughts on “#213. A moment of truth

  1. Good, short synopsis of many months of work and discussion. Unfortunately, homo-superstitious mostly learns the hard way…from mistakes.

    • Thanks Steve.

      An optimistic slant on your comment might be that ‘these are wonderful times for learning!’ – much as an out-matched military commander might refer to the overwhelming force of his opponent as ‘a target-rich environment’!

  2. A well conceived and well-written explanation of the current situation in the U.K. I am very interested in learning more about Dr. Morgan’s ‘taxonomy . . . of the ‘deteriorating economic-prosperity’ situation, and the financial-environmental constraints at play. Fun times.

    • Thanks.

      I look at the economy in sector terms – government, household, finance and PNFCs (private non-financial corporations).

      The ‘taxonomy of de-growth’, as the term is used here, is part of the PNFC sector. It refers to processes by which businesses adapt to de-growth.

      In brief, they can be expected to simplify both their product offerings and their production processes, simultaneously de-layering supply chains. These measures should improve resilience. They will also have to cope with loss of critical mass (where some components or services become unavailable), and adverse utilization effects (where fixed costs have to be allocated across a smaller number of customers). None of these trends will operate in isolation, of course, and the tricky bit is seeing how they inter-act.

      A whole book could be written about corporate strategies in a post-growth era. One of the challenges will be that of transition from “growth company” to “reliable generator of shareholder value”. Investors are likely to turn sceptical of the former, and keen on the latter.

  3. The corporatocracy masquerading as a functioning democracy will fight to the death those who would be a threat to their power and control. Degrowth cannot be institutionalized without a world changing Zeitgeist that is not coming forth. We as Americans have been brainwashed since birth to consume extravagantly and produce new customers wantonly. As a Boomer I must say that the venture up the affluence ladder has been quite enjoyable until “Limits to Growth” raised the spectre of our predicament. My carbon footprint has been lowered to a much smaller imprint but that achieves little in changing anything of import. The road to ruin is the only path available now.

    • Thanks. I retain some optimism in our adaptability, but that’s going to be particularly tough in the US and the UK. American and British gloom is well founded in reality.

      There are some identifiable trends which might act as stimuli for change, and the power and influence of some of ‘the big battalions’ might weaken, as some sectors crumble in the face of de-growth, and the nature of capital markets changes.

      There will be tooth-and-nail resistance to a lot of this, of course, but that’s not new in itself – and consumerism itself is unlikely to be immune to the realities of deteriorating prosperity.

  4. Well done summary of the current situation!

    What concerns me, and what I hope you will consider at length in future posts, is the social and political consequences of energy limits to a society where, as you point out, “this downwards pressure on discretionary prosperity is going to be unpopular, with consumers and with discretionary suppliers alike”. Are countries like the UK and the US going to be able to maintain social cohesion as economic conditions continuously deteriorate?

    I suspect you would suggest that the first requirement for coping with the effects of declining energy availability will be a clear-eyed acknowledgement of that very fact of decline (which drum you bang on so consistently and so well). But if, as I suspect, your voiced concerns are not heard by the politically powerful, what then? What happens if you, Dr Morgan, are destined for the fate of Cassandra, someone whose warnings are absolutely correct, but never believed?

    • Thanks Joe, and I shall indeed set out those subjects for debate. Cohesion is going to be particularly difficult to retain in Britain and America, where the psychological (as distinct from the purely economic) effects of extreme liberalism have been socially corrosive.

      As and when possible, I’d like to have a look at economic philosophies, stretching as they do from Marxism at one extreme to neoliberalism and corporatism at the other.

      For now, though, my priority has been to explain why, as I see it, today’s energy crisis differs from past such crises, and probably marks a profound change in the economy.

    • On the Cassandra point, this is actually a moment of exceptional opportunities, created by change.

      Even in the narrow field of finance, we’re getting a preview of sectors that will succeed and those that will fail. The whole financial system is up for redesign.

      In government, scope exists for a wholly new type of politics, based on the needs of the ‘ordinary’ person rather than the demands of ideology.

      A campaign promise of “affordable essentials for all” could be as game-changing across the world now as “universal pensions” and “health care, free at the point of use” were in Britain in the 1900s and the 1940s.

    • My view: “Ordinary persons” matter as votes to most politicians. Few are into empathy and noblesse oblige. Spin doctoring is the game they play.

  5. Spot on Tim and well needed to bring much needed perspective.


    In response to Jeremy and his woeful forecasts for a growthless future!


    The global economy has been hitting energy limits for some time now Jeremy and the pandemic gave us a much needed respite from the media generated illusion of infinite growth on a finite planet.

    Your underlying solution seems to be always to press even harder on the throttle as if the road to growth is just around the next corner if only we reduce taxes, contract the state, allow freedom of movement for labour, capital, goods and services and therefore globalise even further with no care in the world regarding ecology and finite resources.

    In other words Jeremy, it is YOUR gung ho attitude towards ecological limits that is the prime cause of this cycle of inflation because YOU and the millions like you always want more more more.

    You and countless others are like a human black hole. Never satisfied, never happy and always want more to fill the gaping gap in your discontented life.

    Jeremy, what we as a species actually needs is exactly the opposite of what you want. What we need is stability, an aware of limits and an understanding of what is enough.

    Ultimately, we need to take a step back and learn gratitude for the miracle that is existence rather than constantly striving for more more and more.

  6. When I first came across your work a few years back it was a lightbulb moment for me. For once a clear explanation of why despite rising GDP we don’t feel any better off.

    Right now it appears we have a tipping point with energy scarcity showing up everywhere. Whether this is in part to the pandemic or it is was already baked in to the mix I don’t know. I saw a comment today by one analyst who was saying Italy, Spain, France were all making moves to reduce VAT or provide subsides for power but the U.K. was announcing a new tax for green energy. He basically sees the problem of expensive energy but thinks the solution is government subsidies.

    This is really just first order thinking. He doesn’t recognise that money won’t solve the fundamental issue.

    • Thanks David.

      GDP has been inflated artificially by credit expansion, and by leaving ECoE out of the equation. To get at the reality, we need to (a) strip out the distorting effects of credit expansion, and (b) deduct ECoE from the resulting ‘clean’ measure of economic output.

      Governments are going to have to subsidize energy, but they can only do this, of course, at the expense of other sectors and activities.

      One implication of rising ECoEs is that we – households and businesses – will indeed have to pay more for energy. This could happen by simply letting prices rise, but doing this would hurt households (aka voters), and undermine industry. Any government which thinks strategically will recognize the need to transfer financial resources towards the provision of necessities in general, and energy in particular.

      Ultimately, this is about resource allocation, and the need to increase resources apportioned to energy will reduce the scope for other forms of consumption.

  7. Thank you Tim. Concise and clear.

    Here we are on the brink of winter. Covid/flu/respiratory bug hospitalizations and deaths could spiral upwards in the coming weeks.

    What then?

    Lockdown…more stimulus (debt) …more central bank intervention…the majority of citizens at home 24/7 for the next 6 months…residential demand for electricity and gas through the roof…

    Meanwhile, the energy supply is already uncertain…costs rising…governments all across northern Europe determined to keep the lights on….at any cost…

    The potential is there for absolute carnage!

    • Thanks Jon, you are welcome.

      The scenario you describe is certainly possible. It could be mitigated, though, if governments, and economies more generally, recognize reality and respond accordingly.

  8. Dr Tim,
    I do not wish to detract from your excellent ( as always) assessment of the situation .
    You suggest the 2021 global economy to be no greater than that of 2019,
    Would 2008 not be a more appropriate year than 2019?

    • In measurement terms, SEEDS uses three definitions of economic output:

      1. GDP
      2. C-GDP – underlying (‘clean’) GDP, adusted for credit distortions (where credit expansion artificially inflates recorded GDP)
      3. Prosperity – C-GDP minus trend ECoE

      I might go into the numbers around this in a future article, but in this one I wanted to emphasise the turning-point represented by the current rapid tightening in the energy equation.

      All of these measures, as global aggregates, are higher now than they were in 2008. But growth in C-GDP has been far less than reported “growth” in GDP, and rising ECoEs have further depressed growth in prosperity.

      What really matters is whether C-GDP and, especially, prosperity have been able to increase more rapidly than population numbers. Globally, this has ceased to be possible, making the average person poorer. In the West, this equation turned negative a long time ago.

    • I find it most curious the Fed claims USA GDP greater than before Covid. With millions of jobs still missing, tens of thousands of small businesses crushed, and workforce participation at historic lows, I just can’t fathom how this can be. Perhaps confusing asset appreciation for real economic performance? Each passing year I find govt stats increasingly detached from reality.

    • Based on concensus numbers – and expressing everything at constant 2020 values – American GDP is expected to be about 2.4% bigger in 2021 than it was in 2019. That’s an increase of about $510bn.

      In calendar year 2019, the US fiscal deficit was $1.2 trillion. The equivalent for 2021 is projected at $2.4tn, which is higher by about $1,160bn. This is far bigger than the overall increase of about $510bn in projected GDP.

      So the explanation lies in stimulus, the injection of money borrowed by government, spent by the public and, de facto, created out of thin air by the Fed.

  9. “ The good news is that these processes can be understood and modelled, projected and managed.”

    The good news is that these processes can be understood, modelled and projected.

    The bad news is that it can only be managed until reality sets in.

    The nails of reality will stop scratching your back and start looking for the eyes before you know it.

    First slowly, then suddenly.

  10. The food price index is up again – 130 now:


    Food production, to my mind, is where the ECOE rubber meets the pothole filled road since we still eat petroleum (not pixy dust as some would have us believe). Since ECOE’s must continue to get worse, and AGW will continue to kill/damage crops, the food price index will continue up. (The conditions that allowed a moderation of food prices in recent years are much less likely going forward.)

    This paper came out after the last period that food prices were up. I suspect that history will repeat itself now that prices are up again.


    The ENSO area is in a neutral state and La Niña is predicted for the winter.
    (https://www.cpc.ncep.noaa.gov/products/analysis_monitoring/lanina/enso_evolution-status-fcsts-web.pdf )

    Generally, La Niña years are cooler than El Nino years, and (very generally) more conducive to food production. If this a moment of truth, I suspect that the next major El Nino will bring another.

  11. Interesting summary for readers here, from Q2 2021 Goehring & Rozencwajg Natural Resource Market Commentary.
    “If rebounding global oil demand exceeds the 2019 high of 101 mm barrels per day, then for the first time in the history of oil markets, demand could very well approach global pumping capability.”

    “The oil energy crisis is here. Investors must be prepared.”

