#221. Strategies for a post-growth economy

PART ONE: BUSINESS IN A NEW ERA

Under current conditions, it’s increasingly hard to understand why the inevitability of economic contraction remains so very much a minority point of view.

Many of us have long understood why past growth in material prosperity has gone into reverse.

Here, with the SEEDS economic model, we can go still further, quantifying past trends, and charting a future in which economies get poorer, living standards are squeezed by rises in the real cost of energy-intensive essentials, and the financial system buckles under the weight of its own contradictions.

None of this has to be a disaster, but the management of involuntary economic ‘de-growth’ requires innovative strategies, most obviously in business and government.

The aim here is to concentrate on the PNFC (private non-financial corporate) sector, evaluating strategies that could mitigate the worst effects of economic contraction.

Other sectors – government, households and the financial system – may be the subject of future instalments, whilst the role of technology might merit separate discussion.

Don’t over-simplify

Readers are reminded that this site does not provide investment advice, and must not be used for this purpose.

In any case, it would be an over-simplification to assume that the decline in prosperity must crush discretionary sectors whilst leaving suppliers of essentials largely unscathed.

In fact, suppliers of intermediate (and intermediary) services are at even greater risk than businesses which supply products and services that the consumer might want, but doesn’t need.

Rather, future trends will be more nuanced than a simple decline in all forms of discretionary consumption.

What emerges from this analysis is that businesses will need – and will be pressured by market forces – to front-run the process of de-complexification that will parallel contraction in the size of the material economy.           

To be clear about this, we’ve reached a point at which there are no easy choices, and certainly no painless ‘fixes’.

Transition to renewable energy (RE) alternatives to fossil fuels, imperative though it is on environmental and economic grounds, isn’t going to restore the energy abundance of the past. It would be wholly irrational to expect financial stimulus to produce a supply of low-cost energy that does not exist in nature.

The idea that technology can solve all problems is one of the greatest delusions of the age.  

Strategically, the critical point is that the ever-increasing complexity which has accompanied two centuries of growth has now become a liability rather than an asset.

During the quarter-century precursor period which has preceded the onset of de-growth, this problem has been exacerbated by the expansion of unproductive complexity, a consequence of policies which have promoted activity (as measured by GDP) without adding value.

Just as businesses now need to front-run a process of de-complexification that will accompany de-growth, there’s a corresponding requirement for governments to reset priorities, and increase efficiency as resource availability declines.

The reality of involuntary de-growth

For the purposes of this discussion, it’s going to be assumed that readers understand the inevitability of de-growth.

The fundamental principle is that prosperity is a function of the supply, value and cost of energy. The relentless rise in the ECoEs – the Energy Costs of Energy – of fossil fuels has put prior economic expansion into reverse.

Efforts to counter this material problem with financial responses have failed, in the process creating enormous risk by driving a wedge between the ‘real’ economy of goods and services and the ‘financial’ economy of money and credit.

At the same time that the prosperity of the average person is declining, the cost of essentials is rising, not least because the supply of so many necessities is energy-intensive.

Essentials make the first call on prosperity, which means that other uses of economic resources are being compressed by this process. One of these ‘other uses’ is capital investment, meaning the addition and replacement of productive capacity.

The other is the supply of discretionary (non-essential) goods and services to the consumer.

Meanwhile, and because prices are where the material and the financial intersect, rising inflation is a logical consequence of the imbalance between the ‘two economies’ of energy and money.

The authorities face unenviable choices, mainly because the costs of necessities (including energy and food) are rising within a broader inflationary context. What’s being called the “cost of living crisis” has far-reaching political implications.

Unchecked, it could open the door to ‘left-populist’ parties offering to provide subsidies (paid for by “the rich”), perhaps reinforced with promises to nationalize “fat-cat” utilities.

The lack of logic in such broad-brush proposals cannot be counted upon to reduce their popular appeal.

Letting events take their course risks undermining what consumers can afford to spend on discretionary (non-essential) goods and services, a process which can’t be guaranteed to tame inflation, but would be certain to drive unemployment higher, and induce a recession.

Much the same applies to raising interest rates from deeply negative real levels, which would have the added consequence of triggering sharp falls in the prices of stocks, bonds, property and other assets.

Nominal rates will need to be increased – though this might do little or nothing towards pushing the real cost of capital back into positive territory – and asset prices cannot be propped up indefinitely.

But monetary policy offers no “magic bullet” fix for financial instability.

In these circumstances, subsidizing the cost of living might, to decision-makers, seem the least-bad policy option. But this would send already-elevated public debt soaring, with the almost inevitable consequence of monetization by central banks.

Not for nothing has inflation been called “the hard drug of the capitalist system” – though market economies certainly have no monopoly on the debasement of the purchasing power of money.

The implications for business

Where strategies are concerned, we need to be clear about two things.

First, the rapid economic growth of an Industrial Age powered by fossil fuels was accompanied by ever-greater complexity, making it inevitable that involuntary quantitative ‘de-growth’ will be accompanied by a process of de-complexification.  

Second, policy trends during a growth climacteric which began in the 1990s have added unproductive complexity to the economy.

Efforts to use monetary expansion to stem the onset of economic deceleration and contraction have boosted activity (measured as GDP) without improving the delivery of value.

Where businesses and governments are concerned, this has had the effect of adding to complexity without improving profitability, efficiency or resilience.

From a business perspective, the issues have at least the merit of clarity. Consumer prosperity is deteriorating, whilst resource constraints are the primary factor driving business costs upwards. The appropriate responses are (a) cost control and (b) the pursuit of resilience. These need to be seen as distinct but connected challenges.

There are two stand-out risks to business resilience.

The first of these is adverse utilization effects. As sales volumes shrink, the unit equivalent of fixed costs increases, and passing on these unit cost rises to customers in higher prices is likely to exacerbate the decline in volumes.

The copybook example here is a road bridge, which has high fixed expenses and low user-variable costs. If, say, fixed costs are $10m, and 2 million customers use the facility, a cost of $5.00 has to be incorporated into tariffs. If user numbers fall to 1 million, the fixed cost per user rises to $10. The consequent increase in tariffs may cause further declines in user numbers.

This is a simplistic example, but no business is free from fixed overheads which, of course, include management and promotional expenses, and the servicing of capital.

Importantly, this trend has adverse effects, not just for the bridge operator in our example, but also for nearby businesses whose employees rely on the bridge to get to their place of work, and whose suppliers rely on the bridge for deliveries.

The second risk to resilience is loss of critical mass, where components, inputs or services either cease to be available, or their cost becomes prohibitive. When calculating fade rates for the economy of the future, these factors need to be considered in tandem.

The counter to both of these risks is simplification, which applies both to product offerings and to processes.

Reducing the variety of products offered to customers – from, say, twenty different types of widget to five – streamlines operations, simplifies delivery, and boosts efficiency.

Simplifying the way in which widgets are manufactured (or services are supplied) makes production less expensive, and simultaneously reduces dependency on the supply of inputs. If the number of inputs required in the manufacture of a widget is halved, so, logically, is the risk associated with the loss of access to their supply. 

Carried forward, simplification will reduce managerial and other overheads, and will lead to de-layering, where external service inputs are reduced, taken in-house, or eliminated altogether.

Conclusions

Globally, SEEDS analysis shows that prosperity increased by only 31% between 2000 and 2020, whilst the estimated cost of essentials rose by 80%.

At the aggregate level, prosperity excluding essentials (PXE) was essentially flat over that period, but PXE per capita turned downwards in 2007, since when it has declined – making people feel poorer – by 18%.

By 2030 – with top-line prosperity deteriorating, and the real cost of essentials continuing to rise – even the aggregate PXE number is likely to be 28% lower than it was in 2020.

Logically, this relentless squeeze on PXE implies that the greatest pressures will be imposed on sectors supplying discretionary goods and services to consumers.

But – and even if it were appropriate to do so here – we cannot simply list discretionary sectors ranked by their exposure to contraction or, for that matter, to the rising cost of energy and other inputs.  

Any such listing would be based on the mistaken assumption that neither businesses nor governments will react to declining prosperity and the rising cost of essentials – which, of course, they will.

As we’ve seen, the likelihood is that businesses will react along the lines of the taxonomy of de-growth, shown below. Though different, more positive-sounding phraseology will no doubt be employed, the operative trends can be listed as simplification of products and processes, de-layering and cost reduction within the general theme of de-complexification.  

This predictable trend nuances the outlook, such that the greatest pressures are likely to be exerted, not just on discretionary sectors, but at least equally on those intermediate and intermediary stages capable of de-layering, reduction and elimination. 

Without being sector-specific, this situation has particular implications for technology, of which, as a general proposition, far too much is expected.

Technologies which improve the efficiency (and, specifically, the energy-efficiency) of household and business users can make a premium contribution during de-complexification.

But the future is bleak for technologies which promote new ways of putting energy to discretionary use. 

209 thoughts on “#221. Strategies for a post-growth economy

    • Here in Europe, this falls into the category of government rather than business. Hopefully we’ll get on to government in a later instalment. The answers are likely to involve a focus on priorities and efficiency. I cannot see how the essentially private health system in the US can adapt to de-growth. For me, Obamacare had the right intentions but the wrong methods.

    • The future of health ‘care’ is attached to the future of fiat currencies.

      In decline. What a stupid question.

    • National expenditure on healthcare across all national income levels, whether privately, publicly or mixed funded is tightly correlated with GDP per capita. That is, such expenditure behaves like a discretionary expense rather than an essential expense. This is also seen at a personal level. Lower income individuals foregoing even essential medications while wealthy individuals access expensive procedures. Fully expect healthcare expenditure and access to decline as real incomes decline: both personal and national.

  1. How can the relatively few farm entities be split up in much smaller farms and can you persuade students now filling universities to return to the hard work of a farmer – Will there be a survival of the fittest and willing. I imagine a very harsh fight going on.

    • We won’t necessarily need smaller farms, but we’re likely to need a lot more people on the land. As discretionary sectors contract, and intermediate sectors are de-layered, there will be no shortage of labour.

  2. Good posting, Dr. Tim. W.R.T. renewable energy, I suspect that there are hard physical limits to how much energy can be captured from solar sources and that this will limit how many people we can support with an economy running off of RE. Historically, the last time the world ran off of RE, in the 1700’s, the population maxed out at around a billion with disease, famine and war keeping the population within sustainable bounds.

    • Thanks.

      There are limits, scientifically defined, to how much wind power can be captured per turbine, and how much solar energy per PV panel.

      There are limits, too, to the resources available for RE generation and distribution, limits set by material availability and the energy available to produce these resources. My belief now is that the rise in FF prices is already having adverse effects on the cost of RE systems (and batteries).

      Subsidizing the cost of living will further reduce the scope for expanding QE. In some countries, schemes whereby consumers subsidize RE are becoming untenable.

      Ultimately, RE development relies on the cost and supply of FF energy for construction, maintenance and replacement. This, ultimately, is why REs can never take us back to an age of growth-enablingly-low ECoEs.

    • “Raw material shortages, notably in metals and minerals and polysilicon are impacting the renewable energy industry
      The cost of solar panels, wind turbines, and EV batteries is climbing after years of declines
      Solar panel prices had surged by more than 50 percent in the past 12 months alone. The price of wind turbines is up 13 percent and battery prices are rising for the first time ever “
      https://oilprice.com/Energy/Energy-General/The-Era-of-Cheap-Renewables-Grinds-To-A-Halt.html?fbclid=IwAR2bP-kU2DIRiN7oF6VhiuZ0QVmNJARuLQc2lbkSNa99j9PHk4RHyCL8FYk

  3. “…there’s a corresponding requirement for governments to reset priorities, and increase efficiency as resource availability declines.”

