Discussions of survival tactics in a post-oil world can be categorized in many ways: pessimistic and optimistic, pacific and militaristic, technophobic and technophilic. But a curious dividing line can be seen between older and younger speakers. The old tend to think of little more than their bank accounts, often to the point of dismissing all else with the comment, "Well, anyway, I'll probably be dead before much happens." The young, on the other hand, expect to be entering a strange new world - if they think anything at all. The difference can be seen in terms of whether one expects to be living mainly before or after the end of the money economy.image above: Photo illustrating "The Generation Gap". From http://www.nydailynews.com/news/us_world/2009/06/29/2009-06-29_survey_shows_widening_generation_gap_among_americans.html
We stand on the peak between the rise and the fall of the Oil Age, and descriptions of the future may be either scientific analysis or science fiction, the latter serving a useful temporary role when the former is insufficient. The many studies of oil depletion seem to indicate that the peak itself was around 2008, and that by about 2030 oil production will be about half the peak rate. An older person of today might not have to worry about that 50-percent decline in production. A 20-year-old of today, on the other hand, will be 40 years old at that time, still planning to live for another few decades.
I used to participate in an Internet forum that discussed this future, and while I constantly preached my sermons on such matters as the virtues of Mandan Bride over other varieties of corn, my colleagues were utterly absorbed in the minutiae of pension plans, mortgages, and medicare, as well as the various forms of legalized extortion known as taxes and insurance. For them, everything had to be evaluated in terms of money. My counter-argument was that money can exist only as long as there are such things as governments, stock markets, and currency markets (as George Soros explains in The Crisis of Global Capitalism), and that such things are not likely to last much longer. At the time, I thought of myself as approaching middle age. Does that mean that my colleagues were even older? I suppose so.
This" peak-oil generation gap" seems to occur around age 50, although my choice of this number isn't based on any serious assembly of data, or on any proper statistical analysis. The old sit brooding in their counting houses. The young have a rather directionless anger.
The further we look into the future, the less clearly we can see, yet there is a general feeling that there are a few years left before the roller coaster really begins to terrify. Those who do not go looking for Mandan Bride to plant in their garden are those who have no intention of entering that recurring Stone Age of which Richard C. Duncan speaks in "The Peak of World Oil Production and the Road to the Olduvai Gorge." They may even be physically unfit for such activities, although a good deal of unfitness is self-imposed: I have never been an athlete, but at age 60 I can often outpace a much younger person. But for various good reasons, the elderly may have no intention of heading off into the Rockies with a black-powder gun and a collection of beaver traps. Such post-apocalyptic scenarios, it must be admitted, not only represent hard work, but the Rockies of the twenty-first century may be less welcoming than those same mountains of two hundred years ago. As we get older, our admiration for Nature may not diminish, but we might prefer to watch the sunset through a large window in a spacious cottage with all the mod cons.
All of this is fine, as long as we don't forget that money is only phlogiston, that mysterious stuff that was once thought to be responsible for combustion. The history of money is the history of its gradual transformation into the truly mystical. It is now so mystical that we can never be sure we actually have any. In the Middle Ages, yes, there was a chance that Vikings might show up on the weekend, but there was always the option of digging a hole in your backyard and burying your coins there until the danger had passed. If you survived that weekend, you could dig up your savings and carry on as usual. Today there are several good reasons why you might not be able to dig up what you buried.
There seem to be various words of financial wisdom from which to choose, but the proverbs contradict one another. All that is certain is that the next few years will be characterized by what was called "stagflation" during the temporary oil crises of the 1970s and 80s: prices go up but wages do not do the same. If that is again to be the case, and if there are other dangers to our finances, there are three options. The first is to do your best to hang onto money. The second is to get rid of it and exchange money for tangible goods. The third, the most radical, is to give up both money and tangible goods.
The first option is based on the hope that money as such will continue to exist in the near future. If money does continue to exist, then you should work hard, live frugally, and put all your savings into a bank account. A corollary, I suppose, is that you should get rid of debts, since it is often the high interest on debts that prevents people from making any genuine improvements in their lives.
The catch with this option is that there are four reasons why a savings account isn't what it used to be. The above-mentioned stagflation means, by definition, that your present savings will lose their purchasing power, while your ability to put money into the bank will simultaneously decrease. Secondly, in any country there is always the danger of a currency collapse, and even the American dollar itself is no longer sacred. There is no longer a gold standard, there are no longer fixed exchange rates, and therefore any form of money has only the spending power that the speculators allow. The third is that banks are not fortresses: banks can go bankrupt, as we have seen lately, and we should never be foolish enough to believe that a bank account is "guaranteed." (But, no, the credit collapse that began in 2007 has nothing to do with anything I'm discussing, contrary to rumor.) The fourth is that, as they say, money is just dots on a screen. What would you do if those dots disappeared? Without electricity and computers, there would be no money. The malicious wiping out of large amounts of electronic data is becoming child's play. In any case, as Duncan and others have said, the first significant sign of the End may be the collapse of electricity (which in North America is produced mainly with fossil fuels), not the "Sorry, No Gas" signs. No electricity, no dots.