    Click to access 2021.Q2%20Goehring%20%26%20Rozencwajg%20Market%20Commentary.pdf

  12. I saw a news clip recently showing the supply chain structure in Europe using trucking, illustrated by a trip where donuts were picked up in England, then delivered through France to Germany. On the return leg, frozen yoghurt was picked up in Holland for transport back to England. This random example is hugely illustrative of just how wrong the system is from an energy point of view, given the relative unimportance of these products the last of the world’s energy is being squandered on.

    It really is another case of rearranging deck chairs on the titanic, seriously donuts? yoghurt? Anyone reading here can do their own quick search to confirm whether I’m deliberately picking unrepresentative items to prove a point, I bet there are a lot more senseless examples in both quality and quantity. I have been to Germany many times and know their cuisine is strong on bakery produce, they are so much better than donuts, but even so, anyone can locally produce donuts. Why do we have a system that burns food (because I think a breakthrough wake up call for people to understand how crucial our remaining energy is, is to explain that if all today’s food reaches your mouth using hydrocarbons, then fuel is food) to unnecessarily move food?

    Similarly, even today’s broken britain can surely still produce its own yoghurt and if it genuinely can’t, then there are definitely higher priorities for the energy it can afford. A reset on all this is coming soon whether we wake up or not, because the huge increase energy prices will force it.

    • Personally I find these metaphors of ‘broken this’ and ‘broken that’ tedious and are either motivated by a covert perpetual growth narrative or motivated by a perspective that fails to see the economy as layered between essentials and discretionaries.

      Short of heavily centralised planning whereby energy allocations are technocratically managed, the economics of energy limits will force out discretionaries out of the market. People are not going to choose discretionaries over essentials unless they are psychologically dysfunctional for some reason.

      Consequently, this is hardly a broken model but one that penalises unnecessary consumption first. In other words, the media hysteria is actually rooted in a loss of choice of discretionaries for the middle class.

      So yes, Britain might be internally broken in terms of the illusion of perpetual growth that facilitates the unnecessary consumption of wide ranging discretionaries for the middle class but for most of us, life simply goes on but with higher bills, which for anyone that understands the economy as an energy system subject to the laws of diminishing energy returns, is to be totally expected.

    • Steve G, Re opting for discretionary items over necessities, it seems quite common. Think tobacco, alcohol, junk food, sexual gratification, gaming, artistic and musical endeavors, illicit drugs… vs nutritional foods, preventative healthcare, clean and safe living quarters, etc. A good percentage of humans function well enough to survive but not in fashions that are in their long term best interest.

    • @Steven Kurtz
      Weinstein and Heying make the point that people have an urgent need to sense that they are making progress. The lonesome guy in Mega City who seeks out a prostitute for sex believes, for just a little while, that he is making progress. The mature older and wiser man (ahem!) who understands that it really feels good to give a responsive woman a great orgasm and then fall asleep together feels that he is making progress as he woos her. Both people have a feeling of accomplishment. Objectively measured, one failed and one succeeded. One generated GDP while one did not. One is sustainable and one is not.

      This is the Fourth Frontier they describe as our current existential challenge. Anything which enables us to find true fulfillment in terms of the Fourth Frontier (including essentials such as nutritious food and meaningful exercise (sometimes called ‘work’) count as items which are requirements for the Fourth Frontier. But we also have to have an understanding of the Flow State, whether we get it from scientific research or just intuit that it is real or learn it from our culture. We also need to exercise our Theory of Mind, which we and many animals seem to do easily unless we are impeded by our culture. So we can say that a culture which is at least permissive and ideally supportive is essential. When Facebook went down, one wag commented that the world was, ‘for just a few hours, a better place’.

      These sorting questions are very real in a Degrowth world, and don’t lend themselves to superficial distinctions.

      Don Stewart

    • Don S, You seem to be granting free will more power than it deserves. My position which is in accord with most scientists, is that it is a conscious illusion. Heredity and experiences since conception are embodied in us. And it is all physical (energy-matter-information) as far as science can determine. There are no known non-caloric ideas, emotions, etc.

      Making “intelligent” decisions usually requires past experiences from which one has learned. (they could be accidental/random) The cravings for things like salt, sugar, sex, alcohol, are evolved biological drives. Ditto the invention of supernatural “sky hooks” on which to hang our uncertainties and fears.

    • Steven

      In which case, how did single cell organisms evolve into multicellular organisms without ingenuity, novelty and originality.

      Similarly, how did humans evolve from apes and how did humans invent language?

      Or did these examples of evolutionary progress occur as a result of a pattern encoded in the fabric of life by a super intelligent being?

    • Steve G, No. I’m simply stating that a significant percentage do things like drink a few pints at the pub along with some bangers and chips rather than eat a healthy meal. Similarly, many do drugs of all sorts, avoid exercise, have unsafe sex, etc. I’d venture a guess that 1/4 to 1/3 in the developed world are in this category.

    • Steven.

      If these people forego essentials to do these things then they will either die or become diseased and ill.

      That is, they are an example of the psychologically dysfunctional few I referred to earlier!

    • Steve G. You might eat healthfully, but hundreds of millions don’t. And hundreds of millions abuse alcohol, tobacco and drugs. I can give you references if you think I’m making this up.

    • Steven. At what point is the consumption of alcohol, tobacco and drugs (along with the consumption of essential proteins, carbohydrates and vitamins) considered abuse.

      For me, abuse is the point at which the person is depriving themselves of the essential proteins, carbohydrates and vitamins by which to maintain a healthy body.

    • I don’t want to get into psychology here, but economic growth has never been distortion-free.

      Back in the 1850s, an official inquiry into the abuse of alcohol in England heard from one woman that she drank because “gin is the quickest way out of Manchester” (then almost a metaphor for the miseries of life in industrial towns and cities).

      If involuntary de-growth has now arrived, then how we see and value ourselves, and how we relate to others, will change. In some economies, we’ve been taught to value ourselves by what we earn and what we consume, rather than what we are, and have crossed a boundary from incentive and ambition into greed.

    • Well stated Tim.

      People here might be interested in a free ebook that has just been published by Steady State Manchester. It explores the many changes that might occur in a post growth world albeit from a more intentional basis. They are asking people to share on their networks in order to broaden circulation.

      A Viable Future? Explorations in post-growth – free ebook


    • “These sorting questions are very real in a Degrowth world, and don’t lend themselves to superficial distinctions.”

      These sorting questions are very real in a Degrowth world, and don’t lend themselves to superficial distractions”

      How many lessons do we need from our paid overlords, dear Don?

  13. Are wind and solar replacements or additions?
    Let’s suppose that humans have a predilection to use all the energy they have available to them. Now consider a barrel of oil and how it is fractioned into chemicals from which useful products can be made:
    John D. Rockefeller made a lot of money and laid the foundation for our modern economy by figuring out how to use most all of the energy in that barrel of oil. An analogue is a pig, where we ‘use everything but the squeal’. But now, governments think that they can defeat climate change by very selectively subsidizing certain consumer products which are currently made using oil if they are, instead, made using electricity from wind turbines and PV panels. If the governments are successful, then they reduce the income the fossil fuel companies get from a barrel of oil, but the barrel of oil is still required to make the 500 million products which characterize our modern economy. So it still costs the same amount of money to operate the fossil fuel system, and we have to add on top of that the additional cost of operating the wind and solar system.

    In a free market, if wind and solar drive down, let’s say, the cost of moving a light vehicle on roads paved with asphalt or concrete made with high heat produced by fossil fuels and built by heavy earth moving machinery powered by diesel fuel…the fossil fuel companies will raise the price for the products they can still sell because they have to cover their total cost. Or else the fossil fuel industry will have to come up with some other use for the products no longer used to move light vehicles around.

    The point is, I think, that if one really wants to reduce the cost of operating the total economy, then the entire sector needs to be eliminated. But, as noted above, that would mean that 500 million products will no longer be made using the raw materials which currently go into them.

    It seems to me that we are pursuing a strategy which:
    *increases the energy cost of operating the total economy at the same time the energy cost of energy is increasing
    *which accelerates the decline in prosperity
    *and requires more total employees who will each be paid less because the productivity of the economy will have declined as it costs more resources to produce the consumer goods
    *but the use of GDP as the measure of wealth plus money printing can be used to hide the real effects
    *resulting in cognitive dissonance and deep unrest for all concerned

    Don Stewart

  14. Thank you Tim for the latest chapter in this epic story Your insight is illuminating, and leads me to ask have we actually just experienced a seminal moment in history? I must confess to previously having thought we had hit the absolute limit of global energy production, only to be proved wrong. But maybe, “this time it’s different”, to use the old stock market phrase.

    If we are where I think we are (i.e. embarking on an exponential energy descent), then surely the time is right for the winds of change to blow through our political system. The door should be swinging open for a new breed of political party, that will truly govern for the ordinary people and not the elite’s. Let’s just hope it’s not a new breed of fascists. The time has never been more important for the allocation of scarce resources to the sectors that matter, and the culling of those sectors that are a frivolous waste. Policy and politicians must lead the way. I hope that when the revolution comes it’s peaceful, but historically, there’s tended to be blood on the streets. I get the feeling that something’s got to give in the not too distant future.

    • Thanks Neill

      The questions I ask are have we hit (a) global peak surplus (ex-ECoE) energy production, and (b) surplus energy supply per capita?

      The answers are yes – emphatically so on (b).

      The likelihood of politics changing is tied to the worsening hardship of millions of households.

  15. @Steven Kurtz
    The question of free will is an interesting one, and the more alcohol one has consumed, the more interesting it seems to be. But as a practical matter, if I have no choice buttons explain to you the choices I think you have, then I think we come out in the same place. Dave Pollard goes around and around on this, and I don’t find it enlightening. W and H say this near the end of their book:
    “A good regulatory scheme is efficient and light-handed–all but invisible. While inherently constraining, its net effect should be liberating, allowing access to the benefits of innovation without having to obsess about hidden consequences.”

    One of the huge problems with our current set of social regulations is that the system shields people from immediate feedback on their actions. All the way from the cops picking up drunks on cold nights and taking them to the drunk tank to Wall Street billionaires who are continually bailed out by the Fed. There is a difference between the Good Samaritan who helped a man who was beaten and robbed and the notion of saving people who are behaving badly. I think this distinction will be one consequence of Degrowth. It’s an ill wind that blows nobody good.

    Don Stewart

  16. @Steve G;

    Free will? You obviously haven’t researched this topic.

    “In which case, how did single cell organisms evolve into multicellular organisms without ingenuity, novelty and originality.”

    Mutations, and adaptation contribute to selection by the environment.

    “Similarly, how did humans evolve from apes and how did humans invent language?”

    It’s called evolution. Language wasn’t invented by humans. Many species communicate complex meanings audibly and visually.

    “Or did these examples of evolutionary progress occur as a result of a pattern encoded in the fabric of life by a super intelligent being?”

    What a crock. Evolution is not intentional. Neither is emergence.

