The Evil of the Scarcity Meme

In order to avoid misunderstanding, let us make clear from the outset that scarcity is an unavoidable fact of life – it is the very thing that impels economic activity. If all material human wants were satisfied and we were living as immortals in the Land of Cockaigne, there would no longer be a reason to plan for the future, to save and invest, and to weigh the opportunity costs of different choices.

 

NapThe_Land_of_CockaigneWaking up in the Land of Cockaigne. At the time this Utopia was made up, how to obtain sufficient amounts of food was the foremost concern of people.

Image by orph.us

 

In this hypothetical scenario, people may for a while engage in the pursuit of various pleasures, many would probably indulge in producing art or would pursue philosophy and science, but it is a good bet that most people would soon become severely depressed from sheer ennui. However, we live in the real world, and scarcity is a feature of this real world. Purposeful human action is directed toward  relieving this scarcity, a process that has greatly accelerated with the adoption of capitalistic production processes and the associated growth in the division of labor.

Voluntary cooperation between human beings in the framework of the market economy has made it possible for more than seven billion human beings to live on planet Earth, has cut down child mortality to a tiny fraction of what it once was, has more than doubled the lifespan of human beings, has vastly reduced famine, has improved the quality of the environment (contrary to the popular meme, air and water quality have been improving for decades), while global per capita incomes have soared.  A few months ago we discussed the misguided analysis of the market of the new left-leaning pope, on which occasion we showed the following chart by Max Roser:

 

PEA1How free market capitalism has improved human life expectancy – click to enlarge.

 

It is no coincidence that both life expectancy and the human population began to soar right after the Industrial Revolution (an event the Left describes routinely as an unmitigated evil!). In other words, free market capitalism has been very successful in relieving scarcity. Who knows what our average lifespan could be today if a completely unhampered free market economy had been in place over the past century? 130? 150? We’ll never know, but we can certainly conclude that the struggle against central economic planning and the ideologies that support it is a worthy and important one.

The chart above was originally shown in an article by Rachelle Peterson at the National Association of Scholars – as a reminder, we reproduce her remarks again below:

 

“A popular trope has it that we use one and a half earth’s worth of resources every year, destining our descendants to scarce resources. But our “mess of a planet” is actually in the best post-lapsarian shape it’s ever been. Life expectancy is up in every region of the world at all income levels , the global expectancy jumping from 66 in 1990 to 71 in 2013. That’s about 35 billion cumulative years added to the human family. By comparison, global life expectancy in 1900 was about 30 years.

Child mortality is down by half since 1990 alone , quality of life is rising, and happiness is generally ticking skyward . The percentage of the world’s population living on a dollar a dayhas plummeted 80% since 1970 , down from more than a quarter of the globe’s inhabitants to 5.4% as of 2006.

Far from “doing nothing,” we’ve cut pollution and cleaned up the environment. Air pollution has been declining for the past 110 years , and the risk of death from poor air quality has fallen eight-fold. Since 1990, more than 2 billion people have gained access to clean drinking water.”

 

(emphasis added)

Ever since Malthus wrote his screed about the imaginary threat of overpopulation in 1798, the idea that population control is needed and that we are “running out of resources” has been very popular, in spite of what are by now almost 220 years (!) of rather glaring evidence to the contrary. It is actually astonishing that a revered economist like Malthus could make the error of believing economics to be a kind of zero-sum game.

 

Malthus_-_Essay_on_the_principle_of_population,_1826_-_5884843.tifMalthus’ 1798 essay on population will forever stand as a monument to economic error.

 

Considering the time when overpopulation “guru” Paul Ehrlich and the Club of Rome first appeared on the scene, it seems that the popularity of scarcity memes tends to increase whenever credit expansion and money printing egged on by central bank policies cause commodity prices to soar. Note here that one cannot know in advance which prices will be driven higher by money printing, but one can be certain that some prices will be.

Sometimes the commodities sector becomes a beneficiary of monetary pumping, especially after a lengthy bust comes to an end and production capacities have been reduced.  Whenever that happens, we see a veritable flood of very earnest papers and press reports about “peak oil”, about the world “losing all its top soil” and “running out of water any minute”, and of course running out of every other commodity one can think of. Soon billions will starve to death, unless they get cooked or drowned by global warming first.