The second option, getting rid of money and replacing it with tangible possessions, has the advantage that one is not plagued by the vagueness of finance. There is something quite charming about a large toolbox filled with screwdrivers, wrenches, pliers, and other tools, preferably non-electric. Durable clothing (polyester, I regret to say, lasts longer than cotton) and boots (leather, not synthetic) are always worth buying, and if they never get used they can be traded for something else. A small house without a mortgage is a great blessing. So is a large garden, if you have sense enough not to grow low-calorie vegetables (you'll need heavy food for heavy work). If you live in the country, learn to use a rifle and hunt for meat; one deer or moose is a lot of meals. I often suspect that we should forget about euros and gold, and that ammunition will be the only real currency.
And what about that more radical choice, to give up both money and tangible items? In the first place, Americans own vast quantities of junk, and hoarding is a national neurosis. Moving all that tonnage from one house to another can be enough to give its owner a heart attack. In the meantime, a house with one of everything is a prime target for burglars. A lakeside cottage filled with electronic gadgets might as well have a sign in front saying, "Take Me." Even now, the police cannot respond quickly to thefts in rural areas, and if situations become more anarchic the police will be even more overburdened.
Although many philosophers have advocated the simple life, that third choice is puzzling. (Besides, a successful financial analyst must prevaricate eternally.) After the collapse of the Soviet Union, universally during the Great Depression of the 1930s, and on other occasions, money simply ceased to be relevant to daily life. Until this event again comes to pass, however, there might be problems in living with neither money nor tangible goods. Both de jure and de facto, it is a crime to have no money, even if vagrancy laws are being repealed. Governments invented neither deer nor hunting, but they see fit to exact money retroactively for licenses to hunt deer. At the same time, taxes and insurance take a large part of whatever income you may have, generally at no advantage to yourself. Without either money or tangible possessions, also, how would you deal with a future emergency? Well, you could barter (although to some extent this is illegal), either with your present possessions or with your skills. You could learn to make the things you need instead of buying them. You could also learn to repair old items, at least if those possessions are not made of plastic, a nearly ubiquitous material that can only be discarded and repurchased. Perhaps above all, you could learn to stop the knee-jerk response that an item seen is an item that must be bought. But there are no simple answers: the money economy takes so much and gives so little, and we are all enchained by it. If I walk down the highway instead of driving a car, I tend to hang my head in embarrassment, afraid to be looked upon as an alcoholic or a drifter ― unless I am wearing colorful sports clothing and visibly flexing my limbs, making it seem that I am only doing it all for exercise.
The more we look at the fragility of money, then, it seems that the young survivalist with his army-manual reprints may not be living in a world so different from that of the wealthy pensioner who looks at oil depletion as a question of how many angels can dance on the head of a pin. Those who put their faith in the money economy were lucky enough to start saving cash in easier times. For young people today, however, working at a job that provides any savings can be a grim struggle. The two generations need to have more sympathy for each other. We are all heading into the same wilderness.
Image above: Demonstration in front of Old Kauai County building on Rice Street. Photos by Juan Wilson.
By Juan Wilson on 22 August 2009 for Island Breath -(http://islandbreath.blogspot.com/2009/08/50-years-of-hawaiian-fakehood.html)
Yesterday, while my wife and I joined with about fifty friends in anti-Hawaiian statehood demonstrations in Lihue I, and many other registered Democrats, received an email. It said. Aloha, I thought you might find this interesting. Have a great weekend. Thanks, Brian Schatz Chair, Democratic Party of Hawaii The email included a message from Barak Obama on the meaning of the 50th Anniversary of Hawaii as the 50th state in the USA.
It went as follows.
THE WHITE HOUSE Office of the Press Secretary For Immediate Release August 21, 2009 FIFTIETH ANNIVERSARY OF HAWAII STATEHOOD BY THE PRESIDENT OF THE UNITED STATES OF AMERICA A PROCLAMATION
It is with great pride that our Nation commemorates the fiftieth anniversary of Statehood for Hawaii. On August 21, 1959, we welcomed Hawaii into the United States ohana, or family. Unified under the rule of King Kamehameha the Great, it was Queen Lili'uokalani who witnessed the transition to a Provisional Government controlled by the United States.
As a Nation, we honor the extensive and rich contributions of Native Hawaiian culture to our national character. Borne out of volcanic activity in the Pacific Ocean, a chain of islands emerged that would bear witness to some of the most extraordinary events in world history. From Pu'ukohola Heiau and the royal residence at the `Iolani Palace, to the USS ARIZONA Memorial and luaus that pay tribute to Hawaiian traditions, Americans honor the islands' collective legacy and admire their natural beauty.