    • When you fully appreciate the intention-less randomness of it all, it makes the booze and drugs seem essential rather than discretionary. 😜

      Tim – Last couple of articles have been killers 👍

    • I had a friend who collected funny sayings about alcohol – “work is the curse of the drinking classes”, “reality is an illusion caused by alcohol deficiency” and “there’s too much blood in my alcohol stream” – so I know what you mean.

      After these two articles, the big question is: ‘what do I (and we) do next?’

    • According to research Steven, those who tend to ‘disbelieve’ in free will, tend to base their ‘disbelief’ on their ‘belief’ in (hard) determinism and as such are more prone to ‘believe’ in fatalism.

      See Believing in free will

      Is ‘belief’ construction deterministic or an example of free will?

      P.s another example of human novelty is mathematics

    • Steve G. ,I’ve studied this field for over 50 years, and am familiar with the details in this reference. Definition is critical. If anyone can provide evidence for *anything* not physical (energy-matter-information) or notions/concepts dependent upon physical events, a Nobel Prize is likely.

      All activity, thoughts, decisions, feelings…are bodily derived as all known evidence supports. Quantum indeterminacy supports this, as that is physical too, and any such events precede the behavior in question.

      We choose all the time, but the drivers are temporally antecedent and embodied a far as evidence can determine. To posit a ghost in the machine is as speculative as positing a soul for a supernatural. A Nobel Prize would make a person quite wealthy, so the motivation to prove my statements wrong are very powerful. You might even use it to publicize your voluntary simplicity solution! 😉

    • I’m not suggesting free will or mental constructs aren’t rooted in materialism/physicalism.

      Thus my question remains.
      Is belief construction and the construction of theories, examples of free will? 😊

    • Only in subjective consciousness. I’m done as this list isn’t intended to teach analytical philosophy.

    • Interesting ☺️

      Some have likened the symbiotic relationship between fungal networks and trees in terms of the exchange of nutrients as a rudimentary taxation system.

    • @Steve Gwynne
      I think our language gets in the way of understanding. Some biologists with staunchly deny that there is anything such as a ‘symbiotic’ relationship…it’s all about Darwinian reductionism. Other people argue that the biological world is based on cooperation (or even ‘love’).

      These are the facts as I see them. How we describe them with language is a problem:
      *Fungi and fungal networks are adept at finding, filtering, and moving minerals and water over great distances (great as compared to, say, a bacteria or a tree root).
      *Fungi, therefore, are performing the same function as the hypothesized origin of life in a little puddle with a membrane which could selectively filter nutrients and thus establish a gradient, including an electrical charge.
      *Trees are adept at gathering sunlight and photosynthesis and keeping a balance between above ground and below ground biomass. The trees also have a budget which allows about 30 percent of the carbon they fix to go into the soil to feed useful critters, including the fungi.
      *Trees and fungi find it productive to cooperate, with trees doing their thing and fungi doing their thing and the combination working far better than either could accomplish alone.

      Thus, we can think pretty easily about the functional relationship…what they are doing and how it relates to what everything else in the picture is doing. Where we get into trouble is trying to “essentialize” the language: good vs. bad; self-interest vs. common good; sentient vs. mechanical; and so forth. This reminds me of Carlo Rovelli’s description of Quantum physics as defined only by relationships. It’s all about actions and reactions. Static definitions such as an electron resembling a marble on a string are not relevant and will mislead.
      Don Stewart

    • @Steven B Kurtz
      When you say a tipping point is at hand, I’m wondering if you are thinking along the same lines as Richard Duncan in his Olduvai theory? One of the theory’s five postulates is that brownouts and blackouts are reliable leading indicators of terminal decline for our industrial civilisation.

      For anyone unfamiliar with Duncan’s Olduvai Theory, its five postulates are: –
      1. Exponential growth in world energy production ended in 1970.
      2. USA “e” intervals anticipate Olduvai “e” intervals: (1) growth (2) stagnation and (3) terminal decline.
      3. The terminal decline of industrial civilisation will begin circa 2008-2012.
      4. Brownouts and blackouts are reliable leading indicators of terminal decline.
      5. World population will decline proximate with “e”

      Note: “e” = energy per capita

      The theory argues that “sustainability” equals living at a hunter gatherer level of technology, and that industrial civilisation will be a 100 year blip lasting from 1930 to 2030. The theory forecast that by 2030, “e” would have collapsed to levels last seen in 1930, and would be 30% of the all-time peak.

      Time bound forecasts almost always end up being wrong, and Duncan’s work was produced before fracking arrived on the scene, and before the deployment of renewables reached any kind of scale. Sometime around 2008, some guys from the “The Oil Drum” revisited Duncan’s work and concluded that the timing was out, as per my comment about additional energy flows that were unforeseen at the time Duncan Originally published. They also concluded and that if action were taken to build new energy gathering infrastructure, we may be able to secure a civilised existence though this century. Their report also noted that many who have studied this issue have concluded that the Journey back towards a hunter-gather existence is unavoidable.

      From my perspective, Duncan’s Theory is one of the darkest pieces of work that I’ve encountered, when it comes to future possibilities. Thinking through the implications of his theory, is a positively spine chilling experience, and I seriously urge anyone prone to anxiety or depression to think carefully before going through the detail of his work

      Back to my initial remark to Steven. Are the electrical blackouts we have been seeing around the world, telling us that our industrial society has exited the stagnation period and is entered the terminal decline phase? Duncan’s theory would point that way. Or as Duncan would put it, we’ve left the plateau, and are now descending the cliff towards the bottom of the Olduvai Gorge.

      Maybe this should be on the agenda for the next G20 meeting, and the annual gathering of movers and shakers at Davos.

    • Neill, Thank you for your extended comment. I’ve been familiar with Duncan’s work for a couple of decades. The future of complex systems is unknowable is exact detail and timing, but trends do look ominous. Population peak and reversal is possible by mid century in the opinion of many. Humans will go extinct at some point, but that might be millennia away. Neils Bohr: “Prediction is difficult, especially about the future.”

    • When Britain’s largest onshore oil field was developed – in an ‘area of outstanding natural beauty’ – the operators went to extraodinary lengths to conserve both nature and the scenery.

      Well sites were exacavated, so pumps weren’t visible unless you were up close, and these excavations would contain any spillages. Pipelines were buried out of sight in trenches, which again would contain leakages.

      All of this was very expensive, but it meant that oil production activities would be almost invisible to visitors to the area.

      Then the authorities built an ugly flyover across the site……

  17. Pingback: It’s all happening….. | Damn the Matrix

  18. Pingback: Want to understand why economics is science fiction? | Bobbing Around

  19. “The likelihood of politics changing is tied to the worsening hardship of millions of households.”
    I agree but changing to what? In the UK, the workers’ mantra is usually “we are worse off than in 20yx and so we need a pay rise to restore our income in real terms”. If a political party offers this and gets elected then it can only lead to a ratcheting up of inflation. When poverty ensues, people will look for scapegoats. Immigrants and the rich are the likely targets. I fear a Germany 1930s situation. As you have said several times, Dr Tim, redistribution will be called for but this is not so easy now that both people and their assets are much more mobile. And, if all of the rich desert a country then that place becomes even worse off!

    If TPTB and economists cannot understand that energy is the thing that matters, then how can the masses understand why they must accept a lower standard of living?

    • Let me come at this another way.

      Back in the 1960s and 1970s, it must have seemed as though nothing would ever break the power of organized labour, which really meant the power of the leaders of the unions. They could bring entire economies to a halt, and almost dictate to governments over “beer and sandwiches” in “smoke-filled rooms”.

      Superficially, what changed this was Thatcherism and Reaganomics. But the real, enabling change was economic – more specifically, the energy crises of 1973-74 and 1978-79.

      Today we have another energy crisis. This crisis is very different – it’s about ECoEs, not about relationships between exporters and consumers.

      But the effects are going to be, in many ways, much the same.

      Already, in Britain, Conservative MPs – presumably died-in-the-wool supporters of ‘leave it to the market’ – are demanding government intervention (!) to support embattled industries. This process is, perhaps, more advanced in Britain than elsewhere, because the UK economy is in bigger trouble than most. But it won’t be long before the same trend becomes apparent elsewhere.

      Logically, energy change drives economic change, which in turn drives political change.

    • Perhaps the answer to getting the masses to change their behaviour by re-setting expectations is simpler that we’ve all thought, just tell them the truth in a clear and concise way. What is there to lose, everything else has failed? The concept of the problem is not complicated, its not that they don’t get it, its that they haven’t actually ever been taught that energy powers everything and we have to now make do with less because its running out.

      The reason they haven’t been taught this is that the political class and media lie to them that they can have what they want, to get their vote so the establishment retains the power of rule. This brainwashing works so well because the ruling class effectively own the media and so can control what the masses think. The answer therefore would be if the rulers realise this can’t go on and they have to come clean, so use their media tool to transmit this info. This would likely work particularly in the UK as the effect of media influence has been proven, if advertising didn’t work, corporations wouldn’t spend billions continuously doing it.

      The masses have listened to what they were told all their lives and believed anything, irrespective of their education or IQ, so why would that change now?
      I reckon if the media just told them straight they could handle it and then adapt.

    • FI, I’ve tried this but the problem is the average person is completely blind to it because western societies have a quasi religious belief in progress and technology. It’s very hard get past this. Whenever I bring it up with people the common refrain is ‘they’ll think of something’ or a reference to some pie in the sky technology. They mayswell be saying God and magic will save us.

  20. Good article Tim, although I’ll say (as usual) I think you’re too optimistic.

    I found your site about 2 years and my first impression was – this guy’s done great work, but boy is he an optimist. You were postulating if only we can find a way to feed SEEDS info to the right decision makers they’ll adjust their policies to something more sensible.

    It didn’t work after Limits to Growth 50 years ago and it’s way too late now.

    At that time you were quoting IEA forecasts suggesting oil production would be down 15% by 2040 (or something like that, I can’t remember the exact nos).

    Anyway, clearly the world is stuffed energy-wise and I assert we’ve already gone over the edge of the Seneca cliff. Clean green energy ho ho. What a hoot that will be if the UK gets a cold winter and limited gas top ups.

    It appears you’re not allowed to talk about topics such as COVID and climate change for fear of offending true believers in officialdom and getting cancelled, so let me say it.

    Climate change is BS. Most likely we’re heading into a Maunder minimum with much reduced solar activity and temperature trends are down if you look at un-doctored data. Expect crop failures to increase.

    COVID is clearly a depopulation (and control) exercise via the vaccines in response to declining oil, after all we effectively eat oil via industrial agriculture. Lunatic ravings? No just look at clean data for infection and case fatality rates and overall death rates for the heavily vaccinated countries.

