Update March 2010: It took six months for the mainstream to catch up, but now Frank Rich is saying pretty much the same thing in the NYT: white people are upset that they are not in charge any more.
UPDATE: This article has attracted the usual trickle of informative and thoughtful reader comments, which are always welcome, plus a torrent of venomous stupidity, which, unfortunately, I have had to look at in order to reject. It is quite clear that the US is headed in the direction of very stupid, hurtful and dangerous politics. What is also clear is that I have neither the time nor the interest nor the stomach for it. I regret having to do this, but I am disabling comment submission.
I happened to be in Washington, DC last weekend, and on the way to and from the National Gallery I had the opportunity to observe the March on Washington, which was in full swing. Once upon a time I had joined demonstrations, not out of some misplaced idealism, but to pick up women (I was still single at the time). The demonstrations were always full of pretty, high-spirited young women, and the context of marching and chanting slogans together rendered them approachable. And so my first question concerning the crowd marching around the Mall last weekend was, "Where are all the pretty young women?" There weren't any! Surprised, I observed some more. What I saw only deepened my consternation. Not only were there no pretty women to be seen, but the crowd included exactly zero blacks, Latinos or Asians. I don't believe I have ever before seen so many middle-aged, obese, shabbily dressed, melanin-challenged individuals gathered in one place!
What political interests bind over-the-hill flabby white people to the exclusion of all other ethnic groups? What is the shabby white agenda? Perhaps the signs the marchers carried might offer a clue? Most of them carried white corrugated cardboard signs stapled to a sharpened pine stake, of the sort designed for displaying on suburban front lawns. The slogans they scribbled on them were of their own devising, but the form factor of the signs was identical throughout. The slogans related to disparate interests: health care, monetary policy, constitutional law. I eventually stumbled on a pile of the stock they used to make their signs. These were printed signs: the printed side said either "Office Space for Lease!" or "Condos for Sale!". The demonstrators would pry the cardboard off one sign, staple it to another sign face down, and scribble on the blank side of the one in the front. These people are refugees from foreclosure-land that somebody organized and shipped in, together with their props!
Although the topic of war did not seem foremost on their minds, some of the men, and even a few of the ruddy, rugged-looking women, were clad in warrior garb of one of two varieties: quite a few aging road warriors sported motorcycle gang leathers decorated with Harley-Davidson insignia, while others wore frumpy US Military camouflage pyjamas. One very large would-be warrior paraded with a sign that read "I will defend the Constitution by any means necessary." He could certainly snuff one or two enemies of the republic by belly-flopping onto them with his gigantic gut! But this wasn't a rabidly militant crowd, unlike some of the pro-war demonstrations I've witnessed. For this bunch, militarism is clearly just part of the clutter in their mental attic.
The one theme that seemed to tie it all together could be summed up by the statement "Obama is bad". This message was often couched in laughable, preposterous bits of hyperbole: "Obama is a socialist/Marxist/fascist". (To my knowledge, Obama holds no Marxist credentials whatsoever.) Interestingly, some of the signs were decorated with the hammer and sickle, but I did not see a single Swastika. I would venture a guess that this was to avoid mistaken identification; it is probably easier for these people to be mistaken for fascists than for communists. Not that they are either of these: clearly, they are just some regular old shlubby people, self-organized along strict ethnic lines, self-selected by their hatred of Obama.
Since Obama happens to be a politician, a superficial assumption is that these people joined forces in opposition to Obama's politics. It is, however, difficult to see much daylight between Obama's politics and those of his predecessor. There is a dearth of ideas on how to reverse the country's economic slide and point it in a new, more promising direction. Instead, there is a great deal of continuity: in financial bail-out strategies that benefit large financial institutions and wealthy investors (who are part of Obama's base of support just as they were of Bush's), in the policy of open-ended military engagement in Iraq and Afghanistan, in Obama's refusal to investigate and prosecute the previous administration for war crimes, and in most other areas of policy as well, Obama has tuned out to be a Bush in sheep's clothing.
The latest, desperate effort to avoid national bankruptcy at the hands of the medical-industrial complex is not a new initiative. Medical reform has been attempted before, and the outcome can be foretold with some accuracy: efforts at reform will fail because any meaningful reform would be financially damaging to powerful vested interests, and so national bankruptcy will have to be an essential part of the work-out. Feelings of the electorate on the matter are irrelevant. But opposition to medical reform is a convenient ruse to hide the real motivations of these self-selected white demonstrators. Now, could these perhaps have to do with... racism?
Jimmy Carter has recently blundered into the fray, making the following statement on CNN: “I think an overwhelming portion of the intensely demonstrated animosity toward President Barack Obama is based on the fact that he is a black man,” Carter told NBC News." This has caused a bit of an uproar. Captain Obvious was immediately paged but declined comment. The Obama administration immediately started to distance itself from Jimmy. Jimmy does say the darnest things, such as calling Israeli policies toward Palestinians "Apartheid". (Speaking truth to liars is a dangerous sport, because if you do, their lying turns vicious. Everyone knows that anything short of a glowing endorsement of Israeli policies brings an automatic charge of antisemitism. When is Jimmy going to learn?)
Obama's ethnic and racial identity is ambiguous. He is a self-described mutt. If he is black, then he is black in the way a puppy born of a black Labrador and a golden retriever might be black, not the way a lot of the US prison population is black. He is a cross between a Kenyan and an anthropologist, and a privileged, pampered member of America's ruling class. His people did not come from Africa in slave ships to be auctioned at Charleston and work on plantations.
He may not be particularly black, but he is definitely not of the same tribe as the Washington demonstrators, who were predominantly of Scots-Irish or English or German descent. This is who America's proud owners and proprietors have been through most of American history, the ethnic groups that have built the American empire, driving slaves, running factories, fighting the natives and driving them into reservations, driving the Mexicans out of the Southwest, and manning the police departments, the military bases and the prisons. They are the ones who worked to impose Pax Americana on the Americas, and, for a short while, almost succeeded in having their way with the rest of the world.
And now they have grown old, fat and sick and are mired in debt. Their time is over, and they are every bit as upset about it as they ought to be. I can't fault them for it. Up until last year, they could comfort themselves by thinking: "We may be poor, but at least we ain't black!" But now they have a black President. What a shock that must be!
What is lost on many simple minds is that the concept of racism is actually a lot of ridiculous nonsense. The term should be retired. It initially presupposed the existence of some sort of natural hierarchy, with a master race (English aristocracy) at the top and semi-evolved animal-like barbarians (Africans, Asians and such) near the bottom. This theory was responsible for a great deal of misery and injustice, but now it has been thoroughly discredited by genetics. The human genome is not differentiated according to race or skin color: we are all one race.
What remains of the concept of race is irrational racial hatred, but racial hatred is neither necessary nor sufficient to produce ethnic strife. Privileged ethnic groups do not have to hate ethnic groups they oppress any more than I have to hate chickens in order to steal and eat their eggs. Ethnicity-based feelings of entitlement and a clan mentality work just as well to divide a multi-ethnic society into warring factions. You might think that intermarriage and a long history together might mitigate against this risk, but there was plenty of intermarriage and a very long history together between Serbs and Croats in Yugoslavia, and between Tutsi and Hutu in Rwanda, and look at where that got them. Multi-ethnic societies are fragile entities, and have a tendency to explode. When they do everyone loses.
Whenever two or more ethnic groups live side by side, the danger of ethnic strife, civil war, ethnic cleansing and genocide is always present. What usually triggers it is the presence of politicians who are willing to exploit ethnic differences in order to grab or hold on to power. Do we have any of those here? Do they even know that they are playing with fire? The poor people I saw parading around Washington last weekend didn't seem so threatening, but where there is smoke there is fire.
It is possible to excuse those who are upset with the way things are in the country. It is, after all, a sad state of affairs. It is also possible to forgive people for being upset that their leader doesn't look or act like them. Bush did his best to appease them by playing a redneck on TV, cutting up logs with a chainsaw, driving a pickup truck around his ranch during his lengthy and numerous vacations, and cultivating a fake Texas twang to mask his New England upper-class roots.
But what of those in positions of influence who are willing to exploit public frustration and stir up ethnic hatred, all in order to defeat health care reform? Isn't that exactly what we should expect of those who want to continue to extort money from sick people in order to make profits even while the country teeters toward bankruptcy? Are they too stupid to realize how dangerous a game that is? Or do they think that it might not be too bad for them, and that a bloodletting might be good for their business, making it even more profitable?
In the US, politics is a stupid, pointless, but mostly harmless game. Let's all do our best to make sure that it stays that way.
Thursday, September 17, 2009
Monday, September 14, 2009
Time's Up!

Time's Up! An Uncivilized Solution to a Global Crisis
by Keith Farnish
Green Books, September 2009
Keith's book is a reader challenge: the reader is tasked with developing a survivable future for her progeny. Very carefully and delicately, with many references to academic research and a rich bibliography, Keith lays out the case that extinction is the default choice – unless you, dear reader of such books, along with a few other people, people like Keith, who would like to help you, come up with a better plan.
Keith points to two of the narratives that are becoming prevalent in thinking about our lack of future. The first of these is the vision of technological apocalypse: the complex, highly interconnected technology-based life support system crashes, stranding us in a dead landscape that is not survivable. The second is the vision of environmental catastrophe: methane bubbles out of the tundra, the ice caps melt, the oceans rise, the forests burn up, fields turn to desert, harvests fail, and, along with most other species, humans go extinct. Keith asks us to create a third narrative – one in which our children stand a chance, as members of an uncivilized, and perhaps an endangered species, but not an extinct one. Keith asks us to start taking steps toward making this vision a reality.
A worthy goal, although one rife with difficulties and internal contradictions. The first of these is that such a consummately civilized book is an odd vehicle for promoting the destruction of the civilization that is leading us all to perdition. Another is that his presentation, true to fact though it is, due to its dark subject matter, is enough to drive most people to melancholy. Questions of survival and extinction are hard for us, for we civilized humans are a sentimental lot: we bake cupcakes and play with kittens and babies, and prefer to think that the big world out there is just an extension of our little safe haven with its security and its comforts, where we can go and play if we want to. We worry about all the little baby animals out there, the cute, sad-eyed, furry ones especially, but we leave the dirty, planet-destroying work of providing our security and our comforts to specialists – soldiers, the police, politicians, businessmen, engineers and industrial workers. These, being professionals, generally feel that they need not concern themselves with matters outside their purview, such as their forthcoming extinction.
As for those whose purview does include the minor matter of our continued viability as a species, the list now includes anyone who seriously studies ecology, climatology, natural resource physics, crisis economics, or any of the other disciplines that tell us of crisis, danger, or catastrophe. For them, deep and abiding melancholy has become something of an occupational hazard. Scientists are professional problem-solvers, and tend to choke on the idea that their problem-solving happens to be responsible for having caused much of the problem. If all you can do is study something to death, then die, then why on earth bother? But Keith does come up with a very simple, powerful idea that cuts through all of this sentimental fog like a laser beam.
This is perhaps the most powerful idea of his entire book. We – all of us – should just follow our genetic programming a little better. As bits of biological hardware executing a genetic program, it is our primary function to pass our genes on to the next generation. This part is not controversial, and there are several billion of us on hand to attest to the program's success. But unlike, say, yeast, some of us are also capable of understanding an important principle: that just blindly creating progeny doomed to extinction is not as clever as we like to imagine ourselves to be. If we leave no viable habitat for our children, then we could give birth to countless numbers of them and still fail to reproduce successfully. (Yeast are actually somewhat clever, and when their environment becomes too polluted with their main waste product, alcohol, for them to function, they fall dormant and wait for an improvement, whereas we just kick the bucket.) The key question is not whether to breed, it is where to breed, and just as many animals range far and wide to find a place to breed and rear their young, we need to look beyond the cupcake-and-kitten universe with its plastic baby car seats and baby formula, and reconcile our effort with the big picture, or we are only doing half the job of parenting.
