Endlich mal was lustiges auf diesem Blog, wird aber auch Zeit:
"Die Meinungsfreiheit die wir meinen ist frei von jeder Meinung!"
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Samstag, 5. Mai 2012
Freitag, 4. Mai 2012
Demystifying the miracle of the market
The zealots of economy will argue that everything that has been said in this blog is ridiculous nonsense because, if a commodity gets rare and its price increases, due to the laws of supply and demand, the amazing force of innovation will take care of the problem by itself.
What if growth stops and capitalism doesn't
So let’s take a look at that assumption. What will happen if oil gets scarce and its price is rising from a market perspective? We will not even consider the developments described in the posts before and assume capitalism will survive the end of growth. We still know though that 95 % of the goods that we produce are not only dependent on energy but directly dependent of oil as a resource.
Furthermore there is no resource that can be exploited without the aid of energy and/or oil, therefore all resources and all products and services prices will rise (in relation to their dependency on oil). So not only oil will get scarce but everything will. As a result GNP will drop, as obvious (for anybody but economists) if a key ingredient of your production process gets scarce, and if you can’t compensate it with anything else, you will not be able to produce as much or can’t produce at all. If a producer can’t produce, he will have to close shop so invariably unemployment will rise.
As this will happen throughout all industries, the GNP will decrease, while prices go up. What does it mean when everything gets more expensive? Surely many people will not be able to consume as much as they did before, if they were already stretched thin (as many are), they will get desperate and angry. To be able to afford their costs of living they will demand higher wages or some help from society. Social unrest, strikes and a class struggle will ensue.
So we will have at our hand high inflation and lower production, lower surpluses, more unemployment, a class struggle and much lower GNP. I will call that a global recession. In this situation of a global recession the magical hand of the markets will have to be mighty indeed to save capitalism, but let’s assume it does.
To solve the problems of oil scarcity we will not only need one invention, but thousands, innovations like how to make rubber cheaply without oil, how to produce naphta (resource for 80 % of all chemical products) without oil, how to grow corn without chemical fertilizer, how to fuel trucks without diesel etc.
Most of the time, we will find, that the solution is a problem in itself. Of cause we could substitute fossil fuels with bio fuels, but we need fossil fuels to grow and transport agricultural products, and, we will need to eat something too. If you do the math, you will find we will not even have the area of agricultural land to grow enough of it, so this is not an option. Similar problems will arise with other strategies (atomic energy, fission, etc).
Also, when trying to save this market that solves anything, we will not only have to invent fast enough to match current oil production but keep up with an exponentially rising demand. Meaning, that with a steady growth of demand of 3.5%, to fuel growth of GNP we will have to have produced MORE substitutes of fossil fuels in 20 years than the total amount of ALL fossil fuels we have used up in history minus the amount of oil that we could still produce (that will be down to 50 % at that time with a estimated 3,5% drop in production).
So in the end this arithmetic comes down to roughly 75% of total world oil resources that we have exploited in all our history (approximately 1000 billion barrels) replaced by 750.000.000.000 Barrel of Oil equivalent that we will have to have produced at the end of a time span of 20 Years.
During that time, coal, gas and many other resources will probably also reach their peak, especially if we try to substitute oil with them (i.e. coal), leading to further decrease of production, GNP and more work for the invisible hand to come up with more substitutes for things we have taken for granted for a hundred years now.
An arithmetic example
Let us use some arithmetic again on this. One Liter of crude contains about 37.000.000 J. One Barrel is a little less than 160 liters so it contains an energy equivalent of roughly 5.920 * 1012 J. We Multiply that by 750 * 109 bl from above and get final Energy equivalent of 4.4 * 1024 Joule or 1,23 * 1018 KWh that we need to have produced in 20 Years.
As a physicist I would opt for creating a sustainable cycle of energy production and would probably vote for synthetic fuels created by using sustainably produced electricity (wind gas, solar fuel etc.).
Let us say we will be very successful in creating a process for producing an oil substitute (i.e. solar fuel) with an efficiency of 50% (which would be very good indeed) so we would need electricity in an amount of estimated 2.5 * 1018 KWh to produce enough to meet our demands in crude oil substitution alone. (Note: btw. this process needs catalysts made from rare metals today that we are running out of very quickly, i.e. Copper and Platinum).
2010 we were producing 5000 GW or 4.38 * 1013 KWh per year in electricity worldwide (REN21 renewable worldwide status report 2011). 67.6% of this electricity was produced with fossil fuels, 13% with nuclear energy and the rest 19.4% renewable with only 3.3 not coming from hydropower (which is not to be growing anymore as we ran out of rivers to use).
Keeping up this energy output (which would be hard) would bring us non closer to our goal than 57000 years to produce the power we would need to have produced in 20 years to substitute oil.
Note that a huge amount of electricity produced is produced by using fossil fuels (67.6%), so we need to replace these facilities with new ones based on our innovation. If we would like to do so by using non hydro renewable energy and meet the growing demands, we would need to aim for a steady growth of renewable energy by approximately 100% per year for a cumulated output of more than 2.5 * 1018 KWh in 20 years, to have at the end an output that is a million times higher than today.
Right now we manage 20% growth, which is not too bad but will hardly be enough. A steady growth fof 20% would bring us to a renewable energy production of 9.24*1013 KWh per Year which is only 1/16000 of what we need! It would be more than twice of all electricity that we produce today. It will be enough to keep up with our electricity demands, but surely will not be enough to substitute oil.