    It’s also worth watching some of the many whistleblower doctor, nurse, pathologist and scientist videos. Then ask yourself why are all those front line health professionals resigning rather than taking the jab?(Hint: it’s because they’ve seen the vaccine-injured first hand).

    Good news? Our solar battery system is about to be installed. The grid here in Australia isn’t as stuffed as in the UK, but we’re out in the boonies, so I expect we’ll be triaged before too long.


    • Thanks Fred. You’ve been very frank, and so shall I.

      My background is financial markets research – I was head of research at a big financial services company, before that I did the strategy job (during the GFC….) at another one and, before that, I was an energy specialist.

      In that field, your colleagues, your bosses and your clients want evidence, and “I just think……” won’t do. So I stick to what I know about, and emphasise economic modelling (from an energy perspective) because that, to me, is the ‘best route to reality’ about the economy. I think this approach is providing useful insights, though that’s not for me to judge.

      What we – or, for that matter, I – do with those insights is another question.

      If I don’t comment about covid, it’s because I don’t have specialist knowledge. I have opinions, but that’s not the same thing. Debate should be as broad as possible, and no side has a monopoly of the truth.

      I’ve had long enough exposure to the environmental issue (after all, it’s a function of energy) to discuss it. As far as I can tell, environmental risk is real, ecological degradation looks very real indeed, and pollution – to use an older term – is undoubtedly harmful.

      What we can ‘bring to the party’ here is an understanding of the relationship between energy and the economy, and this is critical if we’re to put environmental issues in context.

      I try not to be either optimistic or pessimistic, but objective. If the evidence suggests that prosperity is deteriorating, that discretionary prosperity is in sharp decline, and that the financial system (as we know it) is running out of road, so be it.

  21. Steve Keen’s website and tweets
    Steve interviewed Simon Michaux on the perilous situation relative to mineral assets. There is also an extensive comment from one of his readers that summed up a lot of wisdom as far as I can tell:

    What’s the good news?
    We can now be certain what happened in 1929.
    Bringing back neoclassical economics has allowed the same problems to be repeated again and again in different countries around the world.
    China is adding further data for examination.

    What’s wrong with neoclassical economics?
    1) It makes you think you are creating wealth with rising asset prices
    2) Bank credit flows into inflating asset prices.
    3) No one notices the private debt building up in the economy as neoclassical economics doesn’t consider debt.
    4) The banking system and the markets become closely coupled, and as soon as asset prices fall it feeds back into the banking system

    What is the fundamental flaw in the free market theory of neoclassical economics?
    The University of Chicago worked that out in the 1930s after last time.

    Banks can inflate asset prices with the money they create from bank loans.

    Click to access money-creation-in-the-modern-economy.pdf

    Henry Simons and Irving Fisher supported the Chicago Plan to take away the bankers ability to create money.
    “Simons envisioned banks that would have a choice of two types of holdings: long-term bonds and cash. Simultaneously, they would hold increased reserves, up to 100%. Simons saw this as beneficial in that its ultimate consequences would be the prevention of “bank-financed inflation of securities and real estate” through the leveraged creation of secondary forms of money.”
    Margin lending had inflated the US stock market to ridiculous levels.
    Richard Vague had noticed real estate lending balloon from 5 trillion to 10 trillion from 2001 – 2007 and went back to look at the data before 1929.
    Real estate lending was actually the biggest problem lending category leading to 1929.

    The IMF re-visited the Chicago plan after 2008.

    Click to access wp12202.pdf

    Existing financial assets, e.g. real estate, stocks and other financial assets, are traded and bank credit is used to fund the transfers.
    The money creation of bank credit inflates the price.
    You end up with a ponzi scheme of inflated asset prices that will collapse and feed back into the banking system.
    The money creation of unproductive bank lending makes the economy roar as you head towards a financial crisis and Great Depression.

    At the end of the 1920s, the US was a ponzi scheme of inflated asset prices.
    The use of neoclassical economics and the belief in free markets, made them think that inflated asset prices represented real wealth.
    1929 – Wakey, wakey time

    Why did it cause the US financial system to collapse in 1929?
    Bankers get to create money out of nothing, through bank loans, and get to charge interest on it.

    Click to access money-creation-in-the-modern-economy.pdf

    Bankers do need to ensure that money gets paid back, and this is where they get into serious trouble.
    Banking requires prudent lending.

    If someone can’t repay a loan, they need to repossess that asset and sell it to recoup that money.
    If they use bank loans to inflate asset prices they get into a world of trouble when those asset prices collapse.
    As asset prices collapsed, the banks became insolvent as their assets didn’t cover their liabilities.
    They could no longer repossess and sell those assets to cover the outstanding loans and they do need to get the money they lend out back again to balance their books.
    The banks become insolvent and collapsed, along with the US economy.

    When banks have been lending to inflate asset prices the financial system is in a precarious state and can easily collapse.

    What was the ponzi scheme of inflated asset prices that collapsed in Japan in 1991?
    Japanese real estate.
    They avoided a Great Depression by saving the banks.
    They killed growth for the next 30 years by leaving the debt in place.

    What was the ponzi scheme of inflated asset prices that collapsed in 2008?
    “It’s nearly $14 trillion pyramid of super leveraged toxic assets was built on the back of $1.4 trillion of US sub-prime loans, and dispersed throughout the world” All the Presidents Bankers, Nomi Prins.
    We avoided a Great Depression by saving the banks.
    We left Western economies struggling by leaving the debt in place, just like Japan.
    It’s not as bad as Japan as we didn’t let asset prices crash in the West, but it is this problem has made our economies so sluggish since 2008.

    The last lamb to the slaughter, India
    They had created a ponzi scheme of inflated asset prices in real estate, but it collapsed.
    Now they need to recapitalize their banks.
    Their financial system is in a bad way, recovery isn’t going to be easy.

    Repeating the same thing over and over again during globalisation has ensured we are now certain what happened in 1929.
    Real estate is particularly dangerous as it forms such a large part of bank lending.
    Leverage it up, and add complex financial instruments, to take out the global economy (2008).”

    In 1929 we had no climate change and no shortage of minerals. Now we have the unholy combination of climate change, mineral depletion, and financial excess. But we DO have Vicki Robin asking ‘what could go right?’

    (I’m not trying to be cute. I appreciate what Vicki does, but it does seem like whistling past the graveyard.)
    Don Stewart

  22. My background is climate science Fred and I can assure that climate change is as far from BS that it gets. Heat trapping gases are increasing every day and all the temperature records keep going up. With Arctic Amplification growing Siberian forest are burning down and permafrost is melting and releasing the more destructive methane in greater quantities. The Maunder Minimum has been debunked but still pushed by deniers.

    • Pointing out the ups and downs due to solar cycles doesn’t make one a ‘climate change denier’. Maybe the current solar minimum will cause the rate of temp rise to slacken, only to return to its previous rate *or worse* when solar output normalises again.

    • Yes, that’s one of Tim’s best articles.

      It’s now emerged that there’s a big row going on between the department for business – which wants support for industries affected by surging energy prices – and the Treasury (finance ministry) – which doesn’t.

      In my view, a case can be made – generally, not just in Britain – for energy subsidy, but this requires resource-shifting (i.e. taxes have to be increased, and/or other public spending reduced, and/or various other forms of consumption cut back).

      The UK economy is in very big trouble, but the government doesn’t seem to know what to do about it, and neither do opposition politicians. The problems can be defined as (a) lack of understanding of economic realities, and (b) unwillingness to adopt policies which could improve the situation, but which would be unpopular.

    • @ Dr T., I never understand the politicisation of issues of national security, my view (political centrist overall) is that certain functions are crucial to a country’s survival and so it should be unquestionable that a responsible state has to have control over them. Anything else would disbar them from rule as the people could not be confident in their governance, things like safe water, power, education, healthcare, security services, emergence services, etc. (If you want to be a serious country)

      Governments of all stripes would be negligent if they didn’t perform these basic needs well and they should be regarded as primary requirements, therefore above politics, like it being indisputable that any building needs a solid foundation.

      Scarily, I don’t see it as absurd that we could unravel into the Lebanese situation.

    • Agree, FI. And in NYC, civilization is showing signs of unraveling. See:


      ‘Third World’ NYC drug store shelves empty amid shoplifting surge

      Essentials like tampons are completely gone from the shelves at certain drug stores. Helayne Seidman
      Thanks to a citywide shoplifting tsunami, bare necessities are now rare luxuries on drug-store shelves across New York City.

      “It looks like the Third World,” bemoaned one Manhattan resident, after eyeing the aisles of a CVS on Sixth Avenue in Soho desperately low of toothpaste, face wash and hand sanitizer, among a long list of other items.

      “They’ve all been stolen,” a CVS employee told The Post.

      State bail reform laws make shoplifting a promising career option for some New York City crooks. One man, Isaac Rodriguez, 22, of Queens, was arrested for shoplifting 46 times this year alone, The Post exclusively reported last week.

      The blame goes straight to the halls of power in Albany, said New York City top cop Dermot Shea.

      “Insanity,” the police commissioner tweeted last week in response to The Post report. “No other way to describe the resulting crime that has flowed from disastrous bail reform law.”

      Ninth Precinct police officers stand guard inside the Duane Reade on Avenue B and East 2nd St., where certain items are kept locked.Helayne Seidman
      Serial shoplifters, even if arrested, typically walk free the same day. Cases against them are often not prosecuted. Drug stores, filled with aisles of small necessities, offer an easy-to-harvest goldmine for thieves.

      Rodriguez allegedly stole from Walgreens stores 37 times, lifting everything from protein drinks to soap, baby formula and body lotions, often simply filling up a bag with items then walking out the front door without paying.

      There are 77 other thieves right now walking the streets of New York with rap sheets of 20 or more shoplifting charges, NYPD sources say.

      As of Sept. 12, the city has seen 26,385 complaints of retail theft — the most ever recorded (going back to 1995). It’s a 32 percent spike from last year (20,024) and 38 percent surge from 2014 (19,166).

      Post reporters visited a dozen CVS, Duane Reade/Walgreens and Rite Aid stores around the city and found the same shocking situation in all of them.

      Large swaths of barren shelves, in some cases frighteningly empty of almost every imaginable need: cereal, batteries, hand wash, diapers, paper goods and baby formula.

      Good luck finding tampons. Each Post visit revealed almost none on the shelves. Displays of relative luxuries such as lipstick and shoe polish also looked neglected.

      Only 12 of 57 paper goods listed on price displays at a CVS on 50th Avenue in Long Island City were in stock. About 8 in 10 clothing detergents were missing from the shelves of a Rite Aid on Broadway in Astoria; as were all 27 varieties of Ensure nutrition drinks and all 15 types of Irish Spring soap and body wash.

      State bail reform laws make shoplifting a promising career option for some New York City crooks.Helayne Seidman
      Two cops stood sentinel inside the doors of the Duane Reade at the corner of Avenue B and East Second Street on the Lower East Side this week.

