What is the goal of the economy? Growth? Full employment? Equity? Price stability? Security? Or, perhaps, to make the top 1% super rich at the cost of everyone else? Well, if it’s that latter, than the economy is doing a stellar job. If you think that’s too cynical to say, then you can chose two on the list above. Or one. Maybe none. With a relentless fall in people’s purchasing power, an energy infrastructure hitting diminishing returns, and being led by less than stellar minds, I argue, there will be just one overarching goal remaining. Security. The rest be damned.
We are heading into quite “interesting” times on the back of a lurking transportation fuel shortage. Lacking a viable solution to the question of long distance transport, or doing agriculture and mining without fossil fuels, the coming decline of carbon based energy will mean a further decline in living standards. All this happens amidst an unfolding ecological destruction brought about by humanity in overshoot. It looks pretty much guaranteed that sooner or later we will all experience severe disruptions and shortages. Water. Heating fuel. Food. Electricity.
Since it is our ruling elite, whether democratically elected or not, to whom we turn for solutions in such tumultuous times, we must now examine their role in the long emergency we are all in. And while at it, we must also not forget that our elites are comprised of humans too. Who, much to our detriment though, are far from being altruistic. As John Kenneth Galbraith astutely observed:
“People of privilege will always risk their complete destruction rather than surrender any material part of their advantage. Intellectual myopia, often called stupidity, is no doubt a reason. But the privileged also feel that their privileges, however egregious they may seem to others, are a solemn, basic, God-given right.”
For additional insight as to why or how that might be, I have to refer you to a study funded by NASA titled “Human and nature dynamics (HANDY): Modeling inequality and use of resources in the collapse or sustainability of societies”. Quote:
The Elites — due to their wealth — do not suffer the detrimental effects of the environmental collapse until much later than the Commoners. This buffer of wealth allows Elites to continue “business as usual” despite the impending catastrophe. It is likely that this is an important mechanism that would help explain how historical collapses were allowed to occur by elites who appear to be oblivious to the catastrophic trajectory (most clearly apparent in the Roman and Mayan cases). This buffer effect is further reinforced by the long, apparently sustainable trajectory prior to the beginning of the collapse. While some members of society might raise the alarm that the system is moving towards an impending collapse and therefore advocate structural changes to society in order to avoid it, Elites and their supporters, who opposed making these changes, could point to the long sustainable trajectory “so far” in support of doing nothing.
As long time readers might already know: the situation we are in is nothing new. Ever since humanity has devised ways to grow and store large amounts of food (a.k.a. energy for the economy) societies have always ended up with all sorts of sociopaths declaring themselves better than the others. They often used religion to justify their upper place in the hierarchy, and used their powers to keep a tight control over energy flows (first and foremost food, later fossil fuels too). The use of force and violence was duly monopolized, and was wielded against those who were not willing to yield.
Given the fact that both human nature and resource use are driven by the maximum power principle, the same old pattern kept repeating over and over again. It started with discovering a new resource (fertile land, coal, oil, uranium etc.), and mining it to exhaustion — pretending that this is not a problem at all, while kicking the can down the road ever more desperately — until implosion arrived. Every single time. After a brief lights out, or a dark age allowing nature to regenerate somewhat, the cycle started all over. This time though we were so thorough in depleting both natural and mineral resources, and so busy polluting what’s left, that there is hardly any chance for another high tech civilization to arise. The abundance of raw materials — high grade ores, easy to access fossil fuels, lush forests etc. — are simply no longer there. It all went up in smoke, or were scattered around the planet. (Presuming that the climate supports agriculture at least here and there in the centuries ahead, maybe we could cobble together a few more neolithic empires, but nothing more, really.)
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So what can our wise betters and elders do at this late stage before things really start to implode? Watch in awe, as their minds lapse into the darkness of senility…? Apart from holding on to a comfortable life for themselves, they must also ensure that they won’t be overthrown. And what’s a better way to do that than to focus people’s attention outwards, on foreign threats? People, amidst fears for their own and their families economic, energy, water or food security, will become even more susceptible for such messaging. In such circumstances it is all too easy to play various groups against each other: be it ethnic, religious or other in nature. Witness the rise of “far right” movements all across the West, openly bragging about their xenophobic policies. It’s not particularly hard to see how political tensions tend to rise on the back of economic hardship blamed on immigrants or other nations.