Home to unique and endangered species, active volcanoes, and abundant reefs, the Hawaiian islands actively conserve their distinctive ecosystems with responsible development and a deep-rooted appreciation for the land and surrounding ocean. The Aloha Spirit of Hawaii offers hope and opportunity for all Americans. Growing up in Hawaii, I learned from its diversity how different cultures blend together into one population -- proud of their personal heritage and made stronger by their shared sense of community.
Our youngest State, Hawaii faces many of the same challenges other States face throughout our country, and it represents the opportunity we all have to grow and learn from each other.
NOW, THEREFORE, I, BARACK OBAMA, President of the United States of America, by the virtue of the authority vested in me by the Constitution and laws of the United States, do hereby proclaim August 21, 2009, as the Fiftieth Anniversary of Hawaii Statehood. I call upon the people of the United States to observe this day with appropriate programs, ceremonies, and activities.
IN WITNESS WHEREOF, I have hereunto set my hand this twenty-first day of August, in the year of our Lord two thousand nine, and of the Independence of the United States of America the two hundred and thirty-fourth. BARACK OBAMA
For those who could not bare to read the proclamation, it says in part... "it was Queen Lili'uokalani who witnessed the transition to a Provisional Government controlled by the United States." That seems an awfully neutral way of describing an illegal overthrow of another nation. Obama may have been born in Hawaii, but he certainly is missing something about the sense of the place.
Even Wikipwedia knows better...
"Queen Lili'uokalani, was deposed in a coup d'état led largely by American citizens who were opposed to Lili'uokalani's attempt to establish a new Constitution. The success of the coup efforts was supported by the landing of U.S. Marines, who came ashore at the request of the conspirators. The coup left the queen imprisoned at Iolani Palace under house arrest."Like all the presidents since Carter, Obama is inside the bubble (or Matrix) or what ever you want to call it. For those deluded people it is still "Morning in America". At least Clinton was able to pass the Hawaiian Aplology Bill in 1993 in commemoration of the 100th year after the overthrow.
A reversible sign held in front of Kauai County building reads on one side "50 Years of Hawaiian Fakehood" and on the other side "200 Years of Hawaiian Nationhood"
Ea O Ka Aina: Hawaii Statehood Unmasked 7/30/09
That we live in an age of miracles has become common knowledge. A man may sit on a beach near Sydney, with nothing but the bucket bottom of the universe over his head, and still carry on a casual conversation with an Eskimo near the North Pole. Using an Internet-based phone service, he may do so at negligible cost. If this were not miracle enough, he may now grow himself a new nose, if he needs one, on his own arm.
image above: Slightly modified photo on Indians riding bus.
In this age of miracles, people seem ready to believe that anything is possible. Recklessly crossing the street at the end of the Late Bubble Epoque, the world economy got hit by a cross-town bus. Now, the feds propose to reverse and run over the poor fellow again. It will be as if they had reversed the film; the economy will be as good as new, they say.
But we are suspicious. And we begin today’s rumination by examining the bus driver’s motives.
In its naked form, government is not evil; it is merely a self-interested parasite, like a bank lobbyist. Its main value comes from its ability to elbow out other parasites. Of course, the typical citizen is no saint either. Instead, he is merely a parasite in the larval stage. If he is lucky enough or cunning enough, he could grow into a parasite himself. The citizen, generally, doesn’t mind being lied to and robbed – just so long it is by someone he elected. Or at least by someone whom tradition or local connivance put in place. He does not usually resent his homegrown government, even though it routinely costs him a substantial part of his output. On the contrary, he grows so fond of it he even dons his helmet from time to time to protect it. Naturally, the feds return the favor.
The basic business model of government is to keep order, protect campaign contributors and lure supporters with the promise of other peoples’ money. The game plan of the typical citizen is even simpler: to be on the receiving end, not the paying end. Over time, more and more of them get into position. And the whole society becomes more costly, and more corrupt.
In the United States, entire industries now operate as wards of the state. They may have too little capital. Or, their operations may be too costly. Or, their products may be simply out-of-date and unattractive. Still, government keeps them going – even at the cost of at the expense of competitors. And the money doesn’t only go to business. Cities stay solvent only by the grace of federal government grants. Whole sections of the population depend on government – including 34 million who draw their rations directly from the federal food stamp program. The spectacle is breathtaking and alarming at the same time – like a Pakistani bus on a mountain road, freighted with passengers clinging to the roof. The old rust bucket could tip over at any time, but what politician would tell a voter to get off?