      “There’s a lot of theft here,” one of the officers said, adding that they’ve made guard duty at the store part of their neighborhood patrol efforts.

      The Wall Street Journal reported last month that retailers are the target of a $45 billion organized crime theft spree, with lifted goods often being resold on Amazon.

      “Reported thefts (at CVS) have ballooned 30% since the pandemic began,” the WSJ report states.

      Disruptions in global supply chains have fueled shortages at drug stores and other retailers across the country.

      “Product supply challenges are currently impacting most of the retail industry,” CVS spokesman Matthew Blanchette told The Post. “We’re continuing to work with our vendors to address this issue and we regret any inconvenience that our customers may be experiencing.”

      Retailers here in New York and around the nation, meanwhile, struggle to find people to re-stock those shelves; while trucking companies report difficulty finding drivers to make much-needed deliveries.


  23. In view of the latest fiasco with energy supply companies collapsing en-masse, the reasons for not re-nationalising UK power generation and distribution seem to ebbing away as fast as our reserve capacity. This is a mess of the government’s own making. However, considering our energy predicament, any government could surely spin it as being in the national interest, if not a matter of national security, to re-nationalise.

    I’ve generally viewed nationalisation as undesirable, but there’s a clear distinction between nationalising consumer goods such as the automotive industry, which Britain did in the 1970’s, and nationalising critical national infrastructure, and services.

    I suspect that political dogma will stand in the way of any sensible debate within government. The neo-liberal doctrine just wouldn’t allow it. And so we wait for our Lebanon moment.

  24. Crouch is making some good (unevidenced) points about economic growth here when reviewing a selection of post growth books.

    I will state his observations in reverse as they make more sense.

    The first is redistribution.

    “Saying farewell entirely to growth would bring further risks. Back in the 1950s, the British intellectual and Labour politician Anthony Crosland argued in The Future of Socialism that redistribution was easier to achieve in a growing economy than a static one. If the incomes of the rich were increasing, they would not mind so much if the poor received a higher proportion of that growth than did they. Opposition to redistribution would become more difficult to cope with if there were no growth”.

    This leads to his second about green growth and the need for “technologies that considerably reduce the use of non-renewable resources, not only in their own production but in their application throughout the economy. It will enable us to combat climate change while preserving some limited impetus to growth”.


    Of course, he isn’t contextualising his reviews with an energy based economy approach but his main point is that some rhetoric of growth is needed in order to encourage redistribution which might go some way to explaining why governments, business institutions and the media persist with the rhetoric of growth. Firstly, to maintain social stability and secondly to preserve wealth allocations.

    • Population is a critical factor. If it is growing, a steady state economy would make the average person materially poorer.

  25. Another great essay Dr Tim.

    Your quote “Denial, for the moment, remains unchallenged.” is a very pertinent observation.
    The number of times I have heard that we are now all going to live in a high wage society post Brexit is growing – that is, unless you happen to be a nurse in which case you’ll be offered a pittance but topped up with rounds of applause on a Thursday evening. Not once is this meaningless assertion challenged. I heard a Brexit MEP (I think) on LBC on Saturday making the same claim and, as per usual, not being challenged on this.
    If we are going to this “high wage society” as is constantly proclaimed, then, for those of you that can remember it, this reminds me of Italy when they had the Lira. You thought you were rich until you bought a loaf of bread or a cup of coffee!

    However, being the cynic that I am, I’m unconvinced that we will be living in this fantasy world.

    • Thanks.

      I’ve spent years arguing for a high-wage, high-skills economy, when the official line has been that low labour costs make a country ‘more competitive’ – after all, if this were true, Ghana would be wealthier than Germany.

      But is there any intention to follow through on this? Zero-hours contracts are still allowed, and the latest tax rises target employees and employers, not – for instance – capital gains and inheritance.

      Moreover, the British situation seems to be spiralling out of control. At the moment, the thinking seems to be that the spike in energy prices will be temporary, that it won’t affect consumer spending on discretionaries, and that wind-power will save the day.

      Taxes (including council tax) are rising, the cost of energy and everything produced using energy are rising sharply, and the BoE will almost certainly have to raise rates, yet the assumption seems to be that some form of ‘normality’ lies just around the corner.

      The present government seems to live from gimmick to gimmick, and from fix to fix, but this situation has developed over a long period, and the current opposition seems to offer no fundamental change.

      The problem isn’t so much that the current government has no answers, but that they’d almost certainly be re-elected if there was an election tomorrow. From a distance, one can only conclude that voters, despite the immediate problems, ‘like it this way’.

    • Thanks for the reply, Dr Tim!

      With regards to the political outlook – the main reason that it is so dire is that all of the main Parties are addicted to the notion of infinite growth on a finite Planet. That this current shambolic Government is not being held to account by an astonishingly insipid Labour Party is the theme of Jonathan Pie’s latest rant: https://www.youtube.com/watch?v=YqCf0NKl9m0

      It speaks volumes for the state of politics in the UK when the effective leaders of the opposition are a current and a former Manchester United and England footballer – Marcus Rashford and Gary Neville – along with a satirical youtube comedian in Jonathan Pie.

      Society faces major upheavals as various factors – including the rising ECoE – bite harder. Plan accordingly folks, as no Government is going to save you. But then again, I’d imagine everyone on this board has come to the same conclusion..

  26. “US Unfunded Liabilities 5.46x National Debt Outstanding”
    “As Congress debates their $3.5 trillion spend-a-thon and their human infrastructure bills, we need to bear in mind that while US Treasury debt is at $28.863 trillion (and growing really fast), the US has promised $157.738 TRILLION in unfunded benefits such as Social Security and Medicare.”
    “And mandatory spending (aka, entitlements) is projected to keep on growing while discretionary spending has flat-lined.” [Chart omitted].

    People and companies are not the only ones for whom discretionary spending will be increasingly limited. Governmental discretionary spending is how political parties achieve buy-in to their programs for support. Otherwise they have to raid previously committed entitlement spending, – ticking off one group – in order to free up funds to buy support from others – programs to favor the MIC or corporate oligarchy, e.g.

    It seems politicians are going to have to find a new paradigm for getting elected as well!

    • Tagio, I get that SS and Medicare costs are huge. But they are partially funded by ongoing contributions from workers, employers, and retirees. Money is taken out of my SS monthly retirement income to contribute to Medicare premiums (medical care and prescription drug costs). The higher my income the previous year, the more I pay. (therefore a few brackets).

    • Medicare, medicaid, social security and the other so called entitlements are as nothing compared to the cost of the military industrial complex. Being upset that old people and the poor are getting a few pennies while ignoring the fact that the people of the US spend trillions to blow up brown children around the world is a symptom of being recipient of constant bombardment of (sometimes ridiculous) propaganda.

      (i.e. No, the Chinese are not going to go to war (unprovoked) to eliminate the people/suckers that buy their cheap crap.)

      It is the very effective propaganda that we must endure every day that keeps the powerful and/or obscenely wealthy in power. Once you start to see it, you will be less worried about “entitlements”.

  27. How the globalised just-in-time logic came to rule the world economy.


    How EU regulations reorganised the animal slaughtering sector to the migrant dependent just-in-time low wage ethic.

  28. Last week I posted some remarks about the guys at EWI forecasting that a once in a lifetime (more like 3 lifetimes actually) stock-market crash was slowly gathering pace. I’ve now seen some updated information forecasting the Dow Jones to crash below 1000 points. These guys don’t always get it right, and in recent years, the constant injections of Fed liquidity have confounded the best technical analysts, including Robert Prechter and his outfit.

    However, if they are anywhere near right in their forecast, we will surely witness one of the greatest upheavals in modern times. Such an event, unfolding over the period of 2-3 years, would be a massive overshoot to mean reversion in the stock market. The broader consequences would be historically significant.

    It usually takes some kind of massive geopolitical shock to trigger such violent stock market crashes. The Covid crash was a brutal fall of circa 40%, but it was all over and done in a couple of months. What could cause a market collapse of more than double that? Well one current candidate is an outright debt default by the US government. That would quickly lead to financial mayhem around the world. Unthinkable? Who knows? We live in strange times. Congress has kicked the can down the road for a few weeks, but, to my understanding, nothing has been resolved.

    Any possible triggers for an event of such magnitude are grim and gloomy. A turn for the worse in the pandemic? A sudden outbreak of war? A catastrophic solar flare? There could be other purely financial triggers aside from the spectre of US debt default, but they would have to be big, and beyond containment. Pure speculation, but the point is that it would probably take something of this magnitude, to trigger such a monumental stock market collapse. Let’s hope that Bob Prechter and his team have been outfoxed by the market movers, and called it wrong. Sooner or later though, the bubble has to burst. Like an infected boil, the bigger it grows, the nastier it will be when it’s lanced.

    • As I see it, over-inflated markets are a consequence of the enormous gap which has emerged between the ‘real’ economy of goods and services (and, ultimately, of energy) and the ‘financial’ economy of money and credit.

      On this basis, the occurence of a crash would relate to a forced closure of this gap.

      The processes which have created and supported this gap (such as ZIRP) are unsustainable.

      A possible route to denouement would be that the implausibility of perpetual growth would become apparent to investors. There are potential (relative) winners of this process, but these would be far outweighed by losers. In essence, resilience stocks in essential sectors would be winners, and growth-valued stocks, predominantly in disretionary sectors, would be losers.

    • One caveat about picking ‘winners’ in a likely correction in valuations in equity markets is the forced selling compelled by margin calls. Whenever a bottom of some sort is reached, there should be ample time to decide which, if any, companies are worth owning.

    • Ive been reading this guy – https://zensecondlife.blogspot.com – for a number of years (a decade?). He has predicted the inevitable crash of the stock market nearly every day for the entire time, and he gives good reasons (as far as i can tell). I think that he will be right soon enough.

  29. Yes Steve, the dreaded margin call will sweep away the decision making power of investors large and small. With there being so many leveraged positions in the market, it shouldn’t take too long before the margin calls start rolling in. During the immediate turmoil, there will be indiscriminate selling, and the baby will be thrown out with the bath water. It will be somewhere between difficult and impossible to find any safe sanctuary in asset markets.

    Gold was a fascinating case during the Covid crash. Margin calls resulted in the forced selling of gold ETF’s and other paper instruments, but at the same time, the price of physical gold increased, and went ex-stock. Those who wanted to buy gold coins or ingots, just couldn’t get their hands on the stuff.

    Cash has been despised for years, but maybe the old cliche of “cash is king” is about to be revived. That is, if your nation’s fiat currency survives.

    Once things bottom out and the dust settles, I think that Tim’s point about the resilience stocks in essential sectors leading the market recovery, makes perfect sense. Discretionary spending will have collapsed, and some (probably many?) companies dedicated to this sector will have gone to the wall.