As always and with everything, there is a problem with this approach as well. It is quite possible to take the position that while the cupcake-and-kitten universe is undeniably real, first-hand experience, and is all that makes your life interesting and fun, the big scary world of ecological and economic catastrophe is an ever-changing carnival show of horrific visions that our apocalypse-addled culture serves up as popular entertainment. It seems that there is always something out there to moan about in public. It used to be nuclear winter, but now it's global warming summer, with some killer asteroids lurking about to spice things up. Sure, lots of children might go extinct, but who's to say they will be my children? Mine might turn out to be particularly clever – much more clever than you or me – so why not let them sort this out for themselves? Indeed, when it comes to planning our own birth, what advice would any of us want to have given to our own parents, beyond "Oh, please, don't think about it, just get on with it!" And while, simultaneously, some of us may wrinkle our noses at all the stupid people who pop out babies with no means or plans to bring them up properly, that, you see, is part of their genetic programming as well: in a heterozygotic species such as ours, breeding is a matter of chance, nobody knows which two crabapples might produce a Golden Delicious, and if none of the numerous idiots among us were allowed to breed, there would be even fewer geniuses among us.
While "Please, just get on with it!" sums it up nicely, some sort of plan might still be called for. We want our children to be grateful, not just weak with relief for being born at all. And while the introduction declares bombastically that "Part Four contains the keys to human survival" [p. 8] by the time Part Four rolls around, Keith is quick to offer a disclaimer: "These are just thoughts, ideas, imperfect sketches for something that could work if it's done properly. I can't predict how things are going to turn out, even if what I am going to propose does succeed; nobody can predict something that hasn't started yet." [p. 182-3] Keith's practical thoughts and considerations are not unhelpful, including all the usual steps toward self-sufficiency, such as constructing your own shelter and growing and gathering your own food, but they really are (as perhaps they should be) just baby steps.
Keith also talks about the task of destroying industrial civilization in order to allow life on earth to return to equilibrium. A worthy goal, perhaps, although none of what Keith proposes is particularly radical or effective, or it would be illegal and his book would be banned. Is it a goal worth pursuing? If we try and succeed, would we feel proud of ourselves, and wear "I collapsed industrial civilization" T-shirts? (Unlikely, since by then we would be clad in skins, furs or homespun cloth, or, if global warming comes through in time, perhaps a simple loincloth would suffice.) Won't industrial civilization collapse in any case, and so shouldn't we devote our scarce energies and short lives to more constructive pursuits? The forces that maintain industrial civilization do so at the cost of ever-increasing complexity, an approach that, once it reaches the point of diminishing returns, only hastens its own destruction. A more worthy goal might be to insulate yourself and your children from this wave of destruction that is about to befall industrial society, by freeing yourself from its enslavements. Indeed, I believe that inside Keith's somewhat ambiguous and tentative message of conscious destruction lurks a far more potent and coherent message of emancipation from mental slavery.
The chapter on "connecting" elaborates one part of this message. "Connecting" is a process of liberation that allows a person to pierce the veil of objectivity, to cease being a part of objective reality, subject to objective judgment and evaluation, and to enter a realm of direct, subjective meaning and experience. It can start with something as superficial as a trip to the seashore and exposure to the timelessness of surf and wind and sand. It can be as significant as dissolving in the life of a forest, drawing all inspiration and sustenance from it, to the point of being ready to defend it with your own life, which no longer has a significance that is separate from the forest itself.
The next chapter contains a fairly complete description of the elements that prevent connection. Keith calls these mind control methods of modern society the "tools of disconnection." The machinery is subtle and advanced, and the work of emancipation difficult. We are all brainwashed: the rhetoric of freedom is so ingrained in us that breaking through it requires a great deal of effort. Serfdom is obsolete, and old-fashioned slavery is a crime against humanity. To become modern, the slave must be upgraded to new and improved wage-slavery, complete with consumer rights. Freedom requires slavery for it to have meaning. Those who are truly free have no use for the word, and do not know its meaning. Keith's clear exposition of the mind control techniques involved in making this neat little hat trick work helps to break the spell.
But my favorite part of the book is Part One: The Scale of The Problem, in which Keith gives a meticulously researched exposition of life at all scales at which life on Earth has been observed and studied, from the microscopic to the gigantic. In each case, he shows how human industrial activity has impacted and destabilized the web of life, usually with inevitable and dire consequences for our own chances of survival. Each one of us is tied up in this unfolding drama of wrenching change, as both the perpetrator and the victim, in a web of such stunning complexity that such simplistic labels become meaningless, including many others, such as "environmentalist" or "industrialist".
To rediscover meaning in this context, what is needed is direct contact, outside of the limits set by society and officially sanctioned roles. Keith's book is a progress report from one man's search for this meaning. I encourage you to join efforts with him, and to work on discovering a future in which you and your children might find a place.
Tuesday, August 04, 2009
Interview on KPFA.org
Guns and ButterWednesday, August 5, 2009, 1:00pm
"The Collapse Gap" with Dmitry Orlov, author of "Reinventing Collapse - The Soviet Example and American Prospects". Orlov's repeated travels to Russia throughout the early nineties allowed him to observe the aftermath of the Soviet collapse first-hand. Being both a Russian and an American, Dmitry was able to appreciate both the differences and the similarities between the two superpowers. Eventually he came to the conclusion that the United States is going the way of the Soviet Union. His emphasis is on all the things that can still be made to work, and he advocates simply ignoring all that will fall by the wayside.
"Guns & Butter" investigates the relationships among capitalism, militarism and politics. Maintaining a radical perspective in the aftermath of the September 11th attacks, "Guns & Butter: The Economics of Politics" reports on who wins and who loses when the economic resources of civil society are diverted toward global corporatization, war, and the furtherance of a national security state.
Live on KPFA at 01:00 PM Pacific Time: WednesdaysYou can listen to it here.
Tuesday, July 21, 2009
You don't have to go to school
A small but already by no means negligible number of Americans is starting to realize what their future looks like: no retirement, no job, no savings, plus they are getting old. Their only possible means of support in old age is their children.And so, in the meantime, let's continue to mindlessly send our children off to "learning" institutions, where they will be properly supervised at all times, bored half to death, medicated into submission should they rebel, even by simply refusing to pay attention, not taught anything worth knowing by demoralized, underpaid public servants, and then spat out into the world with their spirits crushed.
On second, thought, let's stop doing that. When thinking about making big changes, sometimes it's healthy to hear of places halfway across the world, which may have their own issues to deal with, but they are not the same ones we have here, allowing us to see past them. But the problem of institutionalization of children and emphasis on mindless discipline and rote learning is the same in all "developed" nations, being part of the worldwide legacy of industrialization and militarism, which we all have to deal with somehow. And a good first step is to starve this mindless suicide machine of fresh cannon fodder - by denying it access to our children.
Here is the story of a Russian woman's experience with pulling her three children out of school that I thought would provide some valuable perspective to people in the States who are confronting the same decision, so I translated it.
В школу можно не ходить
(You don't have to go to school)
(You don't have to go to school)
Ksenia Podrova, St. Petersburg, Russia
http://ruk.1september.ru/article.php?ID=200701613 (Set encoding to Windows-1251)
http://ruk.1september.ru/article.php?ID=200701613 (Set encoding to Windows-1251)
Translated by me.
I have known this for sure for twelve years now.During this time, two of my children have received high school diplomas while sitting at home (since it had been decided that these could turn out to be useful to them during their lives). My third child passed exams for the primary grades without attending classes, and is not about to stop there. Honestly, I am unconcerned. And I don’t get in the way of them choosing whatever substitute for school they manage to think of.
When my eldest was in secondary school, I started noticing that all too often he would recall situations of the following type: “I started reading a really interesting book during math class today;” or “I started composing a new symphony during history class;” or “It turns that Peter plays chess quite well – we played a few games during geography today.”
And I started thinking: why is he going to school? Is it to study? But then he does completely unrelated things during classes. Is it to socialize? But then it’s possible to do that outside of school.
Shift of consciousness
And then a sudden shift occurred in my consciousness. And I thought: “Maybe he shouldn’t go to school at all?” For a few days we discussed this idea. Then I went to see the school principal and told her that my son will no longer be attending school. (Afterwards many of my friends told me: “You were lucky to have such a principal! What if she didn’t agree?”) But it had nothing to do with the principal. If she didn’t agree, this would not have changed our plans at all. It's just that in that case our further steps would have been slightly different.
The principal (whom I remember with sympathy and respect to this day) was sincerely interested in our motivations, and I was quite open with her concerning my opinion of school. She herself proposed how we should proceed: we should write a statement requesting that my child be transferred to home schooling, and she will make arrangements with the Department of Education, so that my child (supposedly because of his superior talents) will, as part of an experiment, study independently, and take tests as an external student at this same school.
And so we forgot about school almost until the end of the school year. My son was absorbed in all the things for which he had never had enough time. He spent entire days composing music and performing it on “live” instruments. He spent nights in front of the computer, building his own BBS (those of you who were fans of Fidonet know what that means). He also managed to find time to read anything he wanted, to study Chinese (just because he found it interesting at the time) and to help me with my work in translating and typing documents in various languages, installing email (still a difficult task at the time that involved consulting an expert), entertaining the younger children… In all, he was incredibly happy with his new freedom from school, and did not feel that he was missing anything.
The Price of Freedom
In April, we suddenly remembered: “Oh, we must prepare to take exams!” My son pulled out the dusty textbooks and concertedly read them for two or three weeks. Then we went to see the principal and told her that he is ready to take the exams. At this, my involvement in his school affairs ended. On his own, he caught up with the various teachers and arranged with them when and where they would met.
He managed to pass in all the subjects in one or two visits. The teachers themselves decided on the form of the exam. Sometimes it was just a conversation, sometimes a written test. Curiously, almost none of them wanted to give him an ‘A’, although my child certainly knew no less than the others. Our favorite grade became ‘B’, but this was not the least bit upsetting: this was the price of freedom.
Some time ago it had been considered that a child must attend school every day. If it turned out that someone doesn’t do this, one could get a visit from some special government agency (with something like “guardians of childhood” in the title, but I am no expert in these matters, so I could be wrong). In order for a child to gain the right to not go to school, it was necessary to receive a medical certificate that he is unable to attend school due to bad health. This is why I often heard confused questions such as: “What are your children sick with?” “Then why aren’t they in school?!” “They don’t want to be.”
An awkward silence ensued. By the way, later I found out that some parents simply bought such certificates from doctors they knew.
But in the summer of 1992 President Yeltsin issued a historic decree which announced that henceforth any child (independent of medical condition) has the right to study at home! Furthermore, the local schools must pay to the parents of such children, because they are spending the government’s education funds not on teachers and not on school buildings, but independently and at home!
And then there were two
When my daughter became old enough, I told her that she didn’t have to go to school at all. But she was a socialized child, having read many children’s books which stressed the idea that going to school was highly prestigious. Since I was in favor of a free upbringing, I wasn’t about to forbid it. And so off she went to first grade.
She lasted almost two years! Only around the end of the second year did she get sick of this empty waste of time, and she announced that she is going to study at home, like her older brother.
I delivered yet another statement to the principal. And now I had two children who did not go to school.
Yet another statement
Once in September I went to see the principal and give her yet another statement that this year my children are studying at home. She gave me the text of the presidential decree to read. (I didn’t think to write down its title, number and date, and now don’t even remember. If you are interested – search the Internet, and let me know.)
And then the principal said: “Nevertheless, we aren’t going to pay you for not sending your child to school. It’s too complicated for us to get these funds. But, on the other hand, we won’t charge you for their exams.”
I was quite satisfied with this. It would have never occurred to me to take money from her. And so we parted satisfied with each other and with the changes to our laws.
Spelled out in black and white
Last year I went to arrange home schooling for my third child.
Imagine this situation: i come to see the head teacher and tell her that I want to register my child to attend school, first grade. The head teacher writes down the name of the child and asks for the date of birth. It then turns out that then child is ten years old. And now – the really pleasant part: the head teacher reacts calmly, and even shows me an official document that stated that any person has the right to come to any school and request to take exams for any grade, and is not required to show any documents regarding completion of previous grades. The school administration is required by law to create a commission to administer all necessary exams.
That is, you can go to any school when you reach 17 years of age (by the way, along with my daughter, there were two bearded fellows who had suddenly decided that they wanted their diplomas) and directly take the exams for 11th grade. And you will receive that same diploma, which so many people consider to be so necessary.
As they explained to us
Once, after we moved, and more out of curiosity than need, I went to the school nearest to our new house, and asked to see the principal.
I told her that my children have long since and irreversibly stopped going to school, and that I am currently looking for a place where they can take exams for 7th grade, quickly and inexpensively. The principal (a pleasant young woman with progressive views) was very glad to meet me, and I was glad to tell her about my children. But at the end of our conversation she suggested that I look for some other school.