The so called “democratic” forces are not a tad bit better in this regard, sadly. Sponsored by corporate elites, these leaders enjoy the benefits of revolving door policies (shuffling in and out of government positions and cushy corporate roles), while doing the bidding of their wealthy donors. It certainly looks like that we are left to chose between openly autocratic xenophobes on the so called “right”, and a totally unaccountable inverted totalitarian corporate regime on the so called “left”, while in reality all we get is Tweedledum v Tweedledee in a battle between Oceania and Eurasia.
“War is Peace. Freedom is Slavery. Ignorance is Strength.”
Well, no wonder: since we are dealing with autocratic technologies — be it fossil fuel based or powered by “renewables” — all we can expect is autocracy in one form or the other. When the relative calmness of the electorate depends on cheap and abundant energy, then eventually all moral and legal barriers or “red tape” will be removed to secure that new pipeline, oil well, or mine for that matter (producing copper, lithium, rare earths etc.). We will see sacrifice zones emerge from the Balkans to North Africa or Latin America where the plundering of natural resources and pollution released by factories could go on unabated and undisturbed. There the true, authoritarian face of “modern” “clean” “green” technologies will show itself to the locals, but not to the overly sensitive public in the North.
As rich mining and drilling sites deplete, and new ones will require ever more land, energy and water to operate, the process will eventually hit a breaking point. There simply will not be enough energy and water to run everything everywhere as usual. Something will got to give.
Seen in this light what’s happening around the world is nothing but a spectacular exercise in pressing the pedal to the metal; just to see what can be squeezed out from the economy before it decides it’s time to turn belly up. Take AI for example. Large language models like Chat GPT are making things up at such an industrial scale that we should rather call them Master BS Models, yet they are hyped like the saviors of humankind. My sarcastic quibbles aside, AI might come in handy for enhancing production processes or product design, but it does not create new energy nor any other type of resources. It just optimizes their use, and thus hastens their depletion (due to the Jevons-paradox).
Ultimately, as is the case with every other invention, all we have achieved with AI is taking yet another step in increasing complexity (and thus energy demand). AI already consumes 4.3 GW of electricity today, a figure that could grow almost five-fold by 2028. (This is not to mention the massive energy and freshwater demand generated by increased chip manufacturing activity, or all the supposedly “green” energy equipment manufactured and installed to provide for all that extra electricity demand.)
Infrastructure, which is supposed to support all this extra demand has started to hit its limits though. Europe’s EV boom already faces serious grid “challenges”, and a major breakthrough in electric vehicle sales is still ahead of us… As a result, electricity used to charge vehicles and operate heat pumps may be curtailed as soon as 2024. Isn’t that ironic? Now add to this that central banks increasingly want to use digital currencies and digital identities — all requiring massive data centers hoovering up even more electricity — and you start to see how utterly inconsiderate modern policy making is. OK, being led by politicians utterly removed from reality explains some of the flamboyant stupidity on display, but not everything. Consider, for example, how high interest rates are killing “clean energy”, or how California’s new solar policy could prove problematic for future installations:
Dubbed Net Energy Metering 3.0, the California solar energy policy revision decreases the value of solar energy credits by a whopping 75% in a bid to encourage customers to purchase solar battery storage with their solar system. In essence, the California Public Utilities Commission (CPUC) wants the state’s residents to store more of their excess solar energy instead of sending it to the grid.
Of course, equipped with at least of modicum of systems thinking this all should have been clear as daylight. In the real world there is no such thing as a free lunch. A grid designed with a stable supply and demand of electricity in mind cannot take up more than a limited amount of weather dependent “renewables”, and thus would require an exponentially growth in investments to cope with the task. All attempts made at electrifying this Titanic of a fossil fuel economy is bound to hit diminishing returns though; especially so late in the “let’s exhaust our resources as fast as we can” game. Yet despite all this, energy advisors are still pushing to do more of the same, striving to accelerate the “energy transition”. Something which, quelle surprise, just might prove to be too expensive… Well, as the saying goes: “In the war between platitudes and physics, physics is undefeated.” Let’s see if it’s any different this time.