    These are my personal views and not any kind of financial advice.

    • Also – and taking it as given that nothing here is financial advice – I think there are some additional factors to consider.

      First, whilst I’m hesitant to suggest that some countries and their currencies ‘won’t survive’ what’s coming, geography will be important, because some economies will be taken down several pegs. Back in the 1940s, Argentina was one of the world’s most prosperous economies. Argentina has ‘survived’, of course, but has never regained that status. A case of “Don’t cry for me, ———” and fill in the blanks?

      Second, I can’t see how some industries, in some countries, can avoid nationalization. This will be a matter of necessity, not ideology – a country won’t have to have a ‘left wing’ government for this to happen.

      Third, we – and companies – need to rethink, not just strategy, but what businesses are for. The new ambition might be to be ‘a reliable generator of shareholder value’, rather than any promise of growth.

  30. Dr Tim – I bring you a summary from the hilltops of Fantasy Island, shown on maps as ‘United Kingdom’. Here’s the problem. They’re struggling to make stuff in China, and even if they can hire a container they need to find a ship, and when the ship arrives at Felixstowe it can’t dock, and even if it could they’d struggle to unload it, and even if they got the container onto a truck then there’d be no one to drive it, and even if we found a driver they’d have to find some diesel, and then when it got to the shops they’d be no one to put the stuff on the shelves; and even if the stuff got onto the shelf you’d discover that despite your higher wage you can no longer afford to buy it as the price has gone up twice as much! That, I think, is a reasonable summary of the situation.

    • for all the supposed vacancies unfilled, I keep checking the jobs listing for my area and 95% of the positions are for cleaners, 4% are for healthcare or administration and 1% are for some practical craft or trade,

      there isn’t a driving job within 20 miles of me, there was one job maintaining forestry machinery that mildly interested me, it said I’d need a 3.5T driving licence and it would be useful if it included licencing to tow a trailer,
      all good so far, then it said I’d have to be prepared to travel anywhere in Britain and Ireland, this is the nature of tradesmens work in the UK today, endless driving from one job to another over a huge catchment area,

      the guy downstairs installs ducting for fibre broadband installations, he’s expected to cover a huge catchment area and often drives more than two hours in each direction, he spends 3 or 4 hours on site actually doing some work,

      I’ve known gangs of plasterers who were doing daily the 90 mile round trip into London to do a plastering job,

      the woman who ran the builders cafe next to the station here lived in Medway and was daily commuting a 70 mile round trip,

      the people who work round here drive 60-80 miles a day commuting from the places they can afford to live on the coast,
      the people who live here commute into London for work,

      no one can afford to live where their job is or take a job in the area they can afford to live,

      the whole UK economy is shaped around private car ownership and driving endlessly around one of the most crowded parts of Europe, it seems highly inefficient and frankly insane.

      years ago I did some warehouse work, the overnight delivery service collected each afternoon, took everything to Birmingham, by road, to a distribution hub where it was sorted into delivery routes for the next day,
      to send a product to the next town it had to go via Birmingham, 160 miles away.
      in the end they relocated the business to Birmingham.

      what the papers never tell you is where the unfilled job vacancies are, every decent sized SME I’ve known in this area has relocated somewhere up north seeking cheaper premises and staff,

      what I’m told is that this is ‘efficient’, I’d agree it is very efficient in financial terms but at the expense of every other possible consideration.
      money can be sent digitally down a phoneline at the click of a finger but it’s the only thing in the economy that can do, everything else, all the physical stuff, including people, is obliged to move in real time and space requiring energy to propel them.

      the whole economy seems built on squandering cheap energy to save money, once the energy becomes expensive and difficult to obtain the whole system falls apart.

      lets go global, on reddit there was a picture of a 1 portion plastic pot of pear chunks, on the side it said; grown in Argentina, packed in Thailand, it was on sale in the USA.

      I don’t think there’s an energy crisis, the world still uses 90 million barrels of oil a day, there is a squandering energy crisis due to a fixation with maximising profits.

      surely you can grow pears in the USA, surely Americans can pack them into pots, how does sending pears on a world tour make sense?

    • Kevin & Matt, Two of the best comments on the insanity of our predicament that I have ever read.
      To paraphrase the Joker: “I used to think that human life was a tragedy. Now I realise, its a comedy”.

  31. There is now a better than even chance that the abysmal performance of the present US presidency, combined with the growing hardship rooted in energy depletion, will result in a second Donald Trump presidency in 2024. If voters face that simple two-way choice in 2024, then it really is a Hobson’s choice, that involves trading one clueless and incompetent leader for another.

    Trump appears (to me at least) to be a mediocre populist politician. He achieved power by standing against continued globalisation, which has hollowed out the US economy and made a handful of billionaires super wealthy, whilst millions of working class men and women have seen their living standards decline. Some sort of rebellion through the ballot box was all but inevitable.

    But for a variety of reasons, he has so far failed to turn MAGA into anything useful to the average man. His trade tariffs against China have likely added to inflation, at a time when energy costs are already pushing in this direction. The problem is that the US is not in a position to emulate Chinese competitive advantage, in the form of cheap coal based energy, cheaper labour, long established supply lines and huge economies of scale. Chinese competitive advantage is failing anyway and coal depletion will soon result in severe physical shortages of energy intensive products. Trump failed to understand the energy basis of the economy and had no grand plan for laying the groundwork for a US manufacturing renaissance. Such a renaissance can only be based on a nuclear energy base, as US domestic oil and gas EROI has fallen too low to provide the energy base for a renewed US manufacturing economy. The idea of a renewable energy base for a manufacturing renaissance is a non starter for the same reason. Growth and high levels of average prosperity require a high EROI energy base.

    Trump missed an obvious easy win in failing to reform Obama Care into something like an affordable universal health care system, that would have broken the racket that US health care has become. Succeeding in this area would have benefited his voter base more than anything else he could have done, at least in the short term. And he would have had enough bipartisan support. But he failed miserably. He abolished affordable health care reforms largely to spite his predecessor. In my opinion, had he seen past his ego on this issue, it would have guaranteed him a second term.

    Like so many on the Right, he failed completely in grasping the nettle in the anthropogenic global warming debate. A man with even high school level physics would have understood that radiative forcing is long established physics. There seems to be a misunderstanding generally, that reality isn’t something you can change through political debate. The fact that your opponents are exploiting an issue, does not make the issue fake; and the right course of action in the face of that problem is not to attempt to take a contrarian stand against scientific consensus. An aggressive approach to replacing the fossil energy base with high power density, Gen 4 nuclear power reactors, would have pulled the climate crisis from under the Left’s feet by effectively solving it in the only way that it can be solved without poverty and starvation. And it would have given the US some world dominating exports that it could have sold to the rest of the world. But this, like so many other opportunities, was missed.

    All in all, this man does not have the ability or desire to be the messiah of the New Right, nor is he the Fascist demagogue that the US Left try to paint him as. The sad truth is that he doesn’t appear to have the foresight, education level or brain power to derive any kind of clever masterplan. He will be remembered as a sort of Ronald Reagan with less brains. What a shame the US could not find a younger and brighter presidential candidate that understands the need for some sort of MAGA, but has the brain power to actually implement it in an achievable way.

  32. “The new ambition might be to be ‘a reliable generator of shareholder value’, rather than any promise of growth.”
    Tim, do you mean, a reliable generator of shareholder dividends, rather than “value”? I suspect that reliable dividend distributions will become more important than increases in value from “growth,” which these days pretty much just means speculative gains.
    Companies that have to borrow funds in order to make dividend distributions (e.g., Exxon, which eventually may have to be nationalized) aren’t going to make the cut.

    Good rule, Tim. Default position on this site is that no comments here are investment advice.

    • Thanks. The business model of the future is an area that I’m thinking through.

      Let’s start with a small business – electrician, plumber, local retail ‘corner-shop’ (which I think is a drug store in the US). These businesses thrive where they provide a good service. They provide a steady income for their owners. They don’t (and can’t) go deeply into debt, and few have “growth” ambitions, beyond modest improvements in profitability. They don’t carry “passengers”, and don’t outsource any more than they have to.

      This is by no means the worst model for the future, as a ‘reliable generator of value for owners’. Obviously, their futures will depend in part on whether they provide discretionary or essential products and services.

  33. Wow, Tim, I didn’t expect that very intriguing reply! Not sure if you intended this but what I hear is the end – for the most part – of investment, in the sense of money making money. Your example suggests a country primarily of artisans, shopkeepers and small, probably primarily family based family productive freeholds – almost Jeffersonian it its outlook.

    You say let’s start with small business but I assume that this will (ideally) be against a backdrop of nationalized agencies/companies providing essentials of a country’s infrastructure, including energy, transport, water, communication and health services. Maybe not education, which could be returned to local government, as it was when I was in elementary school in the early 1960s and before. This leaves the very intriguing question of what scope would remain for large companies in the goods and services fields.

    • As I see it, what this means is a change in corporate purpose, and not too inconsistent with a lot of what’s already happening. It might be a useful topic for discussion here. It’s not the end of investment (which will always be needed), but the end (or rather the de-prioritizing) of speculation.

      In a context of post-growth – ushered in by a collision with rising ECoEs and the limits of enviromental tolerance – corporations will still be necessary, but will evolve towards different objectives. Competition will still operate, new businesses will still be formed, and others will still fail. What changes are (a) the size of the market, and (b) business purposes.

      The new objectives are likely to be (1) generate reliable returns for shareholders, and (2) do this better than others are doing it. Add to this the ‘taxonomy of de-growth’ and we have a wholly new business climate.

  34. Art Berman on Prospects for Oil, Gas, and Coal with a Brief Comment on Nuclear

    My summary of Art’s position: the current debacle is a failure of management rather than any fundamentals in the energy supply.

    My own thoughts: the rising ECoE is an even more fundamental factor than the mismanagement in places like the EU and Britain, or the ups and downs of supply and demand in the markets.

    Don Stewart

  35. Consciousness of Sheep on Peak Gas??
    This is an obnxious comment from across the ocean. Responding to:
    ” Although Mr Putin’s use of gas shortages to cajole the EU Commission into finalising the Nord Stream 2 pipeline has echoes of the 1973 OPEC oil embargo”

    The actual numbers are that NordStream 2 will only incrementally increase gas supplies to Europe. It has a small capacity in comparison to EU total consumption. While I would suggest that the EU get over its hostility to Russia and negotiate as equals, I can’t see much prospect that Russia can supply enough gas to meet Europe’s demands, particularly if the bloom is now off the wind and solar roses. As Art Berman says, he doesn’t hear any great enthusiasm in France to launch a fleet of new nuclear plants. So where will the energy to operate whatever replaces those nuclear plants come from?

