I've felt that at the root of the global financial collapse we'd find energy — mainly the end of cheap oil. Energy is the basis for real economic activity, and we seemed to be reaching oil supply limits by summer of 2008 just before the economic collapse hit its stride. 1979 was the year we reached per capita global peak energy. Maybe 1979 was the year we hit the true limits to growths and didn't realize it. Or didn't want to face it?
There are gazillion words about the collapsing global economy (which may be the end of cheap credit?). But nobody seemed to be connecting the dots between the end of cheap oil and the economic collapse. Until good ol' The Long Emergency author James Kunstler nailed it in "What Next?"
The Peak Oil story was never about running out of oil. It was about the collapse of complex systems in a world economy faced by the prospect of no further oil-fueled growth. It was something of a shock to many that the first complex system to fail would be banking, but the process is obvious: no more growth means no more ability to pay interest on credit… end of story, as Tony Soprano used to say.
….The last desperate act of the banking system in the face of Peak Oil's no-more-growth equation was to engineer species of tradable securities that could produce wealth out of thin air rather than productive activity.
In a nutshell. Thanks, Jim.
And speaking of limits to growth, about a week later I was astounded to read (in the NY Times no less) what appeared to be a major turnabout for highly visible economics author and economic globalization proponent Thomas Friedman in The Inflection Is Near?
Let's today step out of the normal boundaries of analysis of our economic crisis and ask a radical question: What if the crisis of 2008 represents something much more fundamental than a deep recession? What if it's telling us that the whole growth model we created over the last 50 years is simply unsustainable economically and ecologically and that 2008 was when we hit the wall — when Mother Nature and the market both said: "No more."
We have created a system for growth that depended on our building more and more stores to sell more and more stuff made in more and more factories in China, powered by more and more coal that would cause more and more climate change but earn China more and more dollars to buy more and more U.S. T-bills so America would have more and more money to build more and more stores and sell more and more stuff that would employ more and more Chinese …
We can't do this anymore.
Holy Ecology, Batman, is the Limits of Growth message making it into the mainstream minds? This out-of-character-for-Friedman column brought up a similar response in Asher Miller, executive director of Post Carbon Institute. In a post titled "Hot, Flat, and Confused," he write, "When people like Friedman…are all talking about the end of growth, now that gives me some hope."
My hope was dampened somewhat into realism when our cohort Michael Brownlee in Boulder wrote about attending Friedman's talk about his new book Hot, Flat, and Crowded:
He laid out his main arguments from his new book, which hinge on the premise that in order to meet the challenge of climate change we need to make our top priority developing technologies which will result in "a cheap and abundant, clean and reliable source of electrons and molecules" that will (among other things) end our dependence on fossil fuels….
That's right, this is the quintessential "Techno-Fix" position, the quasi-religious belief that technology will solve our problems, allow us to continue to fuel economic growth by some means other than fossil fuels, and maintain our current way of life. ("Our current way of life," means, of course, the Western way of life typified in America.)…
In the face of growing global crises of climate change, resource depletion and economic collapse, placing all bets on Friedman's fabulous as-yet-uninvented technology is at best wildly speculative. At worst, it is deeply and dangerously wrong-headed.
Still, it's a step in the right direction: for a well-known economist/writer to say such a (taboo!!) notion in public widens the conversation. Which we desperately need as the Obama administration seems bent on returning us to "economics/business as normal" by pumping up the debt, which got us here in the first place. As James Kunstler asserts in "Full Commanding Denial":
[W]e can't possibly return to the easy credit and no money down "consumer" economy no matter how many nominal dollars get shoveled into the fiery furnaces of banks too-big-to-fail…. Everything that we're doing right now is engineered to avoid reality, to sustain the unsustainable, to recover the unrecoverable, when the mandate of reality compels us to face our losses in order to move on to the next chapter of a collective American life. The next chapter would be a society that runs on a much more local and modest scale, centered on essential activities like growing food, requiring harder physical work, and focused attention — in other words, the opposite of a society lost in abstractions, long-range daisy chains of off-loaded responsibility, and incessant pleasure-seeking."
The limits to growth. Debt growth, consumption growth, population growth. Most people alive today have only known growth. It's a huge mindshift to even consider contraction, much less see it as beautiful, as a gift. I'm glad to see some cracks in the denial. We'll arrive where we're headed a whole lot more easily if we don't resist it.
Fossil Fuel
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