Even respected investors like GMO’s Jeremy Grantham can suddenly discover their inner Karl Marx when faced with a few years of rising commodity prices (see “Grantham and Marx – the Odd Couple of the Month” for details on this).

 

paul_ehrlichPaul R. Ehrlich – according to one web site, he is “the worlds most renowned population analyst” (we think he should be the most reviled one). Every major prediction he has made since the 1960s has been utterly wrong (as in, 180 degrees wrong because the exact opposite happened). So has he recanted? No! He still believes, in his own words: “We have to humanely and as rapidly as possible move to population shrinkage“. We note that Mr. Ehrlich has so far refused to set an example by removing himself from the gene pool.

Photo credit: L. A. Cicero

 

These periods of rising scarcity paranoia are regularly followed by a collapse in prices when the boom invariably turns to bust. Then the tone of press reports will suddenly change rather noticeably and one gets to read about things like a sudden “oil glut”. In fact, the number of Google search results on “glut of oil” is close to overtaking the number of “peak oil” references (8,530,000 vs. 9,320,000 results). Who would have thought?

The ideas propagated by Ehrlich, the Club of Rome and similar doomsters are what we refer to as the “scarcity meme” above. Their flavor of scarcity propaganda represents a sub-movement of environmentalism. Since the latter inter alia regards mining and oil exploration as the devil’s work, the scarcity meme obviously fits well with its agenda.

After all, so the theory of the scarcity propagandists goes, we would be better off by not extracting valuable commodities! Hopefully it is not necessary to explain why this idea is complete rubbish. We do believe our readers have at the very least an inkling about economic principles, something Ehrlich and his associates can certainly not be accused of.

So why are we calling this propaganda evil? Its main objective is to scare people, in order to get them to accept certain policies. One may well wonder how “we” are supposed go about moving “rapidly and humanely to population shrinkage” as Mr. Ehrlich proposes. Should we build a few gas chambers? Just asking. Allow us to point out in this context that population growth is actually positive for human progress, not negative as Ehrlich contends (we plan to discuss this point in more detail in a future post on demographics).

No matter which scarcity meme one looks at, whether it is the overpopulation scare or the peak oil scare, at its root there is always the demand for the “government to do something”, i.e., the demand for more central planning and coercion. In short, it is all about exercising power over the lives of people.

 

The Left and Environmentalism – Enemies of Civilization

Until about the 1960s the political left never cared about environmentalism. Previously it was, if anything, more likely to be opposed to it. In fact, the command economies of the former communist bloc, i.e. the countries in which socialism had been realized to its full extent, were the worst polluters in all of human history. As an example, after German reunification air pollution in the former socialist GDR was found to be between 8 to 12 times higher than in West Germany.

 

ddr-museum4-smogElectro-chemical combine Bitterfeld in East Germany: poisoning people for decades

Photo via DDR Museum

 

This makes it quire ironic that environmentalism and the Left have found each other in the West, but the lefties evidently realized that concerns about the environment could be used to promote their anti-capitalist agenda. The merger deepened after the former sugar daddy of Western Marxists in Moscow suddenly expired. To their horror, even China decided that crony capitalism was to be preferred over Marxism, although it did of course retain many of the central planning features beloved by the authoritarian left.

Authoritarian is the key term here. We are certainly not saying one should not care about the environment, but as the experience of real socialism so vividly demonstrates, nothing is more likely to preserve a livable environment than strong property rights – which are the very thing constantly under attack by the left. Idealistic leftists – those Lenin referred to as “useful idiots” – are merely economically ignorant. As Friedrich Hayek once said: “If socialists understood economics they wouldn’t be socialists”.

 

95d39/huch/1889/09Friedrich A. Hayek. He may not have considered that some socialists are only in it for the power.