    In short, blaming Russia may serve some short term purposes for the politicians, but the real problems are much deeper.

    Don Stewart

  36. a major obstacle to getting western politicians and elites in general to change their minds, approaches and ideologies is that the loonies at NATO have decided that their ‘competitors’ are trying to avoid engaging in ‘kinetic’ warfare (shooting) and are relying on cognitive warfare to subvert us and make us think differently,

    a quote taken from the conclusion section of this paper;

    “Today’s progresses in nanotechnology, biotech-nology, information technology and cognitive science (NBIC), boosted by the seemingly un-stoppable march of a triumphant troika made of Artificial Intelligence, Big Data and civilisational “digital addiction” have created a much moreominous prospect: an embedded fifth column, where everyone, unbeknownst to him or her, is behaving according to the plans of one of our competitors.”August Cole, Hervé Le GuyaderNATO’s 6th Domain

    anyone showing signs of dissent from BAU could quite easily be considered brainwashed by the enemy and under their influence,


    Click to access 20210122_CW%20Final.pdf

    the paper is well worth reading, it gives insight into the current depth of understanding of neuroscience, it’s possible applications and the depth of paranoia within the security establishment.

    • @Matt
      My wife and I joke about ir, but it is literally true that puppies and babies can easily manipulate us to get what they want from us. If one goes deeply into it, the survival of both babies and puppies DEPENDS on their ability to manipulate adult humans. The microbes in our guts create cravings in our brain to eat the food they need. What has changed is that corporations and governments have now systematized the same capabilities to manipulate us in ways that maximize profits and power, while frequently obscuring physical limits….e.g., rising ECoEs are not important. Global GDP in 2200 will be several multiples of what it is today, because we can always print more money and money creates growth…or Fabulous new technologies will revolutionize the energy business….or New Frontiers in Space offer us unimaginable opportunities.

      While it always pays for another human or microbe to manipulate us, we did not evolve to be helpless. An amazing number of young ladies have been able to resist my offers, for example.

      Don Stewart

    • I do think people are becoming more aware of and resilient to psychological manipulation but the establishment seems to think that, increasingly, psychological manipulation is a vital part of their toolkit to maintain control,

      I posted this briefing because it shows how much attention they are paying to this area,
      the Brexit campaign was almost unbearable, all the craziness of the 2016 US election and accusations of ‘Russian interference’ set everyone on edge,
      media stories get increasingly bizarre as blame is unloaded on to anyone and everyone except the establishment with it’s dogged determination to carry on regardless,
      the greatest moment of tension is likely to be just before the tide turns or the storm breaks,
      if we think the last few years has been crazy we should be prepared for the information war to get even crazier before the establishment narrative finally starts to publicly crumble,
      within this briefing is the observation that the best defense against information attacks is:
      “The importance of truly “knowing yourself” cannot be understated.

      it’s probably good advice to buckle up and prepare to follow Kiplings advice in his poem ‘If’
      If you can keep your head when all about you
      Are losing theirs and blaming it on you,

  37. An article by the BBC is reporting that life expectancy has been falling in parts of England since 2010. Significantly, the trend was well underway before Covid arrived.

    There’s also huge inequality between life expectancy in the wealthiest parts of London and some of the major urban areas in northern England, where it’s dropped to below 70 for men. I was already aware of this trend at a superficial level, but some of these new statistics have shocked me.

    I guess this is a sign of things to come. It seems to fit with the trend in decreasing average prosperity per capita, and increasing inequality in the distribution of wealth. I wonder how long it is before real rage erupts over these kinds of issues?

    When the great British public wakes up and sees through the fog of establishment BS, there will be trouble. Levelling-up are we Boris? I’d get moving if I was you.


    • Gradual economic change and declining prosperity are in prospect for most economies, but Britain is already in the throes of something very much more unpleasant. There is little or no awareness of reality, either in the corridors of power or amongst the wider public.

      That we – everywhere in the world – have to transition away from fossil fuels is factual, not just because of the environment, but also because the rising ECoEs of fossil fuels are undermining the FF economic dynamic.

      But claims that this can maintain current levels of prosperity, let alone deliver “growth”, are fiction.

    • Presumably, one of the long term effects of rising ECoEs is reduced longevity.

      Are you suggesting we dramatically increase the throughput of carbon energy in order to compensate.

      Alternatively, how do you think an equality of outcomes regarding longevity be achieved. A centrally planned lifestyle regime or a centrally planned equality of outcome regarding wages, income and wealth?

    • I largely agree with Neill although COVID didn’t feature much change in age-adjusted all-cause mortality (deaths per 100,000) in the UK. This offends the government narrative, so it doesn’t get discussed much, except on sites like the Daily Sceptic. The rising inequality may be *the* reason, plus the unhealthy UK diet … and couch potato habits made worse by lockdown.

      The book ‘The Spirit Level’ suggested that inequality tends to lead to less good social outcomes, e.g. Sweden or Japan (low inequality) have tended to do better than the UK and USA (high inequality). Maybe the UK governing classes live such lavish lives that they hardly meet ‘normal’ or ‘poor’ people. I also fear that the less well-off are so stretched and stressed just getting by that they don’t vote as much as the better-off, rather a vicious circle.

  38. Oil Supply Adequate For Now, But Larger Supply Crunch Looms.

    Global oil supply will be enough to meet demand in the short and medium term, but the world is headed towards a supply shortage after 2026 unless the oil industry boosts investment in new projects, participants at last week’s Energy Intelligence Forum 2021 said.


    • there’s still plenty of fossil energy being extracted and consumed in the world, it’s just not necessarily being used for sensible and essential purposes,

      the problem is that the total amount of energy available isn’t growing each year in the manner it used to,
      for the entire economy to keep growing every sector has to be able to consume more energy,
      what we need now is a sort of energy triage where frivilous discretionary activities are cut back so that their energy consumption can be diverted to support essential activities,
      we are becoming like a family living on a fixed income that has to decide what expenses to cut so as to support activities that are essential,

      wishing to keep expanding commercial aviation whilst we are starting to worry about keeping the lights on in mid winter is a bit bonkers,
      we will have to start robbing Peter to pay Paul,

      how could the energy powering commercial aviation be redeployed to keep the lights on in winter?
      well this an ‘outside the box’ quick fix that the Russians devised to cope with electricity shortages in the past,


      how about that for an emergency backup generator!

    • To all,

      Oil might be approaching tightness, but n.gas is currently biting more than heating and electricity generation. See:


      Diesel owners can have a serious problem! AdBlue is starting to miss – PRAVDA.sk

      The largest manufacturer of AdBlue in Europe does not accept orders from new clients, the second largest has reduced its production and the third largest has even stopped completely. The reason is the high prices of natural gas.

      The Minister of Economy Richard Sulík (SaS) did not rule out that Slovakia would temporarily ban the export of AdBlue.

      There are no semiconductors, car radios, there is a problem with rubber, car manufacturers are stopping production, some cars have been waiting for almost a year, in addition, new ones are becoming more and more expensive and the price of fuels has been rising for several months. To make matters worse, a whole new and serious problem has now arisen for the owners of newer diesel cars – AdBlue is starting to be missing from the market. And all over Europe! Its production is already limited by the largest producer in Europe, Duslo Šaľa.

      Will we ban the export of AdBlue?

      It looks like an alarm message, but the truth is that “the production of fertilizers is also linked to the production of AdBlue and Duslo is the largest producer in Europe. The second largest is in Germany and it has started to cut AdBlue production. The third largest is in Poland and it stopped production, “said Minister of Economy Richard Sulík (SaS) at a meeting with journalists earlier this week. According to him, there will be a real problem with enough products in the near future. It may even be that the state will completely ban the export of AdBlue abroad.

      And what exactly does AdBlue need? In particular, to reduce nitrogen oxide emissions in modern diesel engines to meet the Euro 5 and later emission standards. This is achieved by neutralizing the pollutants with a solution of synthetic urea (known as AdBlue), which is the essence of a selective catalytic reduction system. Thanks to it, the amount of nitrogen oxides in the exhaust gases can be reduced by up to 95 percent. Engines that use it cannot work in the absence of AdBlue.

      “If these solutions are not on the market, it means that all engines of the category from Euro 5 above, which AdBlue must buy, will most likely be shut down,” said Duslo Šaľa head Petr Bláha and pointed out that it is not just cars, but also for trucks and buses.

      The problem is gas

      AdBlue is starting to be missing due to high natural gas prices. Its separate production is not economically sustainable and is therefore part of the production of other products. For example, in Dusle Šaľa is linked to the production of some fertilizers, which the company significantly reduced due to the already mentioned high natural gas prices.

      For the time being, according to Bláh, Duslo is still fulfilling its contractual obligations towards customers, but it is currently rejecting new customers. The company limited production to a technological minimum. According to Bláhu, however, its complete interruption is also in play until the prices are more favorable.

      According to Bláh, there are several connections to the restriction of production in chemical plants, it is not just AdBlue. “Some products used in healthcare may be missing, as long as there are no fertilizers on the market, we will see a decline in crops, rising prices of agricultural products and food.


    • Matt
      The problem here is that all of the MSM are either tied into the notion of techno fixes will save the day or that there isn’t a problem here at all – move along, please!
      Tim Watkins shatters this narrative with clarity – hence he will never be given a fair crack of the whip.

  39. @Dr. Morgan
    I can’t reasonably quarrel with how you characterize your own position. However, ‘market forces’ getting us to the right place raises many questions, which you might like to answer in as much or little detail as you see fit. My questions pertain precisely to the US, and perhaps by extension in other places:

    *We currently have an extremely distorted distribution of assets. Most people in the US do not have a surplus of physical assets. For example, they rent an apartment or have a mortgage on their house and many rent their car and even their furniture. If their income falls, they will have nothing at all. A market crash would wipe out a lot of the notional wealth of the super-rich, but some subset of them would still own a very high percentage of real assets. We might note that the fall of the Soviet Union wiped out currency values, but that did not prevent an aristocracy from emerging out of the ashes. We might label that world ‘feudalism’. For what it is worth, Jim Kunstler populated one of his A World Built By Hand books with a religious commune, a feudal plantation, and a democratic small town. I can see it going in any of those directions, but the default looks to me like feudalism, particularly if the government survives.
    *We suffer from ‘regulatory capture’. The regulatory agencies see it as their job to promote the quasi-monopolies they supposedly regulate. And it is common knowledge that it really doesn’t make any difference what the ‘public’ thinks, it is the big political donors who control things.
    *The rise of social media has dumbed everything down, and narrowly channelized information flows. It’s hard to see how, in a Degrowth world, we get back to anything like Athenian democracy. Not that the Old Days were perfect, but I think almost everyone agrees that the current political system is disaster.
    *Many people will agree that our four largest industries…medical, military, education, and food…are ill equipped for survival in a Degrowth world. Is it possible to eliminate or rearrange these physical organizations if their leadership survives?

