Tuesday, December 23, 2008

From prognosticator to witness

I haven't been posting of late, mostly because I feel that my job is more or less done. I called it as I saw it, and, unfortunately, I seem to have called it correctly. The US is collapsing before our eyes. Stage 1 collapse is very advanced now; stages 2 and 3 are picking up momentum. I might have more to say later. In the meantime, here is a guest post from a nurse in Michigan. He does not wish to be identified.

With the decline of one of the last vestiges of our manufacturing base, the auto industry, Detroit and the surrounding areas are described as "ground zero" for the meltdown that has been occurring. Places that just a few years ago seemed like icons -- various restautants, movie theaters -- are being shut down and boarded up. Meijers, Walmarts, Target are all cutting back their employees' hours and making them work 32 hours a week instead of 40. Christmas sales are down this year, and retailers are just about giving their stuff away. There are rumors that many will further cut their already worried employees, and that others will go bankrupt.

In the last few years, roughly half of my neighborhood has gone up for foreclosure, and I live in a middle class neighborhood. I am still haunted my the memory of a neighbor down the street driving away with her 3 children, tears streaming down her face. She was a victim of the auto layoffs. I learned later that she stated that she had nowhere to go. Just a few months ago, the street was alive with the sound of children playing. Then the streets became silent. Homes that went up for sale are just sitting there, not being sold.

Many others are moving back in with parents, relatives, friends or family. Those who do not have such resources head for the homeless shelters, which, like the soup kitchens here, are bursting at the seams. Many people, when asked, will state with utter despair that they never thought they would have been in this predicament just a few months ago.

People who commit crimes do not want to leave jail. This is a first, to prefer prison over cold and hunger. Of those unemployed that do not prefer prison life, they will do just about anything to earn a dollar. There were stories on the local news last night about these people standing out in the frigid cold suffering from frostbite for a mere $40 to hold a "going out of business" sign for yet another store going belly-up. Other women whom I had met on the net and dated in my single years (my happy years) are degenerating from once happy and secure ladies to ones full of anguish and despair. Some are begging people to let them clean their houses, some are even thinking about selling themselves. There has been a large increase in prostitution in this area.

Local, country, and state governments are scaling back. I have noticed that it takes them what seems like forever to clear the highways after the recent snow storm. The medians along the highways are starting to look like they do in Iraq: cars spun out into ditches and medians, and abandoned.

I am one of the few who still has a job, as a nurse. Employers are developing a sadistic mentality: if you have a job, you had better work harder, or else you are out the door! Meanwhile, broke state governments are strapped for funds are doing everything they can to "regulate" our jobs, making an already hard and stressful job next to impossible.

In sum, things are bad and about to get much worse. Mr. Orlov is 100% on the money in my book.

Tuesday, November 18, 2008

Poverty an asset; assets a burden

Another guest post from Chris, most recently from the Outback, but now ensconced in a place that seems much more collapse-proof.

Chris writes of a paradox: lack of assets may be the greatest asset of all.
I don't believe that this is a paradox: the higher you climb, the harder you fall. A place that is used to an artificially high standard of living inevitably develops artificially high standards. These standards cannot be undone overnight, as soon as the standard of living collapses, delaying commonsense adaptations until it is too late. Prosperous places have expensive infrastructure, and, once it can no longer be maintained, it becomes much worse than no infrastructure at all. Lastly, poverty takes practice, and a sudden lapse into poverty is far more traumatic than the habit of a stable but constrained existence.

I have recently moved from Australia, where Peak Oil issues are just beginning to gain traction belatedly in the mainstream press, to the Philippines, where seemingly nobody has even heard of peak oil -- yet.

I have read that the USA is leveraged up to a debt ration approaching 15/1 (1 real dollar for each dollar borrowed). I believe Australia's ratio is about 3/4 of that. The Philippines has a debt ratio of approximately 1/1. Hence when the wolf is finally at the door the Philippines may be in a better fiscal position than countries currently far richer.

However, this is all semantics. The real issue is preparedness.

I believe Australia is in a similar position to the USA and Europe in many regards, beyond financial issues.
The looming disaster in these countries is mostly to do with the feckless assumption that the status quo will somehow continue: private car ownership and food being transported over vast distances being prime among many key vulnerabilities in these societies. Other factors include simple laziness, poor health generally, and addictions to substances both legal and illegal.