They were, by law, indeed required to accept my children, and indeed required to allow them to study at home. That would not be a problem. But, she explained, ordinary teachers, which are the majority at this school, will not agree to my conditions of home schooling: letting the child pass the entire annual course at one go. The child cannot pass the entire program in one visit! The child has to work a certain number of hours. That is, they have absolutely no interest in what the child actually knows, they are only interested in the time spent studying. They want the child to attend all quarterly exams. And, of course, the child is required to participate in the life of the school: wash windows on Saturdays, collect trash on school grounds, and so on.
Obviously, I refused.
We just do not understand
But in spite of this the principal gave me what I needed, simply because she enjoyed our conversation. Specifically: I needed to borrow all the textbooks for the 7th grade from the library, to avoid having to buy them. And so she immediately called the librarian and ordered her to issue me all the textbooks free of charge until the end of the school year.
And so my daughter read all these textbooks and, with no fuss or “class participation,” passed her exams somewhere else. Then we brought the textbooks back. After that, if only she wanted to, she could have gone to any school and studied alongside her peers.
But somehow she doesn’t want to. Quite the opposite: she, just as her brothers, just as I do, considers such a suggestion to be pure nonsense. And we just cannot understand why a normal person would want to go to school.
Friday, July 10, 2009
Video of Public Lecture

This is a video of the public lecture I gave last month in Dublin, Ireland, the night before the opening of the Feasta Conference. Click here to watch.
Thursday, June 25, 2009
The Slope of Dysfunction
(Update: click here for a special version for the Nihonjin care of Masayuki.)
(Update, November 2009: Michael Lardelli spells out the same point in much more detail in The oil-economy connection) Perhaps you have heard of the Peak Oil theory? Most people have by now, even the people whose job used to involve denying the possibility that global crude oil production would peak any time soon. Now that everybody seems a bit more comfortable with the idea, perhaps it is time to reexamine it. Is the scenario Peak Oil theoreticians paint indeed realistic, or is it firmly grounded in wishful thinking?
Here is a typical, slightly outdated Peak Oil chart. I chose it because it looks pretty and conveys the typical Peak Oil message, which is that global crude oil (and natural gas condensate) production will rise to a lofty peak sometime soon, and then drift down gently, over several decades, until, by the year 2050 or some other distant date, less than half as much oil will be produced globally. Since this would still be a very impressive number, and since we have decades to adjust to living with half as much oil, this would not necessarily pose a major problem. Some combination of new energy from wind, solar, biomass and nuclear sources, coupled with efficiency improvements such as light rail and electric cars, better-insulated buildings and so on, would allow us to plug up the gap.
Peak Oil theorists base their calculations on data from the many oil-producing provinces that have already peaked, such as the United States, which peaked in 1970. The majority of oil-producing provinces and countries are past peak now, providing the theorists with a wealth of precise data. But they seem to have overlooked one little detail, which, I believe, is rather important. What do countries do when they reach their peak and can no longer supply themselves with sufficient quantities of oil from their depleting domestic sources? They turn to imports, of course. They can do so if their local peak comes before the global peak; they cannot do so if it comes after. This makes local peaks poor analogies for the global peak.
And what happens if a country cannot import oil to make up for the production deficit? It just so happens that we have a convenient example of just such a scenario unfolding: post-Soviet oil production after the collapse of the USSR. There, production declined 43% between 1987 and 1996. The decline was arrested and reversed by the introduction of foreign investment and technology (Source: Marek Kolodziej and Doug Reynolds, ASPO Workshop, Lisbon, Portugal, May 19. 2005).

Note how just around the time of the collapse oil production goes into free-fall, which is only arrested in mid-1990s. Had the Former Soviet Union remained economically isolated, the free-fall would have continued. Kolodziej and Reynolds drew some interesting conclusions based on these data. Firstly, the crash in oil production preceded collapse in USSR's Gross Domestic Product. The lag time between the two, and the severity of the collapse are clear enough to ascribe causality: to say that the oil crash caused the economic collapse. On the other hand, coal and natural gas production, which also crashed, did so after the GDP collapsed, again, with a significant enough lag time to say with confidence that it was economic collapse that caused coal and gas production to crash.
What actually happens to an economy and a society under such circumstances? With oil in short supply, industrial production plummets, the economy stalls, there is a financial crisis because of debts going bad, followed by a commercial crisis because of falling demand and lack of credit, followed by political collapse caused by dwindling government revenues, followed by social collapse as unemployment rises and crime becomes rampant. After a while of this, the idea of you and your friends going out to the oil field and pumping some more oil starts to seem rather odd, and so oil production heads to zero.
The global oil peak is different from all the little localized peaks in that the planet as a whole cannot import its way out of an oil shortage, resulting in a global economic collapse. The economic collapse will, in turn, cause global oil production to crash even faster, extinguishing the industrial economy.
It seems possible that certain countries which are currently oil exporters might be able to keep the oil flowing, provided they have nationalized their oil production and are sufficiently authoritarian and militarized to quell any unrest. But modern oil production is a technically complicated business (the easy-to-get-at oil is all gone) while the field service equipment and parts delivery system is fully globalized and exceedingly complex. Shocks to any part of the global economy are very likely to disrupt the whole before too long. Nevertheless, it seems likely that some countries will be able to keep their military supplied with fuel, until enough of their equipment wears out.
What, then, of our canonical Peak Oil scenario, which is that global crude oil (and natural gas condensate) production will rise to a lofty peak sometime soon, and then gently waft down, over several decades, until, by the year 2050 or some other distant date, less than half as much oil will be produced globally? Ever eager to present a hopeful vision, I will say here and now that I believe this scenario to be entirely plausible... but it requires alien intervention. As Russian oil production was saved by foreigners, so Earthling oil production must be be saved by aliens from outer space. Here's an updated Peak Oil slide:
Although we have absolutely zero data on which to base this assumption, we must assume that oil production throughout the rest of the universe has not peaked yet. Further, we must assume that interstellar vessels will deliver this oil to Earth in a timely manner, making up for any planetary production shortfall before Earth's economy collapses. Further, since Earth has few resources to trade for this oil, let us assume that the aliens will be happy to give us their oil in exchange for a truly excellent recipe for brioche à tête which (for reasons we should find intuitively obvious) no-one in the rest of the universe has been able to perfect.
(Update, November 2009: Michael Lardelli spells out the same point in much more detail in The oil-economy connection) Perhaps you have heard of the Peak Oil theory? Most people have by now, even the people whose job used to involve denying the possibility that global crude oil production would peak any time soon. Now that everybody seems a bit more comfortable with the idea, perhaps it is time to reexamine it. Is the scenario Peak Oil theoreticians paint indeed realistic, or is it firmly grounded in wishful thinking?
Here is a typical, slightly outdated Peak Oil chart. I chose it because it looks pretty and conveys the typical Peak Oil message, which is that global crude oil (and natural gas condensate) production will rise to a lofty peak sometime soon, and then drift down gently, over several decades, until, by the year 2050 or some other distant date, less than half as much oil will be produced globally. Since this would still be a very impressive number, and since we have decades to adjust to living with half as much oil, this would not necessarily pose a major problem. Some combination of new energy from wind, solar, biomass and nuclear sources, coupled with efficiency improvements such as light rail and electric cars, better-insulated buildings and so on, would allow us to plug up the gap.Peak Oil theorists base their calculations on data from the many oil-producing provinces that have already peaked, such as the United States, which peaked in 1970. The majority of oil-producing provinces and countries are past peak now, providing the theorists with a wealth of precise data. But they seem to have overlooked one little detail, which, I believe, is rather important. What do countries do when they reach their peak and can no longer supply themselves with sufficient quantities of oil from their depleting domestic sources? They turn to imports, of course. They can do so if their local peak comes before the global peak; they cannot do so if it comes after. This makes local peaks poor analogies for the global peak.
And what happens if a country cannot import oil to make up for the production deficit? It just so happens that we have a convenient example of just such a scenario unfolding: post-Soviet oil production after the collapse of the USSR. There, production declined 43% between 1987 and 1996. The decline was arrested and reversed by the introduction of foreign investment and technology (Source: Marek Kolodziej and Doug Reynolds, ASPO Workshop, Lisbon, Portugal, May 19. 2005).

Note how just around the time of the collapse oil production goes into free-fall, which is only arrested in mid-1990s. Had the Former Soviet Union remained economically isolated, the free-fall would have continued. Kolodziej and Reynolds drew some interesting conclusions based on these data. Firstly, the crash in oil production preceded collapse in USSR's Gross Domestic Product. The lag time between the two, and the severity of the collapse are clear enough to ascribe causality: to say that the oil crash caused the economic collapse. On the other hand, coal and natural gas production, which also crashed, did so after the GDP collapsed, again, with a significant enough lag time to say with confidence that it was economic collapse that caused coal and gas production to crash.
What actually happens to an economy and a society under such circumstances? With oil in short supply, industrial production plummets, the economy stalls, there is a financial crisis because of debts going bad, followed by a commercial crisis because of falling demand and lack of credit, followed by political collapse caused by dwindling government revenues, followed by social collapse as unemployment rises and crime becomes rampant. After a while of this, the idea of you and your friends going out to the oil field and pumping some more oil starts to seem rather odd, and so oil production heads to zero.
The global oil peak is different from all the little localized peaks in that the planet as a whole cannot import its way out of an oil shortage, resulting in a global economic collapse. The economic collapse will, in turn, cause global oil production to crash even faster, extinguishing the industrial economy.
It seems possible that certain countries which are currently oil exporters might be able to keep the oil flowing, provided they have nationalized their oil production and are sufficiently authoritarian and militarized to quell any unrest. But modern oil production is a technically complicated business (the easy-to-get-at oil is all gone) while the field service equipment and parts delivery system is fully globalized and exceedingly complex. Shocks to any part of the global economy are very likely to disrupt the whole before too long. Nevertheless, it seems likely that some countries will be able to keep their military supplied with fuel, until enough of their equipment wears out.
What, then, of our canonical Peak Oil scenario, which is that global crude oil (and natural gas condensate) production will rise to a lofty peak sometime soon, and then gently waft down, over several decades, until, by the year 2050 or some other distant date, less than half as much oil will be produced globally? Ever eager to present a hopeful vision, I will say here and now that I believe this scenario to be entirely plausible... but it requires alien intervention. As Russian oil production was saved by foreigners, so Earthling oil production must be be saved by aliens from outer space. Here's an updated Peak Oil slide:
Although we have absolutely zero data on which to base this assumption, we must assume that oil production throughout the rest of the universe has not peaked yet. Further, we must assume that interstellar vessels will deliver this oil to Earth in a timely manner, making up for any planetary production shortfall before Earth's economy collapses. Further, since Earth has few resources to trade for this oil, let us assume that the aliens will be happy to give us their oil in exchange for a truly excellent recipe for brioche à tête which (for reasons we should find intuitively obvious) no-one in the rest of the universe has been able to perfect.
Saturday, June 20, 2009
Errata
In my previous post, I quoted some numbers from François Cellier. In doing so, I inadvertently used the word "oil" where I should have used the word "energy". As a result, I incorrectly calculated the approximate oil price as percentage of GDP at which the global economy stalls out to be 25% instead of 6%. The specific numbers are irrelevant to the rest of my argument; however, a lot of people (who are apparently comfortable with arithmetic but not much else) have decided that this is a reason to start calling me names. I have a name for them too: I like to call them "the arithmeticians". The rest of you can safely ignore these details and concentrate on what's important: economic recovery -> oil price spike -> economic crash. Repeat as often as it takes to learn the lesson: no more growth is possible.
Tuesday, June 16, 2009
Definancialisation, Deglobalisation, Relocalisation
This talk was presented at The New Emergency Conference in Dublin, on June 11, 2009.
[Update: The latest International Energy Agency report includes the following chart. Had it existed a year and a half ago, I would have included it in this talk. The gears of international agencies grind slowly, but that's better than not at all.]

1. Good morning. The title of this talk is a bit of a mouthful, but what I want to say can be summed up in simpler words: we all have to prepare for life without much money, where imported goods are scarce, and where people have to provide for their own needs, and those of their immediate neighbours. I will take as my point of departure the unfolding collapse of the global economy, and discuss what might come next. It started with the collapse of the financial markets last year, and is now resulting in unprecedented decreases in the volumes of international trade. These developments are also starting to affect the political stability of various countries around the world. A few governments have already collapsed, others may be on their way, and before too long we may find our maps redrawn in dramatic ways.