    This is where the rubber meets the road, Dr Tim. Expecting governments to act in the best interest of the populace is not in accordance with history as I read it. Some countries might be fortunate to have a regime in power that attempts it, but I judge those exceptions that prove the rule of the primacy of elite self-preservation. I expect that most governments will attempt to please the populace with tokens, crumbs, and spin. Few will tell them that decline is unavoidable and to fasten seat belts.

    • New conditions – and de-growth is without precedent – might produce new quality of government.

      The position of the elites might be worth a dedicated article. Their absolute wealth cannot be kept intact, and much of that wealth, in any case, is paper/theoretical – for instance, how rich would the elites be if asset markets crashed? This point also tells against those who advocate massive redistribution.

      There have always been elites, but the form that elites take has varied – aristocrats, courtiers, the clergy, soldiers/warlords, landowners, merchants, industrialists, commissars. We don’t yet know what, or whom, the next elites will be.

    • orig reference: T.M.…”there’s a corresponding requirement for governments to reset priorities, and increase efficiency as resource availability declines.”

      SK: I questioned the likelihood of that in my response.

      T.M.:
      “There have always been elites, but the form that elites take has varied … We don’t yet know what, or whom, the next elites will be.”

      S.K.:
      My comment was intended to address the rest of this decade as a start. The power-elite control most governments, and I can’t envision wholesale replacement of them in the next 8-9 years. Given the increasingly brittle material and cyber-based systems, serious problems from degrowth are likely to accelerate soon. Present governments are, in the main, oblivious and more concerned about the next election. The” requirement” in your first quote above strikes me as hopium.

    • Yes, it’s going to be difficult – to put it mildly – especially in the next few years. I’ll look at this specifically in the planned instalment about government.

      There’s always a tendency to believe that the elites of the moment are permanent, but elites get replaced.

      On government, I believe – perhaps naively – that de-growth will stimulate change.

    • Thanks Steve, I agree. My base-case expectation is that populism offering false hope will be the response to failure of governments/elites. Whether this is right or left populism (or right or left false hopes) is immaterial to me. Part of the illusion the right will have to give up is that a “middle class” can be restored or maintained. Part of the illusion the left will have to give up is that a future economy based on renewables can allow the lower classes to be raised up to greater levels of consumption.

      Of course, there won’t be one future – there will be futures. People will try different things. Hopefully this provides some opportunity for learning from others.

    • Dr. Morgan said, “ Unchecked, it could open the door to ‘left-populist’ parties offering to provide subsidies (paid for by “the rich”), perhaps reinforced with promises to nationalize “fat-cat” utilities.”

      As an extension to what Mr. Kurtz said, and to give an opposite, and in my opinion much more likely scenario (at least in the US) I offer the following:

      Unchecked, it could open the door to right-populist (ie fasciest) parties offering minorities up as scapegoats, explaining that subsidies and other relief for majority persons suffering cannot be given because — the blacks, the Jews, the Mexicans get it all.

      Again, to paraphrase the cartoon “Archer”, “You want Trump, Biden gets you Trump.” Trump and everything that goes with him.

    • Re: “offering minorities up as scapegoats, explaining that subsidies and other relief for majority persons suffering cannot be given because — the blacks, the Jews, the Mexicans get it all.”

      SK: You’re leaving out many other ethnic groups, Pintada. And I find it curious that you say that ‘fascists’ blend skin color, geographic origin, and religion as equally valid descriptors of people. There are Black Jews, Black Mexicans, Mexican Jews, etc. I suppose that hateful fanatics forego logic.

    • “… fascists’ blend skin color, geographic origin, and religion as equally valid descriptors of people …”

      Ive known a lot of bigots in my life and Ive never known any of them to worry overmuch about logic. It’s just a matter of finding someone to demonize so that no one notices that they are getting poorer because of complex things that they likely would not understand anyway. My point was that the far right is more likely to win the elections in 2022 and 2024 than some far left coalition.

    • “My point was that the far right is more likely to win the elections in 2022 and 2024 than some far left coalition.”

      Obviously, since there are no “far left coalitions” there.

    • “The comment you just responded to was by Pintada, not by me.”

      Yes, I responded to him. I don’t see any obvious way to reply to comments that are not top level. Presumably quoting makes it clear enough what is being addressed?

    • @ Vic K

      When that is the set up, best to address the person as I am doing here.

      Cheers
      Steve K

  4. Very fine, Dr. Tim. On a practical level for investors, I think that individuals should not have an objective of ‘beating stock markets’ over short periods – that is plain silly speculation. Instead, individuals should seek to protect the real value of capital over the long term. That is very challenging, and has become more so. Bracing for turbulence makes sense by being cautiously positioned, perhaps holding high-quality equities, index-linked securities, etc.

  5. Degrowth is part of the same mythology of Peak oil and Overpopulation.
    The extent to which the general analysis of this blog has steered to a millenarian doomster
    psychosis is very sad Tim.
    More than dead wrong https://dieoff.com/
    The level of confirmation bias that increases and dominates each new post is now beyond parody.
    Just saying.

    • I have two answers to this, Roger.

      First, think about which makes more sense – a material economy, determined by energy and subject to constraints, or a perpetual growth machine, powered by money and capable of delivering ‘infinite growth on a finite planet’.

      Second, look around. Growth is over, we’re even running out of the ability to fake it by racking up promises for the future, and the situation now looks very like what we’ve been talking about here for a long time, and not at all like the perpetual growth promised by conventional economics.

    • Tim, The DIagnosis is incomplete in your analysis let alone starting on prescriptions.
      In short, identifying a phenomenon does not answer the possible causes, and why those causes are contributing to a particular phenomenon.
      Regarding “Infinite Growth” what is the formal definition?
      Regarding a Finite Planet, again what are the falsifiable boundary conditions, and what are your units of measurement.
      Without defining your terms which you have not then your predictions are not falsifiable. As such seeds without clearly stated
      definitions is in fact pseudo-scientific hypothesis, something it shares in common with the dismal science in general.
      I am afraid your answers beg more questions than they provide definitive answers, Tim,

    • Would Mr. Lewis care to make charitable wagers on longbets dot org on his certainties? Thousands of scientists using best current data, disagree with his theories. Recall the saying: don’t confuse me with the facts, as I don’t like them!

    • I would accept that most readers here share some fundamental underlying positions which we don’t spend time rehashing. However, I see robust debate on other items. Dr. Tim and I have had productive interchange recently about matters such as the creation of money via debt vs printing, the potential for durable inflation and the defining characteristics of “civilization” in times of historical change.

      Many things are falsifiable. For instance, if global oil production (total liquids, 12 month average) ever exceeds the levels of ~nov 2018 there are many people who I owe a pint ‘down the pub, as my friends across the sea may say.

      If, on the other hand, global population in 2050 is over 9 billion persons and agricultural production has increased by 60% to support the same, not only will I eat my hat, but I’ll tell me children I wasted a great deal being overly confident that I could draw predictions from a complex system with too many variables.

    • Dear Blond Beast,

      Several other blog members have contacted me at my request, and one at their own volition. Only one chose to remain incognito. I’m in New England, not the jolly old one. My email has been posted here before. It is Canadian, as we’re dual citizens. I’d appreciate hearing from you, as well as any others keen on system science and probability. I’m allergic to ideologies and absolutes. Note: I’m not trying to steal discussion from this blog. Economic topics remain here.

      kurtzs@ncf.ca

    • Dear Steve K. – Expect an email, and thanks for the invite. Please note I am horrendously bad at responding to email so please don’t take it personally if I miss something. My inlaws are in NE and I’m currently designing a passive cabin in the area for a future residence. Maybe we’ll meet for a coffee some day!

    • Mr. Lewis,

      You claim: no peak oil, no overpopulation, no finite planet. I’ll wager on any/all.

  6. I think Mr Lewis is clutching at straws. The economy is a wholly-owned subsidiary of the biosphere. Physical constraints are crowding in on us ever more urgently (climate change, access to energy, strategic minerals, potable water, arable land, adequate fish stocks in an over-fished and acidifying ocean). Notions of some kind of independent reality for the finance sector – for endlessly growing “wealth” – might seem realistic from behind the mirror-glass in a city tower block, but they are ludicrous to anyone working in the real economy, and quite fantastical to anyone with a rudimentary grasp of the laws of physics. Above all, this is not a joke to cash-strapped millennials whose hopes of a mortgage-free future are vanishing over the horizon, or to my friends in Africa whose lives are already being ruined by increasingly bizarre weather. The real question is this: what is each of us willing to do to give our kids some chance at a decent life?

    • “The economy is a wholly-owned subsidiary of the biosphere,” this is a very pithy sentence. Excellent.

    • As is this: “The real question is this: what is each of us willing to do to give our kids some chance at a decent life?” A crushing question.

  7. Rogerglewis.

    I’m a bit confused by your post.
    What exactly are you saying?
    Which bits of Dr Tim’s post do you not agree with.
    Are you in agreement with the article you linked to?

    • In a nutshell, John.
      Degrowth is a Euphamism for Austerity and Austerity is the Patsy for De-population.
      Tim calls it Involuntary quantitative de-growth.
      In being a classical dupe for Pareto efficiency Tim fails to understand the Biological reality of cooperators trending to 12 Log 2-8 and the insights of Bernard Leitaer Vis. The stratification, layering, and diversification within all successful ecological systems, and the essential addition of this dynamic complexity into any reasonably useful model of Political economy.
      The driving motivation behind the accelerated rush to a Techno Fascist Feudalism has been occupying my mind for the years leading up to the Repo Spike in New York in September 2019.
      In the Financialised economy and with the CBDC push tied to DIgital Id’s, we see a symptom of the appearance of what the system is trying to preserve, namely itself and its Monopoly ingroup. The real Economy is put in the position of trying to make bricks without straw, a misallocation of resources, and the Credit tokens to acquire those resources.
      The Dominant Resource tieing the Financial system’s real potentials to the Real potentials of the real economy is the Flow of Energy resources and Primary resources through the economy. It would seem that a Hard limit on available energy to sustain the present industrial output of the global economy has been hit, what seems inexplicable is the Priorities touted in narratives regarding Why our largest Energy Sources the Hydro Carbons, Gas, Oil and Coal, and the largest potential replacement for them Nuclear are being demonised? It is more properly described as being stood down, why? Climate Change, The Climate Crisis, The Plague of Humans. (1)

      “The purpose of the 4th Industrial revolution is to stymie the development of energy resources and to control Population and growth and instigate rapid population decline”.
      Charitably Tim has fallen to barking up the wrong tree, There are copious reasons ahead in the que for why Prosperity has
      come a cropper very near the front of that que is the failed Ideology of Liberal world order under the neoclassical priesthood
      Mearsheimer’s essay on why the liberal international order was always bound to fail is well worth a read
      https://www.belfercenter.org/publication/bound-fail-rise-and-fall-liberal-international-order

    • Ideologues focussed on the blame game and political theory may fail to understand biological-habitat (finite) system analysis. They rant about the failures of science. Observe nature (we are a part) cull the plague species: pandemics, wars, famines, droughts…It’s called reality. Bernard Lietaer and I communicated over a decade before he died. We disagreed about demurrage, but not much else. He had been a top Economist for the Belgian Central Bank.