100% seems not so utopian altogether though (if one does not understand the arithmetic of exponential growth). Surely this is doable? (this would of cause apply to other forms of energy production, i.e. nuclear energy, with the added problems of exponentialy increasing waste).
In Germany there were already an astounding number of 367000 people employed in the renewable energy industry. If we would have this industry grow by 100% per year in 20 years we would need 200 billion employees in renewable energy business in Germany alone! I am not sure I would want to live here anymore and the efforts in reproduction might be more than I could handle. But maybe by being more efficient this number would not apply?
We invested 211 Billion $ into renewable energy in 2010. Growing by a 100% every year would bring this number up to 100 000 000 000 000 000 $ in 20 years. 0.1 billion billion $. As an investor I would start buying stocks now!
When growth stops we need growth to grow but it stopped?
One thing should be obvious though, whatever these substitute may be that the magic hand of the market conjured up out of thin air, we will need to have the production capacities to deliver huge amounts of it in a very, very short time span, and we do not have them at all right now. I can’t even imagine how many facilities for solar fuel we will need to build, how many wind parks and solar cells. As seen above, we will need a million times more renewable energy plants than we have today. Obviously this will cause a lot of work, things to be produced, workers to be paid etc. It will be the greatest effort that mankind ever undertook, meaning it will require growth!
Remember where we started out, that we need energy and oil to have growth but we don’t have them? But the hand of the market will solve this problem? Recursion is another concept (like arithmetic) that economists do not seem to be able to grasp, and therefore choose to ignore.
We could have thought about preparing for peak oil and started this endeavor when we still had a steady growth of oil production. Not that there has not been a horde of scientists (even economists like Kenneth Boulding) that have pointed out the problem from early on, but what would have been the virtues that could have achieved this endeavor?
They would have been foresight, modesty, common sense, solidarity, caring about future generations, respect for our nature and the willingness to accept losses to further the common good, virtues capitalism is desperately lacking because they would have severely gotten in the way of making money, and that, to capitalism, is unacceptable.
In the end it turns out, real innovation is not so much of a trait of capitalism at all.
What if growth stops and capitalism doesn't
So let’s take a look at that assumption. What will happen if oil gets scarce and its price is rising from a market perspective? We will not even consider the developments described in the posts before and assume capitalism will survive the end of growth. We still know though that 95 % of the goods that we produce are not only dependent on energy but directly dependent of oil as a resource.
Furthermore there is no resource that can be exploited without the aid of energy and/or oil, therefore all resources and all products and services prices will rise (in relation to their dependency on oil). So not only oil will get scarce but everything will. As a result GNP will drop, as obvious (for anybody but economists) if a key ingredient of your production process gets scarce, and if you can’t compensate it with anything else, you will not be able to produce as much or can’t produce at all. If a producer can’t produce, he will have to close shop so invariably unemployment will rise.
As this will happen throughout all industries, the GNP will decrease, while prices go up. What does it mean when everything gets more expensive? Surely many people will not be able to consume as much as they did before, if they were already stretched thin (as many are), they will get desperate and angry. To be able to afford their costs of living they will demand higher wages or some help from society. Social unrest, strikes and a class struggle will ensue.
So we will have at our hand high inflation and lower production, lower surpluses, more unemployment, a class struggle and much lower GNP. I will call that a global recession. In this situation of a global recession the magical hand of the markets will have to be mighty indeed to save capitalism, but let’s assume it does.
To solve the problems of oil scarcity we will not only need one invention, but thousands, innovations like how to make rubber cheaply without oil, how to produce naphta (resource for 80 % of all chemical products) without oil, how to grow corn without chemical fertilizer, how to fuel trucks without diesel etc.
Most of the time, we will find, that the solution is a problem in itself. Of cause we could substitute fossil fuels with bio fuels, but we need fossil fuels to grow and transport agricultural products, and, we will need to eat something too. If you do the math, you will find we will not even have the area of agricultural land to grow enough of it, so this is not an option. Similar problems will arise with other strategies (atomic energy, fission, etc).
Also, when trying to save this market that solves anything, we will not only have to invent fast enough to match current oil production but keep up with an exponentially rising demand. Meaning, that with a steady growth of demand of 3.5%, to fuel growth of GNP we will have to have produced MORE substitutes of fossil fuels in 20 years than the total amount of ALL fossil fuels we have used up in history minus the amount of oil that we could still produce (that will be down to 50 % at that time with a estimated 3,5% drop in production).
So in the end this arithmetic comes down to roughly 75% of total world oil resources that we have exploited in all our history (approximately 1000 billion barrels) replaced by 750.000.000.000 Barrel of Oil equivalent that we will have to have produced at the end of a time span of 20 Years.
During that time, coal, gas and many other resources will probably also reach their peak, especially if we try to substitute oil with them (i.e. coal), leading to further decrease of production, GNP and more work for the invisible hand to come up with more substitutes for things we have taken for granted for a hundred years now.
An arithmetic example
Let us use some arithmetic again on this. One Liter of crude contains about 37.000.000 J. One Barrel is a little less than 160 liters so it contains an energy equivalent of roughly 5.920 * 1012 J. We Multiply that by 750 * 109 bl from above and get final Energy equivalent of 4.4 * 1024 Joule or 1,23 * 1018 KWh that we need to have produced in 20 Years.