2. "Sustainability" -- what's in a word?
In a word, unsustainable. So what does that mean, exactly? Chris Clugston has recently published a summary of his analysis of what he calls "societal over-extension" on The Oil Drum web site. Here is a summary of his summary, in round numbers. I don't want to trifle with his arithmetic, because it's the cultural assumptions behind it that I find interesting. The idea is that if we shrink our ecological footprint by an order of magnitude or so, that should make the whole arrangement sustainable once again. This is expressed in financial terms: here we are lowering the GDP of the USA from, say $100 thousand per capita per annum, to, say $10 thousand. Clugston draws a distinction between making this reduction voluntarily or involuntarily: we should make it easy on ourselves and come along quietly, so that nobody gets hurt. I find the idea that Americans will voluntarily lower their GDP by a factor of 10 rather outlandish. We keep the same system, just shut down 9/10 of it? Wouldn't that make it a completely different system? This sort of sustainability seems rather unsustainable to me.
3. My plan
I would like to offer a more realistic alternative. Everybody should have one US Dollar, for purely didactic purposes. This way, all Americans will be able to show their one dollar to their grandchildren, and say: "Can you imagine, this ugly piece of paper was once called The Almighty Dollar!" And their grandchildren will no doubt think that they are a little bit crazy, but they would probably think that anyway. But it certainly would not be helpful for them to have multiple shoe-boxes full of dollars, because then thir grandchildren would think that they are in fact senile, because no sane person would be hoarding such rubbish.
4. An unpalatable alternative
Clugston offers an alternative to the big GDP decrease: a proportionate decrease in population. In this scenario, nine out of 10 people die so that the remaining 10% can go on living comfortably on $100 thousand a year. I was happy to note that Chris did not carry the voluntary/involuntary distinction over to this part of the analysis, because I feel that this would have been in rather questionable taste. I can think of just three things to say about this particular scenario.
First, humans are not a special case when it comes to experiencing population explosions and die-offs, and the idea that human populations should increase monotonically ad infinitum is just as preposterous as the idea of infinite economic growth on a finite planet. The exponential growth of the human population has tracked the increased use of fossil fuels, and I am yet to see a compelling argument for why the population would not crash along with them.
Second, shocking though this seems, it can be observed that most societies are able to absorb sudden increases in mortality without much fuss at all. There was a huge spike in mortality in Russia following the Soviet collapse, but it was not directly observable by anyone outside of the morgues and the crematoria. After a few years people would look at an old school photograph and realise that half the people are gone! When it comes to death, most people do in fact make it easy on themselves and come along quietly. The most painful part of it is realising that something like that is happening all around you.
Third, this whole budgeting exercise for how many people we can afford to keep alive is a good way of demonstrating what monsters we have become, with our addiction to statistics and numerical abstractions. The disconnect between words and actions on the population issue is by now is almost complete. Population is very far beyond anyone's control, and this way of thinking about it takes us in the wrong direction. If we could not control it on the way up, what makes us think that we might be able to control it on the way down? If our projections look sufficiently shocking, then we might hypnotise ourselves into thinking that maintaining our artificial human life support systems at any cost is more important than considering its effect on the natural world. The question "How many will survive?" is simply not ours to answer.
5. What's actually happening

Back to what is actually happening right now. There seems to be a wide range of opinion on how to characterise it, from recession to depression to collapse. The press has recently been filled with stories about "green shoots" and the economists are discussing the exact timing of economic recovery. Mainstream opinion ranges from "later this year" to "sometime next year." None of them dares to say that global economic growth might be finished for good, or that it will be over in "the not-too-distant future" -- a vague term they seem to like a whole lot.
There does seem to be a consensus forming that last year's financial crash was precipitated by the spike in oil prices last summer, when oil briefly touched $147/bbl. Why this should have happened seems rather obvious. Since most things in a fully developed, industrialised economy run on oil, it is not an optional purchase: for a given level of economic activity, a certain level of oil consumption is required, and so one simply pays the price for as long as access to credit is maintained, and after that suddenly it's game over. François Cellier has recently published an analysis in which he shows that at roughly $600/bbl the entire world's GDP would be required to pay foroil energy, leaving no money for putting it to any sort of interesting use. At that price level, we can't even afford to take delivery of it. In fact, at that price level, we can't even afford to pump it out of the ground, because the tool pushers, roughnecks and roustabouts that make oil rigs work don't drink the oil, and there would no longer be room in the budget for beer.
And so, the actual limiting price, beyond which no economic activity is possible, is certainly a lot lower, and last summer we seem to have experimentally established that to be around $150/bbl. which is something like256% of global GDP. We may never run out of oil, but we have already run out of money with which to buy it, at least once, and will most likely do so again and again, until we learn the lesson. We will run out of money to pump it out of the ground as well. There might still be a few gushers left in the world, and so there will be a little bit of oil left over for us to fashion into exotic plastic jewelry for rich people. But it won't be enough to sustain an industrial base, and so the industrial age will effectively be over, except for some residual solar panels and wind generators and hydroelectric installations.
I think that the lesson from all this is that we have to prepare for a non-industrial future while we still have some resources with which to do it. If we marshal the resources, stockpile the materials that will be of most use, and harness the heirloom technologies that can be sustained without an industrial base, then we can stretch out the transition far into the future, giving us time to adapt.
6. Key points
I know that I am running the risk of overstating these points and oversimplifying the situation, but sometimes it is helpful to ignore various complexities to move the discussion forward. I do believe that these points are all true, roughly speaking.
Now that the reality of Peak Oil has started to sink in, one commonly hears that "The age of cheap oil is over". But does that mean that the age of expensive oil is upon us? Not necessarily. We now know (or should have learnt by now) that once oil rises to over256% of global GDP, the world's industrial economy stalls out, and as soon as that happens, oil ceases to be particularly valuable, so much so that investment in maintaining oil production is curtailed. The next time industry tries to stage a comeback (if it ever does) it hits the wall much sooner and stalls again. I doubt that it would take more than just a couple of cycles of this market whiplash for all the participants to have two realisations: that they cannot get enough oil no matter how much they pay for it, and that nobody wants to take their money even for the oil they do have. Those who still have it will see it as too valuable to part with for mere money. On the other hand, if the energy resources needed to run an industrial economy are no longer available, then oil becomes just so much toxic waste. In any case, it is no longer about money, but direct access to resources.
7. A reasonable set of objectives
Now, I expect that a lot of people will find this view too gloomy and feel discouraged. But I feel that it is entirely compatible with a positive vision of the future, so let me try to articulate it.
First of all, we do have some control. Although we shouldn't hold out too much hope for industrial civilisation as a whole, there are certainly some bits of it that are worth salvaging. Our financial assets may not be long for this world, but in the meantime we can redeploy them to good long-term advantage.
Secondly, we can take steps to give ourselves time to make the adjustment. By knowing what to expect, we can prepare to ride it out. We can imagine which options will be foreclosed first, and create alternatives, so that we do not run out of options.
Lastly, we can concentrate on what is important: preserving a vibrant ecosphere that supports a diversity of life, our own progeny included. I can imagine few short-term prerogatives that should override this - our highest priority.
8. Managing financial risk
It will take some time for these realisations to sink in. In the meantime, we will no doubt keep hearing that we have a financial crisis on our hands. We must do something to shore up the banks, to deal with the toxic assets, to shore up our credit ratings and so forth. There are people who will tell you that this was all caused by a mistake in financial modelling, and that if we re-regulate the financial sector, this won't happen again. So, for the sake of the argument, let's take a look at all that.
Financial management is certainly not my speciality, but as far as I understand it, it is mostly about assessing risk. And to do that, financial managers make certain assumptions about the phenomena they are trying to model. One standard assumption is that the future will resemble the past. Another is that various negative events are randomly distributed. For instance, if you are selling life insurance, you can be certain that people will die based on the fact that they have been born, and you can be reasonably certain that they will not all die at once. When someone dies is unpredictable, when people in general die is random, most of the time. And so here is the problem: the world is unpredictable, but classes of small events can be treated as random, until a bigger event comes along. It may seem like an obscure point, so let me explain the difference in a graphical way.
9. This is (pseudo)random
Here is a random collection of multicoloured dots. Actually, it is pseudo-random, because it was generated by a computer, and computers are deterministic beasts incapable of true randomness. A source of true randomness is hard to come by. Even very good random noise generators can have higher-order effects. Small events are frequent, and therefore we can treat them as random, larger events are less frequent and rather unpredictable, and some of the really large events put an end to the careers of the statisticians trying to model them, and so we never find out whether they are random or not. To a layman, this is random enough, but eventually you run out of randomness and hit something very non-random.
10. This is not random but predictable
Like this. Now this is not random, even to a layman. This is like oil expenditure going to 1/4~6% of global GDP. That certainly wasn't random. But was it unpredictable? We had a few years of monotonically increasing oil prices, and the high prices failed to produce much of a supply response in spite of record-high drilling rates, investment in ethanol, tar sands, and so on. We also have some good geology-based models that accurately predicted oil depletion profile for separate provinces, and had a high probability of succeeding in the aggregate as well. So this is definitely not random, and it is not even unpredictable. So, at a higher level, what sort of mathematics do we need to accurately model the inability of our financial and political and other leaders and commentators to see it, or to understand it, even now? And do we really need to do that, or should we just let this nice brick wall do the work for us. Because, you know, brick walls have a lot to teach people who refuse to acknowledge their existence, and they are very patient with students who need to repeat the lesson. I am sure that the lesson will sink in eventually, but I wonder how many more full-gallop runs at the wall it will take before everyone is convinced.
11. His models mostly work
One person I would like to have a close encounter with the brick wall is this fellow, Myron Scholes, the Nobel Prise-winning co-author of the Black-Scholes method of pricing derivatives, the man behind the crash of Long Term Capital Management. He is the inspiration behind much of the current financial debacle. Recently, he has been quoted as saying the following: "Most of the time, your risk management works. With a systemic event such as the recent shocks following the collapse of Lehman Brothers, obviously the risk-management system of any one bank appears, after the fact, to be incomplete." Now, imagine a structural engineer saying something along those lines: "Most of the time our structural analysis works, but if there is a strong gust of wind, then, for any given structure, it is incomplete." Or a nuclear engineer: "Our calculations of the strength of nuclear reactor containment vessels work quite well much of the time. Of course, if there is an earthquake, then any given containment vessel might fail." In these other disciplines, if you just don't know the answer, then you just don't bother showing up for work, because what would be the point?
12. We love their lies
The point certainly wouldn't be to reassure people, to promote public confidence in bridges, buildings, and nuclear reactors. But economics and finance are different. Economics is not directly lethal, and economists never get sent to jail for criminal negligence or gross incompetence even when their theories do fail. Finance is about the promises we make to each other, and to ourselves. And if the promises turn out to be unrealistic, then economics and finance turn out to be about the lies we tell each other. We want to continue believing these lies, because there is a certain loss of face if we don't, and the economists are there to help us. We continue to listen to economists because we love their lies. Yes, of course, the economy will recover later this year, maybe the next. Yes, as soon as the economy recovers, all these toxic assets will be valuable again. Yes, this is just a financial problem; we just need to shore up the financial system by injecting taxpayer funds. These are all lies, but they make us feel all right. They are lying, and we are buying every word of it.
13. Fastest way to lose all your money
Let's face it, these are difficult times for those of us who have a lot of money. What can we do? We can entrust it to a financial institution. That tends to turn out badly. Many people in the United States have entrusted their retirement savings to financial institutions. And now they are being told that they cannot withdraw their money. All they can do is open a letter once a month, to watch their savings dwindle.
We can also invest it in some part of the global economy. I know some automotive factories you could buy. They are quite affordable right now. A lot of retired auto workers have put all of their retirement savings into General Motors stock. Maybe they know something that we don't? (Actually, that's part of a fraudulent scheme perpetrated by the Obama administration, to pay off their banker friends ahead of GM's other creditors.)
Well then, how about a nice gold brick or two? A bag of diamonds? Some classic cars? Then you could start your own personal museum of transportation. How about a beautifully restored classic luxury yacht? Then you could use the gold bricks to weigh you down if you ever decide to end it all by jumping overboard.