Very few people in these countries under the age of about 80 remember anything about what it means to have to survive somehow in the environment, from that environment. Look to the evidence online; how many sites are telling people to stock up on guns and ammo or to stockpile massive amounts of food? The guns will attract violence, the ammo will make those using it targets for those who have less ammo; the food will perish, attract rodents and thieves. In comparison, how many are teaching how to build suburban gardens, recycle small power and methane generators, and other practical adaptations?

The Philippines, like a number of other countries, is living in a paradox of different proportions. Outside of the biggest cities here, food is growing everywhere, in the villages themselves, as well as the agricultural lands around them. Most people here can tell you how to grow a list of useful plants and to raise chickens.
They are also very much used to sharing. There is virtually no government safety net here. To become eligible for social welfare payments, one must have held the same job for ten years; this almost never happens. Yet even in the moderate-sized cities, nobody starves. Interdependence is local and regional rather than national and international. Of course, there is a degree of modernization contributing to the welfare of people. Some people work in the cities or overseas and send money home to support the extended family. But even without this money life would go on.

Most people here are very fit compared to developed nation's. I have seen hardly any overweight people, let alone obese. Washing is done by hand in water pumped by hand from the ground. "Sounds horrible," I hear the average reader murmur: but it works and it means the people are physically fit. The main diet is locally grown rice with similarly grown meats and vegetables. Fruit can be expensive because a lot of it is exported, yet whatever is in season is abundant. The fishing trade here is mostly very small boats with small crews using small nets and lines; there are very few industrial scale fishing boats. I live near a fishing village where 95% of the income is derived from fishing in these small boats; the population of over 2,000 people is the healthiest, happiest bunch I have ever met.

Transport here is a world away from that in developed nations, yet there is no problem getting anywhere. Locally, there are tricycles and jeepneys going past all the time in all directions; these and the buses are very affordable for most people. Only about 2% of households have a car, and maybe half have a private 125cc motorcycle or tricycle. These vehicles get about 100 miles to a gallon of fuel.

The paradox is this: the Philippines greatest asset in the future may be its lack of assets now. Less debt, less dependence on expensive gadgets, less laziness and complacency. More communalism, more integration.

Friday, November 14, 2008

Second Radio Ecoshock Interview

I recently recorded my second interview with Alex Smith of Radio Ecoshock, in which we discuss Bailout 2.0 Beta, how to find food, what to do with repatriated troops, where you can stick your money (should you still have any) to avoid being overcome by its putrid smell, and how having one's predictions come true is not necessarily a happy outcome. My first interview with him was rebroadcast by over 40 radio stations. Now that it's no longer a guessing game as to whether collapse is real, we should be able to do a lot better. Then again, the worse things get, the more of a reason people have to keep on faking it.

Monday, November 03, 2008

The Five Stages of Collapse - Presentation from Fifth Annual Community Solutions Conference

Last night I got back from the conference in Michigan. My talk was one of the two keynote addresses at the conference (John Michael Greer gave the other one). The slide show and notes can be viewed here.

Thursday, October 16, 2008

Post-Soviet Lessons now available in Portuguese

José Almeida de Souza Jr., Brazil, has translated the entire article. This is a first. If you wish to translate it into another language, please do so. No need to ask me permission, as long as you agree to freely share the result and show it to me first.

Tuesday, October 07, 2008

New Review of RC on Dry Dipstick

Mick Winter of Dry Dipstick has just published an excellent review of my book, Reinventing Collapse. Many other reviews are available on Amazon. What more convincing do you need? Buy it, read it, and you will feel better even as your world continues to collapse all around you!

Upcoming Community Solutions Conference

The Fifth Annual conference on Peak Oil and Community Solutions will be held on October 31 - November 2 at Oakland University, Rochester, Michigan. I will be presenting on two subjects:
  • The Five Stages of Collapse (Highly topical, as we are currently in the middle of Stage 1, with elements of Stages 2 and 3 plainly visible on the horizon.)
  • Planning for a Sail Transport Network: Challenges and Opportunities
Also speaking at this conference will be John Michael Greer, John Michael Greer, Pat Murphy, Katrin Klingenberg, Peter Bane, Christopher Bedford, John Richter, and Megan Quinn Bachman.

Monday, September 29, 2008

Peak Oil in the Outback

The following is from an email from Chris, who lives and works in Alice Springs, Australia. It offers an interesting perspective on hitting the peak oil wall in resource exploitation, the scant possibilities of continuing family life as we know it post-peak, and on what it means to be a native (in the truest sense).