As a physicist I would opt for creating a sustainable cycle of energy production and would probably vote for synthetic fuels created by using sustainably produced electricity (wind gas, solar fuel etc.).
Let us say we will be very successful in creating a process for producing an oil substitute (i.e. solar fuel) with an efficiency of 50% (which would be very good indeed) so we would need electricity in an amount of estimated 2.5 * 1018 KWh to produce enough to meet our demands in crude oil substitution alone. (Note: btw. this process needs catalysts made from rare metals today that we are running out of very quickly, i.e. Copper and Platinum).
2010 we were producing 5000 GW or 4.38 * 1013 KWh per year in electricity worldwide (REN21 renewable worldwide status report 2011). 67.6% of this electricity was produced with fossil fuels, 13% with nuclear energy and the rest 19.4% renewable with only 3.3 not coming from hydropower (which is not to be growing anymore as we ran out of rivers to use).
Keeping up this energy output (which would be hard) would bring us non closer to our goal than 57000 years to produce the power we would need to have produced in 20 years to substitute oil.
Note that a huge amount of electricity produced is produced by using fossil fuels (67.6%), so we need to replace these facilities with new ones based on our innovation. If we would like to do so by using non hydro renewable energy and meet the growing demands, we would need to aim for a steady growth of renewable energy by approximately 100% per year for a cumulated output of more than 2.5 * 1018 KWh in 20 years, to have at the end an output that is a million times higher than today.
| Year | 100'% growth renewable energy production / KWh |
| 1 | 1,45E+12 |
| 2 | 2,90E+12 |
| 3 | 5,79E+12 |
| 4 | 1,16E+13 |
| 5 | 2,32E+13 |
| 6 | 4,63E+13 |
| 7 | 9,26E+13 |
| 8 | 1,85E+14 |
| 9 | 3,71E+14 |
| 10 | 7,41E+14 |
| 11 | 1,48E+15 |
| 12 | 2,96E+15 |
| 13 | 5,93E+15 |
| 14 | 1,19E+16 |
| 15 | 2,37E+16 |
| 16 | 4,74E+16 |
| 17 | 9,49E+16 |
| 18 | 1,90E+17 |
| 19 | 3,79E+17 |
| 20 | 7,59E+17 |
| 21 | 1,52E+18 |
| Sum | 3,04E+18 |
Right now we manage 20% growth, which is not too bad but will hardly be enough. A steady growth fof 20% would bring us to a renewable energy production of 9.24*1013 KWh per Year which is only 1/16000 of what we need! It would be more than twice of all electricity that we produce today. It will be enough to keep up with our electricity demands, but surely will not be enough to substitute oil.
100% seems not so utopian altogether though (if one does not understand the arithmetic of exponential growth). Surely this is doable? (this would of cause apply to other forms of energy production, i.e. nuclear energy, with the added problems of exponentialy increasing waste).
In Germany there were already an astounding number of 367000 people employed in the renewable energy industry. If we would have this industry grow by 100% per year in 20 years we would need 200 billion employees in renewable energy business in Germany alone! I am not sure I would want to live here anymore and the efforts in reproduction might be more than I could handle. But maybe by being more efficient this number would not apply?
We invested 211 Billion $ into renewable energy in 2010. Growing by a 100% every year would bring this number up to 100 000 000 000 000 000 $ in 20 years. 0.1 billion billion $. As an investor I would start buying stocks now!
When growth stops we need growth to grow but it stopped?
One thing should be obvious though, whatever these substitute may be that the magic hand of the market conjured up out of thin air, we will need to have the production capacities to deliver huge amounts of it in a very, very short time span, and we do not have them at all right now. I can’t even imagine how many facilities for solar fuel we will need to build, how many wind parks and solar cells. As seen above, we will need a million times more renewable energy plants than we have today. Obviously this will cause a lot of work, things to be produced, workers to be paid etc. It will be the greatest effort that mankind ever undertook, meaning it will require growth!
Remember where we started out, that we need energy and oil to have growth but we don’t have them? But the hand of the market will solve this problem? Recursion is another concept (like arithmetic) that economists do not seem to be able to grasp, and therefore choose to ignore.
We could have thought about preparing for peak oil and started this endeavor when we still had a steady growth of oil production. Not that there has not been a horde of scientists (even economists like Kenneth Boulding) that have pointed out the problem from early on, but what would have been the virtues that could have achieved this endeavor?
They would have been foresight, modesty, common sense, solidarity, caring about future generations, respect for our nature and the willingness to accept losses to further the common good, virtues capitalism is desperately lacking because they would have severely gotten in the way of making money, and that, to capitalism, is unacceptable.
In the end it turns out, real innovation is not so much of a trait of capitalism at all.
Donnerstag, 3. Mai 2012
exponential growth
Why, you ask, can I be sure that peak oil is immnent and the end of growth is reached?
The simple answer is, that I made an effort to understand the exponential function.
If you didn't please see this video of a lecture by Physicist Albert A. Bartlett on "Arithmetic, Population, and Energy."
The simple answer is, that I made an effort to understand the exponential function.
If you didn't please see this video of a lecture by Physicist Albert A. Bartlett on "Arithmetic, Population, and Energy."