Here's another brilliant idea: buy green products. Whatever green thing the marketers and advertisers throw at you, buy it, toss it, and buy another one straight away. Repeat until they are out of product, you are out of money, and the landfills are full of green rubbish. That should stimulate the economy. Market research shows that there is a great reservoir of pent-up eco-guilt out there for marketers and advertisers to exploit. Industrial products that help the environment are a bit of an oxymoron. It's a bit like trying to bail out the Titanic using plastic teaspoons.
Another great marketing opportunity for our time is in survival goods. There are some web sites that push all sorts of supplies to put in your private bunker. It's a clever bit of manipulation, actually. Users log in, see that the stock market is down, oil is up, shotgun shells are on sale, so are hunting knives, and if you add a paperback on "surviving financial armageddon" to your shopping cart you qualify for free shipping. Oh and don't forget to add a large tin of dehydrated beans. Fear is a great motivator, and getting people to buy survival goods is almost a matter of operant conditioning: a marketer's dream.
If you want to help save the environment and prepare yourself for a life without access to consumer goods, then doing so by buying consumer goods doesn't seem like such a great plan. A much better thing to do is to BUY NOTHING. But that is not something you can do with money. But there are useful things to do with money, for the time being, if we hurry.
14. How to lose all your money (but have something to show for it)
Most of the wealth is in very few private hands right now. Governments and the vast majority of the people only have debt. It is important to convince people who control all this wealth that they really have two choices. They can trust their investment advisers, maintain their current portfolios, and eventually lose everything. Or they can use their wealth to reengage with people and the land in new ways, in which case they stand a chance of saving something for themselves and their children. They can build and launch lifeboats, recruit crew, and set them sailing.
Those who own a lot of industrial assets can divest before these assets lose value and invest in land resources, with the goal of preserving them, improving them over time, and using them in a sustainable manner. Since it will become difficult to get what you want by simply paying for it, it is a good idea to establish alternatives ahead of time, by making resources, such as farmland, available to those who can put them to good use, for their own benefit as well as for yours. It also makes sense to establish stockpiles of non-perishable materials that will preserve their usefulness far into the future. My favourite example is bronze nails. They last a over a hundred years in salt water, and so they are perfect for building boats. The manufacturing of bronze nails is actually a good use of the remaining fossil fuels - better than most. They are compact and easy to store.
Lastly, it makes sense to work towards orchestrating a controlled demolition of the global economy. This calls for a new financial skill set: that of a disinvestment adviser. The first step is a sort of triage; certain parts of the economy can be marked "do not resuscitate" and resources reallocated to a better task. A good example of an industry not worth resuscitating is the auto industry; we simply will not need any more cars. The ones that we already have will do nicely for as long as we'll need them. A good example of a sector definitely worth resuscitating is public health, especially prevention and infectious disease control. In all these measures, it is important to pull money out of geographically distant locations and invest it locally. This may be inefficient from a financial standpoint, but it is quite efficient from the point of view of personal and social self-preservation.
15. Beyond finance: controlling other kinds of risk
Coming back for a moment to the poor bankers and economists, it seems rather disingenuous for us to treat economics and finance as a special case of people who generate a lot of unmitigated risk. Do we have any examples of risks we understood properly and acted on in time? Are there any really serious systemic problems that we have been able to solve?... The best we seem to be able to do is buy time. In fact, that seems to be what we are good at - postponing the inevitable through diligence and hard work. None of us wants to act precipitously based on what we understand will happen eventually, because it may not happen for a while yet. And why would we want to rock the boat in the meantime? The one risk that we do seem to know how to mitigate against is the risk of not fitting in to our economic, social and cultural milieu. And what happens to us if our entire milieu finally goes over the edge? Well, the way we plan for that is by not thinking about that.
16. The biggest risk of all
The biggest risk of all, as I see it, is that the industrial economy will blunder in for a few more years, perhaps even a decade or more, leaving environmental and social devastation in its wake. Once it finally gives up the ghost, hardly anything will be left with which to start over. To mitigate against this risk, we have to create alternatives, on a small scale, that do not perpetuate this system and that can function without it.
The idea of perpetuating the status quo through alternative means is all-pervasive, because so many people in positions of power and authority wish to preserve their positions. And so just about every proposal we see involves avoiding collapse instead of focusing on what comes after it. A prime example is the push to develop alternative energy. Many of these alternatives turn out to be fossil fuel amplifiers rather than self-sufficient resources: they require fossil fuel energy as an essential input. Also, many of them require an intact industrial base, which runs on fossil fuels. There is a pervasive idea that these alternatives haven't been developed before for nefarious reasons: malfeasance on the part of the greedy oil companies and so on. The truth of the matter is that these alternatives are not as potent, physically or economically, as fossil fuels. And here is the real point worth pondering: If we can no longer afford the oil or the natural gas, what makes us think that we can afford the less potent and more expensive alternatives? And here is a follow-up question: If we can't afford to make the necessary investments to get at the remaining oil and natural gas, what makes us think that we will find the money to develop the less cost-effective alternatives?
17. How long do we have?
It would be excellent if more people had these realisations, and started making progress toward making their lives a bit more sustainable. But social inertia is quite great, and the process of adaptation takes time. And the question is, is there enough time for significant numbers of people to have these realisations and to adapt, or will they have to endure quite a lot of discomfort?
I believe that people who start the process now stand a fairly good chance of making the transition in time. But I don't think that it is too wise to wait and try to grab a few more years of comfortable living. Not only would that be a waste of time on a personal level, but we'd be squandering the resources we need to make the transition.
I concede that the choice is a difficult one: either we wait for circumstances to force our hand, at which point it is too late for us to do anything to prepare, or we bring it upon ourselves ahead of time. If we ask the question, How many people are likely to do that? - then we are asking the wrong question. A more relevant question is, Would we be doing this all alone? And I think the answer is, probably not, because there are quite a few other people who are thinking along these same lines.
18. It's always personal
I think it is very important to understand social inertia for the awesome force that it is. I have found that many people are almost genetically predisposed to not want to understand what I have been saying, and many others understand it on some level but refuse to act on it. When they are touched by collapse, they take it personally or see it as a matter of luck. They see those who prepare for collapse as eccentrics; some may even consider them to be dangerous subversives. This is especially likely to be the case for people in positions of power and authority, because they are not exactly cheered by the prospect of a future that has no place for them.
There is a certain range of personalities that are most likely to survive collapse unscathed, physically or psychologically, and adapt to the new circumstances. I have been able to spot certain common traits while researching reports of survivors of shipwrecks and other similar calamities. A certain amount of indifference or detachment is definitely helpful, including indifference to suffering. Possibly the most important characteristic of a survivor, more important than skills or preparation or even luck, is the will to survive. Next is self-reliance: the ability to persevere in spite of loneliness lack of support from anyone else. Last on the list is unreasonableness: the sheer stubborn inability to surrender in the face of seemingly insurmountable odds, opposing opinions from one's comrades, or even force.
Those who feel the need to be inclusive, accommodating, to compromise and to seek consensus, need to understand the awesome force of social inertia. It is an immovable, crushing weight. "We must take into account the interests of society as a whole." Translated, that means "We must allow ourselves to remain thwarted by people's unwillingness or inability to make drastic but necessary changes; to change who they are." Must we, really?
There are two components to human nature, the social and the solitary. The solitary is definitely the more highly evolved, and humanity has surged forward through the efforts of brilliant loners and eccentrics. Their names live on forever precisely because society was unable to extinguish their brilliance or to thwart their initiative. Our social instincts are atavistic and result far too reliably in mediocrity and conformism. We are evolved to live in small groups of a few families, and our recent experiments that have gone beyond that seem to have relied on herd instincts that may not even be specifically human. When confronted with the unfamiliar, we have a tendency to panic and stampede, and on such occasions people regularly get trampled and crushed underfoot: a pinnacle of evolution indeed! And so, in fashioning a survivable future, where do we put our emphasis: on individuals and small groups, or on larger entities - regions, nations, humanity as a whole? I believe the answer to that is obvious.
19. "Collapse" or "Transition"
It's rather difficult for most people to take any significant steps, even individually. It is even more difficult to do so as a couple. I know a lot of cases whether one person understands the picture and is prepared to make major changes in the living arrangement, but the partner or spouse is non-receptive. If they have children, then the constraints multiply, because things that may be necessary adaptations post-collapse look like substandard living conditions to a pre-collapse mindset. For instance, in many places in the United States, bringing up a child in a place that lacks electricity, central heating, or indoor plumbing may be equated with child abuse, and authorities rush in and confiscate the children. If there are grandparents involved, then misunderstandings multiply. There may be some promise to intentional communities: groups that decide to make a go of it in rural setting.
When it comes to larger groups: towns, for instance any meaningful discussion of collapse is off the table. The topics under discussion centre around finding ways to perpetuate the current system through alternative means: renewable energy, organic agriculture, starting or supporting local businesses, bicycling instead of driving, and so on. These certainly aren't bad things to talk about it, or to do, but what of the radical social simplification that will be required? And is there a reason to think that it is possible to achieve this radical simplification in a series of controlled steps? Isn't that a bit like asking a demolition crew to demolish a building brick by brick instead of what it normally does. Which is, mine it, blow it up, and bulldoze and haul away the debris?
20. Better living through bureaucracy
There are still many believers in the goodness of the system and the magic powers of policy. They believe that a really good plan can be made acceptable to all - the entire unsustainably complex international organisational pyramid, that is. They believe that they can take all these international bureaucrats by the hand, lead them to the edge of the abyss that marks the end of their bureaucratic careers, and politely ask them to jump. Now, don't get me wrong, I am not trying to stop them. Let them proceed with their brilliant schemes, by all means.
21. Simpler approaches: investment
There are far simpler approaches that are likely to be more effective. Since most wealth is in private hands, it is actually up to individuals to make very important decisions. Unlike various bureaucratic and civic bodies, which are both short of funds and mired in social inertia, they can act decisively and unilaterally. The problem is, what to do with financial assets before they lose value. The answer is to invest in things that will retain value even after all financial assets are worthless: land, ecosystems, and personal relationships. The land need not be in pristine or natural condition. After a couple of decades, any patch of land reverts to a wilderness, and unlike an urban or an industrial desert, a wilderness can sustain life, human and otherwise. It can support a population of plants an animals, wild and domesticated, and even a few humans.
The human relationships that are the most conducive to preserving ecosystems are ones that are in turn tied to a direct, permanent relationship with the land. They can be enshrined in permanent, heritable leases payable in sustainably harvested natural products. They can also be enshrined as deeded easements that provide the community with traditional hunting, gathering and fishing rights, provided human rights are not allowed to supersede those of other species. I think the lifeboat metaphor is apt here, because the moral guidance it offers is so clear. What has to happen in an overloaded lifeboat at sea when a storm blows up and it becomes necessary to lighten the load? Everyone draws lots. Such practises have been upheld by the courts, provided no-one is exempt - not the captain, not the crew, not the owner of the shipping company. If anyone is exempt, the charge becomes murder. Sustainability, which is necessary for group survival, may have to have its price in human life, but humanity has survived many such incidents before without descending into barbarism.
22. Gift-giving as an organising principle
Many people have been so brainwashed by commercial propaganda that they have trouble imagining that anything can be made to work without recourse to money, markets, the profit motive, and other capitalist props. And so it may be helpful to present some examples of very important victories that have been achieved without any of these.
In particular, Open Source software, which used to be somewhat derisively referred to as "free software" or "shareware", is a huge victory of the gift economy over the commercial economy. "Free software" is not an accurate label; nor is "free prime numbers" or "free vocabulary words". Nobody pays for these things, but some people are silly enough to pay for software. It's their loss; the "free" stuff is generally better, and if you don't like it, you can fix it. For free.
General science works on similar principles. Nobody directly profits from formulating a theory or testing a hypothesis or publishing the results. It all works in terms mutuality and prestige - same as with software.
On the other hand, wherever the pecuniary motivation rises to the top, the result is mediocre at best. And so we have expensive software that fails constantly. (I understand that the British Navy is planning to use a Microsoft operating system on their nuclear submarines; that is a frightening piece of news.) We also have oceans full of plastic trash - developing all those "products" floating in the ocean would surely have been impossible without the profit motive. And so on.