Photo credit: Rue de Archives / PVDE

 

The basic error of socialists is to regard the economy as static, as providing an unchanging “fixed pie”. They wrongly think that people can only become rich by exploitation, that their existence automatically implies that there must be a vast class of losers who continue to become ever more poor. Thus, the main task of politics is to “fairly distribute” this fixed pie. There are of course notable exceptions to this fairness doctrine, namely the ruling comrades at the top and their cronies. One must of course understand that enormous responsibilities are weighing on them once they have attained power; it follows that they will deserve a larger share of the pie (sorry, we forgot that they are all angels and will of course resist abusing their power to their own advantage).

We regard the unholy alliance of Marxism and Greens (a.k.a. watermelons) as enemies of civilization and humanity itself. You certainly don’t have to accept our word for it, you can instead consider the words uttered by assorted red-green climate activists, scarcity propagandists and globalists themselves. Here are a few examples:

 

  • “The common enemy of humanity is man. In searching for a new enemy to unite us, we came up  with the idea that pollution, the threat of global warming,  water shortages, famine and the like would fit the bill. All these dangers are caused by human intervention, and it is only through changed attitudes and behavior that they can be overcome. The real enemy then, is humanity itself.” – Club of Rome (premier environmental think-tank, consultants to the United Nations.
  • “Complex technology of any sort is an assault on human dignity. It would be little short of disastrous for us to discover a source of clean, cheap, abundant energy, because of what we might do with it.” – Amory Lovins, Rocky Mountain Institute
  • “The prospect of cheap fusion energy is the worst thing that could happen to the planet.”
    – Jeremy Rifkin, Greenhouse Crisis Foundation
  • “Giving society cheap, abundant energy would be the equivalent of giving an idiot child a machine gun.” – Prof Paul Ehrlich, Stanford University
  • “The only hope for the world is to make sure there is not another United States. We can’t let other countries have the same number of cars, the amount of industrialization, we have in the US. We have to stop these Third World countries right where they are.”
    -Michael Oppenheimer, Environmental Defense Fund
  • “Global Sustainability requires the deliberate quest of poverty, reduced resource consumption and set levels of mortality control.” -Professor Maurice King
  • “We must make this an insecure and inhospitable place for capitalists and their projects. We must reclaim the roads and plowed land, halt dam construction, tear down existing dams, free shackled rivers and return to wilderness millions of acres of presently settled land.” – David Foreman, co-founder of Earth First!
  • “In Nature organic growth proceeds according  to a Master Plan, a Blueprint. Such a ‘master plan’ is  missing from the process of growth and development of the world system. Now is the time to draw up a master plan for  sustainable growth and world development based on global  allocation of all resources and a new global economic system. Ten or twenty years form today it will probably be too late.” – Club of Rome,
    Mankind at the Turning Point
  • “Democracy is not a panacea. It cannot organize everything and it is unaware of its own limits. These facts must be faced squarely. Sacrilegious though this may sound, democracy is no longer well  suited for the tasks ahead. The complexity and the technical nature  of many of today’s problems do not always allow elected  representatives to make competent decisions at the right time.”  – Club of Rome, The First Global Revolution
  • “The emerging ‘environmentalization’ of our civilization and the need for vigorous action in the interest of the entire global community will inevitably have multiple political consequences. Perhaps the most important of them will be a gradual change in the status of the United Nations. Inevitably, it must assume some aspects of a world government.”
    – Mikhail Gorbachev, State of the World Forum
  • “In my view, after fifty years of service in the United Nations system, I perceive the utmost urgency and absolute necessity for proper Earth government. There is no shadow of a doubt that the present  political and economic systems are no longer appropriate and will lead to the end of life evolution on this planet. We must therefore absolutely and urgently look for new ways.” – Dr Robert Muller,  UN Assistant Secretary General
  • “A keen and anxious awareness is evolving to suggest that  fundamental changes will have to take place in the world order  and its power structures, in the distribution of wealth and income. Perhaps only a new and enlightened humanism can permit mankind to negotiate this transition.” – Club of Rome, Mankind at the Turning Point
  • “The current course of development is thus clearly unsustainable. Current problems cannot be solved by piecemeal measures. More of the same is not enough. Radical change from the current trajectory is not an option, but an absolute necessity. Fundamental economic, social and cultural changes that address the root causes of poverty and environmental degradation are required and they are required now.”
    – from the Earth Charter website
  • “The goal now is a socialist, redistributionist society,  which is nature’s proper steward and society’s only hope.”  – David Brower, founder of Friends of the Earth
  • “If we don’t overthrow capitalism, we don’t have a chance of saving the world ecologically. I think it is possible to have an ecologically sound society under socialism.  I don’t think it is possible under capitalism”  – Judi Bari, principal organiser of Earth First!
  • “Isn’t the only hope for the planet that the  industrialized civilizations collapse?  Isn’t it our responsiblity to bring that about?” – Maurice Strong, founder of the UN Environment Programme
  • “A massive campaign must be launched to de-develop the United States. De development means bringing our economic system into line with the realities of ecology and the world resource situation.” – Paul Ehrlich,  Professor of Population Studies

