The Road to Ruin — Part 1
Throughout history civilizations rose, prospered then fell. Western civilization itself had multiple iterations in the form of various empires, starting from the Greeks and Romans, and after some failed attempts to expand their rule globally (Spain and Portugal comes to mind here) the latest version has finally nailed it. We could call it the Anglo-Saxon Capitalist Empire after its birthplace in Britain, but since many other nations have contributed to this model from the Dutch to the French and ultimately Americans themselves, let’s call it simply the (modern) West.
After an industrial revolution and two consecutive world wars stripping the European core bare of its resources, effectively making it unable to hold a world-spanning empire together, the center of power was shifted further west, to Washington. From a number of perspectives this shift has taken the model to the next level, but it has stayed fundamentally a capitalist project based on 100% non-renewable mineral inputs. America is now in the process of repeating the same mistake Europe has made: attempting infinite growth in a finite place based on a finite amount of resources. The consequences Europe facing right now will thus come home to roost further west as well — but hey, what did they expect? — after all, they have adopted the same unsustainable model, just like the rest of the world.
There is nothing new under the Sun here. Call it however you want, using one-time mineral inputs like coal or oil and various metals are not a single bit different than wearing down natural resources like soil or forests as the West’s predecessors did thousands of years ago. The process has always followed the same pattern: ramp up extraction (rise), spend what you’ve earned in a bonanza, while leaving less and less for the masses and hoarding everything for the elites (prosper), then when resource extraction starts its slow decline due to economic reasons, drive your empire to the wall (fall). Contemporary western elites would love to think that they’ve finally got a handle on things, but they were just blindly copying the same old model, with the same predictable outcomes.
In addition to this cycle there was another dynamic at play in the life of empires long gone. These entities have always consisted of two parts: a core, where decisions were made and where resources ended up disproportionally, and a periphery which enjoyed “protection” by the core in exchange for its resources (be it human, natural or mineral). During the growth phase the periphery might got some additional benefits the core provided them as a largesse, but as soon as the core has been faced with its own mortality, it immediately started to siphon everything out again to save itself from the inevitable. In this late phase the core increasingly saw its former allies as rivals, and instead of keeping them in a good shape, the center of imperial power has started to weaken them — often with the help of its subservient elites.
Arriving at today’s predicament after this short history lesson, one can find many interesting parallels. It might come as no surprise for example why Europe — the rundown core, now increasingly a periphery of the West — has now found itself in the deepest energy crisis of its history, threatening with a massive de-industrialization of the region. While this is not yet fully visible to the average citizen, the outflow of capital has already begun, leaving the Euro and Pound in an ever-worse shape.
Running a massive trade deficit (where one region or country has to spend more money on imports, than what it earns from selling goods and services) was never a sign of prosperity. In fact it was the fastest road to ruin. If Europe had to resort to buying expensive energy from the market competing against the entire world, then this situation might easily become permanent. In a world of depleting resources, it can only get worse.
This might leave an impression in some readers that this current energy crisis is somehow going to ruin Europe completely in the coming years. Truth to be told, Europe has always lived on borrowed time with regards to its resources — an underlying fault line, which has already triggered two world wars and now perhaps the third. Even with a prospect of all-out war aside tough, the continent’s predicament is nothing less than brutal. Especially talking about next spring, when gas, coal and fuel reserves would run to their historic lows, exposing Europe to the reality of what losing 40% of its gas, and 20% of its coal and oil supply could mean for its prosperity.
With that said however, this will not be an instant apocalypse pushing back proud Europeans to the stone age. It will be a major setback, combined most likely with a major financial crisis, but as I wrote earlier a new equilibrium will soon set in — accommodating lower energy availability and perhaps some new resources.
The economy is a massive self-adaptive system capable to rewire itself sooner than one might think. This does not mean of course, that the divide between the well-to-do, and people living from paycheck to paycheck will not keep growing as big industrial factories, smelters and chemical plants close. More and more people will lose their jobs, further reducing demand. Food prices will continue to climb eliminating even more demand for industrial products. All this would be resulting in a nice little feedback loop adjusting energy consumption to reality — at the expense of the many and to the benefit of the lucky few.
Expect none of this to be represented faithfully in the mainstream media or official statistics. There, GDP will continue to grow and unemployment will hit zero. Still, the Europe of the late 2020s will be markedly different than what it used to be in the 2010s. How? Look no further than rural England and Wales after de-industrialization began there in the 1980-s, or the Soviet Union after its fall in the 1990s. The long descent of Western civilization will be spotted with sudden drops like this followed by a period of relative tranquility — until the next crisis hits.
Was this a conscious decision then?
One might accuse Europe’s leadership class at this point with a blind obedience in subordinating their economic needs to maintaining the global hegemony of the West, but they have made this choice on a rather ill-advised concept of how economies work. Based on their fatally wrong models they thought sanctions won’t be that bad and that the worst consequences could be avoided by some meddling or outright intervention.
Where did they get it so terribly wrong? Is there something other societies can learn from their mistakes? And most importantly what could Europe do differently to soften the blow? (HINT: yes, there is a way to remain civilized and even prosper despite these radically challenging conditions.) In order to understand what options are available to us, we will have to take a hard look on the myths leading up to this point in the next essay of the series. Stay tuned!
Until then,
B