“Peakers” are still rare out here. I met my 1st one here in 1972. Not in the fully developed intellectual sense; yet nonetheless prophetic.

An aboriginal school teacher at the time, a friend of my fathers. I was five years old, a migrant from the USA, I wanted to know how aboriginal people saw white people.

His response was unforgettable: “You guys say we’ve been here 40,000 years; we say since the dreamtime. You may as well call it forever. You guys got here yesterday and tomorrow, you’ll be gone. But we will still be here.”

I know some cattlemen here who 5 years ago were burning $40,000 in diesel to run split system air conditioners to keep a whole house cool through the long hot desert summer. Of course these costs are moving exponentially. This seems to be a crazy amount to be spending on micro climate control; yet the purpose is to make it livable for non native women. One farmer told me that when the generator breaks down his wife just jumps in the car and drives 400 miles to Darwin; she will stay in an air conditioned motel until the generator is fixed. Without these women, the outback white community will cease to exist.

This is just the tip of an iceberg emerging through the fog out here in the desert. A huge amount of the economy is based on speculative ventures in mining, for example, where all of the feasibility projections are assuming ridiculously low energy costs. Major negotiations are underway towards a huge boost in uranium mining, huge royalties will go to largely mal adjusted aboriginal people as cash. The Government is by far the biggest employer and spender out here, largely on programs designed to help the Aboriginal people here. Of course they are mostly designed to help make these people more like whites; generally they are a dismal failure.

In short, my father’s friend’s philosophical perspective nearly forty years ago, seems ripe fruit soon ready for harvest.

Sunday, September 28, 2008

The Canadian Solution to the Subprime Credit Crisis

I just happened across this gem, excerpted from here. Solving the subprime mortgage crisis is simple; unless, that is, your country is in the process of being hijacked by a bunch of 9/11 con artists, that is.

In August 2007, it was discovered that Canada, just as the U.S., had a subprime mortgage-backed securities problem. Since the Canadian economy is more than ten times smaller than the American economy, the magnitude of the problem was also smaller, but it was nevertheless acute.

Indeed, Canada's subprime mortgage market was a smaller proportion of the total mortgage market than in the U.S. and mortgage defaults have not been as prevalent in Canada as in the United States. For instance, there has not been a housing bubble burst in Canada. Overall, risky mortgage-backed paper constituted, about 5 per cent of the total mortgage market, while in the U.S., subprime mortgage paper constitutes about 20 per cent of the total mortgage market, and mortgage defaults have been rising dramatically.

Nevertheless, there was some $32 billion (CAN) of non-bank asset-backed commercial paper in Canada. When this market became illiquid after August 2007, as a consequence of the global credit crisis that originated in the U.S., a restructuring committee was assembled in Canada by large pension plans, Crown corporations, banks and other businesses holding the bulk of $32 billion in non-bank asset-backed commercial paper (ABCP) in order to find a solution to the liquidity problem. (Large Canadian banks covered the asset-backed commercial paper that were on their books or in their money market funds). This was the Pan-Canadian Investors Committee for Third-Party Structured ABCP, chaired by a Toronto lawyer, Mr. Purdy Crawford, and created after a proposal that originated from the large Quebec pension fund, the Caisse de dépôt. This was the Montreal proposal.

The committee ended up proposing to restructure the frozen and illiquid securities into longer-term securities. It proposed that ABCP notes, initially intended as low-risk and short-term debt, be exchanged for new replacement notes or debentures that would not mature for years (seven or nine years) while earning interest originating from the underlying primary mortgages.

The plan was approved by a Canadian court last June and is scheduled to close by September 30, after Canada's Supreme Court refused to hear an appeal against the plan. The plan was designed to prevent a forced a fire sale of the asset-backed paper and to restore confidence in the Canadian financial system, especially in the money market funds. And it did all that without the government risking a penny of taxpayers' money.

Of course, those entities that had invested in what they believed to be liquid and relatively high-yield 30- to 90-day debt instruments had to accept new notes maturing within nine years, but most of them thought that this was better than the alternative of outright liquidation. Those investors can hold the newly-issued notes to maturity or they can try to trade them in the secondary market. A market for asset-backed securities was thus indirectly created where none existed before.