Continue this lecture on Youtube: Part 2,
Mittwoch, 2. Mai 2012
Mobilizing society in the face of peak oil
This is a copy of a french initiative by leading french oil experts to apeal for more recognition of the gravity of peak oil:
After more than a century of ever increasing production and
consumption of oil, the Earth is being depleted, and the concept of
“peak oil”, hitherto ignored, has become a pressing reality. This strain
is already becoming evident through the use of extraction methods that
require ever greater amounts of energy, resources and investment.
The fact that a resource is finite means that its extraction rate will grow, reach a maximum, plateau, and finally decline. Inexpensive and easy-to-access oil follows this pattern. Most experts, including the International Energy Agency, admit that it reached its global production peak a few years ago.
Despite the recent discoveries of new oil fields reported in the media, the world keeps consuming each year more oil than is discovered through exploration. The extraction of hard-to-access oil – so-called non-conventional oil (tar sands, shale oil, deep-water offshore fields…) – will be much more expensive and, more importantly, much slower. It will therefore be unable to prevent the decrease in global oil production, following a plateau that is expected to last only until 2015-2020. Alternative energies, even if they are vigorously developed, cannot compensate for the reduction in oil production, either in quantity or in cost of production. No substitute for liquid fuels is available today at the scale of current or future demand.
It is inevitable that less energy and fewer resources will be available to us in the future, the more so as the world’s population is increasing and developing countries are industrializing rapidly. Furthermore, oil-exporting countries are using an ever-increasing share of their production to fuel their own development.
The fact is that the functioning of modern societies depends upon sustained economic growth, which goes hand in hand with escalating consumption of energy and resources.
It is therefore urgent that we anticipate the inexorable descent of energy availability. The physical limits should trigger a real transition of society toward a major decrease of our dependence on non-renewable resources through a profound change in our behavior, in the organization of our nation (land use, infrastructure) and of our economy. If this transition is not anticipated and planned for, it will take place in a chaotic manner, with disastrous economic consequences, such as occurred in the subprime crisis. The foundations of democracy and peace could thus be threatened.
In this context, it is essential that policy makers, but also all social and economic actors as well as citizens become aware of this issue and demonstrate foresight, in order to forestall the very real risk to social cohesion and the functioning of all vital sectors of our community.
The signatories invite all candidates for future elections to take into account this urgent situation. They call on the candidates to take a stand on this issue through debates and concrete policy proposals. These proposals need to be consistent with the physical reality of resource extraction and must enable us to cope with the upcoming decrease in energy available to our society.
Signatories :
Mobilizing society in the face of peak oil
The fact that a resource is finite means that its extraction rate will grow, reach a maximum, plateau, and finally decline. Inexpensive and easy-to-access oil follows this pattern. Most experts, including the International Energy Agency, admit that it reached its global production peak a few years ago.
Despite the recent discoveries of new oil fields reported in the media, the world keeps consuming each year more oil than is discovered through exploration. The extraction of hard-to-access oil – so-called non-conventional oil (tar sands, shale oil, deep-water offshore fields…) – will be much more expensive and, more importantly, much slower. It will therefore be unable to prevent the decrease in global oil production, following a plateau that is expected to last only until 2015-2020. Alternative energies, even if they are vigorously developed, cannot compensate for the reduction in oil production, either in quantity or in cost of production. No substitute for liquid fuels is available today at the scale of current or future demand.
It is inevitable that less energy and fewer resources will be available to us in the future, the more so as the world’s population is increasing and developing countries are industrializing rapidly. Furthermore, oil-exporting countries are using an ever-increasing share of their production to fuel their own development.
The fact is that the functioning of modern societies depends upon sustained economic growth, which goes hand in hand with escalating consumption of energy and resources.
It is therefore urgent that we anticipate the inexorable descent of energy availability. The physical limits should trigger a real transition of society toward a major decrease of our dependence on non-renewable resources through a profound change in our behavior, in the organization of our nation (land use, infrastructure) and of our economy. If this transition is not anticipated and planned for, it will take place in a chaotic manner, with disastrous economic consequences, such as occurred in the subprime crisis. The foundations of democracy and peace could thus be threatened.
In this context, it is essential that policy makers, but also all social and economic actors as well as citizens become aware of this issue and demonstrate foresight, in order to forestall the very real risk to social cohesion and the functioning of all vital sectors of our community.
The signatories invite all candidates for future elections to take into account this urgent situation. They call on the candidates to take a stand on this issue through debates and concrete policy proposals. These proposals need to be consistent with the physical reality of resource extraction and must enable us to cope with the upcoming decrease in energy available to our society.
Signatories :
- Pierre René Bauquis - Former Director of Strategy and Planning at Total
- Jean-Marie Bourdaire - Former Director of Economic Studies at Total, former Director of Studies at WEC
- Yves Cochet - European Deputy, former Environment Minister.
- Jean-Marc Jancovici – Consultant, energy and CO2 issues, ASPO France
- Jean Laherrère - Former Chief of Exploration Technologies at Total
- Yves Mathieu - Former Hydrocarbon Reserves Project Manager at the Institut Francais du Petrole (French Petroleum Institute)
- Philippe Labat - Oil Consultant
- Jean-Luc Wingert - Consultant, ASPO France
- Bernard Durand - Former Director of the Geology Division at the Institut Francais du Petrole
- Jacques Varet - Former Director of Prospecting at BRGM, former President of Eurogeosurveys
Dienstag, 1. Mai 2012
Struggle for a future continued
In my first post I outlined how capitalist economy and the “western culture” could thrive by exploiting the natural resources. My central argument is, that the unsurpassed surpluses in industrial countries were only possible by the exploitation of fossil energy.