    • Stephen, If you see my comment below David Higham on February 3, 2022 at 11:39 pm said:, I refer to Fanantics. I exclude Tim our host from that comment but do include your own Fanatical overshoot theories which are amply dealt with as per the promise of renewables, regarding your own Aper on the question of overpopulation we settled our differences in December 2019.

    • Roger Lewis,
      Is your repeated mis-spelling of my name intentional? The whole list recalls that I proposed charitable wagers to you, itemizing the three elements you claim are facts. Your silence is deafening.

    • Rogerglewis.

      Nope. Still, non the wiser. It’s all a bit rambling and incoherent.

      One question.

      Do you not believe in the logic of a rising ECoE as fossil fuels become more energy intensive to exploit?

    • Steven, no not deliberate, is that better?.
      No, I do not wish to have a bet for charity or for-profit, The Arguments which I make in opposition to your arguments are well set out on my blog and various other multi-media platforms.
      What is quite clear going back over the past 200 years is This time really has never turned out to be any different.
      Betting on the future does not resolve the matter particularly as most of the predicted outcomes are to do with outcomes that I will not see in my lifetime, I am 57, and even come 2050 ( or 2047 in my case), I have a 75 % probability of living to the age of 82 according to this. https://www.blueprintincome.com/tools/life-expectancy-calculator-how-long-will-i-live/
      Regarding predictions of Ehrlich, Hansen, Malthus, and another similarly pessimistic folk there is no need to have a bet, we can check the record and see how wrong they were.
      https://www.aei.org/carpe-diem/18-spectacularly-wrong-apocalyptic-predictions-made-around-the-time-of-the-first-earth-day-in-1970-expect-more-this-year-3/

      You will find a link to Tetlock’s excellent book in a post tiled red Lines and settled science on my blog.
      Expert Political Judgment
      how good is it?
      how can we know?
      Philip E. Tetlock
      John Adams,
      On ECOE, I do think the Net energy cliff is a thing, that said the ratio is not fixed and immutable, for renewable or even for existing oil and other hydrocarbon reserves, clearly modern recovery methods have lowered the Dollar cost of recovery and presumably the Energy Cost of extraction.

    • OK, Roger. I’ll now cease responding to your ‘theoretical’ and ‘political’ exclamations. If everyone else does likewise, bandwidth will be conserved! Books and history are great for mental massages, but they do not cover probabilities. Adios.

    • What you might be missing, Roger, is that nobody here is a collapse-nik, a catastrophist or a peddlar of conspiracy theories.

      We address a thesis that the economy was built on low-cost fossil fuels whose ECoEs are rising, that the economy is an energy sysem (obvious), that money is a token or ‘claim’ exchange system (again obvious), and that we can’t make ourselves prosperous by lending to ourselves, or by creating new money out of the ether. Most of us recognize, too, that RE transition depends on the deployment of raw materials which are themselves reliant on FF energy, and that humanity prefers to drive and fly rather than invest energy in RE systems. Even if one disputes the climate change thesis, we can see what’s happening to the quality of air, water and ecological diversity.

      Somebody said that “anyone who believes in infinite growth on a finite planet is either an idiot or an economist”. Some of us think that rational economics isn’t beyond the scope of possibility.

    • “anyone who believes in infinite growth on a finite planet is either an idiot or an economist” I believe the someone is Kenneth Bolding

  8. Dr Tim.

    If you are correct (which I think you are) and the private sector is going to have to simplify. The resulting job losses will either have to be absorbed by the public sector. Either that, or those unemployed will require State support in order to get the very basics to survive. (I can’t see people being in a position to provision their needs on their own. I can see only chaos in that scenario.)
    Either way, the State will need to step in. Whether this is what you mean by ‘left-populist’ or not, I’m not sure.

    • yes it looks certain that simplify = job losses.

      job losses = less consumption and therefore more downsizing in discretionary sectors which means even more job losses.

      job losses also = more need for state provision, even as less work means less taxation to finance those provisions.

      all of the above are positive feedback loops that reinforce an accelerating economic decline.

      if there are any negative feedbacks that will insert themselves into this economic downward spiral caused by declining net (surplus) energy, well, I would welcome responses as to what that would be.

    • With this article, I started from the position that energy-based economic interpretation is turning out to be right; that real material growth actually ended some time ago; that the scope for self-delusion over this has pretty much been exhausted; and that we’re now dealing (or failing to deal) with the resulting issues. The situation of PNFC businesses seemed to be a good place to start looking at ‘challenges, strategies and prospects’.

      I mention this because work might merit its own instalment. My pencilled-in list of instalments already includes government, finance, the environment and, perhaps, technology.

      Before fossil fuels, most people were engaged in physical labour. Energy abundance changed the human role to the direction of energy inputs. De-growth will start to put this process into reverse. What I call ‘unproductive complexity’ has staved off this trend, but will eventually be reversed by de-complexification, simplification and de-layering. The equation linking capital assets, labour and energy will change fundamentally.

      These trends will improve efficiency, but destroy a large proportion of existing employment. They are, though, likely to create other forms of employment.

      By way of example, let’s consider the humble kitchen table. Today, this is produced in ways that are low-skill, and highly intensive in the use of energy and the resource products of energy. It’s a throw-away product, not something people keep for long, let alone pass on to their children. It’s a consumable, not an asset.

      Pre-FF, when resources were scarce and costly, the domestic table was made by a craftsman, with a wholly different balance between labour/skills (high proportion) and energy/material inputs (low proportion). It cost far more as an initial purchase, but lasted very much longer. It was, arguably, not just better quality, but cheaper, because people didn’t have to throw it away and buy a new one every five or ten years. People still buy and use furniture made in the 1680s or the 1780s, but not in the 1980s.

      We’re not going straight back to this, obviously, but this may very well be a direction of travel.

    • Physical Labor
      In their book Deep Fitness, Philip Shepherd and Andrei Yakovenko give us the evidence that humans are healthier if they work their muscles pretty hard. Just in the last few years we have learned that muscles release a hormone, myokines, which signals to a great many of our organs, from liver to brain and back to mitochondria. There is considerable evidence that exercise is the single most important factor in the difference between health and disease for the great majority of chronic disease…which accounts for 85 or 90 percent of all medical expenditures.

      So an “ideal” world might be a Degrowth world where human muscles replace fossil fuels, but we keep the knowledge that we have accumulated in terms of public health. I would also argue that using certain types of electricity surely would be nice. John Muir worked as a public school teacher. Part of his contract was that he had to arrive very early at the classroom on cold mornings to start a fire to warm the building before the students got there. Muir invented a mechanical fire starting system triggered by a spring powered clock…but modern electrical systems can surely help make the world a more pleasant place to live…while still allowing for muscle power to split the firewood.

      Choosing which technologies are actually helpful and which lead to degradation is a very tricky proposition. Dmitry Orlov wrote a book in the subject, Technocracy, which described the problem, but did not, IMHO, provide any clear guidance. For example, it was never clear to me whether the choice had to be made by individuals or rather by societies. The Amish would be an example of societal choice.

      Don Stewart

  9. The only historical example of anything close to a de-growth example, I can think of, is Britain in WW2.

    I’m not sure how the private sector functioned during that time? The State ran a big chunk of the economy. Was there a private sector at all, as we know it today? I’m guessing that, with energy, raw materials and production capacity geared up to fighting the war, there wasn’t much of a discretionary economy.

    Maybe looking at how the government ran the wartime economy, would be a good place to start with managing the de-growth one to come?

    • In thinking about the war time economies and the ensuing post-war boom the key difference is that they could increase resource availability by providing debt financed money. This was able to be paid back for a variety of reasons – but chief among these is that the capital infrastructure made available was easy to access for structural reasons. Part of our problem now is that it is no longer possible to use debt in such a way that interest and principal can be paid back from a stream of future cash flows.

      While there are many reasons for this, key among them is that energies role in the productivity function is collapsing. Only Tim M and Steve Keen seem to be focusing closely on this issue.

  10. Tim: Once more a great piece. Thanks.

    Tainter’s (The Collapse of Complex Societies, 1988) notion of “diminishing marginal returns on social complexities” was useful but his examples always seem so distant. And while his book was more about extreme simplification as a positive adaptive response, his later writing was dismal and laden with predictions of collapse. Sam Alexander (2012, Resilience Through Simplification: Revisiting Tainter’s Theory of Collapse at simplicityinstitute.org/wp-content/uploads/2011/04/ResilienceThroughSimplificationSimplicityInstitute.pdf) was a good, much more positive, response.

    But your work is adding something that neither author could. In particular, your statement that “… this problem has been exacerbated by the expansion of unproductive complexity, a consequence of policies which have promoted activity (as measured by GDP) without adding value” is a new wrinkle on how we create “fatal remedies.” The idea of “unproductive complexity” seems usefully different from Tainter’s idea of diminishing marginal returns. In his work, the increasing social complexity in fact does solve the problem being faced but its costs can’t be long supported, and the result is eventual collapse/extreme simplification. In contrast, unproductive complexity doesn’t solve the problem being faced, cannot long be supported, yet is pursued nonetheless.

    In Tainter’s examples the leadership could be considered competent yet faced with having arrived at a point where only simplification is the adaptive response. Today, leaders _may_ have the best of intentions but are clearly demonstrating incompetence, even after decade(s) of feedback.

  11. Thank you for this analysis Dr Tim. From my perspective, it’s been eagerly awaited.

    There are many interesting points for debate, but first, may I ask for some clarity on one specific point. Could you define (or at least characterise) which sectors fall within the scope of “suppliers of intermediate and intermediary services” ? It sounds like these people are most at risk, based on your commentary.

  12. Dr. Tim, I thought your analogy of the craftsman-built kitchen table was very good. I happen to have a few clients who are, I suppose, ‘manufacturers’, in that they are carpenters, stonemasons, potters, etc. They make things using consumer-chosen raw materials, quite slowly, but very skillfully. The things they make are likely to last for a very long time as they are well designed, carefully made, and one-off unique pieces.

    The problem is, in today’s “I want it now” (and I want it cheap/on credit) society, most people fail to appreciate these things. A few years ago, I commissioned a local carpenter to make some oak shelves for me. They are beautiful, bespoke, things and they cost me a not unreasonable £1,000 at the time. I could have purchased cheap mass-produced shelves for about a fifth of that. The shelves will be in my home long after I have died, I’m sure, but the MDF/chipboard stuff will have long crumbled to dust.

    The analogy of the kitchen table works for investments, too, I think. Surely its better to buy and hold over as long a term as possible, stocks in high-quality businesses and be patient? After all ” the purpose of making an investment is the purchase of an income”, and time and compounding are your friends. We can see this in the illustrious history of investment trust companies, especially those large Companies launched in the late 19th century. Their simple approach has been amazingly attractive over the long term.

  13. I’ve started reading Gerard K. O’Neill’s The High Frontier. On the surface hearing about his ideas, you might put him down as another techno-optimist. The book was written in the late ’70s after the OPEC oil embargoes, and the initial Club of Rome Limits to Growth publication, so the first few chapters describe the problems we discuss here – limits to resources and energy, increasing demands from population growth, lack of equality worldwide, etc.

    His solution is to access the resources in space – he suggests bootstrapping a solar satellite energy business using resources from first the moon (plus any missing bits sent up from earth), and then from asteroids (which can then replace the need for missing elements from earth), and building large cities in space to offload population from the earth. As he points out, in space solar energy is completely free and reliably available (no clouds, no night if positioned correctly), and by using microwave or laser can be beamed down to earth to provide as much energy as is required at low cost. He also strongly suggests offloading industries to space – reducing pollution on earth etc.