 

And these are actually the relatively harmless ones. We haven’t cited anything that has emanated from self-declared eco-fascists like Pentti Linkola (you can scroll down here to see some of the stuff this vile, sorry excuse for a human being is spewing). Many more such quotes can be seen here, and here is a page with references and sources.

As you can see, these people are playing fast and loose with the facts. Contrary to what they keep asserting, capitalism has immeasurably improved every single thing they insist is getting worse (and will of course continue to get worse unless we give them unlimited power). This is copied directly from the playbook of Karl Marx. It is a variation of his “iron law of wages” that states that evil capitalists will forever keep the wages of workers at the level of mere physiological subsistence.

 

marxismLenin, Engels and Marx – purveyors of an erroneous and ultimately evil creed.

 

This so-called “law” made up by Marx and Engels has been contradicted by the facts for centuries as well.  Here is a table made in 2005 (we couldn’t find a more recent one) that shows the amenities available to people in the US with incomes considered to be below the official poverty line. 200 years ago, not even a king would have been able to enjoy any of these.

 

poor-2Amenities available to the poor in the US as of 2005.

 

Looking at the quotes above, it also becomes clear what the real agenda is. For most of these people the environment and the incessant scare stories about its imminent destruction are merely devices to promote the demise of what is left of the free market. It is in the end nothing but a disguise for introducing socialism through the back door and establish a system of total control.

We should mention here that if this agenda were to succeed, it would actually be doomed to self-destruction. Without a free market, mankind will cease to be a teleological force in this world. Civilization would quickly collapse and after a while only small clusters of people living from hand to mouth would be left. It would soon become impossible to exert “control” over such a world. However, that would hardly be a consolation.

 

An Interview with Dr. Robert Zubrin

We were inspired to write this post after seeing a pod-cast by Stefan Molyneux in which he speaks with Dr. Robert Zubrin, who very eloquently demolishes the lies and economic errors of this sinister leftist-environmentalist combine. Facts and reason are clearly on his side. The video lasts nearly an hour, but we can assure readers that watching it is time well spent.

 

Stefan Molyneux speaks with Dr. Robert Zubrin about the anti-human mindset of environmentalists.

 

Conclusion

We don’t need to be “saved” by allegedly benevolent central planners and self-anointed world improvers. If humanity and civilization are to continue to advance, the idea that a select few wise men will be able to coerce us toward Utopia has to be vigorously opposed. Ideologies based on Marxist ideas have done more than enough damage already.

The popularity of these ideas continually waxes and wanes and they have recently gained currency again – not least because the current system of cronyism has been falsely advertised as representing free market capitalism. While a market economy continues to be in place, it is a severely hampered one and it is not surprising that many people feel it isn’t delivering what they think it should.

It is important though to make clear that there is no salvation in an even more statist and socialist system. Voluntary cooperation and freedom are the only way forward.

 

Charts and tables by: National Association of Scholars, US dept. of energy

 

 
 

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17 Responses to “Marxism and Environmentalism: The Unholy Alliance”

  • Kreditanstalt:

    Careful…on one hand you write that “there are limits” by dint of scarcity…yet on the other hand you see no limits to technology. But I submit that no amount of unfettered human ingenuity, of engineers, scientists or planners engaged in tech development will ever be able to replicate the energy provided by fossil fuels – which mst definitely represent a LIMIT.