The concept of monetary gain as the driving force of all human interaction and the resulting economic that puts the siphoning of these surpluses by a capitalist elite in the center of our culture is based on the presumption that these surpluses not only exist indefinitely but grow exponentially forever.
As the production of Crude Oil has peaked in 2006 and will probably start declining very soon I argue that the basis of neoclassical economy, the capitalist economic system and the culture that is based on it, will collapse. As this is obviously happening all around us these presumptions should not come as a surprise.
Also, if connecting the dots between energy output and accumulation of wealth, it is not surprising that peak oil production and peak liquidity are happening at the same time, in fact it is a strong evidence for the assumptions made above.
Peak liquidity also means that the concentration of wealth and power reached its climax today. The power is mostly concentrated in financial industry and especially in investment banking. These financial institutions that are struggling with the amounts of liquidity they have to handle, have been driven to ever more radical measures to guarantee the yields they have promised to their customers.
They have as yet done so but could only achieve further capital gains for the rich by stealing from public wealth (state budgets, tax money, common goods etc.). This power also corrupted these financial institutions themselves to also (or primarily) act in their own interest, often even in fraudulent disregard to the customers they serve.
Even though capital has long ago disconnected itself from national boundaries and has become what we call globalization today, the governments of the countries where these institutions and most of their customers are at home have been corrupted by them beyond realistic hopes of salvation.
They have as yet done so but could only achieve further capital gains for the rich by stealing from public wealth (state budgets, tax money, common goods etc.). This power also corrupted these financial institutions themselves to also (or primarily) act in their own interest, often even in fraudulent disregard to the customers they serve.
Even though capital has long ago disconnected itself from national boundaries and has become what we call globalization today, the governments of the countries where these institutions and most of their customers are at home have been corrupted by them beyond realistic hopes of salvation.
The struggle for the remaining resources is, and has been, the cause for more and more conflicts around the globe but especially in the middle-east. Many of the countries that still hold oil reserves have dismissed all pretense of democracy and the ruling elites of these countries greedily rake in profits while they still can. (Saudi Arabia, Iran, Libya (past, future?), Russia, Sudan …)
It is obvious that the powers that be, those that thrived on the surpluses gained of the exploitation of virtually free energy, will not step down, distribute their wealth and live in modesty ever after. It is obvious that they feel they have a right to their capital gains and pursue this ostensible right by force. It is also obvious that they concentrate economic power, means of production, political power and armed forces in a way never seen before. The described results of peak oil will only escalate in the future.
Today the capitalists feel sure enough in their hubris to forgo any act of kindness towards the lower classes, because they can, as they are in control of the executive, and they must, because growth is now longer possible.
It is also a fact that we will not be able to sustain the leeches any longer. While it might be obvious for many it is not obvious for the leeches themselves. For their capital gains to grow further, the pressure they put on anybody working in a dependent employment will be increased.
As long as there was enough surplus to sustain capital gains by the increase of fossil fuel production to fuel the production of more (and more excessive, wasteful and worthless, i.e. SUVs) goods of consumption, it was possible to appease the public majority in capitalistic societies with some adjustment to the distribution of the riches.
As growth comes to a halt and surpluses sink, they enforce the reduction of wages to compensate. This can be seen in all countries around the western world today as wages stagnated for twenty years while capital gains skyrocketed.
Of cause the result is the increasing gap between rich and poor and the end of any vertical social mobility that might have existed, as it is intended to be by those who are responsible for this development. If there is no growth, the rich can only get richer by the poor getting poorer (and by denying the not so poor any chance for also getting rich).
Especially the young generation is virtually shut out of partaking in this collapsing culture. For an ever increasing percentage of young people, finding a paying job that provides for their livelihood, an affordable home or any other positive outlook into the future seems impossible. Many break down under the increasing demands of the society, while education, health care or any other kind of benefit, that society has doled out freely to past generations is now only granted to the rich and their offspring.
The things that are done today in the name of greed show that any restraining boundaries that might have existed have fallen. Evident examples are trading with the debts of “third world” countries by vulture funds, land grabbing and the speculation with food or the circulation of fake malaria drugs in africa (the list could go on forever with examples of destruction and death in the name of money).
Even if it is hard to believe, it will get even worse in the future. As the corruption of governments grows, the fraudulent nature of trading worsens and the boundaries between “legitimate business” and organized crime get thinner, we will see more and more atrocities, things we couldn’t even imagine humans being capable of to come to the surface.
The embarrassing puppet shows staged by the “world leaders” to bring about a change for the better in banking regulation, wildlife protection, fishing regulations, global warming etc. were nothing more than a further waste of time and money. All they did was bringing to our notice the ineptitude of governments to put any kind of a moral restraint on the greed and wastefulness of capitalism.
To be continued …
Mittwoch, 25. April 2012
Part 2, the struggle for a future
As mentioned in the first part, the generations that have thrived in the 20th century have left us an unsolvable mess at our doorstep. They have amassed astronomical riches by wasting the following generations (our) resources and demand that the next generations will clean up the mess.