Friday, September 26, 2008

Reinventing the Sandwich

A new C-Realm podcast featuring me, Daniel Pinchbeck of Reality Sandwich, and, of course, our host KMO. We talk about optimism, saving the future through better design, and reinventing ourselves. Also, KMO and Daniel briefly discuss the Singularity while the electrics on my boat go on the blink and I briefly lose contact. Enjoy!

Thursday, September 25, 2008

A note on timing

A lot of people commented on to the following sentences in my last post:
And that will bring on Phase 2: Commercial Collapse. That is probably what we are getting for Christmas this year, or shortly thereafter.
Some take it to mean that I have committed the cardinal sin of prognosticators in making a Specific Prediction. Actually, I was just being a bit glib, thinking that commercial collapse would make a perfectly suitable Christmas present, that being the most commercial of holidays.

Timing collapse phases is just like timing peak oil: it becomes possible to do only after each phase has largely run its course. I believe financial collapse has a while to go, and may partially overlap with commercial collapse.

When it comes to social and cultural collapse (phases 4 and 5) I am not even certain that I got the relative timing right. To wit: there is a little city park around here that is always full of people who are drunk and stoned out of their minds 24/7. There are a few police on hand who try to keep them from getting into fights, and to herd them right after sundown into a maximum security flophouse they have for them right on the square. A truck stops by periodically to hand out food to them. Clearly, cultural collapse is quite far along for these folks, but political and social collapse have not caught up with them yet.

So have a Merry Christmas, but don't be surprised or despair if you are touched by commercial collapse in some form, mild or not so mild. You might be short on gas to drive to the mall to buy presents, or the road might be impassable because there is no money in the budget for snow removal (a touch of political collapse there). Even if you do get to the mall, some of your favorite stores (Sharper Image?) might be gone, or your credit cards maxed out. I hope that that's specific enough of a prediction, but that is as specific as one should be, I believe.

Tuesday, September 23, 2008

Adieu, Stage 1 Collapse!

In February of this year, I wrote The Five Stages of Collapse, connecting each stage of collapse – financial, commercial, political, social and cultural – with a specific mental milestone, where faith in some aspect of our status quo is shattered in the face of dramatically altered circumstances. Here is what I had to say at the time about Stage 1: Financial Collapse:

Financial collapse, as we are currently observing it, consists of two parts. One is that a part of the general population is forced to move, no longer able to afford the house they bought based on inflated assessments, forged income numbers, and foolish expectations of endless asset inflation. Since, technically, they should never have been allowed to buy these houses, and were only able to do so because of financial and political malfeasance, this is actually a healthy development. The second part consists of men in expensive suits tossing bundles of suddenly worthless paper up in the air, ripping out their remaining hair, and (some of us might uncharitably hope) setting themselves on fire on the steps of the Federal Reserve. They, to express it in their own vernacular, "fucked up," and so this is also just as it should be.

The government response to this could be to offer some helpful homilies about "the wages of sin" and to open a few soup kitchens and flop houses in a variety of locations including Wall Street. The message would be: "You former debt addicts and gamblers, as you say, 'fucked up,' and so this will really hurt for a long time. We will never let you anywhere near big money again. Get yourselves over to the soup kitchen, and bring your own bowl, because we don't do dishes." This would result in a stable Stage 1 collapse - the Second Great Depression.

However, this is unlikely, because in the US the government happens to be debt addict and gambler number one. As individuals, we may have been as virtuous as we wished, but the government will have still run up exorbitant debts on our behalf. Every level of government, from local municipalities and authorities, which need the financial markets to finance their public works and public services, to the federal government, which relies on foreign investment to finance its endless wars, is addicted to public debt. They know they cannot stop borrowing, and so they will do anything they can to keep the game going for as long as possible.

About the only thing the government currently seems it fit to do is extend further credit to those in trouble, by setting interest rates at far below inflation, by accepting worthless bits of paper as collateral and by pumping money into insolvent financial institutions. This has the effect of diluting the dollar, further undermining its value, and will, in due course, lead to hyperinflation, which is bad enough in any economy, but is especially serious for one dominated by imports. As imports dry up and the associated parts of the economy shut down, we pass Stage 2: Commercial Collapse.

So far so good. In terms of mental milestones, we can tease apart financial collapse into a number of psychological levees that are being breached one by one. The first one to go was people's faith in home equity: that the value of their homes will serve as a nest egg to sustain them in retirement. What we have been witnessing for the past week or so is the demise of people's faith that their investment portfolio will sustain them. It is still easy to find investment advisers who will tell you to "go long on equities" because, you see, "eventually the economy will recover," but their reassuring words are starting to sound like a death rattle to all those whose retirement savings suddenly look laughably inadequate.