Electrification could all too easily prove to be yet another failed attempt to prop up an ageing civilization. The infrastructure we have built so far has brought about great economic growth: bringing electricity, water and sewage to places where none was available, enabling companies to create new jobs or build better housing. Now, we have reached a point, where the grid not only needs to be maintained to uphold past service levels, but extended significantly to cater for all the excess electricity generated by solar, or taken up by EV-s. All this to provide roughly the same level of economic services: commuting by car, having a hot shower, running the same factory. The result: a hell of a lot money spent, and not a single cent increase recorded in taxes payed or services bought. Again, this is nothing new: the same process contributed greatly to the decline of many past empires, with the Romans and Mayans being just two of the most prominent examples.
Exponentially growing investment and maintenance costs with no returns whatsoever… Hmm, what could possibly go wrong?
When I talk money, of course, I mean: energy. All this infrastructure replacement, and extension would require a galactic amount of digging (not only for cables, but for the raw materials required), not to mention the copious amounts of fossil fuels spent during mining, transportation, smelting, manufacturing and so on. In an era of dwindling energy supplies, and with no ideas on how to keep the necessary industrial processes alive at scale to keep on mining, manufacturing, recycling materials for these devices without fossil fuels, this forced electrification is a massive shot in the leg. Instead of attempting the impossible, we desperately need a Brown New Deal. As Tim Watkins writes, quote:
“A proportion of the remaining fossil fuels (hence a “brown” new deal) would be used to deploy alternative energy generation, including wind and solar; but not with a view to growing the economy. Instead, the energy which remains to us would be redirected to maintaining pockets of complexity, such as some degree of socialised medicine or a functioning water treatment and sewage disposal system. Meanwhile, a great deal of the (often debt-based) consumption which has grown the financialised economy in the last three decades will have to go away. The word “enough” and the old wartime plea to “make do and mend” will have to feature large in the vocabulary of the future. Most work will have to be refocused on genuinely essential activities such as growing food and transporting essential commodities.”
Will such a Brown New Deal be implemented? Perhaps in a few Nordic states, but not worldwide. Governments will wait to the very last minute to announce “temporary emergency” measures to cut energy consumption, and to maintain a semblance of normalcy. How average people will tolerate this, after being spoon-fed by governments how infinite growth is perfectly possible, is anyone’s guess, but there has to be one pretty damn scary narrative behind. And scary narratives, from cyberattacks to foreign interference and a collapse in banking, will be abound. Everything and everyone will be blamed other than the true cause: our overshoot in resource use and pollution beyond any tolerable level.
The infighting among various lobby groups over dwindling resources will be no less spectacular. The war machine, pharma, big ag, mining, oil&gas, banking will all present increasingly conflicting needs and demands. The one thing they will not realize is that they are all part of the same technological ecosystem. None, I repeat, none of them can hope to survive without the other. When the system breaks, everything breaks.
If we were rational species, being able to agree on what is feasible and what is not, we would have devised a rather different trajectory for ourselves a long-long time ago. Who knows? We might have given up on agriculture early on, as we saw fertile lands slide into the sea due to erosion… But we didn’t. The very fact that we keep debating after 28 climate conferences whether fossil fuels should be “phased out” or “transitioned away from”, while emissions just keep rising and rising, tells it all.
If we are what our records say we are, we will continue to push the system beyond its breaking point. We will continue to gravitate towards autocrats, whose last remaining public and economic policy will be providing security. At all costs, but first and foremost for themselves. Meanwhile public funds will dry up, together with social security, education and other civil services. Everything but the military will stop to function, but even that will be a pale shadow of its former self. Not that it could happen any other way: the present system is wholly unsustainable and desperately needs an “exit strategy”. But instead of at least making attempts at trying to dismantle it carefully in an effort to soften the blow somewhat, we will get more idiocy… At least until people say enough is enough and walk away, to try something totally different — but more on that next week. Stay tuned!
Until next time,
B
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