The most mind boggling thing is that the capitalists see it just the other way round. In the capitalist thinking we are indebted and are supposed to pay them interest for the riches they have raked in by greedily and stupidly wasting the resources for no other reason than being richer than the next man.
Please think about this once again. This generation that has been bereft of their part of the riches of this planet by the previous generations capitalist is now asked by the thieves them self’s to pay them interest as if we were indebted to them? This is far beyond sanity.
As growth comes to a halt the amount of interest in relation to the GNP will skyrocket. The global amount of liquidity (that is of cause balanced out by a similar amount of debts) is today ten times the global GNP. 90 % of these riches are in the hand of us-americans, and most of it is owned by the top one percent.
How could the rich get that rich? How could they accumulate that much power? One of the reason is that it seems socialism failed us. As mentioned in the previous post, this power and money was not earned by the working class or the farmers, it was accumulated by exploiting the natural ressources of the planet while the socialists were bought off just enough to be content to let it happen.
We can not blame it on the left though, the sad truth is, that all members of society seemed to be content to adjust to capitalism if the “benefits” of growth would to some degree trickle down to them. In capitalism the future generation painfully lacks a lobby. Most people were content with “enough” and didn’t bother that some accumulated riches of astronomical magnitudes, not thinking that these riches would amount also in debts and interests to be payed.
The GNP, limited by services and goods produced and therefore by energy, will stop growing as the oil production peaks. No, it has already stopped growing 2006 when peak crude oil was reached. Growth as (ostensibly) happened afterwards happened in the virtual world of financial industry and was, by all means, a sham.
For the amount of interest people around the world have to pay alone, when considering a rate of 5%, half of the global GNP will be needed! This means, 50% of the time we work will be for paying for the interests of the rich without ever having the remotest chance to paying these imagined debts back and while the interest will rise every year because the amounted liquidity will rise exponentially.
This is the future we are presented with from a monetary side. While the demands of the rich will rise, our means of living will diminish drastically. Without enough oil we will not be able to produce the same amount of food and famines will spread around the world.
Oil is the basis for all products we make, especially in the chemical industry. Oil is needed to get to or exploit every other resource while these will also get rare, harder to find and further to transport. Transportation, logistics and personal mobility will be more and more of a problem.(see i.e. Hirsch report)
Al these problems are not insurmountable with enough time and resources, but the time we had was wasted with accumulating riches instead preparing for a steady state economy. The people these riches belong fail to see these problems, ignore them or choose to not care about them.
In order to have any chance to successfully transition into a steady state economy we will have to wrest it from the hands of those that have stolen it. This is not a class struggle, but the most vicious conflict between generations this world has ever seen.
It is also struggle for which we almost have no energy left because of the weight of the ostensible debts for which we are supposed to pay interest, a struggle against an enemy that is more powerful than any power in the world has ever been. We would need all our abilities and what is left of the resources to solve all the overwhelming problems caused by the diminishing oil resources.
Instead we will have to use all of our energy to topple the corrupt governments that side up with the rich old men that give a rats ass about our future. This is why young people ”see no future”, these are the hurdles we have to take, and I did not even mention global warming that is left to us as a special gift from the 20th century.
Read on in Part 3
The most mind boggling thing is that the capitalists see it just the other way round. In the capitalist thinking we are indebted and are supposed to pay them interest for the riches they have raked in by greedily and stupidly wasting the resources for no other reason than being richer than the next man.
Please think about this once again. This generation that has been bereft of their part of the riches of this planet by the previous generations capitalist is now asked by the thieves them self’s to pay them interest as if we were indebted to them? This is far beyond sanity.
As growth comes to a halt the amount of interest in relation to the GNP will skyrocket. The global amount of liquidity (that is of cause balanced out by a similar amount of debts) is today ten times the global GNP. 90 % of these riches are in the hand of us-americans, and most of it is owned by the top one percent.
How could the rich get that rich? How could they accumulate that much power? One of the reason is that it seems socialism failed us. As mentioned in the previous post, this power and money was not earned by the working class or the farmers, it was accumulated by exploiting the natural ressources of the planet while the socialists were bought off just enough to be content to let it happen.
We can not blame it on the left though, the sad truth is, that all members of society seemed to be content to adjust to capitalism if the “benefits” of growth would to some degree trickle down to them. In capitalism the future generation painfully lacks a lobby. Most people were content with “enough” and didn’t bother that some accumulated riches of astronomical magnitudes, not thinking that these riches would amount also in debts and interests to be payed.
The GNP, limited by services and goods produced and therefore by energy, will stop growing as the oil production peaks. No, it has already stopped growing 2006 when peak crude oil was reached. Growth as (ostensibly) happened afterwards happened in the virtual world of financial industry and was, by all means, a sham.
For the amount of interest people around the world have to pay alone, when considering a rate of 5%, half of the global GNP will be needed! This means, 50% of the time we work will be for paying for the interests of the rich without ever having the remotest chance to paying these imagined debts back and while the interest will rise every year because the amounted liquidity will rise exponentially.
This is the future we are presented with from a monetary side. While the demands of the rich will rise, our means of living will diminish drastically. Without enough oil we will not be able to produce the same amount of food and famines will spread around the world.