    The weakness of modern-day libertarians and “conservatives” (faux or otherwise) is this boundless and irrational faith in technology-without-limits.

    Can I be a libertarian follower of .H. Kunstler? Please?

    • sufganiyah:

      Can I be a libertarian follower of .H. Kunstler? Please?

      Sure, if you like to be wrong all the time. Kunstler is a typical doomer. No amount of contrary evidence will make him adjust his opinions.

  • therooster:

    Pater ……

    There’s an overwhelming blind spot infecting the whole world these days. It’s called “I think of the dollar as a currency” and that blind spot can recognize the dollar as being debt based or otherwise, it doesn’t matter.

    To see the true value of the dollar, one must shift their gaze and attention to “the other end” of the currency application (medium of exchange) which would be the role fiat plays in the price model … the real gem.

    Don’t forget the price model !!! It’s the price model that allows for the price comparison of two debt-free economic widgets. On the basis of agreement, those two debt-free widgets can trade for each other directly with no debt involved in the trade, whatsoever. This is where the dollar plays a role, not as a currency, but as a simple scale of comparative value.

    Once one understands the above, it becomes easy to simply insert gold (or silver) into the trade as being one of the debt-free widgets in the application of bullion as a debt-free medium of exchange ….a currency with real-time pricing for the sake of combining its debt-free quality with fully expandable and scalable liquidity.

    Bullion is now a market driven real-time currency …. debt-free. Its infinitely expandable liquidity can be credited to the USD/oz floating price measure. Now you might be better equipped to see the benefit of the gold price severance from the fixed pag back in 1971. Gold cannot be rightfully monetized on the basis of a fixed value when the retrievable mass , from the ground, is limited and finite. A fixed value would cause us to run low and run completely out ….a dead end street that had to be modified.

    Are there a few “necessary evils” in God’s script ? I think so.

  • Hans:

    When dealing with those living in a fantasy world two things are
    fundamentally required, the ability to profusely lie and an abundance
    of ignorance.

    Try Marxists bakery goods, which consist many of air and inedible
    ingredients.

  • Mark Humphrey:

    Thank you for this excellent review of the vicious environmental-socialist movement. I want to believe the best about people, so I am encouraged by Hayek’s quote to the effect that socialists just need to understand economics. But then I sober up and once again doubt the benevolence and intelligence of socialists.

    They can talk a good talk, but they don’t think, by subconscious choice. They’re enamored and in awe of the power, not of identifying and understanding facts, but of aligning themselves with people who “hold sway”. Most socialists feel that what other “important people” believe, expect, and demand is primary. What every “correct” (and fashionable) believer “knows” is beyond doubt. In other words, “mind” is logically antecedent to existence. From this warped sense of life, facts are not important, or even relevant; but what others believe about facts is crucial.

    It’s not difficult to get that anyone with this sense of life would be drawn to collectivism as a creed. Economics is a study of the logical implications of scarcity and choice, a discipline grounded in facts and elaborated through reason. That is to say, it is a discipline irrelevant to the concerns of leftists.

    It’s no coincidence that when left wingers do politics, they run in packs: Joining arms, holding hands, and hugging. That behavior signifies how they feel and why they refuse to think. Separate any of these people from the herd and they’re helpless: Fear, sadness and resentment overwhelm them. These are the people so drawn to green misanthropes.

    I’d bet money on this.

  • woodsbp:

    Pater, what in God’s holy name are you on about? The folk you mention – and unfortunately many more besides are a tad challenged in their Math Departments – not Malthus. He was just gazing fixedly out of his front window as the steam tractor chugged away in the back. He will be correct – eventually. Run the math.

    What the rest do not seem to understand and appreciate is our old mathematical friend, the Exponential Function – like that nice doubling series, 1; 2; 4; 8; 16 ……. Or the Doubling Time? – is that some new iApp? How’s about a little reading of Albert Bartlett? You know the one – “Forgotten Fundamentals of the Energy Crisis” – Reflections in 1998 on the Twentieth Anniversary of the Publication of the Paper (in Am J Phys) of the same name: Negative Population Growth, Inc. April 1998.