In all, the profit motive fails to motive altruistic behaviour, because it is not reciprocal. And it is altruistic behaviour that increases the social capital of society. Within a gift-giving system, we can all be in everyone's debt, but going into debt makes us all richer, not poorer.
23. Barter as an organizing principle
Gifts are wonderful, of course, but sometimes we would like something rather specific, and are willing to work with others to get it, without recourse to money, of course. This is where arrangements made on the basis of barter. In general, you barter something over which you have less choice (one of the many things you can offer) for something over which you have more choice (something you actually want).
Economists will tell you that barter is inefficient, because it requires "coincidence of wants": if A wants to barter X for Y, then he or she must find B who wants to barter Y for X. Actually, most everyone I've ever run across doesn't want to barter either X for Y, or Y for X. Rather, they want to barter whatever the can offer for any of a number of the things they want.
In the current economic scheme, we are forced to barter our freedom, in the form of the compulsory work-week, for something we don't particularly want, which is money. We have limited options for what to do with that money: pay taxes, bills, buy shoddy consumer goods, and, perhaps, a few weeks of "freedom" as tourists. But other options do exist.
One option is to organise as communities to produce certain goods that the entire community wants: food, clothing, shelter, security and entertainment. Everyone makes their contribution, in exchange for the end product, which everyone gets to share. It is also possible to organise to produce goods that can be used in trade with other communities: trade goods. Trade goods are a much better way to store wealth than money, which is, let's face it, an essentially useless substance.
24. Local/alternative currencies
There is a lot of discussion of ways to change the way money works, so that it can serve local needs instead of being one of the main tools for extracting wealth from local economies. But there is no discussion of why it is that money is generally necessary. That is simply assumed. There are communities that have little or no money, where there may be a pot of coin buried in the yard somewhere, for special occasions, but no money in daily use.
Lack of money makes certain things very difficult. Examples include gambling, loan sharking, extortion, bribery and fraud. It also makes it more difficult to hoard wealth, or to extract it out of a community and ship it somewhere else in a conveniently compact form. When we use money, we cede power to those who create money (by creating debt) and who destroy money (by cancelling debt). We also empower the ranks of people whose area of expertise is in the manipulation of arbitrary rules and arithmetic abstractions rather than in engaging directly with the physical world. This veil of metaphor allows them to mask appalling levels of violence, representing it symbolically as a mere paper-shuffling exercise. People, animals, entire ecosystems become mere numbers on a piece of paper. On the other hand, this ability to represent dissimilar objects using identical symbols causes a great deal of confusion. For instance, I have heard rather intelligent people declare that government funds, which have been allocated to making failed financial institutions look solvent, could be so much better spent feeding widows and orphans. There is no understanding that astronomical quantities of digits willed into existence and transferred between two computers (one at a central bank, another at a private bank) cannot be used to directly nourish anyone, because food cannot be willed into existence by a central banker or anyone else.
25. Belief in science and technology
One accusation I often hear is that I fail to grasp the power of technological innovation and the free market system. If I did, apparently I would have more faith in a technologically advanced future where all of our current dilemmas are swept away by a new wave of eco-friendly sustainability. My problem is that I am not an economist or a businessman: I am an engineer with a background in science. The fact that I've worked for several technology start-up companies doesn't help either.
I know roughly how long it takes to innovate: come up with the idea, convince people that it is worth trying, try it, fail a few times, eventually succeed, and then phase it in to real use. It takes decades. We do not have decades. We have already failed to innovate our way out of this.
Not only that, but in many ways technological innovation has done us a tremendous disservice. A good example is innovation in agriculture. The so-called "green revolution" has boosted crop yields using fossil fuel inputs, creating generations of agro-addicts dependent on just one or two crops. In North America, human hair samples have been used to determine that fully 69% of all the carbon came from just one plant: maize. So, what piece of technological innovation do we imagine will enable this maize-dependent population to diversify their food sources and learn to feed themselves without the use of fossil fuel inputs?
I think that what makes us likely to think that technology will save us is that we are addled by it. Efforts at creating intelligent machines have failed, because computers are far too difficult to program, but humans turn out to be easy for computers to program. Everywhere I go I see people poking away at their little mental support units. Many of them can no longer function without them: they wouldn't know where to go, who to talk to, or even where to get lunch without a little electronic box telling what to do.
These are all big successes for maize plants and for iPhones, but are they successes for humanity? Somehow I doubt it. Do we really want to eat nothing but maize and look at nothing but pixels, or should there be more to life? There are people who believe in the emergent intelligence of the networked realm - a sort of artificial intelligence utopia, where networked machines become hyperintelligent and solve all of our problems. And so our best hope is that in our hour of need machines will be nice to us and show us kindness? If that's the case, what reason would they find to respect us? Why wouldn't they just kill us instead? Or enslave us. Oh, wait, maybe they already have!
26. The need to evolve
Now, supposing all goes well, and we have a swift and decisive collapse, what should follow is an equally swift rebirth of viable localised communities and ecosystems. One concern is that the effort will be short of qualified staff.
It is an unfortunate fact that the recent centuries of settled life, and especially the last century or so of easy living based on the industrial model, has made many people too soft to endure the hardships and privations that self-sufficient living often involves. It seems quite likely that those groups that are currently marginalised, would do better, especially the ones that are found in economically underdeveloped areas and have never lost contact with nature.
And so I would not be surprised to see these marginalised groups stage a come-back. Almost every rural place has its population of people who know how to use the local resources. They are the human component of the local ecosystems, and, as such, they deserve much more respect than they have received. A lot of them can't be bothered about fine manners or about speaking English. Those who are used to thinking of them as primitive, ignorant and uneducated will be shocked to discover how much they must learn from them.
27. Beyond planning
So what are we to do in the meantime, while we wait for collapse, followed by good things? It's no use wasting your energy, running yourself ragged and ageing prematurely, so get plenty of rest, and try to live a slow and measured life. One of the ways industrial society dominates us is through the use of the factory whistle: few of us work in factories, but we are still expected to work a shift. If you can avoid doing that, you will be ahead. Maintain your freedom to decide what to do at each moment, so that you can do each thing at the most opportune time. Specifically try to give yourself as many options as you can, so that if any one thing doesn't seem to be working out, you can switch to another. The future is unpredictable, so try to plan so as to be able to change your plans at any time. Learn to ignore all the people who earn their money by telling you lies. Thanks to them, the world is full of very bad ideas that are accepted as conventional wisdom, so watch out for them and come to your own conclusions. Lastly, people who lack a sense of humour are going to be in for a very hard time, and can drag down those around them. Plus, they are just not that funny. So avoid people who aren't funny, and look for those who can laugh at the world no matter what happens.
[Update: The latest International Energy Agency report includes the following chart. Had it existed a year and a half ago, I would have included it in this talk. The gears of international agencies grind slowly, but that's better than not at all.]

1. Good morning. The title of this talk is a bit of a mouthful, but what I want to say can be summed up in simpler words: we all have to prepare for life without much money, where imported goods are scarce, and where people have to provide for their own needs, and those of their immediate neighbours. I will take as my point of departure the unfolding collapse of the global economy, and discuss what might come next. It started with the collapse of the financial markets last year, and is now resulting in unprecedented decreases in the volumes of international trade. These developments are also starting to affect the political stability of various countries around the world. A few governments have already collapsed, others may be on their way, and before too long we may find our maps redrawn in dramatic ways.
2. "Sustainability" -- what's in a word?
In a word, unsustainable. So what does that mean, exactly? Chris Clugston has recently published a summary of his analysis of what he calls "societal over-extension" on The Oil Drum web site. Here is a summary of his summary, in round numbers. I don't want to trifle with his arithmetic, because it's the cultural assumptions behind it that I find interesting. The idea is that if we shrink our ecological footprint by an order of magnitude or so, that should make the whole arrangement sustainable once again. This is expressed in financial terms: here we are lowering the GDP of the USA from, say $100 thousand per capita per annum, to, say $10 thousand. Clugston draws a distinction between making this reduction voluntarily or involuntarily: we should make it easy on ourselves and come along quietly, so that nobody gets hurt. I find the idea that Americans will voluntarily lower their GDP by a factor of 10 rather outlandish. We keep the same system, just shut down 9/10 of it? Wouldn't that make it a completely different system? This sort of sustainability seems rather unsustainable to me.3. My plan
I would like to offer a more realistic alternative. Everybody should have one US Dollar, for purely didactic purposes. This way, all Americans will be able to show their one dollar to their grandchildren, and say: "Can you imagine, this ugly piece of paper was once called The Almighty Dollar!" And their grandchildren will no doubt think that they are a little bit crazy, but they would probably think that anyway. But it certainly would not be helpful for them to have multiple shoe-boxes full of dollars, because then thir grandchildren would think that they are in fact senile, because no sane person would be hoarding such rubbish.4. An unpalatable alternative
Clugston offers an alternative to the big GDP decrease: a proportionate decrease in population. In this scenario, nine out of 10 people die so that the remaining 10% can go on living comfortably on $100 thousand a year. I was happy to note that Chris did not carry the voluntary/involuntary distinction over to this part of the analysis, because I feel that this would have been in rather questionable taste. I can think of just three things to say about this particular scenario.First, humans are not a special case when it comes to experiencing population explosions and die-offs, and the idea that human populations should increase monotonically ad infinitum is just as preposterous as the idea of infinite economic growth on a finite planet. The exponential growth of the human population has tracked the increased use of fossil fuels, and I am yet to see a compelling argument for why the population would not crash along with them.
Second, shocking though this seems, it can be observed that most societies are able to absorb sudden increases in mortality without much fuss at all. There was a huge spike in mortality in Russia following the Soviet collapse, but it was not directly observable by anyone outside of the morgues and the crematoria. After a few years people would look at an old school photograph and realise that half the people are gone! When it comes to death, most people do in fact make it easy on themselves and come along quietly. The most painful part of it is realising that something like that is happening all around you.
Third, this whole budgeting exercise for how many people we can afford to keep alive is a good way of demonstrating what monsters we have become, with our addiction to statistics and numerical abstractions. The disconnect between words and actions on the population issue is by now is almost complete. Population is very far beyond anyone's control, and this way of thinking about it takes us in the wrong direction. If we could not control it on the way up, what makes us think that we might be able to control it on the way down? If our projections look sufficiently shocking, then we might hypnotise ourselves into thinking that maintaining our artificial human life support systems at any cost is more important than considering its effect on the natural world. The question "How many will survive?" is simply not ours to answer.
5. What's actually happening

Back to what is actually happening right now. There seems to be a wide range of opinion on how to characterise it, from recession to depression to collapse. The press has recently been filled with stories about "green shoots" and the economists are discussing the exact timing of economic recovery. Mainstream opinion ranges from "later this year" to "sometime next year." None of them dares to say that global economic growth might be finished for good, or that it will be over in "the not-too-distant future" -- a vague term they seem to like a whole lot.
There does seem to be a consensus forming that last year's financial crash was precipitated by the spike in oil prices last summer, when oil briefly touched $147/bbl. Why this should have happened seems rather obvious. Since most things in a fully developed, industrialised economy run on oil, it is not an optional purchase: for a given level of economic activity, a certain level of oil consumption is required, and so one simply pays the price for as long as access to credit is maintained, and after that suddenly it's game over. François Cellier has recently published an analysis in which he shows that at roughly $600/bbl the entire world's GDP would be required to pay for
And so, the actual limiting price, beyond which no economic activity is possible, is certainly a lot lower, and last summer we seem to have experimentally established that to be around $150/bbl. which is something like
I think that the lesson from all this is that we have to prepare for a non-industrial future while we still have some resources with which to do it. If we marshal the resources, stockpile the materials that will be of most use, and harness the heirloom technologies that can be sustained without an industrial base, then we can stretch out the transition far into the future, giving us time to adapt.
6. Key points
I know that I am running the risk of overstating these points and oversimplifying the situation, but sometimes it is helpful to ignore various complexities to move the discussion forward. I do believe that these points are all true, roughly speaking.- Global GDP is a function of oil consumption; as oil production goes down, so will global GDP. At some point, the inability to invest in oil production will drive it down far below what might be possible if depletion were the sole limiting factor. Efficiency, conservation, renewable sources of energy all might have some effect, but will not materially alter this relationship. Less oil means smaller global economy. No oil means a vanishingly small global economy not worthy of the name.