Eventually, faith in the magical, mystical properties of the US Dollar will be lost, but it seems very important to all concerned to make the process gradual. It seems safe to assume that in the limit, as time goes to infinity, the value of the US Dollar goes to zero:

limt→∞US$ = 0

It also seems safe to assume that it is negligible even for finite, foreseeable values of t. The problem is making it look like a continuous function. If the value of any given type of dollar-denominated garbage jumps to zero suddenly (because it cannot be sold at any price) then that produces a discontinuity: a rift in the fake financial space-time continuum.

This is what the current bailout plan is generally about. It is not about making anyone here happy: the fascists think that smells of socialism, the socialists think that it smells of fascism, and everyone (except for Bush, Paulson and Bernanke) agrees that it smells. Some people would like to see some heads roll, but as Robespierre discovered in the course of the French revolution, that just puts you knee-deep in headless aristocratic corpses, still with neither bread nor cake to feed to the peasants.

Speaking of peasants, everyone continues to repeat that the bailout is being financed by "the taxpayer," although it is unclear why our soon-to-be jobless and destitute taxpayer should be expected to cough up an extra trillion or more. The taxpayer may soon need a bailout too. If this mythical taxpayer actually tried to borrow her share of a trillion dollars against her future earnings, what sane person would want to give her that loan? Clearly, the gratuitous mention of the taxpayer is just a ruse designed to hide the rather obvious truth.

The bailout is actually going to be financed by foreign interests that hold US Dollar assets. Yes, the value of their holdings will go to zero, but they do not want this to happen suddenly. They wish to continue redeeming their US Dollar holdings for all manner of things of value, from capital equipment and intellectual property, which can be expatriated, to farmland and other means of production, which can be used in situ to grow food, mine ore, and so forth, which are then expatriated. There is some optimal function for this great unwinding, which will allow foreigners to expropriate the maximum amount of value in the minimum amount of time before their efforts to redeem their remaining US Dollar holdings stop paying for themselves in terms of the value of the available stuff.

As this process runs its course, the US will lose access to imports. Most significantly, it will find it more and more difficult to obtain the 2/3 of the transportation fuels that come from abroad, which are needed to keep the economy functioning. And that will bring on Phase 2: Commercial Collapse. That is probably what we are getting for Christmas this year, or shortly thereafter.

In the meantime, enjoy Stage 1. You will miss it once it's over.

Tuesday, September 16, 2008

Superpower Similarities

realitysandwich.com has published Chapter 2 of Reinventing Collapse. You can read it here.

Monday, September 15, 2008

Survival of the Nicest?

Periodically I find myself bombarded with a certain type of query: What is the timing of the collapse? How far along are we? Is it 5 years away, 50, or 500? And no matter how many disclaimers I issue, the queries keep coming.

If you listen to extremist yahoos like Alan Greenspan, we appear to be in the midst of a financial collapse. As it runs its course, the strange idea that endless economic growth on a finite planet is possible, or even desirable, will mercifully fall by the wayside, to be replaced by the much nastier mindset that economics is a zero-sum game: if you are to win, somebody else has to lose. No amount of greenwash or pining after sustainability is likely to stem the tide of nasty people who are determined to make it at your expense.

And so collapse, for you, is likely to turn out to be a deeply personal experience. Furthermore, if you manage to survive it, chances are, you will be none to eager to divulge the details of how you made it, for they will not be edifying. The process of survival is only enjoyable if it is experienced vicariously -- at someone else's expense.

I recently picked up a book about castaways, and was amazed to discover that the introduction to the book spells out this very idea succinctly and in good prose, perhaps better than I could, so I will reproduce a piece of it here:

After a century of enjoying the roller coaster ride of the Industrial Revolution, we face the bleak prospect of it all ending so suddenly that there's no time to don a life jacket, grab a parachute, or find a pack of matches. The fact that most humans are hopelessly unprepared for the ultimate crisis was driven home for me several years ago when a survey of boating accidents on Chesapeake Bay produced a curious detail: most of the male corpses fished out of the bay over the years had their flies open. The inescapable conclusion reached by the authorities was that all these people met their end while blithely peeing over the side. Their last thought, I'm sure, was astonishment. The next most common emotion (for those who do not die immediately) is a deep, sometimes suicidal melancholy, eventually pushed aside by hunger, panic, and -- in many cases -- temporary insanity...