    Now he has costings, but he developed those based off the overly optimistic projections for the cost of using the space shuttle, and we all know how that turned out. However – as we also know, money is just a token for mediating access to resources and energy, so costings (in money terms) can be decided to be irrelevant.

    If we think about the premise of Don’t Look Up, do we really think that if it was known for almost complete certainty that a planet killer was on the way, that the World would not attempt to respond as one? So is it possible to convince those in power that the only solution to poverty, energy, degrowth and the issues we discuss in this blog, is to do a worldwide push for space along the lines of The High Frontier? There are enough energy and resources available to start the bootstrap process, and the High Frontier was proposed on using the existing technology of the 70s space program, so nothing technically new has to be invented necessarily (unlike suggestions for taking CO2 out of the air, or Fusion). A concerted worldwide push in the name of all humankind.

    Or not…

    • @Richard
      The evidence is that if humans on Earth found an abundant new source of energy and materials in space we would continue to use it to destroy Earth. It is useful to understand that a majority of mass in living creatures still resides in single celled organisms. Giving one tiny part of that mass of living creatures virtually unlimited energy and resources is not necessarily wise.

      It is true that the universe is filled (or maybe, a better word, composed) with energy. Have you seen the new picture of the center of the Milky Way? But humans evolved on a planet with limited energy, and when we learned the tricks of burning wood and then fossil fuels, we began to destroy our homeland.

    • Richard,

      I haven’t read O’Neill’s work, so I comment from a more generalised frame of reference. Any notion that the solution to our problems is the exploitation of space, always seems “Pie in the Sky” to me, if you’ll pardon the pun. Any exploitation of natural resources in space, must surely be a very high maintenance proposition. In reality, the technology seems to be far away, and would need significant resources to develop it. We haven’t even managed to put a single human on Mars yet.

      Accepting that the things you discuss may be technically feasible, and might be realised on a small scale in the future, it is the elements of time and scale that make space-centric solutions highly unlikely IMHO.

      There are critical choices to be made in the very near future. Do we dedicate our dwindling scarce resources (of energy and minerals) to long-lasting, low tech solutions for the masses, or should we bet the farm on unproven techno-dreams for the gratification and enrichment of the elite? That’s an oversimplification of our predicament, but it illustrates a real situation that we have to engage with, and engage with quickly.

      Beyond the utility of certain satellite projects, I find it difficult to frame the new wave of space exploitation companies as anything other than vanity projects. Seeing Jeff Bezos standing next to his “phallic” shaped space rocket says it all for me. No further words required.

    • @Don
      Yes we may well use an abundant new source of energy and materials to continue to destroy Earth. Although what I am suggesting is a worldwide awakening to our predicament, so that would include this. One of the early points the book makes is that even if we did find a new energy source on earth (such as Fusion, which even then the author was pessimistic about), it would lead to environmental damage from waste heat causing further warming. The law of thermodynamics tells us that using energy to do work produces waste energy in a less usable form and eventually just becomes waste heat in the environment. Hence his notion of pushing industry into space, as well as large amounts of population. I’m skeptical that a sizeable fraction of the worlds population can get to move to space habitats in any sensible time frame. Except if it became a worldwide priority and basically everyone threw in together to achieve it.

      @neill61

      Yes you are right that we face a critical choice on how best to dedicate our dwindling scare resources. I think that if we do go for a long-lasting, low tech solution that is fair and equitable to everyone – ie allow those in poverty a better standard of living, whilst all those of us on this blog and probably most everyone we personally know to have a much reduced standard of living – that there is no way back from that. It will take millions of years to refill the oil and gas reservoirs. The minerals may never be exploitable by low-tech again – concentrations too low now for anything except advanced mining techniques. We will by necessity have to give up advanced physics research, advanced engineering and thankfully nuclear weapons, “stealth” fighters and white elephant UK carriers!

      So the choice is do we as a planet go back to living as we did 200 odd years ago (with some improvements – ham radio is pretty low tech and could provide a basic low bandwidth digital network for basic computers that might still be buildable, and of course we have better ideas on how to improve food yields – without needing fossil fuel inputs, etc), or do we as a planet seriously look into O’Neill’s and other peoples ideas and see if it is feasible. Note if we could sell this to the planet as a whole, we could still start degrowth but allocate a proportion of the resources left to try and bootstrap into space (and by bootstrap I mean get far enough to be self-sustaining from resources that are in space) – with minimal cost – maybe a slight reduction in the general standard of living of everyone.

    • Hi Richard.

      The link below is the best assessment of the different energy options open to humanity going forward.

      There is a whole section on space exploration/exploitation. Sobering stuff. Thus stuff is easy to imagine in a Sci-fi move, but reality is a very different proposition.

      https://escholarship.org/uc/item/9js5291m

  14. So, a 54% increase to the energy price cap here in the UK. There is big trouble coming, financially, for millions. What a mess; after 10 years of the ‘disaster capitalists’ being ‘in charge’, we are seeing the consequences of a failed energy policy over many years.

    We knew this was coming, thanks to Dr. Tim and others.

    • Thanks.

      What seldom if ever gets mentioned is that, in addition to domestic consumers, businesses are affected as well – and this is passed on in higher prices.

      In the UK, there are tax rises coming as well, plus the likelihood of higher interest rates.

      All of this will affect discretionary consumption, and the affordability of property.

    • I also note that the UK authorities once again see borrowing as the answer to everything.

      They seem to assume that energy prices will fall all the way back down again.

      They seem not to recognize that cost rises will worsen the economics of renewables. Even battery prices are rising after years of decline.

      Clueless – not alone in cluelessness, but still muppets.

    • Mark and Dr Tim.

      The government response to the much anticipated energy price hike is interesting.

      Government intervention rather than “free market” is their answer. I think this is going to be the trend going forward.

      It’s started with loans to the energy providers, but this is only the beginning. If the price of gas never goes back down, then the suppliers will find it hard to pass the debt onto customers to pay back the government loans.

      My next prediction is that the next step will be that the loans will be written off and the energy suppliers will be taken back under State control.

      Rationing will then follow.

      The Great De-layering has begun!

  15. Tim: thanks for this – as always clear and compelling!
    I’d like to see some discussion about the voluntary/charitable/aid sector. This is of personal interest as I am heavily involved in running an organisation addressing medical needs in sub-Saharan Africa. Hitherto, this has been very dependent on governmental aid money (UK- DFID/FCDO). We have already seen substantial reductions in funding and indeed we had a large grant promised but withdrawn by the current administration as part of the reduction in the UK aid budget. Despite promises, I see little likelihood of a restoration to the previous level of 0.7% GDP. Charitable organsations likewise seem to be drawing in their belts.
    Your analysis suggests a rather grim future for this whole effort which will impact on many of the poorest communities in the world as well as being be an additional driver for migration.

    • Thanks.

      I’ve always been interested in issues affecting poorer countries – at Cambridge, I was involved with what was known, back then, as Third World Scholarship, where I helped with a major change of direction.

      The only SSA country on SEEDS is RSA – I wish I could add others, but I don’t have all the necessary energy data.

      The voluntary sector is certainly something we can look at.

  16. How do YOU know?
    The interesting question for the prospective collapse of our own society is this: if you were a late imperial Roman, and someone told you about the ongoing decline in atmospheric lead, how would you process this information? Today, if we saw a drop in lead pollution, our first assumption might be that this is due to the advent of greener technology. Economic decline wouldn’t naturally come to mind. Victory has many fathers, but defeat is an orphan. We find it hard to believe that we were once more capable of intentionally affecting the world than today. After the collapse of the Roman Empire, wanderers among the ruins of aqueducts concluded that they must have been built by giants. The classical Greeks examined the massive stone ruins of Mycenaean civilization and assumed that the great walls were built by a race of Cyclopes.

    https://thesideview.co/journal/why-civilizations-collapse/

    • Red.

      “The classical Greeks examined the massive stone ruins of Mycenaean civilization and assumed that the great walls were built by a race of Cyclopes.”

      There are still plenty of people around today who think that they were!!!!!! Pop into a bookshop in Glastonbury and you’ll see what I mean🙂.

  17. I don’t know if anyone’s picked up on this, but the shares of Meta (that’s the sexy new name for Facebook) dropped more than 25% overnight. The proximate cause was alarm at the quarterly earnings report, which was released yesterday. In their analysis, Bloomberg TV were very specific that investors had dumped the stock because Growth had hit the buffers. For the first time, the number of Facebook users had declined. This could be our first big case study of what De-growth means in reals terms for the Tech Sector, and t the financial assets that support it.

    Poor old Mark Zuckerberg. He’s just lost about $24 billion of funny money. You’ve got to feel for the guy……or maybe not.

    • Neill61.

      It’s interesting to see how quickly things can drop. 25% in a day!!!!!!

      The readjustment of the financial economy could be all over in a week!!!!!!!

    • Neill61.

      25% down in 24 hours is very impressive!!!

      When the readjustment of the financial economy happens, it could be all done and dusted in a week!!!!

    • It’s going to be an interesting time for the markets, and overall economy, when the tech bubble finally bursts. This is but a taster of the damage to be done. When consumer electronics giants, social media networks, and angel investor backed unprofitable start-ups begin to face reality, it will kill off the one major growth market left.

      And then what props up the investor confidence and pay the dividends?

      I would say the energy companies, but given ESG and the pure ire felt now in the UK against the likes of Big Oil and Gas, it would seem premature to think those sectors have much growth left, despite being vital.

      All I’ve read all day today has been the befuddlement of the public at what’s going on. Energy prices, food prices, National Insurance and council tax increases, interest rate hikes, petrol costs etc. All going up. Could this be the start of the downturn? Mere months after rosy predictions of a growth fuelled recovery to offset two years of decline or stagnation at best (ignoring the mediocre treading water of the last decade anyway), maybe the depression without end begins soon.

      Quite a few commenters on these stories have also picked up on discretionary spending being hit hard. Something of a big deal given the lack of spending on hospitality, for example, due to COVID. Seeing all these ads for holidays, and hilariously cruises no less, seems wholly disconnected from what I’ve been reading is about to happen.

    • I never do investment advice here, but I don’t think anyone who’s been following our discussions would be unduly optimistic about discretionaries in general, energy-intensive discretionaries in particular, or anything dependent on ‘growth through technology’. At the same time, rises in energy prices are putting up the raw material costs for everything from solar and wind to batteries and EVs.

      On FB, I noted somewhere that the company said something along the lines that the market for ad revenues was tough and getting tougher. That, again, is a logical implication of where we are.

  18. @Dr. Morgan
    Taking a Broad View of Business
    In the West we assume that businesses are incorporated or at least otherwise legally regulated operations. But in the poorer sections, businesses are usually informal and not regulated at all. Two examples:
    *In Edo Japan, it was rare for a homeowner in a city to have a kitchen. Almost all prepared food for ordinary people came from informal places serving meals very cheaply.
    *My daughter spent some time in Guatemala and southern Mexico. She tells me that informal taxi service is the dominant way that people without cars get somewhere that they can’t reasonably walk to. She said “there is always somebody with a vehicle going into town”.

    At the present time, we have way more college graduates than there are job openings REQUIRING college degrees. So we are likely to see a downshift in the wage expectations of people who assumed that they would live comfortably at relatively high wages. Opening small, informal, businesses may be the best they can do.