- We have had a chance to observe that economies crash whenever oil expenditure approaches
1/4~6% of global GDP. Attempts at economic recovery will cause oil price spikes that break through this ceiling. These spikes will be followed by further financial crashes and further drops in economic activity. After each crash, the maximum level of economic activity required to trigger the next crash will be lower. - Financial assets are only valuable if they can be used to secure a sufficient quantity of oil to keep the economy running. They represent the ability to get work done, and since in an industrialised society the work is done by industrial machinery that runs on oil, less oil means less work. Financial assets that that are backed with industrial capacity require that industrial capacity to be maintained in working order. Once the maintenance requirements of the industrial infrastructure can no longer be met, it quickly decays and becomes worthless. To a large extent, the end of oil means the end of money.
Now that the reality of Peak Oil has started to sink in, one commonly hears that "The age of cheap oil is over". But does that mean that the age of expensive oil is upon us? Not necessarily. We now know (or should have learnt by now) that once oil rises to over
7. A reasonable set of objectives
Now, I expect that a lot of people will find this view too gloomy and feel discouraged. But I feel that it is entirely compatible with a positive vision of the future, so let me try to articulate it.First of all, we do have some control. Although we shouldn't hold out too much hope for industrial civilisation as a whole, there are certainly some bits of it that are worth salvaging. Our financial assets may not be long for this world, but in the meantime we can redeploy them to good long-term advantage.
Secondly, we can take steps to give ourselves time to make the adjustment. By knowing what to expect, we can prepare to ride it out. We can imagine which options will be foreclosed first, and create alternatives, so that we do not run out of options.
Lastly, we can concentrate on what is important: preserving a vibrant ecosphere that supports a diversity of life, our own progeny included. I can imagine few short-term prerogatives that should override this - our highest priority.
8. Managing financial risk
It will take some time for these realisations to sink in. In the meantime, we will no doubt keep hearing that we have a financial crisis on our hands. We must do something to shore up the banks, to deal with the toxic assets, to shore up our credit ratings and so forth. There are people who will tell you that this was all caused by a mistake in financial modelling, and that if we re-regulate the financial sector, this won't happen again. So, for the sake of the argument, let's take a look at all that.Financial management is certainly not my speciality, but as far as I understand it, it is mostly about assessing risk. And to do that, financial managers make certain assumptions about the phenomena they are trying to model. One standard assumption is that the future will resemble the past. Another is that various negative events are randomly distributed. For instance, if you are selling life insurance, you can be certain that people will die based on the fact that they have been born, and you can be reasonably certain that they will not all die at once. When someone dies is unpredictable, when people in general die is random, most of the time. And so here is the problem: the world is unpredictable, but classes of small events can be treated as random, until a bigger event comes along. It may seem like an obscure point, so let me explain the difference in a graphical way.
9. This is (pseudo)random
Here is a random collection of multicoloured dots. Actually, it is pseudo-random, because it was generated by a computer, and computers are deterministic beasts incapable of true randomness. A source of true randomness is hard to come by. Even very good random noise generators can have higher-order effects. Small events are frequent, and therefore we can treat them as random, larger events are less frequent and rather unpredictable, and some of the really large events put an end to the careers of the statisticians trying to model them, and so we never find out whether they are random or not. To a layman, this is random enough, but eventually you run out of randomness and hit something very non-random.10. This is not random but predictable
Like this. Now this is not random, even to a layman. This is like oil expenditure going to 11. His models mostly work
One person I would like to have a close encounter with the brick wall is this fellow, Myron Scholes, the Nobel Prise-winning co-author of the Black-Scholes method of pricing derivatives, the man behind the crash of Long Term Capital Management. He is the inspiration behind much of the current financial debacle. Recently, he has been quoted as saying the following: "Most of the time, your risk management works. With a systemic event such as the recent shocks following the collapse of Lehman Brothers, obviously the risk-management system of any one bank appears, after the fact, to be incomplete." Now, imagine a structural engineer saying something along those lines: "Most of the time our structural analysis works, but if there is a strong gust of wind, then, for any given structure, it is incomplete." Or a nuclear engineer: "Our calculations of the strength of nuclear reactor containment vessels work quite well much of the time. Of course, if there is an earthquake, then any given containment vessel might fail." In these other disciplines, if you just don't know the answer, then you just don't bother showing up for work, because what would be the point?12. We love their lies
The point certainly wouldn't be to reassure people, to promote public confidence in bridges, buildings, and nuclear reactors. But economics and finance are different. Economics is not directly lethal, and economists never get sent to jail for criminal negligence or gross incompetence even when their theories do fail. Finance is about the promises we make to each other, and to ourselves. And if the promises turn out to be unrealistic, then economics and finance turn out to be about the lies we tell each other. We want to continue believing these lies, because there is a certain loss of face if we don't, and the economists are there to help us. We continue to listen to economists because we love their lies. Yes, of course, the economy will recover later this year, maybe the next. Yes, as soon as the economy recovers, all these toxic assets will be valuable again. Yes, this is just a financial problem; we just need to shore up the financial system by injecting taxpayer funds. These are all lies, but they make us feel all right. They are lying, and we are buying every word of it.13. Fastest way to lose all your money
Let's face it, these are difficult times for those of us who have a lot of money. What can we do? We can entrust it to a financial institution. That tends to turn out badly. Many people in the United States have entrusted their retirement savings to financial institutions. And now they are being told that they cannot withdraw their money. All they can do is open a letter once a month, to watch their savings dwindle.We can also invest it in some part of the global economy. I know some automotive factories you could buy. They are quite affordable right now. A lot of retired auto workers have put all of their retirement savings into General Motors stock. Maybe they know something that we don't? (Actually, that's part of a fraudulent scheme perpetrated by the Obama administration, to pay off their banker friends ahead of GM's other creditors.)
Well then, how about a nice gold brick or two? A bag of diamonds? Some classic cars? Then you could start your own personal museum of transportation. How about a beautifully restored classic luxury yacht? Then you could use the gold bricks to weigh you down if you ever decide to end it all by jumping overboard.
Here's another brilliant idea: buy green products. Whatever green thing the marketers and advertisers throw at you, buy it, toss it, and buy another one straight away. Repeat until they are out of product, you are out of money, and the landfills are full of green rubbish. That should stimulate the economy. Market research shows that there is a great reservoir of pent-up eco-guilt out there for marketers and advertisers to exploit. Industrial products that help the environment are a bit of an oxymoron. It's a bit like trying to bail out the Titanic using plastic teaspoons.
Another great marketing opportunity for our time is in survival goods. There are some web sites that push all sorts of supplies to put in your private bunker. It's a clever bit of manipulation, actually. Users log in, see that the stock market is down, oil is up, shotgun shells are on sale, so are hunting knives, and if you add a paperback on "surviving financial armageddon" to your shopping cart you qualify for free shipping. Oh and don't forget to add a large tin of dehydrated beans. Fear is a great motivator, and getting people to buy survival goods is almost a matter of operant conditioning: a marketer's dream.
If you want to help save the environment and prepare yourself for a life without access to consumer goods, then doing so by buying consumer goods doesn't seem like such a great plan. A much better thing to do is to BUY NOTHING. But that is not something you can do with money. But there are useful things to do with money, for the time being, if we hurry.
14. How to lose all your money (but have something to show for it)
Most of the wealth is in very few private hands right now. Governments and the vast majority of the people only have debt. It is important to convince people who control all this wealth that they really have two choices. They can trust their investment advisers, maintain their current portfolios, and eventually lose everything. Or they can use their wealth to reengage with people and the land in new ways, in which case they stand a chance of saving something for themselves and their children. They can build and launch lifeboats, recruit crew, and set them sailing.Those who own a lot of industrial assets can divest before these assets lose value and invest in land resources, with the goal of preserving them, improving them over time, and using them in a sustainable manner. Since it will become difficult to get what you want by simply paying for it, it is a good idea to establish alternatives ahead of time, by making resources, such as farmland, available to those who can put them to good use, for their own benefit as well as for yours. It also makes sense to establish stockpiles of non-perishable materials that will preserve their usefulness far into the future. My favourite example is bronze nails. They last a over a hundred years in salt water, and so they are perfect for building boats. The manufacturing of bronze nails is actually a good use of the remaining fossil fuels - better than most. They are compact and easy to store.
Lastly, it makes sense to work towards orchestrating a controlled demolition of the global economy. This calls for a new financial skill set: that of a disinvestment adviser. The first step is a sort of triage; certain parts of the economy can be marked "do not resuscitate" and resources reallocated to a better task. A good example of an industry not worth resuscitating is the auto industry; we simply will not need any more cars. The ones that we already have will do nicely for as long as we'll need them. A good example of a sector definitely worth resuscitating is public health, especially prevention and infectious disease control. In all these measures, it is important to pull money out of geographically distant locations and invest it locally. This may be inefficient from a financial standpoint, but it is quite efficient from the point of view of personal and social self-preservation.
15. Beyond finance: controlling other kinds of risk
Coming back for a moment to the poor bankers and economists, it seems rather disingenuous for us to treat economics and finance as a special case of people who generate a lot of unmitigated risk. Do we have any examples of risks we understood properly and acted on in time? Are there any really serious systemic problems that we have been able to solve?... The best we seem to be able to do is buy time. In fact, that seems to be what we are good at - postponing the inevitable through diligence and hard work. None of us wants to act precipitously based on what we understand will happen eventually, because it may not happen for a while yet. And why would we want to rock the boat in the meantime? The one risk that we do seem to know how to mitigate against is the risk of not fitting in to our economic, social and cultural milieu. And what happens to us if our entire milieu finally goes over the edge? Well, the way we plan for that is by not thinking about that.16. The biggest risk of all
The biggest risk of all, as I see it, is that the industrial economy will blunder in for a few more years, perhaps even a decade or more, leaving environmental and social devastation in its wake. Once it finally gives up the ghost, hardly anything will be left with which to start over. To mitigate against this risk, we have to create alternatives, on a small scale, that do not perpetuate this system and that can function without it.The idea of perpetuating the status quo through alternative means is all-pervasive, because so many people in positions of power and authority wish to preserve their positions. And so just about every proposal we see involves avoiding collapse instead of focusing on what comes after it. A prime example is the push to develop alternative energy. Many of these alternatives turn out to be fossil fuel amplifiers rather than self-sufficient resources: they require fossil fuel energy as an essential input. Also, many of them require an intact industrial base, which runs on fossil fuels. There is a pervasive idea that these alternatives haven't been developed before for nefarious reasons: malfeasance on the part of the greedy oil companies and so on. The truth of the matter is that these alternatives are not as potent, physically or economically, as fossil fuels. And here is the real point worth pondering: If we can no longer afford the oil or the natural gas, what makes us think that we can afford the less potent and more expensive alternatives? And here is a follow-up question: If we can't afford to make the necessary investments to get at the remaining oil and natural gas, what makes us think that we will find the money to develop the less cost-effective alternatives?
17. How long do we have?
It would be excellent if more people had these realisations, and started making progress toward making their lives a bit more sustainable. But social inertia is quite great, and the process of adaptation takes time. And the question is, is there enough time for significant numbers of people to have these realisations and to adapt, or will they have to endure quite a lot of discomfort?I believe that people who start the process now stand a fairly good chance of making the transition in time. But I don't think that it is too wise to wait and try to grab a few more years of comfortable living. Not only would that be a waste of time on a personal level, but we'd be squandering the resources we need to make the transition.
I concede that the choice is a difficult one: either we wait for circumstances to force our hand, at which point it is too late for us to do anything to prepare, or we bring it upon ourselves ahead of time. If we ask the question, How many people are likely to do that? - then we are asking the wrong question. A more relevant question is, Would we be doing this all alone? And I think the answer is, probably not, because there are quite a few other people who are thinking along these same lines.
18. It's always personal
I think it is very important to understand social inertia for the awesome force that it is. I have found that many people are almost genetically predisposed to not want to understand what I have been saying, and many others understand it on some level but refuse to act on it. When they are touched by collapse, they take it personally or see it as a matter of luck. They see those who prepare for collapse as eccentrics; some may even consider them to be dangerous subversives. This is especially likely to be the case for people in positions of power and authority, because they are not exactly cheered by the prospect of a future that has no place for them.There is a certain range of personalities that are most likely to survive collapse unscathed, physically or psychologically, and adapt to the new circumstances. I have been able to spot certain common traits while researching reports of survivors of shipwrecks and other similar calamities. A certain amount of indifference or detachment is definitely helpful, including indifference to suffering. Possibly the most important characteristic of a survivor, more important than skills or preparation or even luck, is the will to survive. Next is self-reliance: the ability to persevere in spite of loneliness lack of support from anyone else. Last on the list is unreasonableness: the sheer stubborn inability to surrender in the face of seemingly insurmountable odds, opposing opinions from one's comrades, or even force.