That preface on the state out of the way, we turn to the state of the economy. The key to understanding the great credit bubble of 1945-2007 is to capture the codependent relationship between China and the United States of America. It seemed to serve both parties well. Each enabled each other’s excess. China added mightily to the world’s supply – far more than was actually needed. America, meanwhile, did heroic work on the demand side. While the growth in the United States was led by consumer spending, the growth in China was led by capital investment; factories expanded, towns were built, and output was revved up. But there was a flaw. Americans ran out of money. After the ’70s, they could only increase their buying by going into debt. This they did with insouciance bordering on insanity. Total debt rose 370% of GDP and then blew up in 2007, with major lenders forced into bankruptcy and mergers, while GDP sank at its fastest pace since the end of WWII.
Now, the old formula no longer works – neither for Americans nor for the Chinese. Despite the urging of their government, Americans cannot be expected to take on more debt in order to consume more stuff from China. As savings rates grow toward 10%, demand from the United States will collapse by an estimated $1 trillion per year. With the China trade now accounting for 83% of America’s non-oil trade deficit, you’d think the Chinese would panic. They already have as much as two times the output capacity needed to meet real demand. They should trim their manufacturing sector, not expand it.
We draw out that relationship only to show how hopeless it would be to draw it out further. Borrowing to consume is merely tricking stuff from the future to enjoy in the present. By 2007, some $30 trillion worth of spending that would have occurred ‘in the future’ had already occurred in the past. Factories that would have produced consumer items for 2009 discovered that they had already produced more than enough of them in 2005 and 2006.
It would be better to invite the future in…let her collect her debts…and then get on with things. Yet government officials on both sides of the Pacific continue their numbskull efforts to revive the bubble economy. On the US side, the feds are trying to stimulate demand for more stuff. On the far side, Chinese stimulation is going into producing more stuff. As if the world didn’t have too much stuff already.
But the role of government is neither prosperity nor plausibility…but protection of the pests and parasites. They will keep paying them off and carrying them along…until the bus runs off the road.
Our industry is in the midst of some wrenching changes, but a much deeper transition is just over the horizon.
You could be forgiven for thinking the economic crash was bad enough. The next big shift will affect the way we grow our food, manage our buildings, and transport ourselves and the products we use every day. We’ve reached the end of cheap oil, and the effects were captured in this short video, aired at MPI’s 2009 World Education Conference by panelists Elizabeth Valestuk Henderson and Fiona Pelham.
Video above: From http://www.youtube.com/watch?v=Ulxe1ie-vEY&feature=player_embedded
It’s rare for a two-minute video—a two-minute cartoon, no less—to tell a story that adds up to life, the universe, and everything. To put yourself or your business in the picture, think of the driver at the bottom of the hill and ask yourself the following questions:
- How did I get to work today? (If you work from home, how did you get to your last client meeting?)
- How far did my breakfast travel to get to my plate?
- Where will my next three meetings be held? How are those facilities heated and cooled? Where do they get their power?
- How many participants will fly to and from those meetings? If they’re travelling regionally, can they find high-speed rail—or any reliable rail at all?
If you can answer those questions, you’re probably already thinking about “peak oil.” If you don’t know the answers, that’s part of the problem, but you’re not to blame. One of our industry’s enduring weaknesses is its reliance on an absolutely essential product that is invisible to the majority of planners and suppliers.
Which is why Henderson and Pelham have done us such a great service by introducing the words “peak oil” to the industry dialogue. They used the video to open a session that applied the work of the Transition Towns movement to the global meetings industry.
“In a real Transition Town, the process takes about a year,” Henderson said of developing community project to lower energy use. “Fiona and I analysed the process, adapted it to our industry, and condensed it to 90 minutes.” But the session was still unusual and eye-opening for many participants, giving them a sense of what external factors (such as a peak oil scenario) may influence the success of our industry in the future.
The group came up with some great ideas for reducing the industry’s carbon footprint and its reliance on peak oil:
- Buying food and beverage locally, relying on community farms, and reducing portion sizes;
- keeping temperatures moderate at venues, while setting standards for lighting and air conditioning;
- recycling and reusing exhibition materials, or shifting to electronic handouts; and
- emphasizing regional and co-located meetings to reduce air travel.
Henderson, an independent consultant in corporate social responsibility who works half-time as MPI’s CSR director, said the session left participants with a sense of hope. “The industry can learn that our members are not afraid to take a look at what the future holds, and can understand and debate implications of big external trends, like peak oil,” she said. “While we still need to understand contracts, Excel, and public speaking, we also need to understand the strategic implications of our work.”
There are still people in our industry who think climate change is a mirage (it’s not), that oil prices are driven by Wall Street speculators (not the whole story), and that drilling for more oil will sustain a habit that is far out of control (it won’t … not nearly). Initiatives like Transition Towns and industry consultants like Henderson and Pelham can help industry make a smoother shift to sustainability.
As our friend in the video found out, to his chagrin, the transition is coming, whether we’re watching or not.
No More Plastic Bags for Mexico City