    Governments can obstruct the natural tendency by enforcing onerous regulations. For example, requiring everybody serving food to neighbors for a fee to have a legally furnished, installed, and inspected “commercial kitchen”. And onerous insurance regulations which prevent people from just picking up passengers for a small fee.

    Don Stewart

  19. My recollection of the WW2 and post-war years was that those who participated (especially as buyers) in the black economy and were digging for victory and, most important, were in an extended family, were relatively prosperous. Especially if they were too old to be called-up to fight. Another kind of (hidden) economy that was so important when the formal economy had little to offer. I sense it is re-emerging.

  20. Red.

    “The classical Greeks examined the massive stone ruins of Mycenaean civilization and assumed that the great walls were built by a race of Cyclopes.”

    There are still plenty of people around today who think that they were!!!!!! Pop into a bookshop in Glastonbury and you’ll see what I mean🙂.

  21. Pingback: Days of reckoning

  22. Nate Hagens and Daniel Schmactenberger in Conversation

    There will apparently be 2 additional sessions.
    Don Stewart

    • At the bottom of the whole argument including the rebuttals and response to the rebuttals is the fundamental mistake which underpins the demonisation of Hydrocarbons, there is no Climate crisis and public health issues related to industrial processes including mining and manufacturing, including of renewables are addressable through proper regulation and and enforcement of regulations regarding externalities.
      Thank you though David Higham for being honest as to what the real objectives of the “Involuntary quantitative de-growth” agenda is at least for the Fanatics.

    • David Higham.

      Thanks for the links and the rebuttals and the rebuttals to the rebuttals.

      All interesting stuff.

      Think I’m still with Bill Reese’s side of the argument.

    • @Roger Lewis – If you read Riis’ replies he takes great effort to situate climate change within the broader context of overshoot. And overshoot is a combination of population and per capita consumption. I’m happy to set global warming aside – as I am skeptical of the catastrophism often associated with it – along with vilification of fossil fuels, as I believe we need all of these we will be able to access. Nevertheless, Riis makes the point, and I concur, overshoot remains intractable.

      If regulations can solve soil loss, aquifer draw down, insect population decline, fishery collapse, fresh water salination, and salt water acidification – without stopping growth, I’m all ears. The path of BAU projected to 2050 is 9 billion people with 60% increased agricultural production – and more of everything from oil to aluminum. This is not going to happen. That doesn’t mean we’ll all be freezing in the dark, but that is one possible outcome.

    • Can’t resist. Re Thorcon liquid fission electrification piece: heavy equipment cannot run on known technologies utilizing electrical power, Drilling, mining, transporting, processing…myriad minerals required for industry and agriculture cannot be accomplished with electricity alone. Mr. Lewis cannot rebut this, nor will he wager for charity on his optimistic speculations even a couple of decades out. See the Energy Skeptic link I just posted.

    • Roger and theblondbeast, The climate disruption aspect of our predicament is real. This civilsation is dependent on fossil
      fuels to function, but those fossil fuels are wreaking havoc on the natural world. That is the pincer’s grip that we are in,whether you choose to acknowledge it or not. Maybe I’m more aware of it than most U.K. citizens. The two strongest
      recorded cyclones to hit Queensland, Australia,have been since 2006,and the eye of each cyclone passed within 15kms
      of us. (one to the north,one to the south ). The Great Barrier Reef is about 80kms east of where I am sitting, and ocean heating has caused immense damage to it through coral bleaching, and there might be further damage this year.
      That is probably the most magnificently beautiful ecosystem that exists,and on current trends it will be dead within the next
      few decades. It is just unspeakably tragic, the whole damn mess that we’ve made of this planet.

    • “For climate change, there are many scientific organizations that study the climate. These alphabet soup of organizations include NASA, NOAA, JMA, WMO, NSIDC, IPCC, UK Met Office, and others. Click on the names for links to their climate-related sites. There are also climate research organizations associated with universities. These are all legitimate scientific sources.
      If you have to dismiss all of these scientific organizations to reach your opinion, then you are by definition denying the science. If you have to believe that all of these organizations, and all of the climate scientists around the world, and all of the hundred thousand published research papers, and physics, are all somehow part of a global, multigenerational conspiracy to defraud the people, then you are, again, a denier by definition. 
      So if you deny all the above scientific organizations there are a lot of un-scientific web sites out there that pretend to be science. Many of these are run by lobbyists (e.g.., Climate Depot, run by a libertarian political lobbyist, CFACT), or supported by lobbyists (e.g., JoannaNova, WUWT, both of whom have received funding and otherwise substantial support by lobbying organizations like the Heartland Institute), or are actually paid by lobbyists to write Op-Eds and other blog posts that intentionally misrepresent the science.”
      https://thedakepage.blogspot.co.uk/2016/12/how-to-assess-climate-change.html

  23. Hagens and Schmachtenberger
    Yesterday I heard that corn farmers in the US are saying that the increase in the price of the nitrogen fertilizer (ammonia) that they rely on to grow the corn in their depleted soils is sufficiently high tha sot they may not plant corn in 2022. The last I heard, some fertilizer plants in Europe had closed down due to high prices for natural gas. I have a good sense of how nonsensical our agricultural system is, but I don’t follow it day to day. I believe it was Schmachtenberger who made the comment about the US.

    When Trump came to power, he was all about freeing up the economy. The mandate that gasoline had to be diluted with corn ethanol was up for renewal. What his administration found out was that a whole ecosystem built around that mandate had arisen, and that ecosystem resisted any change. So the mandate was renewed. If there is no corn to make the ethanol, yet the gasoline retailers are required by law to include the ethanol, and the industrial supply chain is set up to distribute diluted gasoline, could we run out of gasoline next summer?

    This might be a moral tale with the moral being that idiocy eventually takes its pound of flesh. Maybe political maneuvering doesn’t actually produce much that is useful, and maybe energy blindness is a potentially fatal disease? And maybe another decades old ‘green dream’ has crashed on the hard rocks of reality?

    Don Stewart

    • Hi Don,

      All we need do is ask Roger Lewis to apply his technological expertise to solve every problem that might occur. He repeatedly claims that’s a piece of cake!

    • The governor of the BOE has also stated that even in these straightened circumstances people should not seek pay increases . A bit rich from someone earning £500000 p.a. and whose colleagues have for 50 years totally mismanaged
      the economy . They have overlooked the connection between energy and finance by injecting / extracting money rather than creating a resilient energy system. A fact that is crystal to any followers of Dr Morgan,Tim Watkins and Nate Hagens and many others.

    • Thanks. I’ve seen what the governor has been saying.

      He seems to think the slump in UK standards of living will only last until 2023, though he doesn’t seem clear on why – or whether this means that (a) living standards will be restored by then, or (b) just start to improve from a low base. He urges people not to seek wage rises to try to keep up with increasing living costs. This makes it appropriate to mention – as the media has – that his own remuneration is reportedly about £575,000.

      I’ve nothing against the governor or the BoE, but I find it hard to handle this amount of denial.

      Prosperity has stagnated, at best. The per capita share of total debt has surged. The cost of essentials is rising rapidly. Broader inflation is taking off. Financial markets are at huge risk. Rates remain at least 5% below inflation. Property affordability is crumbling. The government sees yet more borrowing as the fix for everything. The BoE has monetized crisis-support deficits. The cost of RE transition is rising. Living standards are falling at the fastest rate in 32 years.

      And all of this is temporary, under control and in safe hands?

  24. Steve B K.

    Indeed. Things are starting to look very interesting here in the UK.

    Energy cap being increased in April, resulting in 54% increase on the average household bills. To ease the pain, Government giving loans to suppliers (to keep household bills down) that will be repaid by increases in household bills over the next 5 years. (when gas prices drop!!!!????) Nothing for businesses, so far from government. Also one off reduction of local authority taxes for households. (Council Tax)

    Contrary to the above, government is increasing National insurance contributions to pay for adult social care and backlogs in NHS waiting times, due to COVID. (NI is a tax to, in theory, pay for state pensions)

    So government is giving with one hand and taking away with the other.

    As your article says, BoE has increased interest rates. Landlords with buy-to- let mortgages, will just pass on the increase in mortgage costs on to tenants, increasing the squeeze on households. For the rest with mortgages, mortgage costs are going to rise.

    There is going to be a squeeze on discretionary spending. Plus, I can see the increase in energy prices causing lots of small business, still reeling from COVID restrictions, going to the wall.

    A real danger that we are at the beginning of a downward spiral.

    Only lots of cheap energy can halt the trend.

    Buckle up, it’s going to be a bumpy ride.

    Who would be a politician in these volatile days? Non of this is a vote winner.

    • Quite so – and what are they doing about the soaring costs being experienced by businesses?

      At times like this, I wish I was still i/c strategy research – things have seldom looked this obvious!

  25. Rachel Donald and Jason Bradford

    First, Jason Bradford thinks industrial civilization is toast. So more “pessimistic” than Dr. Morgan, I would say. Bradford is optimistic about the potential for change, but pessimistic that society will actually change. However, the bulk of the conversation is about how to get the message to people that the collapse of what we have called civilization offers rewards for those who are prepared to actually work and produce something good. Particularly in a cooperative spirit.
    Don Stewart

    • I Should Have Mentioned
      When Rachel asks Jason about Renewables, he says that the latest calculations put the EROEI at 12 to 1, which can support an industrial civilization. But when adjusted for intermittency, the ratio falls to 3 to 1…which cannot support an industrial civilization. Which gives some logic to his emphasis on getting to an energy positive food system. (I’m not smart enough to parse the different viewpoints expressed by Dr. Morgan and Jason in terms of the ability of Renewables to support industrial civilization.). If you think that, for whatever reason, an energy positive food system is desirable, then Jason is guy worth listening to.
      Don Stewart

  26. Just a thought or two on “technology”, in all its forms:

    Technologies are part of a process; they serve to facilitate the process in question. They are never causal, as far as I can see. For example, RE techniques are simply part of the process of global industrialization, aka “growth”. This contention is illustrated in the attached graph:

    https://ourworldindata.org/energy-production-consumption

    RE technology serves to add some tiny amount to the global mix of energy sources. It does not serve to mitigate the relentless pursuit of growth, for the sake of growth. All technologies, within any milieu, not just industrial, serve this single (mindless) purpose, growth for its own sake.

    • The reality right now is that the cost of everything required for RE is heading upwards – steel, concrete, plastics, lithium, copper, cobalt – because of rises in the costs of oil, gas and coal.

      We cannot think of RE as somehow detached from the economics of fossil fuels. The idea, favoured in some quarters, that we can somehow use money creation to turbocharge RE expansion, is absurd – if we handed a lot of new QE money to the RE sector, the spending of this money would cause a surge in the cost of inputs. I don’t see the ECoEs of REs ever dropping below about 12%, because of this cost linkage to FFs. We need ECoEs far lower than that to prevent de-growth.

      I’m not in any way ‘anti-‘ renewables – on the contrary, RE expansion is vital. What I do criticise is the claim that an RE economy can be as prosperous as, or more prosperous than, an economy built on FFs.

    • @davelysak

      Some people would very plausibly say that “growth for its own sake” is the definition of life. But leaving the more philosophical questions about “growth” aside, I think all technologies, human and animal alike, are about solving a particular problem, whether it is making food easier to chew or retrieving termits from a mound. Growth is not the immediate goal.

      Growth is a serious problem, but if human technologies relied primarily on inputs from the living world, renewable inputs, then growth would be self-limiting at levels below those that could cause worldwide environmental problems. Local overshoot could still happen and local dieoff and collapse could still occur, but it took the gigantic amounts of energy made available by fossil fuels to create and grow the technologies that are destroying the climate and the ecosphere.