    Modern economies (since about 1700) were founded on, and are maintained, by the consumption of massive amounts of fossil (hydrocarbon) fuels: first coal, then coal and oil, then oil and coal, now oil, gas and coal. All three are present in finite quantities. When these run down (not out) – and they will, then its bye-bye modern economy. Actually, we may start to run short of potable water first.

    Lighten up Pater. Just try not to think what a sudden reversal of the tectonic plate subduction off the west coast of the US – or the collapse of the Cumbre Vieja volcanic ridge (Gran Canaria), would result in.

    • HitTheFan:

      Ah, the delicious irony of you telling Pater to lighten up whilst fretting about peak fossil fuels.
      No faith that technology will deliver us newer better cleaner forms of energy then?
      Sad.

      • woodsbp:

        Hi, HTF. Now what will those ” … better cleaner forms of energy …” be then? Better than oil and coal? Sure their combustion products are environmental pollutants. But who cares? China?

        My study of organic chemistry tells me that there are no chemical substitutes for either coal or oil as carbonaceous fuels: like none. Nat gas is a complement: neither a replacement nor a substitute. As finite resources all will slowly decline in availability. As I wrote above – you must run the math on this and not get your knickers in a knot about all those dire and doomer predictions. When you check out their math – its either inappropriate or non-existent.

        What “technology/s” did you have in mind? Are there any hiding in plain sight? At an industrial-scale level of readiness?

        What? – me fret? Nope! I have more trivial economic matters to worry about. Cheers.

        • You have to keep in mind though that Jevons worried about “peak coal” in 1864 already. He wrote a big paper on the imminent coal energy shortage and its catastrophic inevitability. Ironically, he too was an economist, and economist should normally be the least prone to such worries.
          Let me quickly say a few things: you are entirely correct that there is nothing in sight that could e.g. replace fossil fuels on an “industrial scale” overnight. I personally have no idea what will eventually replace them, but given that energy is mc squared, this seems mainly a matter of know-how, not one of natural resources. One error both Malthus and Jevons fell prey to was that they underestimated human ingenuity and the power of the market to find solutions to such problems.
          However, there is another error many people seem to be making. For instance, I often see calculations in which someone adds up the amount of conventional oil that has been discovered (call that “A”), looks at demand and average demand growth and estimates how much that will amount to over say the next 30 years (“B”), and then takes out his abacus and deducts “B” from “A”. Presto, it seems crystal clear that the end of industrial civilization must be imminent!
          Now, I could point to the fact that it seemed to be “imminent” for decades, and we’re still waiting (meanwhile, global oil demand is at a new record high as we speak). But I actually want to make an entirely different point. The problem with such calculations is that they don’t take resource economics into account.
          Let me give you an example. You may read about a newly discovered gold deposit that is good enough to be developed into a mine. The feasibility study on which the construction decision is based shows 2 m. oz. of reserves and a 10 year mine life. The mine is built and starts producing an average of 200K oz. per year. 10 years pass, and you get the latest annual report.
          The guy who deducted “B” from “A” above would expect to read about the imminent closure of the mine. But instead, the report talks about the costs of the 200K oz. expected to be produced next year and mentions that the remaining mine life is still 10 years! How is that possible? The reason is that it is simply uneconomic to prove up reserves beyond a certain time horizon. Instead, as production takes place, mining companies will try to prove up a sufficient amount of new reserves every year to roughly replace what has been mined out.
          If you were to go back through all the annual reports of my hypothetical example mine, every one of them would mention a remaining mine life of 10 years. In other words, reports showing the total amount of “x” discovered hitherto tell you nothing about how much there actually still is. Note that it is generally underestimated how big the planet is and how small we are relative to it. All the oil used up to now wouldn’t even fill Lake Tahoe!
          Furthermore, extraction technology doesn’t stand still. What was considered uneconomic and impossible to extract yesterday, can be extracted at a profit today. These methods are continually improving.
          I may discuss all of this in more detail in a future post.

          • woodsbp:

            Pater, much obliged for your thoughtful comments. There is nothing that I can honestly disagree with, especially your comments about the math of determining the “remaining life” of a finite reserve.