Oil is the basis for all products we make, especially in the chemical industry. Oil is needed to get to or exploit every other resource while these will also get rare, harder to find and further to transport. Transportation, logistics and personal mobility will be more and more of a problem.(see i.e. Hirsch report)
Al these problems are not insurmountable with enough time and resources, but the time we had was wasted with accumulating riches instead preparing for a steady state economy. The people these riches belong fail to see these problems, ignore them or choose to not care about them.
In order to have any chance to successfully transition into a steady state economy we will have to wrest it from the hands of those that have stolen it. This is not a class struggle, but the most vicious conflict between generations this world has ever seen.
It is also struggle for which we almost have no energy left because of the weight of the ostensible debts for which we are supposed to pay interest, a struggle against an enemy that is more powerful than any power in the world has ever been. We would need all our abilities and what is left of the resources to solve all the overwhelming problems caused by the diminishing oil resources.
Instead we will have to use all of our energy to topple the corrupt governments that side up with the rich old men that give a rats ass about our future. This is why young people ”see no future”, these are the hurdles we have to take, and I did not even mention global warming that is left to us as a special gift from the 20th century.
Read on in Part 3
AW auf: TINSTAAFL and the Welfare State
This is an answer to TINSTAAFL and the Welfare State by Klaus Kastner Blog TINSTAAFL (there is no such thing as a free lunch)
Hello Mr. Kastner,
I will take up the invitation for discussion and decided to enter into it here.
Concerning this article I will start with following. While in social sciences other than economics the idea that there is something like a "primitive society" has long been discarded it is common to use it in economic circles.
It is a huge flaw of economics to still live in the chauvinistic terms of the 19th century scholars like Adam Smith. Especially if when looking into it our society we find that is not a very bright one, but rather the most stupid wasteful society that probably ever was.
But this is just the beginning of what I will guess will be an interesting argument. My thesis is that the existing economic principles that rule our policies are there for no other reason as that there is something like a free lunch since about 150 years, oil.
The treasure in the cellar:
As you may already know after reading my blog, I do admire the teachings of Marvin Harris and his Cultural Materialism. If you follow the link to Marvin Harris you will read that there is significant reason to believe that Human culture is in fact largely defined by the amount of energy it has to its disposal.
Interestingly, what we call economics as a science today, established itself at a time when humans began to exploit the energy that is concentrated in fossil fuels. With exploiting this virtually free energy several things happened to our society simultaneously.
It started an extraordinary rise to all productivity that finally resulted in industrial society. Since the beginning of the industrial age population has risen exponentially worldwide. Also, the feudal system that dominated preindustrial societies came to an end. A new form of stratified society started to emerge.
The structural class of the industrial worker came into existence as productivity of agriculture and rural population raised simultaneously and led to a rural exodus. Urban metropolitan city sprawls like Victorian Age London grew to house this new class of laborers.
The rise of the capitalists
Almost free energy and rising efficiency also gave way to another new development. While in preindustrial societies, the number of people who could live just from holding money was severely limited by the low surplus that could be sustainably produced; the amount of surplus now available gave rise to another class, the capitalist.
The whole Idea of somebody living from the gains of his capital was abhorrent at all other ages. Even in the feudal system there was some kind of legitimacy to the ruling class (given by god and inheritance). The usurer is somebody shunned by virtually all societies predating the industrial age and by almost all religious and ethical believes.
The capitalist on the other hand, had to his side the economist. He was the high priest of the new believe system, that made "earning money by doing nothing", as something not only morally acceptable, but the ultimate goal of all strife in a society, where the individual was being reduced to an homo oeconomicus, a being that is only motivated by personal monetary gain.
Socialism
Not surprisingly this new development led to the rise to several counter movements like anarchism, socialism and communism. I am not saying that the conflict between the haves and have nots, the debtors and the creditors has not been the basis of all revolutions at all ages. There is a significant difference in the struggles in the 19th and 20th century whatsoever.
It settled on a middle ground that allowed the capitalists not only to hold on to the wealth they have gathered, but also convinced the majority of the people that they also could benefit from the capitalist system. Main reason for this is (by the help of protestant religious believe) that a devious myth was invented. It is the myth of vertical social mobility (also called “the american dream”).
Why a myth? Social studies show that there is a huge disparity between actual social mobility and its perception. (i.e. this one). What this myth does is not only giving legitimacy for those who made it, it also suggests that the poor are poor because of their own fault. Propaganda (also called advertising or TV.) sees to it that this myth is always circulated in public space.
This myth alone, of cause, is not enough. Most of the time during the 19th and the 20th century small concessions to the poor had to be made. It did not hurt the capitalists much, because due to the never before achieved “economic growth” in these times, the amount of surplus to be harvested grew evermore.
Growth, as economic sciences defines it, is the growth of total production and services. As we have seen in Marvin Harris analysis, the amount goods and services produced is limited by the energy that is produced by a society. Only that this energy has not been produced, it has been found as a treasure in the cellar. It virtually just needed to be picked up or pumped up from our earth’s crust.
There was a free lunch, but it is over:
This treasure has been wasted by the generations that found it. It has been used to provide the few that managed to rake in the harvest to live the free lunch. Contrary to the believe of many socialists, this free lunch has not been served by “the working class”, or not more or less than during the thousands of years before. The amount of energy people put into production of goods today is actually very minimal. This free lunch has been stolen from future generations.