      However, I do agree with your larger point: modern renewables are products of those same industrial technologies that are causing so many problems (including the support of too many people). It may have once been theoretically possible to have used fossil fuels to build out a non-fossil energy system that was self-replicating, especially if that system didn’t include semiconductors, but now we don’t have enough energy surplus to do it and still support our modern civilization, a civilization that was built on a foundation of fossil fuels and still needs them to operate.

      Except in extreme northern climates where interior heating is absolutely essential, the best use of energy, particularly electrical energy, is for light. Lighting was the “killer app” for electricity in the first place. Perhaps our limited energy supply from renewables will help keep the lights on longer than they would with just fossil fuels. Hydro alone would do that quite well in a lot of places. Whether we could still produce LEDs is another question.

    • anyone who takes the technology of the modern world somewhat for granted ought to take the time out to watch James Burke and his 1978 BBC tv series ‘Connections’

      https://archive.org/details/ConnectionsByJamesBurke

      it’s taken millennia to build up the complexity that surrounds us today, look around you, is there anything you could make from scratch?

    • A related question…
      Is there anything that you, or even a competent blacksmith, could repair if it suffered a broken part?

      If the answer is ‘no’, then risk of catastrophic failure is multiplied by a huge factor.

  27. One Way to Reduce Absolute Dependency
    https://www.opensourceecology.org/about-overview/

    This is an ongoing attempt to build the machines that we utterly depend upon with off-the-shelf products using open designs. The goals are:
    *reduce the mindless complications driven by patents and profits and designed in obsolescence
    *reduce the dependence on unique parts which have only a single source
    *reduce the cost of using machines to perform work
    *increase local ability to build the machines

    You will notice that the machines look clunky, but are cheap and useful and, for many of them, a blacksmith can repair them. However, they are not immune to factors such as depletion of fossil fuels. If DeGrowth is a feasible solution to some of our problems, this effort and others like it could be a big help.

    Don Stewart

  28. Dr Tim.

    What are your thoughts on the energy crunch being felt in the UK.

    Is it a blip due to COVID and oil/gas production ramping back up to meet an increase in demand or is it the crest of the peak oil curve?

    • John:

      I’ve written a guest blog on this for a UK think-tank, it’s likely to be published on Wednesday, and I’ll post a link when it does.

      Briefly, though, this has nothing to do with the pandemic, but is all about resource scarcity and rising ECoEs. The ‘record fall in living standards’ is about deteriorating prosperity, the rising cost of essentials, and the relentless squeeze on the affordability of discretionary (non-essential) goods and services.

      It’s discouraging (though characteristic) that the government’s knee-jerk response is that loans are the answer to everything. The view seems to be that rising energy prices are a temporary phenomenon, but there’s no reason to assume this. Perhaps they see REs as the solution, not noticing that the cost of everything needed for wind, solar and EVs is being pushed up by rising energy costs.

      Whilst government is trying to help household consumers, the missing piece of the equation is what this means for industry, where rising costs will feed through into inflation.

      Lastly, higher costs and rising taxes are negatives for housing affordability, and interest rates will need to rise. False confidence based on over-inflated property prices might not last much longer.

    • Dr Tim.

      Look forward to reading it.

      What do you think the government’s course of action should be? It seems to me, that whatever they do, they will only make the situation worse.

    • I don’t envy those faced with these challenges, not least because the challenges are only going to get worse.

      Needless to say, I’d urge the goverment to start to understand the economy as a constrained energy system, and to ditch the notion that we can rely on perpetual growth achieved financially (or, for that matter, technologically). In the energy squeeze context, this means recognizing that debt isn’t a ‘cure-all’. Collectively, the country has to pay for costlier energy, not put the price onto a national credit-card.

      They could usefully abandon notions that – in UK phraseology- we have to attach the word “up” to the commendable ambition of “levelling”, and that the pursuit of “sustainable” has always to be qualified by the word “growth”.

      The great challenge now, as I see it, should be to ensure that the essentials – household necessities and imperative public services – are accessible and affordable for all.

      This challenge is comparable in magnitude and importance to the creation of the NHS.

  29. RE: Access to Health Care
    “This podcast will introduce you to the exceptional work of Dr. Johnson and how we are now mismatched metabolically for the environment of modern America and our food systems.”

    https://www.docsmo.com/dr-ms-women-and-children-first-podcast-14-dr-richard-johnson-nature-wants-us-to-be-fat/

    My comment: If we hope to survive, we have to stop the reductionist thinking and think in terms of systems. How can it be that middle-aged people being interviewed by Rachel Donald are learning about Donella Meadows for the first time? Her little book on intervention in complex systems should be required reading to graduate from high school.

    So how is it that 98 percent of Americans are metabolically mismatched and expect the sick care system to rescue them? And what would Donella advise? And what will we either do or perish?

    Don Stewart

  30. @Joe Clarkson

    “Growth is not the immediate goal.”

    Yeah, sure. To ascribe a teleology to any of this is kind of a mistake. However, growth and subsequent degrowth (death) is an unavoidable consequence of any viable biological system.

    To explain a little:

    All life, active matter, living matter, whatever term you might choose, is subject to two imperatives, to survive and reproduce. Reproduction must take place at a higher than a 1:1 replacement rate to account for things like sickness, accident, etc., premature death for any reason. Without these imperatives firmly in place, the life form in question is simply unviable. It will go extinct in short order.

    Given these requirements, survival and reproduction, along with a favorable set of reproductive conditions, all life forms must, without question, “grow” until they have destroyed those conditions which allowed their growth in the first place.

    There are, of course, other factors which serve to keep populations in check.

    I guess that the real moral of the story is that there is no control over any of it. It’s just stuff that happens to be happening. I guess.

    • Davelysak.

      “I guess that the real moral of the story is that there is no control over any of it. It’s just stuff that happens to be happening. I guess.”

      But I think humans do have some level of control over this. That is part of the reason why humans have become so “successful”.

      Birth control allows women to make decisions on how many children they decide to have.
      Humans don’t have to max out their reproductive possibilities to match available resources.
      (Japan’s population is in decline. This is through individual choices, not environmental pressures)

      Humans can also chose to end their lives. I’m not aware of any other organisms that do this. This more than anything, goes against the most basic driving force of any organism. The desire to stay alive/survive for as long as possible

      Both of these things go against the “natural order”.

      (Prior to the Holocene, did the human population keep rising or did it stay pretty stable?)

      Humans can adapt to and even change their environments without having to wait for behaviour/physical change to happen through natural selection.

      Whether this will be enough for humans to tackle the coming storm is another matter?

    • John A. and all,

      As to humanity’s exceptionalism, it does have reflexive self-consciousness, suicide, and voluntary simplicity. The latter two are the result of cumulative history, though. They are not free floating, free will. No ghost in the machine. The history is best judged as 100% physical, since no evidence for anything not energy-matter-information has ever been presented. Memories are physical, as are thoughts, feelings, perceptions, and actions.

      A strong case is made here for the involuntary degrowth of our species. Around 85% through it is a section on Hans Selye’s Adaptation Stress Theory.:

      Click to access gambler.pdf

    • Steve B K.

      I’m not sure I would frame what I am saying as human exceptionalism. I don’t see it as human brovado, some sort of destiny. We will become extinct eventually.

      But we are different to other organisms. I think the ability to control when and how many times we reproduce and the fact that we commit suicide, shows that we are not governed by the most basic of urges/laws that all other organisms are driven by. Whether this is based on history is irrelevant.

      I just think that we make conscious decisions. Some are based in history, accumulated knowledge and experience, granted. I don’t see that as negative or restrictive though. We have the ability to imagine new things, ideas, concepts. Different ways to organise and behave. It’s what makes us human I guess. The possibility that we can imagine things that don’t actually exists.

      (I’m not sure what a ghost in the machine means)

    • John A.,

      I agree about suicide and voluntary simplicity being apparent exceptions to the Maximum Power Principle which applies to all other life. The choices are, however, the result of the cumulative past as I’ve said. ‘Free will’ isn’t free of this baggage.

      ghost in the machine
      https://idioms.thefreedictionary.com/ghost+in+the+machine

      1. Human consciousness and thought as an entity distinct and separate from the body.
      Of course, our mental state is so inextricably linked to our physical state that it is at best purely speculative to think of the mind as some sort of ghost in the machine.

      the ghost in the machine the mind viewed as distinct from the body.
      This phrase was coined by the British philosopher Gilbert Ryle in The Concept of Mind ( 1949 ) for a viewpoint that he considered completely misleading.

    • Steve B K

      I’m always a bit sceptical/cautious about theories that explain human behaviour. The can be used to defend/promote certain behaviours. (I’m not suggesting this is what you are doing, by the way)
      “Selfish gene” or “freakenomics”.

      Maximum Power Principal feels like one of those to me. (As I’ve said, I don’t think that we humans follow the rules because of suicide and birth control anyway)
      But it could be suggested that MPP justifies human greed. That greed is just part of our makeup. We are powerless to do anything about it. This then reinforces existing social structures.
      Greed is part of our makeup perhaps, but so is sharing, and abstainance and choice does exist.
      I can chose not to have that extra slice of cake.

    • MPP is a Principle, not a law of nature like entropy. This there are exceptions as I’ve mentioned for years. Suicide and voluntary simplicity are examples. Think Bell Curve, with greed/power tail, and Voluntary Simplicity tail. note that far more in the fat middle of the curve are striving for more rather than less throughput!

    • As I see it, the human make-up includes both the collective (we care about others, and it’s in our own interests to live in a harmonious society) and the selfish. The balance can be upset in one direction by an over-mighty state, or for that matter by fervent nationalism, and in the other by the glorification of greed.

  31. @John Adams

    “But I think humans do have some level of control over this.”

    No, one simple look out the window at the state of the world, and the human condition in general, is enough to disprove this statement. Over population, mass extinction, stripped resource bases, rampant poverty, virtually infinite suffering, on and on, and the beat goes on…

    Degrowth, death of this system (I call it industrialism; but call it what you will.) is inevitable. But human, maybe so called rational, control over any of these processes? I don’t think so.

    The processes possess a logic of their own. We can do nothing but play along.

    • Davelysak.

      It’s an interesting conundrum.

      If we fail to overcome the challenges that we have created for ourselves, is it predestined because of our biology or is it just a failing of culture?

      If we fail, we will know why. We understand the challenges and what needs to happen. Other organisms that reach overshoot do not. They just plough on until collapse. Collapse may well be our fate, but then the failure will be a lack of communication and education. (Ironic, in out digital world). The vested interests that prevent the message getting out are not a continuation of some biological “law”. It cultural.
      Tyranny is no more biological than democracy or visa versa.

      I still believe (perhaps naively) that given the facts, options and agency to act, people will make the necessary changes.

      The Russian Revolution was not inevitable. History could have taken a different course. The Tsar refused to accept that social change was coming. A different person may have played the situation differently. Non of it was inevitable due to human biology.

    • Dave Lysak,
      This is such a large subject,I’m hesitant to even enter into it here. We just need to remember that looking out the window now is just a small glimpse of how humans have lived,and how they have managed to deal with the limits of the
      environment that they lived in. We are now so divorced from living in a natural environment, there is no cultural ‘feedback’
      on methods of living within a natural environment. The steamroller of this ‘energy-unlimited’ civilization has exterminated
      those cultures which lived within an ‘energy limited’ society.There are many examples of societies which did have
      various methods of adaptations through ‘cultural feedback’.