One fascinating aspect... is the dawning awareness that when survivors get back to civilization, they carefully hide much more than they reveal. For the brutal truth, we have to look for clues between the lines. Some of these stories right more true than others, and it is entertaining to see the lengths to which the scoundrels go to paint themselves in noble hues. One comes away with the nagging suspicion that nice people usually do not survive being stranded, and when they do, it is often through freak accident or divine intervention. The real survivors in this world are few and far between. And if they are the fittest to survive, God help us, indeed...

How many of us, unexpectedly tumbled onto an alien shore, would silently give up the ghost rather than face the reality of drinking iguana urine, chewing up grubs, or gagging down raw turtle liver? Lord Byron's grandfather, shipwrecked in the Straits of Magellan, saw his dog killed and eaten by his shipmates... then became so starved himself that he dug up and devoured the dog's paws. We are all far too removed -- even from the rural farms oof our immediate ancestors and the prosaic hardships they faced -- to know what is really put in sausage meat or scrapple, or how to wring a bird's neck. Our soldiers have to be given months of training in jungle survival to prepare them for only a few days of commando operations in rain forests where barefoot people happily raise babies. It is all in your point of view.

Certainly it helps to be marooned with somebody else, for you can commiserate, quarrel, an feud like newlyweds, and when things really get difficult, you can always eat him, or vice versa... When the going gets tough, the tough get eaten. Cannibalism like so many other customs, is merely a state of mind. Over the centuries famine repeatedly drove Europeans and Asians alike to eat everything, including each other. The culinary genius of the French and the Chinese, working with nothing more than a few spices and a bit of garic, turned famine food into such delicacies as snails, sea slugs, and stewed bats, garnished with larvae, pupae, and spawn -- all, like escargot, under more elegant names. And while doughboys in the trenches of World War I were driven insane by body lice and other vermin, political prisoners, POWs, and castaways savor them in their gruel as if they were herbs from Provence. One culture's famine food is another's caviar.

In the case of survival cannibalism, society seasons its judgments with something akin to garlic by conveniently applying certain criteria: Was the main course already dead of natural causes? If not, was a lottery properly conducted before the murder, and are the culprits suitably pious, making analogies to Holy Communion? In this way, the survivors of a plane crash in the Andes could make a group decision to eat some of their number, and walk away heroes. It is only a short distance from the Andes to Soylent Green.

But what is customary is comforting. Cannibalism is a social affair. Solitary survival is not. Solo survivors are a breed apart. Confronted by extreme solitude, by starvation, an by no prospect of rescue, they do not sit around long pining in self-pity but set about urgent practical matters. In some cases this reveals strength of character, tenacity, and the will to live. In others it reveals only animal cunning and stubbornness. Sensitivity and imagination are terrible disadvantages in the crunch. Unusual among these tales because of its painful and pathetic revelations is the diary of a nameless castaway on Ascension Island. Unlike other classical accounts, in which the survivor returns to civilization to enlarge endlessly on his own ingenuity, this victim was much too sensitive for his own good. He kept a diary frankly revealing his misery, his mistakes, his melancholy, his weakness of character, and his hallucinations. The diary is singularly lacking in excuses. Perhaps because he was overly absorbed in his own failings and inadequacies, his struggle failed, and he diary was found beside his bones.

Excerpted from Sterling Seagrave's Foreword to Desperate Journeys, Abandoned Souls: True Stories of Castaways and Other Survivors by Edward E. Leslie

Sunday, September 14, 2008

Alternative Transportation

When in the early 1990's gasoline in Russia got too expensive and scarce, Russian drivers started picking up hitchhikers and charging them. Here's an excerpt from Reinventing Collapse:
When I was in St. Petersburg in the summer of 1990, the lives of drivers were complicated by gasoline shortages, which resulted in long lines at the few gas stations that happened to be open, often made worse by a ten-liter limit on gasoline purchases. For many drivers, this meant that many hours had to be spent looking for gas. Some knew how to buy gasoline on the black market, through the various government depots that received their allotments separately from the retail distribution system, but there they had to pay black market prices. What was a headache for drivers turned out to be a bonanza for the non-drivers: almost every private car was for hire, in a manner of speaking. To get a lift, all I had to do was stand by the side of the road and stretch out my hand. Within minutes, a car would pull over. The driver would ask me where I wanted to go, and give a yes or no answer. There was rarely room for negotiation: either it was along his way, or it was not. The driver would also name the price — usually two or three rubles — which was most reasonable.
Now, you might agree that this is an idea whose time has come to our hurricane-ravaged shores, but then Americans don't seem able to conceive of a solution to a problem that does not involve some newfangled gadget; to wit, plastic composting bins in place of traditional heaps and pits. But then I happened across just such a thing. It's called Avego. It's a newfangled, gadget-based, paid-for hitchhiking system that's just being launched in Ireland and the UK. Not as simple as sticking your thumb out, but perhaps almost as effective.