So, economy, capitalism, industrial age, and the population we now are able to provide for, all of it is a result of the exploitation of fossil fuels and the riches of future generations. The generations that have thrived in the 20th century have left us with an unsolvable mess at our doorstep.
As obvious from reading my blog, I am convinced that the time of cheap oil has come to an end NOW and my arguments for that are very good. The political system, the whole believe system, all values we cherish seem to circle around the concept of growth. What if that growth has finally stopped, like for a very long time, if not forever?
Why, you asked me, do I have such a grim outlook on our future? Read part 2 for an answer to this question.
Regards
AlienObserver
Hello Mr. Kastner,
I will take up the invitation for discussion and decided to enter into it here.
Concerning this article I will start with following. While in social sciences other than economics the idea that there is something like a "primitive society" has long been discarded it is common to use it in economic circles.
It is a huge flaw of economics to still live in the chauvinistic terms of the 19th century scholars like Adam Smith. Especially if when looking into it our society we find that is not a very bright one, but rather the most stupid wasteful society that probably ever was.
But this is just the beginning of what I will guess will be an interesting argument. My thesis is that the existing economic principles that rule our policies are there for no other reason as that there is something like a free lunch since about 150 years, oil.
The treasure in the cellar:
As you may already know after reading my blog, I do admire the teachings of Marvin Harris and his Cultural Materialism. If you follow the link to Marvin Harris you will read that there is significant reason to believe that Human culture is in fact largely defined by the amount of energy it has to its disposal.
Interestingly, what we call economics as a science today, established itself at a time when humans began to exploit the energy that is concentrated in fossil fuels. With exploiting this virtually free energy several things happened to our society simultaneously.
It started an extraordinary rise to all productivity that finally resulted in industrial society. Since the beginning of the industrial age population has risen exponentially worldwide. Also, the feudal system that dominated preindustrial societies came to an end. A new form of stratified society started to emerge.
The structural class of the industrial worker came into existence as productivity of agriculture and rural population raised simultaneously and led to a rural exodus. Urban metropolitan city sprawls like Victorian Age London grew to house this new class of laborers.
The rise of the capitalists
Almost free energy and rising efficiency also gave way to another new development. While in preindustrial societies, the number of people who could live just from holding money was severely limited by the low surplus that could be sustainably produced; the amount of surplus now available gave rise to another class, the capitalist.
The whole Idea of somebody living from the gains of his capital was abhorrent at all other ages. Even in the feudal system there was some kind of legitimacy to the ruling class (given by god and inheritance). The usurer is somebody shunned by virtually all societies predating the industrial age and by almost all religious and ethical believes.
The capitalist on the other hand, had to his side the economist. He was the high priest of the new believe system, that made "earning money by doing nothing", as something not only morally acceptable, but the ultimate goal of all strife in a society, where the individual was being reduced to an homo oeconomicus, a being that is only motivated by personal monetary gain.
Socialism
Not surprisingly this new development led to the rise to several counter movements like anarchism, socialism and communism. I am not saying that the conflict between the haves and have nots, the debtors and the creditors has not been the basis of all revolutions at all ages. There is a significant difference in the struggles in the 19th and 20th century whatsoever.
It settled on a middle ground that allowed the capitalists not only to hold on to the wealth they have gathered, but also convinced the majority of the people that they also could benefit from the capitalist system. Main reason for this is (by the help of protestant religious believe) that a devious myth was invented. It is the myth of vertical social mobility (also called “the american dream”).
Why a myth? Social studies show that there is a huge disparity between actual social mobility and its perception. (i.e. this one). What this myth does is not only giving legitimacy for those who made it, it also suggests that the poor are poor because of their own fault. Propaganda (also called advertising or TV.) sees to it that this myth is always circulated in public space.
This myth alone, of cause, is not enough. Most of the time during the 19th and the 20th century small concessions to the poor had to be made. It did not hurt the capitalists much, because due to the never before achieved “economic growth” in these times, the amount of surplus to be harvested grew evermore.
Growth, as economic sciences defines it, is the growth of total production and services. As we have seen in Marvin Harris analysis, the amount goods and services produced is limited by the energy that is produced by a society. Only that this energy has not been produced, it has been found as a treasure in the cellar. It virtually just needed to be picked up or pumped up from our earth’s crust.
There was a free lunch, but it is over:
This treasure has been wasted by the generations that found it. It has been used to provide the few that managed to rake in the harvest to live the free lunch. Contrary to the believe of many socialists, this free lunch has not been served by “the working class”, or not more or less than during the thousands of years before. The amount of energy people put into production of goods today is actually very minimal. This free lunch has been stolen from future generations.
So, economy, capitalism, industrial age, and the population we now are able to provide for, all of it is a result of the exploitation of fossil fuels and the riches of future generations. The generations that have thrived in the 20th century have left us with an unsolvable mess at our doorstep.
As obvious from reading my blog, I am convinced that the time of cheap oil has come to an end NOW and my arguments for that are very good. The political system, the whole believe system, all values we cherish seem to circle around the concept of growth. What if that growth has finally stopped, like for a very long time, if not forever?
Why, you asked me, do I have such a grim outlook on our future? Read part 2 for an answer to this question.
Regards
AlienObserver
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