    • Aother facet of this is that if the techno-optimists energy-nirvana of nuclear fusion does occur,it will be within a civilization
      where the vast majority of the citizens are devoid of any understading of the dependence of humans on a healthy ecosystem.and would result in the hastening of the process of transforming the planet into an ecologically-devastated wasteland. (We’ll probably have enough fossil-fuels left to complete the process anyway )

    • Your argument that we just have to look around us is probably the one that matters in the end,though. Using the cultural argument,we have the opposition of a culture that revered the forest,the Mbuti Pygmies,and a culture that was busily cutting down the forests as an energy source for metal smelting and for agricultural fields,even before fossil fuels came on the scene.. Colin Turnbull,
      who came from the latter culture, was moved to tears by his experience among the Mbuti ,who had dances dedicated to the forest they lived in. (read “The Forest People” if you want ) . Which culture had the more ‘rapacious’ or
      ‘exploitative’ attitude to the world around them,and which culture dominates the world now ? I guess the evidence is that
      if you combine the intelligence to devolop destructive technologies, and an unlimited energy source with a culture that is unconcerned about the damage
      wrought on the natural world,we will end up with what we have now.

    • Davelysak

      Just to add to what Dave Higham has said.

      This time we are living through is a tiny blip in the whole of human history. The industrial age will probably be a one off and have lasted for only a little over 300 years. (I don’t think that it is sustainable and change is coming.) But I do think that humans can shape that change. I don’t think we a prisoners of a script that has already been written.
      I also think that humans have consciously live within ecological bounds for most of our time on earth. I think our ancestors knew about ecology and made conscious decisions not to over exploit the environments they found themselves in. We can do it again.
      I think that the few remaining hunter gatherer communities left are still living that lifestyle through choice, not because they can’t live any other way. Maybe the look at the alternatives and don’t fancy them?

      I’ve been reading

      The Dawn of Everything.
      By David Graeber and David Wengrow.

      It’s well worth a read. One of the basic propositions of the book is that humans have CHOSEN to live/behave/organise in certain ways and then abandoned them for others. This ebb and flow is a feature throughout human history. Nothing is preordained.

  32. Ghost in the Machine???
    It is clear that almost all living creatures, including humans, have two circuits: multiply vs. conserve and prune. The multiply circuit is consistent with the Maximum Power Principle, while the “conserve and prune” circuit is only representative of the Maximum Power Principle if we allow that principle to stand for the cumulative over time…and figure that a little conservation now will yield returns in the future. In humans, the “voluntary” ways to switch from multiply to conserve and prune include heat stress, cold stress, hunger and protein restriction, and intensive exercise. All of these pathways are currently the subject of intense interest to researchers and investors in Silicon Valley.

    Now the very existence of the pathway to “conserve and prune” (which we might label the Degrowth Pathway) is our heritage from everything that has happened since the Big Bang: the existence of a universe, the creation of atoms, the creation of life which is able to create molecules, the existence of a Blue Planet with available water, a moderate climate with just the right amount of sunshine, etc., etc. But, IMHO, claiming that just because there is this enormous heritage proves that we cannot “choose” whether to follow the reproduce or else the conserve and prune pathway is not even worthy of serious discussion in the world of practical people.

    The fact is that either we choose the conserve and prune path (or else the universe sends us down that path) every time we seek to extend our Healthspan and lifespan through hormesis. It sure feels like a choice. I want people to believe that they can choose…our future depends on it.
    Don Stewart

    • Empirical evidence of human behaviour suggests that the majority will not opt for the kind of voluntary changes needed to arrest current unsustainable trends. Whatever we say about our political and business leaders ( usually nothing too good these days), they are still the recognised leaders, and most people follow their preachings. What do these leaders continually call for ….MORE of everything.
      More growth, more sales, more money spending, more money printing, more debt, more government intervention …and so it goes on.

      Nothing changes until that changes.

      Even if that did change overnight, there’s a massive re-alignment and re-education project required to turn things around with the population. Sadly, our education systems are preparing young people for yesterday’s world, and they’ll find themselves woefully ill-equipped for a future of contraction and de-growth.

    • Don,
      We “choose” due to much more than heredity. Cumulative experiences since egg-sperm conception are stored physically in us. That is continued after birth, with feedback being perpetual until death. As the present is encountered, the combo of all three produces our actions. I already explained reflexive self-consciousness as the movie we are in. Provide evidence for anything not physical (or extricable from it) and win a Nobel!

    • Steven
      The question is not, to my mind, whether there is something called “spirit” which exists outside the realm of the physical that we inhabit. The question is whether humans, when confronted with a wide variety of possible actions, can “choose” between them based on what their prediction based brain tells them the likely outcome of each choice is. I believe it is productive to focus on making that “choice” as wisely as possible. Whether it was always destined to be, from billions of years ago, or whether it is purely random, as in quantum mechanics, is not a very productive question to ask. IMHO.
      Don Stewart
      PS. There was a saying that was popular in the 1950s among the physicists, who were confronted with the perplexities of quantum mechanics: “shut up and compute”.

    • Don.

      I agree with where you are coming from.

      I would add that we humans observe and learn. From that, we can then adapt our behaviour and come up with original ways of behaving.

      The conserve and prune example that you give earlier is a good example.

      The decision to conserve and prune may have nothing to do with a “circuit” that evolved through time. It may be an observed and learnt behaviour.
      For example, watching squirrels storing nuts for the lean months of winter may have given humans the idea of doing the same. i.e, storing food to survive the times of seasonal food scarcity. We were able to understand the basic principles without copying exactly what the squirrels were doing (burying nuts). We could use our big brains to adapt/tweak the principal to suit our particular needs. (Dried meats perhaps.)
      I can’t see that there would have been a long evolutionary pressure to have such behaviours hard wired into our brains. (Not much call for food preservation/storage in the African Savannah.)
      As we moved through different biospheres, we were able to observe and learn new skills/behaviours to increase our chances of survival.

      I think this flexibility of thought has been fundamental to our “success”.

  33. @neil61
    In terms of activation of the “conserve and prune” circuit and governments. David Sinclair at Harvard is a leading Healthspan and lifespan researcher. In his personal life he claims that he now appreciates the benefits of cold exposure and is grateful for Boston winters. He eats one meal per day…and tells people that the fewer meals they eat the longer they will live.

    He also complains bitterly that the National Institutes of Health, which controls all government science funding in the medical arena, will not recognize his research as about any “real” topic. They will not admit that aging has anything to do with disease. They still seem wedded to the “pill for an ill” meme and anything else threatens the Establishment. (Shades of Covid?) Certainly what is overwhelmingly sold on television and social media and internet platforms is the polar opposite of “conserve and prune”.

    But the fact that we currently have a huge bulge in the elderly population and that a good percentage of those elderly go to gyms and do the exercises described in books like Deep Fitness is evidence that SOME people get it. And there is certainly lots of funding coming from Silicon Valley.

    According to a recent book on the subject, the average American spends the last 16 years of their life living with chronic disease. This is hugely expensive. One plausible path is that the elites decide that letting people die more quickly is the path of solvency. I have heard some non-Conspiracy Theory people say that the reason the NIH isn’t willing to recognize aging as a disease and Medicare doesn’t want to fund any gyms offering hormesis solutions is for that very reason.

    This is all a Hall of Mirrors, and I sure as hell don’t know where the magician who controls the Oz illusion is located. Or maybe it is just a natural mass delusion? And it might be that we end up with some relatively small slice of the population surviving a crunch? There are too many moving parts…so I just keep plugging away doing the best I can. I vote, as always, for clear feedback…all living creatures choose the “conserve and prune” pathway in response to feedback. But there are powerful forces favoring obfuscation.
    Don Stewart

  34. Pingback: Olduvai.ca

  35. Part I – Given this:
    Dr. Morgan has done a tremendous job in determining several facts and elucidating them here. (I recognize I am summarizing years of work in one paragraph. Please excuse a certain loss of nuance.):
    * Our global society has reached peak prosperity. From now on things will get worse.
    * We have reached peak prosperity because of a number of factors especially rising ECOE.
    ECOE will continue to rise.
    * (It’s possible that i read between the lines, and Dr. Morgan didn’t actually say this) As things move along ECOE and other factors will cause energy production and use to begin to decline.

    Don Stewart on January 23, 2022 at 1:36 am posted a lecture by Bill Rees. Thank you Don.
    Dr. Rees has been giving the same – with greater detail and accuracy – lecture since 1996 when his seminal book “Your Ecological Footprint” came out. It goes something like this, “There are too F&^%ing many people, and when the dust settles there will be less that 2 billion left.” At about 48 minutes into the lecture he explains why no one listens and that the Olduvai theory is so compelling.

    After the lecture came a long question and answer period, and for me the questions said it all. After listening to the man who has been thinking about this for at least 3 decades and who explained very carefully why no one would listen to him, most of the questions were, “How do we get people to listen?”. One pretty little hippy girl asked how people could be educated to live sustainably. Dr Rees after he just spent an hour and a half explaining that 6 – 7 billion people were going to die was very polite. For example, he didn’t say, “You cant live “sustainably” stupid, because there are too many people! Where have you been for the last 90 minutes?”

    Steven B Kurtz on February 5, 2022 at 12:11 pm posted the “Peak Fossil Fuels Overview”. Thank you Steve.
    That author said, “… we are out of time to replace fossil fuels, since oil, the master resource that makes all others possible, probably peaked in 2008 at 69.5 million barrels per day (mb/d) (IEA 2018 p45), or in 2018 (EIA 2020).” He also said (again I am paraphrasing here) that it really doesn’t matter that the reserves of coal and natural gas theoretically are sufficient for a few more decades since one needs diesel fuel to extract that energy, and the availability of diesel is already declining.

    What is the high net worth individual (HNWI) to do?

    • Part 2 – The plan

      Phase I – BAU Baby!
      If you have stocks, bonds, cryptocurrency and/or some other “investments”, and your net worth is somewhere north of the mid 7 figures, then you are the HNWI. Congratulations. Sell it all. Start looking for the perfect piece of land and two or three perfect families to share it with.

      * You will need to pay people to get them to live on the farm with you. Since they are building their own house and you are letting them live in it for free (as well as handling all utilities), their salary can be small. If you have weekly training sessions, you can keep everyone on the same page regarding phase II and III. If you get a hint that someone is not understanding and agreeing with your vision, they’ve got to go. Everyone on the farm needs to learn some skills for phase II – Animal husbandry, horse shoeing, cheese making, etc depending on their talents and inclinations, but all the skills needed for phase II need to be mastered.

      * The farm or ranch must have good water and enough pasture or other land that you can grow all the fodder and grains needed for the livestock as well as food for everyone in the village. Your employees each have their own house and there is a house for you and separate houses for each of your children. (Do not expect the kids to show up in this phase – in fact, they may try to have you committed and get your money.). This is not a subsistence farm at this stage, and you are not trying to live sustainably (whatever that may mean). It is a farm for training and preparation for phase II.

      The best case for this phase is that you die poor having built the coolest self sufficient farm based on the ancient Roman villa while BAU continues. The worst case would happen if it is already too late, and you are unable to build anything worthwhile before the end of BAU.

    • Part 3 – More Plan
      Phase II – The collapse
      Between 6 billion and all people are going to die before equilibrium is reached. If, as most of the people prominent in the doom-sphere believe it is mercifully quick, and if your facility is fairly isolated, and if you have prepared perfectly, and if your people are very good at defending their homes, and you get lucky, your dream will survive.