            The issue with modern technologies – and the extraction of fossil fuels and ores and the purification of fresh water are of particular concerns, is the steadily increasing amounts of energy each these processes is consuming. If we also need to sustain a positive economic rate-of-growth (3%, p/a compounding for example) in the remaining parts of our economies, then we need to be careful and conservative in our deployment of all the energy we can get hold of. Its the nett energy available we have to consider – that which is available for economic uses after we have consumed whatever proportion of our energy needed in order to obtain that nett. We must treat energy use as a ‘flow’ process (X in; Y out).

            A side-issue of energy use is the levels of incomes available to the majority (90%) of consumers – the goods and services they consume must be priced in such a manner as they are ‘affordable’. If those consumers lose purchasing power (Marginal Propensity to Consume declines) their economy will suffer a demand shock. If the incomes of those 90% either stagnate or decline, economic rates-of-growth will likewise stagnate or decline. Like now?

            Thanks again for the comments. We will surely be back at these matters. They are not going away any time soon.

          • anto:

            “All the oil used up to now wouldn’t even fill Lake Tahoe!”

            Hang on Pater, do you have a link for that or something? Cause that seems crazy… don’t they tap gigantic underground lakes of the stuff?

            • woodsbp:

              anto, it is probably not possible to provide a true value for the amount of liquid hydrocarbon fuels that have been consumed since 1860, but its a lot!

              You can run a sort of messy, mind-experiment as follows: (applies to a western economy only)

              Assume that the economic rate-of-growth (since 1860) was 3%, p/a, compounding, then your economy will double, in aggregate, in approx 23 years. The difference between 2016 and 1860 is 156 years – dividing by 23 you get 6.8 (say, 7 rounded up) “doubling times”.

              [A word of caution: that 3% p/a rate-of-growth does not really apply consistently over the entire period – its an assumption and it makes the math somewhat easier).

              So, lets assume there have been 7 doubling times: that is, 1 -> 2; 4; 8; 16; 32; 64; 128 – hence our present economy is 128 times, larger in aggregate than when it started to expand.

              Now you need a notepad and a pencil. (1 + 2 = 3), but 4 is a higher number
              (1 + 2 + 4 = 7), but 8 is a higher number
              (1 + 2 +3 + 8 = 15), but 16 is a higher number

              Basically, your cumulative total of aggregate economic activity, up to a specific iteration point, is LESS, than the amount of the next full iteration. Put another way, during the 7th iteration event we will have consumed more stuff that ALL of the previous 6 iterations combined together. That’s an awful lot of stuff.

              And some dopey folk want us to continue with economic rates-of-growth at 3%, p/a, compounding? Or want to convince us that alternative energy sources will suffice. Or that we can casually shrink our use of fossil fuels. Or, heaven help us, the 7th Cavalry will arrive bearing a ‘new technology’.

              Our economic and financial issue is that we NEED to have economic rates-of-growth at (or above) that 3% p/a level, else all sorts of bad stuff happens (to pensions, to debt repayments, to incomes, to employment prospects).

              As I encourage folk: please do the math.

              Cheers.

      • Hans:

        Fan, Woodshop is not a member of the Optimist Club!

        When we reach Peak Wood, he will have to change his users name.

        • woodsbp:

          Hans, you’re a tad late (like 5 centuries) – we already had Peak Wood in AD 1450 or so. That’s why we morphed to coal. Nice try though.

  • therooster:

    Interesting. Lots of words but i didn’t see the word “liquidity”, nor did I see the word “debt” even once.

    • That’s not because they aren’t important in this context. I’m convinced that the debt-based system of unsound fiat money (a socialist money system I might add, or considering that it includes a banking cartel it may actually be more correct to call it crypto-fascist, but in any case, it is a centrally planned coercive system) is probably the biggest problem the market economy faces. Not only that, the system also undermines people’s morale and morals.
      I’ll discuss this in another post though – I didn’t want this one to become even more lengthy than it already is, so I focused on what you see above. I’ve been thinking a lot about the enduring popularity of socialism (or statism more generally) and actually have a series of articles on the topic in preparation. We plan to release those over the next few months. You can be sure that debt will be part of that discussion. Stay tuned.

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