Those who feel the need to be inclusive, accommodating, to compromise and to seek consensus, need to understand the awesome force of social inertia. It is an immovable, crushing weight. "We must take into account the interests of society as a whole." Translated, that means "We must allow ourselves to remain thwarted by people's unwillingness or inability to make drastic but necessary changes; to change who they are." Must we, really?
There are two components to human nature, the social and the solitary. The solitary is definitely the more highly evolved, and humanity has surged forward through the efforts of brilliant loners and eccentrics. Their names live on forever precisely because society was unable to extinguish their brilliance or to thwart their initiative. Our social instincts are atavistic and result far too reliably in mediocrity and conformism. We are evolved to live in small groups of a few families, and our recent experiments that have gone beyond that seem to have relied on herd instincts that may not even be specifically human. When confronted with the unfamiliar, we have a tendency to panic and stampede, and on such occasions people regularly get trampled and crushed underfoot: a pinnacle of evolution indeed! And so, in fashioning a survivable future, where do we put our emphasis: on individuals and small groups, or on larger entities - regions, nations, humanity as a whole? I believe the answer to that is obvious.
19. "Collapse" or "Transition"
It's rather difficult for most people to take any significant steps, even individually. It is even more difficult to do so as a couple. I know a lot of cases whether one person understands the picture and is prepared to make major changes in the living arrangement, but the partner or spouse is non-receptive. If they have children, then the constraints multiply, because things that may be necessary adaptations post-collapse look like substandard living conditions to a pre-collapse mindset. For instance, in many places in the United States, bringing up a child in a place that lacks electricity, central heating, or indoor plumbing may be equated with child abuse, and authorities rush in and confiscate the children. If there are grandparents involved, then misunderstandings multiply. There may be some promise to intentional communities: groups that decide to make a go of it in rural setting.When it comes to larger groups: towns, for instance any meaningful discussion of collapse is off the table. The topics under discussion centre around finding ways to perpetuate the current system through alternative means: renewable energy, organic agriculture, starting or supporting local businesses, bicycling instead of driving, and so on. These certainly aren't bad things to talk about it, or to do, but what of the radical social simplification that will be required? And is there a reason to think that it is possible to achieve this radical simplification in a series of controlled steps? Isn't that a bit like asking a demolition crew to demolish a building brick by brick instead of what it normally does. Which is, mine it, blow it up, and bulldoze and haul away the debris?
20. Better living through bureaucracy
There are still many believers in the goodness of the system and the magic powers of policy. They believe that a really good plan can be made acceptable to all - the entire unsustainably complex international organisational pyramid, that is. They believe that they can take all these international bureaucrats by the hand, lead them to the edge of the abyss that marks the end of their bureaucratic careers, and politely ask them to jump. Now, don't get me wrong, I am not trying to stop them. Let them proceed with their brilliant schemes, by all means.21. Simpler approaches: investment
There are far simpler approaches that are likely to be more effective. Since most wealth is in private hands, it is actually up to individuals to make very important decisions. Unlike various bureaucratic and civic bodies, which are both short of funds and mired in social inertia, they can act decisively and unilaterally. The problem is, what to do with financial assets before they lose value. The answer is to invest in things that will retain value even after all financial assets are worthless: land, ecosystems, and personal relationships. The land need not be in pristine or natural condition. After a couple of decades, any patch of land reverts to a wilderness, and unlike an urban or an industrial desert, a wilderness can sustain life, human and otherwise. It can support a population of plants an animals, wild and domesticated, and even a few humans.The human relationships that are the most conducive to preserving ecosystems are ones that are in turn tied to a direct, permanent relationship with the land. They can be enshrined in permanent, heritable leases payable in sustainably harvested natural products. They can also be enshrined as deeded easements that provide the community with traditional hunting, gathering and fishing rights, provided human rights are not allowed to supersede those of other species. I think the lifeboat metaphor is apt here, because the moral guidance it offers is so clear. What has to happen in an overloaded lifeboat at sea when a storm blows up and it becomes necessary to lighten the load? Everyone draws lots. Such practises have been upheld by the courts, provided no-one is exempt - not the captain, not the crew, not the owner of the shipping company. If anyone is exempt, the charge becomes murder. Sustainability, which is necessary for group survival, may have to have its price in human life, but humanity has survived many such incidents before without descending into barbarism.
22. Gift-giving as an organising principle
Many people have been so brainwashed by commercial propaganda that they have trouble imagining that anything can be made to work without recourse to money, markets, the profit motive, and other capitalist props. And so it may be helpful to present some examples of very important victories that have been achieved without any of these.In particular, Open Source software, which used to be somewhat derisively referred to as "free software" or "shareware", is a huge victory of the gift economy over the commercial economy. "Free software" is not an accurate label; nor is "free prime numbers" or "free vocabulary words". Nobody pays for these things, but some people are silly enough to pay for software. It's their loss; the "free" stuff is generally better, and if you don't like it, you can fix it. For free.
General science works on similar principles. Nobody directly profits from formulating a theory or testing a hypothesis or publishing the results. It all works in terms mutuality and prestige - same as with software.
On the other hand, wherever the pecuniary motivation rises to the top, the result is mediocre at best. And so we have expensive software that fails constantly. (I understand that the British Navy is planning to use a Microsoft operating system on their nuclear submarines; that is a frightening piece of news.) We also have oceans full of plastic trash - developing all those "products" floating in the ocean would surely have been impossible without the profit motive. And so on.
In all, the profit motive fails to motive altruistic behaviour, because it is not reciprocal. And it is altruistic behaviour that increases the social capital of society. Within a gift-giving system, we can all be in everyone's debt, but going into debt makes us all richer, not poorer.
23. Barter as an organizing principle
Gifts are wonderful, of course, but sometimes we would like something rather specific, and are willing to work with others to get it, without recourse to money, of course. This is where arrangements made on the basis of barter. In general, you barter something over which you have less choice (one of the many things you can offer) for something over which you have more choice (something you actually want).Economists will tell you that barter is inefficient, because it requires "coincidence of wants": if A wants to barter X for Y, then he or she must find B who wants to barter Y for X. Actually, most everyone I've ever run across doesn't want to barter either X for Y, or Y for X. Rather, they want to barter whatever the can offer for any of a number of the things they want.
In the current economic scheme, we are forced to barter our freedom, in the form of the compulsory work-week, for something we don't particularly want, which is money. We have limited options for what to do with that money: pay taxes, bills, buy shoddy consumer goods, and, perhaps, a few weeks of "freedom" as tourists. But other options do exist.
One option is to organise as communities to produce certain goods that the entire community wants: food, clothing, shelter, security and entertainment. Everyone makes their contribution, in exchange for the end product, which everyone gets to share. It is also possible to organise to produce goods that can be used in trade with other communities: trade goods. Trade goods are a much better way to store wealth than money, which is, let's face it, an essentially useless substance.
24. Local/alternative currencies
There is a lot of discussion of ways to change the way money works, so that it can serve local needs instead of being one of the main tools for extracting wealth from local economies. But there is no discussion of why it is that money is generally necessary. That is simply assumed. There are communities that have little or no money, where there may be a pot of coin buried in the yard somewhere, for special occasions, but no money in daily use.Lack of money makes certain things very difficult. Examples include gambling, loan sharking, extortion, bribery and fraud. It also makes it more difficult to hoard wealth, or to extract it out of a community and ship it somewhere else in a conveniently compact form. When we use money, we cede power to those who create money (by creating debt) and who destroy money (by cancelling debt). We also empower the ranks of people whose area of expertise is in the manipulation of arbitrary rules and arithmetic abstractions rather than in engaging directly with the physical world. This veil of metaphor allows them to mask appalling levels of violence, representing it symbolically as a mere paper-shuffling exercise. People, animals, entire ecosystems become mere numbers on a piece of paper. On the other hand, this ability to represent dissimilar objects using identical symbols causes a great deal of confusion. For instance, I have heard rather intelligent people declare that government funds, which have been allocated to making failed financial institutions look solvent, could be so much better spent feeding widows and orphans. There is no understanding that astronomical quantities of digits willed into existence and transferred between two computers (one at a central bank, another at a private bank) cannot be used to directly nourish anyone, because food cannot be willed into existence by a central banker or anyone else.
25. Belief in science and technology
One accusation I often hear is that I fail to grasp the power of technological innovation and the free market system. If I did, apparently I would have more faith in a technologically advanced future where all of our current dilemmas are swept away by a new wave of eco-friendly sustainability. My problem is that I am not an economist or a businessman: I am an engineer with a background in science. The fact that I've worked for several technology start-up companies doesn't help either.I know roughly how long it takes to innovate: come up with the idea, convince people that it is worth trying, try it, fail a few times, eventually succeed, and then phase it in to real use. It takes decades. We do not have decades. We have already failed to innovate our way out of this.
Not only that, but in many ways technological innovation has done us a tremendous disservice. A good example is innovation in agriculture. The so-called "green revolution" has boosted crop yields using fossil fuel inputs, creating generations of agro-addicts dependent on just one or two crops. In North America, human hair samples have been used to determine that fully 69% of all the carbon came from just one plant: maize. So, what piece of technological innovation do we imagine will enable this maize-dependent population to diversify their food sources and learn to feed themselves without the use of fossil fuel inputs?
I think that what makes us likely to think that technology will save us is that we are addled by it. Efforts at creating intelligent machines have failed, because computers are far too difficult to program, but humans turn out to be easy for computers to program. Everywhere I go I see people poking away at their little mental support units. Many of them can no longer function without them: they wouldn't know where to go, who to talk to, or even where to get lunch without a little electronic box telling what to do.
These are all big successes for maize plants and for iPhones, but are they successes for humanity? Somehow I doubt it. Do we really want to eat nothing but maize and look at nothing but pixels, or should there be more to life? There are people who believe in the emergent intelligence of the networked realm - a sort of artificial intelligence utopia, where networked machines become hyperintelligent and solve all of our problems. And so our best hope is that in our hour of need machines will be nice to us and show us kindness? If that's the case, what reason would they find to respect us? Why wouldn't they just kill us instead? Or enslave us. Oh, wait, maybe they already have!
26. The need to evolve
Now, supposing all goes well, and we have a swift and decisive collapse, what should follow is an equally swift rebirth of viable localised communities and ecosystems. One concern is that the effort will be short of qualified staff.It is an unfortunate fact that the recent centuries of settled life, and especially the last century or so of easy living based on the industrial model, has made many people too soft to endure the hardships and privations that self-sufficient living often involves. It seems quite likely that those groups that are currently marginalised, would do better, especially the ones that are found in economically underdeveloped areas and have never lost contact with nature.
And so I would not be surprised to see these marginalised groups stage a come-back. Almost every rural place has its population of people who know how to use the local resources. They are the human component of the local ecosystems, and, as such, they deserve much more respect than they have received. A lot of them can't be bothered about fine manners or about speaking English. Those who are used to thinking of them as primitive, ignorant and uneducated will be shocked to discover how much they must learn from them.
27. Beyond planning
So what are we to do in the meantime, while we wait for collapse, followed by good things? It's no use wasting your energy, running yourself ragged and ageing prematurely, so get plenty of rest, and try to live a slow and measured life. One of the ways industrial society dominates us is through the use of the factory whistle: few of us work in factories, but we are still expected to work a shift. If you can avoid doing that, you will be ahead. Maintain your freedom to decide what to do at each moment, so that you can do each thing at the most opportune time. Specifically try to give yourself as many options as you can, so that if any one thing doesn't seem to be working out, you can switch to another. The future is unpredictable, so try to plan so as to be able to change your plans at any time. Learn to ignore all the people who earn their money by telling you lies. Thanks to them, the world is full of very bad ideas that are accepted as conventional wisdom, so watch out for them and come to your own conclusions. Lastly, people who lack a sense of humour are going to be in for a very hard time, and can drag down those around them. Plus, they are just not that funny. So avoid people who aren't funny, and look for those who can laugh at the world no matter what happens.