      Your children, and all the shirttail relatives that you have will show up very quickly after the collapse begins. Likely, even if your kids have no useful skills you will likely want them safe in the villa – that’s why you built them houses. The others must be refused in such a way that your people know that you are loyal to them. You have spent years making sure that the people you chose in the beginning are trained and dedicated to making phase III happen and it wont happen without them.

      Besides defense, and raising food everyone during this phase needs to concentrate on horsemanship. All of the kids especially should be completely at home on and around horses. They need to learn how to milk the mares, and everything else about how to use horses for food, transportation, fighting, etc.

      Eventually, and likely too soon, it will be impossible to raise food by farming. The weather will become to weird, all the spare parts provided by the HNWI will have been used up. It will simply be time to move on. This is why the collapse has to occur quickly. If it doesn’t, there will be too many people, and no game, left when phase III must begin.

      Phase III – Amazons

      Horses, and the other ungulates your people chose to preserve, need nothing but grass and water. As long as you can move your herd and your people to where the grass is without stumbling into an area contaminated by nuclear waste (spent fuel ponds etc.) you can live well. The HNWI will be dead by now, possibly long dead. Maybe, his grandchildren and great grandchildren are skilled horsewomen riding free, maybe none of his progeny made the cut. But if someone from the original farm makes it, I think the NHWI won.

      The Amazons rode at will from the pacific to Britain for 5000 years. They needed nothing but their horses.

      ADRIENNE MAYOR, THE AMAZONS: LIVES AND LEGENDS OF WARRIOR WOMEN ACROSS THE ANCIENT WORLD, PRINCETON UNIVERSITY PRESS PRINCETON & OXFORD, 2014

    • Pintada

      Have you read Earth Abides by George R Stewart?

      It’s a post-fall, sci-fi story. You might enjoy some of his conclusions.

  36. I want to post a verbose three part comment, but WordPress doesn’t seem to like that. Any hints?

    • Thanks Frank, but …
      Soundbites? Some would say that is what is wrong with our entire society.

      I do firmly believe in short snappy sentences. My favorite short story is “A Clean Well Lighted Place” after all. The problem is that there are a couple hundred of them. They all fit into paragraphs. The paragraphs make up a single thought. So …

  37. Well, Tim, two articles on Zerohedge this morning confirming your predictions of the shape of things to come:

    Head of Britain’s largest supermarket chain warned “the worst is yet to come” on food inflation as the cost-of-living crisis pulverizes the working poor.”

    During a debate aired by French broadcaster BMF-TV, “French presidential candidate Eric Zemmour, who wants a complete halt on immigration, said he was “not the Santa Claus of humankind” when pressed on how many refugees France should take in, adding that he was “here to save the French people and France…not here to save the world.””

    • Tagio (and others):

      I’m glad that these issues are being raised. My own feeling is that we, including me, have to start setting out some concrete projections about where things are going.

      There’s an almost palpable sense of public anxiety, uncertainty and, to some extent, mistrust. I believe that our understanding of the economy as an energy system enables us to make rational forecasts about where things are likely to go from here.

      It’s clear to me that prosperity is heading downwards, and that the real cost of essentials is rising. As well as affecting discretionary consumption and the scope for capital investment, these trends point towards worsening public anxiety and discontent. The financial system is overdue what we might tactfully call ‘a major correction’. Governments, for the most part, seem not to understand the question, still less have answers to it. The current distribution of wealth and power looks increasingly untenable. Myths such as ‘infinite growth’ and ‘the limitless potential of technology’ are past their sell-by dates.

      In short, I think the time has arrived for concrete forecasts.

    • Tim,
      ‘Re:
      “The financial system is overdue what we might tactfully call ‘a major correction’.”

      Governments will intervene to attempt to keep the markets from signaling economic collapse. China did so yesterday. I suspect a 25% decline will have the US buying despite denying it.

      https://finance.yahoo.com/news/china-state-funds-said-buy-095323613.html
      China State Funds Said to Buy Stocks to Stem Worsening Rout

      Tue, February 8, 2022, 6:34 AM

    • Steven:

      You are right, of course, that governments will continue to do everything they can to prop up and further inflate asset prices. The US authorities have a fixation with the stock market, the UK has an even more bizarrre obsession with house prices, and China is trying to achieve an orderly solution to the problem of excessive real estate debt.

      But carrying on with this risks letting inflation get out of control. There are also questions of feasibility as the economy deteriorates. A stock with underlying value of, say, $20, can be propped up at $50, but how can you prop up a stock worth $0? How can property prices remain inflated as affordability slumps ever lower?

    • “In short, I think the time has arrived for concrete forecasts.”

      This is certainly a most concerning pronouncement, coming from someone intimately aware of the situation.

    • @Mark Meldon
      I realise the following comments are not strictly on topic for this blog ,however,I feel a few observations are appropriate regarding the topic you have mentioned.

      The “smart” approach suggested in the article for the energy supply / demand problem could have significant benefits .
      BUT why should Octopus customers be the only ones to benefit. We have a National Grid and would have had a National
      Supplier if the financialisation of the supply had not occurred in the 90’s. The unravelling of the financial behemoth has begun with the failures we have seen recently in many energy suppliers ( who were really just gamblers).
      I listened in today to a Parliamentary committee on energy in which the CEO of OVO energy ( one of these gamblers) was being grilled . The obfuscation in his responses were breathtaking .

      In my area the local authority continues to install low energy street lights (very laudable infrastructure improvement ).
      However, at the same time a substantial number of residents are adding exterior illumination to their homes purely for cosmetic reasons. These same residents will be benefitting from the chancellor’s energy ‘subsidy”’.

  38. Sad State of Public Discourse on Serious Topics
    https://howtosavetheworld.ca/2022/02/07/propaganda-how-the-cbc-and-other-western-media-are-played/

    I don’t know the solution to the problem. In many ways, it seems hopeless. Perhaps people younger and smarter than I can figure something out. My opinion is that the public will likely be whipsawed from one extremity to the other and will learn the hard way that nothing they are being offered really works.

    Dave attacks the truckers demonstration in Canada, while Heather Heying thinks it is about time somebody says that “the emperor has no clothes”. I’m just sick of the posturing.

    I do think the incoherence and downright corruption in the media make it much more difficult for the good people collected here to be heard. If Bill Rees, and before him the late Bill Catton, could not be heard, why do we think we will be heard?

    Don Stewart

    • Economic deterioration is causing understandable public anger, and many governments appear both baffled and out of touch.

      All that we can really do here is stick to reasoned analysis, and our principles of civilized, constructive and non-partisan debate. It seems to me that economic and political deterioration is accelerating, which is why I think we need to start making concrete forecasts.

      I think we’re entitled to say that we’ve been right on a lot of issues, including prosperity, essentials and discretionaries, where the orthodox line has been wrong.

    • Don,

      Re: “My opinion is that the public will likely be whipsawed from one extremity to the other and will learn the hard way that nothing they are being offered really works.”

      Much like U.S. sanctions of other countries drive those countries to become more self-reliant, our post-truth era of agenda-driven information and misinformation wars drive the more reflective members of the public to the conclusion that the motto above the entrance to the realm of public discourse is “abandon hope all ye who enter here,” and that the only sure thing is to abandon the public realm and politics in favor of highly localized individual action and initiative, or to go to the extreme – the fantasy of a self-reliant homestead. They really can’t be faulted for this- it is a predictable outcome of continually encountering agenda-driven information wars, where there is little to no pursuit of truth and it’s just manipulation all the way down (with apologies to turtles, who have more solidity and are more lovable).

      Nicole Foss identified some time ago that a consequence of declining energy, shrinking economies and degrowth (not her word) would be a drastically reduced “trust-horizon” down to the most basic social groupings and local level. It was one of the key factors she identified that would make top-down “solutions” impossible.

  39. Record Profits at BP hasn’t gone down well in most quarters of the UK.

    This begs the question, what should happen to these profits. Should they be re-invested to bolster depleting reserves, distributed to shareholders who take risk in funding the company, or answer the populist call for a windfall tax?

    Looks like BP can’t win. Opt for re-investment in capacity and/or shareholder distribution and they will get slammed by all and sundry with an opinion. Alternatively they can take a haircut on this profit through a windfall tax, to line the pockets of the treasury and appease opinion. I would like to think that government would look at this from an ECOE perspective, but it’s odd’s on they will look at it from a voter appeal perspective.

    • “I would like to think that government would look at this from an ECOE perspective” – the problem here is that governments don’t know what ECoE is. As far as I can tell from the news channels I read (several ones from different countries), they are all totally energy blind. The may “see” CO2, but they do not see energy as an input. Really not.

  40. Greg Hunter at USA Watchdog.com has just interviewed John Williams of ShadowStats.com
    Mr Williams recalculates the official US CPI-U to give a real world US inflation rate of 14.8%
    he picks holes in the way officialdom presents unemployment figures and GDP,
    in his opinion employment is still 1.9% below the level of 2019, the economy is far from recovering, raising interest rates now would trigger a renewed depression, a double dip, that inflation is now baked in for some years and unavoidable,
    he expects the FED to be forced to keep printing money to keep the system liquid and avoid collapse and this will fuel further inflation,
    with a bemused smile he uses the H word, hyper inflation, as being a real possibility within a year or so,
    he points out that precious metal would be a good way to store and preserve wealth with cash looking increasingly at risk of it’s purchasing power evaporating,
    his caution was that things could get quite dysfunctional and explored the possibility of resorting to barter if the dollar becomes unusable,
    his suggestion was getting yourself a big bag of old silver quarters that people would recognise, trust and be in small enough denominations to use for practical day to day trading,
    in short, what he’s long warned of being a possibility now seems to be arriving.

    https://usawatchdog.com/fed-rate-hike-will-cause-hyperinflationary-great-depression-john-williams/

    http://www.shadowstats.com/

    we’re not out of the woods, we’re plunging deeper into them.

    • @matt do you have a simple answer to: “In short, Williams points out, “The Fed has to keep the system liquid. So, the money is going to continue to flow, and they cannot afford to raise interest rates.”
      Why is “the system” not currently liquid still with more debt than ever having been created?

  41. In Case You Had Any Doubts
    “Oil producers around the world have the capacity to produce at levels that match demand and reduce the high prices.”
    —Jen Psaki, Biden Press Secretary

    If you thought that the Carter Doctrine (“the Middle East is our toy, and the rest of you children are invited to play occasionally, but don’t expect to put down any roots”) was defunct in favor or “clean, renewable energy”, you might wish to rearrange your perception of the world. The current “anti-China” chorus in Washington is all about who makes whatever it is that the Arabs want in return for their oil. Will fiat petro-dollars still do the trick? Or is John Williams correct on the hyper-inflation issue?

    Don Stewart

    • Don, Michael Hudson’s recent article on what the U.S. / Russia fight is all about is well worth reading in this regard, and also discusses the problems with the preserving the reserve status of the U.S. fiat dollar now that the U.S. has de-industrialized and in light of the fact that apart from the arms industry the U.S. has little to offer for oil. Disturbingly, Hudson argues that the U.S. can’t re-industrialize because its economy is financialized and is overburdened with rentier costs.

      Perhaps a little off topic in its focus on geopolitical events, but of course that also is a response to depletion and rising ECoE, and an effort to preserve prosperity at the expense of others.

      https://thesaker.is/americas-real-adversaries-are-its-european-and-other-allies-the-u-s-aim-is-to-keep-them-from-trading-with-china-and-russia/

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