    What plausible evolutionary paths do you see to get us to where we need to be? I’m not in favor of the return of the guillotine, but I am trying to think about this logically. Your thoughts will be appreciated.

    Don Stewart

  40. FYI,


    France unveils nuclear power overhaul – with an eye on China
    13/10/2021 – 18:19

    France’s President Emmanuel Macron speaks during the presentation of “France 2030” investment plan at the Élysée Palace in Paris, October 12, 2021. © Ludovic Marin, AFP
    Macron announced that the “number one priority” for his industrial strategy was for France to develop “innovative small-scale nuclear reactors” by 2030.

    This marks a sea change in France’s approach to nuclear energy. The 1974 Messmer plan (named after then PM Pierre Messmer) poured colossal investment into nuclear power after the previous year’s oil crisis caused by the OPEC embargo exposed the fragility of France’s reliance on imported oil. The strategy allows France to source more than 70 percent of its energy from nuclear power – the highest proportion in the world. Until now, this huge nuclear sector has been built around ever-larger reactors.

    “The small modular reactors each generate less than 300 megawatts (MW) of energy; far less than most reactors currently in service, which tend to produce between 950 and 1300 MW, with some of them including the Flamanville plant [on the English Channel] capable of as much as 1600 MW,” said Giorgio Locatelli, an expert on the engineering of nuclear power stations at Milan Polytechnic.

    The components of these smaller reactors are usually built in a factory assembly line and then transported for assembly on site, where they can be easily adapted to the plant’s particular needs – making them nuclear power’s answer to Ikea furniture.

    This approach is expected to make it easier to build nuclear plants – especially after construction delays in Flamanville’s reactor 3 during the last decade demonstrated that putting in place a huge new reactor can be a tricky process.

    In the grand sweep of the history of French nuclear power, the shift towards smaller reactors looks like a step back, Locatelli suggested, because France “started with small reactors in the 1960s before switching to larger ones to develop economies of scale”.

    However, this trend has now reached its limited, he continued. “Reactors like the one at Flamanville are not only very expensive, but also it’s a long and complex process to build them.” It takes billions to create such plants, and often it is difficult for governments to find investors willing to wait up to a decade before their returns start coming in.

    Competition with China

    Most countries lack the means to pull of these massive reactors, noted Nicolas Mazzucchi, an energy specialist at France’s Foundation for Strategic Research: “The financing models they require – not to mention the capacity to really mobilise a country’s savoir-faire in this domain – are increasingly rare, except in nations like Russia and China where energy companies have total state backing.”

    Consequently, switching to small modular reactors is a strategic pivot to allow France to deal with competition from countries like China, which has increasingly big ambitions when it comes to nuclear power.

    France’s change of approach could also allow it to win lucrative new markets. “By 2025, nearly a quarter of the world’s existing nuclear capacity will be exhausted because the reactors will have become too old,” Mazzucchi continued.

    A further reason why small nuclear reactors could be a French export bonanza is that they can be used for crucial purposes other than energy generation. “It’s a very flexible form of technology,” Locatelli said.

    “These reactors can be used for water desalination – a highly important task in places like the Middle East and even India – as well as to produce hydrogen to heat homes in colder parts of the world,” Mazzucchi pointed out.

    In theory, small reactors are also likely to be safer than traditional large reactors. Japan’s Fukushima accident in 2011 dented nuclear energy’s reputation for safety – then the Taishan incident in China in July showed that technical problems can also assail the most modern reactors.

    By definition, small reactors “contain less nuclear material, which in theory gives them the potential to be safer”, noted Karine Herviou, deputy director in charge of nuclear safety at France’s Institute for Radiological Protection and Nuclear Safety. This can “limit” the release of radioactive substances in the event of an accident – in addition to the safety measures that will be in place, Herviou continued.

    In particular, procedures tailored to small reactors can allow operators to “get rid of the residual power produced by the reactor after a shutdown”, Herviou added. It was this residual power that caused the reactor cores to melt at Fukushima and during the Three Mile Island incident in the US in 1979.

    ‘Lack of experience’

    But that is just a theory. The people in charge of reactors using cutting-edge technology “will have to justify their safety”, Herviou said.

    So far, the theoretical advantages of small modular reactors have not been confirmed in practice. Some 70 such reactors are currently in development throughout the world – and the vast majority of these projects are still in the early stages.

    “The main concern with this technology is the lack of a track record,” said Locatelli. What is more, he continued, nuclear power’s “chicken-and-egg problem is still there: Is it better to start building reactors first to win over buyers or is it best to find the investors first?”

    Although the race for small modular reactors has only just got under way, France is “starting late” compared to the US, Mazzucchi said. Across the Atlantic, regulators have already given the green light to at least one such project – with an entire ecosystem of start-ups emerging to develop this technology.

    Nevertheless, France has every chance of succeeding. “Its big advantage is that its energy sector has already proven itself when it comes to nuclear technology, while controlling the entire supply chain from uranium mining to designing reactors,” Mazzucchi said. And the country will have around a decade to develop its expertise in small nuclear reactors before it can reap the rewards in exports. From 2030 there will be a “real market for this type of reactor”, according to France’s Atomic Energy Commission.

    This article was translated from the original in French.

    • while the West hums and haws and fiddles with it’s belly button the Russians have built and put into service a floating 80MW nuclear power station using two of the proven nuclear reactors they use in their nuclear icebreakers,


      launched 2019.
      the UK is an island, we could have these sort of things moored in ports all around the country,
      when you want to refuel, do major refurbs or decomission you just tow it back to it’s home port installations.
      floating power stations aren’t trapped on land vulnerable to sea level rise and inundation,
      build one a year for 40 years and design them with a 40 year service life and you have a permanent ship building industry for somewhere up north.

    • The first piece of sensible news on energy I have read in ages.
      After reading the above article and thinking about the impending energy issues in UK this winter might it be a good reason to seek refugee status in France?

  41. quite a long video, 2hrs 38mins, President Putin talking at Russian Energy Week earlier today.

    what Western leader is capable of answering questions, without notes, on complex matters over a period of 2 1/2 hours?
    it’s a completely different take on the Western media narrative on the ‘energy crisis’

    the reason Europe is low on gas is that it burnt a lot last winter and through this year when wind and solar performed poorly and didn’t make sufficient efforts to refill storage,
    much of the American LNG destined for Europe was rerouted to Asia so the sellers could get a better price,
    the European energy market is beset with problems due to it’s obsession with market forces, spot prices and short term planning,
    Russia much prefers to sign long term contracts linked to the price of oil on global markets because it wants price stability and predictability to make it’s long term investment strategies in energy work,
    Russia has already raised it’s supply of gas to Europe whenever asked and if need be above levels stipulated in existing contracts, no request is refused,
    10% more natural gas, 15% more LNG so far,
    it could raise supply further if regulatory hurdles and impediments to full utilisation of nord Stream 2 could be overcome,
    Russia is reluctant to increase gas flows through the Ukrainian pipeline system because it’s old and in a poor state of repair with much maintenance long overdue,
    if they turned up the flow and pressure it could break and then the Ukraine and Europe further along the line would be getting no gas at all through it,
    there is a huge underground cavern storage facility for gas in the Ukraine but it’s not been refilled completely and it rather sounds like different actors are drawing gas from it without adequetly accounting or paying for what they take,
    the Ukrainian pipeline draws from an old gas field which is running out, Nord Stream comes from a new gas field in a different place, the pipeline is 2,000kms shorter due to the different route and can supply gas more cheaply due to reduced transit fees,

    I’d much rather hear straight from Mr Putin than after it’s gone through the distorting mirror of the Western media,
    to me he comes over as being very reasonable, maybe Brussels and Washington need to stop playing silly buggers all the time?

    the attractive American women asking Mr Putin snarky questions in an attempt to look tough and smart comes out looking a bit daft.

    • Putin vs. EU Chaos

      I don’t pretend to have any inside information. But when I see Putin put on his one man performances, such as this one, he gives the impression that we have discussed these things and based on the facts and what we can reasonably expect, this is the plan. As one example, ten years ago he was touting gas pipelines because ‘a pipeline will always be cheaper than LNG’. In this talk, he explained that gas will decline over the coming decades as small nuclear plants make up a larger share. Therefore, it doesn’t make sense to invest years of time and lots of money in the fixed asset of a pipeline. The political football of NordStream 2 is a good example. So LNG will be more expensive, and a lot of it will be shipped via the Arctic in icebreakers, but the willing and the solvent will have gas. So he is not afraid to admit that his mind has been changed by developments and sober reflection.

      The ‘open democracy’ lament that “if we just poured more money into wind and solar, we wouldn’t be having this problem” sounds completely nonsensical. Of course the EU would like to force Russia to bail out Ukraine, but the reality is that the EU created a lot of that problem and I can’t see Russia bailing them out.

      In short, I see Russia reacting to a lot of reality and the EU reacting to a lot of slogans. I can’t speak intelligently about the UK…but the little I have seen is “head in the sand”. The US seems to. be shifting gears, very quietly, toward nuclear. Everyone sees that Russia is making it work. My understanding is that China is well down the road. I still have a lot of questions about transport…with the scattered US user base militating against electricity (IMHO). We are perhaps the only country in the world where ‘compact city ordinances’ are used to permit scattershot development.

      Don Stewart

    • I can see EV’s working tolerably well in the densely populated parts of Europe and North America but the wide open spaces and the Interstate Highway System seem ill suited to EV’s,
      Vaclav Smil up in Canada said he didn’t fancy an EV in the depths of winter when the ambient temperature would really reduce an EV’s battery capacity,

      my silly little Reva G-Wiz had lead acid traction batteries and it was equiped with an electric blanket around the battery array on a thermostat to stop them freezing and bursting in cold weather.

  42. My Questions About the Evolutionary Path Forward
    Carey King lays out many of my perceptions about how the world works.

    I will just note a couple of items:
    *King models a breakdown as energy use plateaus and declines
    *The reviewer notes that major steps in evolution toward increased complexity involved the suppression of deadly competition. The neoliberal world, at its best, suppressed deadly competition and achieved global synergies by leveraging money and greed.

    But now, the energy plateau and decline are knocking the pins out from under the money based cooperation. So I question whether purely private enterprise can preserve the global synergies. I note that Putin emphasizes cooperation AND profit oriented companies, but he puts a different spin on it…let us gather together and figure out how we can cooperate to resolve these existential problems. Orlov calls it ‘state sponsored socialism’ . China may be going that way. I expect the response from the EU and the United States and Canada and Australia and the UK to be slinging around the ‘enemy’ label a lot. I believe those countries see it as a zero sum game.

    Don Stewart

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