Wednesday, September 10, 2008

My interview on KWMR

POST CARBON - community radio bringing focus to how we, in West Marin, are transitioning to an era that is no longer dependent on fossil fuels; relocalizing and increasing our community resilience, in the face of climate change, the end of cheap oil, the depletion of our natural resources and the unprecedented extinction of species.

The interview was aired on September 9 at 1 pm on 90.5 FM in Pt. Reyes and 89.7 FM in Bolinas, California. You can listen to the interview here or download the mp3 from here.

Saturday, August 30, 2008

Boats for Post-Cheap Oil Survival

This is a guest post from Ian Swan. As some of you know, I have sold my shoreside residence, and for more than a year now I have been living aboard and sailing up and down the east coast of the US. I have done this both as a lifestyle choice and as a way to minimize costs, including fuel costs, and to maximize the available options. For many of you, such a dramatic change of habits is out of the question. But this is not to say that you should neglect to look at boats as an important element of your post-collapse preparations. Ian's article takes this subject, which for most people resides in the realm of daydreams, and brings it down to the level of practical reality. Unlike many sailing experts that might try to impress you with their opinions, Ian knows his stuff, and, very importantly, he isn't trying to sell you anything. So if you are one of the many people who think that having a "just in case" boat might be a good idea, but have not acted on it, this article is for you.

To introduce myself: I am a New Zealander living near the coast in the North Island. I also lived for nine years in the South Pacific Islands, where I was able to observe primitive, third world living conditions. I share the view that peak oil is going to have a big effect on our lifestyles, and the simultaneous arrival of economic troubles and climate change is setting up a "perfect storm". If things collapse as Dmitry, I, and many others are expecting, you may find yourself in the same situation as a third world hunter (fisherman), gatherer, and farmer. That was the normal situation for many in the South Pacific Islands when I lived there. I'm not saying that we will return to the stone age, or even to the dark ages, but cheap oil -- the basis on which the edifice of our current society is built -- is gone, and the debt bomb is about to explode at the same time. This combination could create a tipping point that could cast you into an economic and social situation which will rival the Great Depression. If you agree with this (and if you are visiting this site it suggests you might) then you should make some preparations, at least in your mind, about what you would do, and how you might survive in this scenario.

Specifically, you might want to ponder the question of food. It has always struck me how much easier it is to get protein from the sea by fishing, and gathering shellfish, crabs, and so on, compared with land-based hunting and gardening. The same applies to a lesser degree to a lake or a large river. There is always food to be had where land meets water, it's a particularly productive environment, once things settle down in a post collapse environment, living near water will offer many opportunities for fishing and hunting, and travel by water. One of the keys to exploiting the sea coast or a lake for food is a boat, or a canoe, and this brings me to the point of this article: we have an opportunity to prepare for post-oil and post-consumer society by getting an appropriate boat, or, better yet, several appropriate boats, as I have.

The use of boats as a means of transport should also be considered. In common with Dmitry, I believe that sail is the way to go. If the boat is small enough, then rowing or sculling can be the source of auxiliary power. The smaller the boat, the more effective and practical this manual propulsion can be.

This article is not intended to be an introduction to boating, so if boats, and especially sailboats, are outside your experience, then I suggest that you get some books on the subject. Older books may be better, since what I am suggesting here is not particularly modern or high tech.

If your experience is with power boats, then I would suggest that you need to change your thinking. The cost and availability of fuel may soon make a modern powerboat a useless asset. The large, high speed "fizz boat" is the pinnacle of gross, wasteful overconsumption of oil-based fuel. Fuel consumption in big, fast powerboats can sometimes be measured in gallons per minute, and it is certainly many gallons per hour. They make Hummers look good.

There is an opportunity right now to try and get used sailboats and sails, which can often be had for very little. A great place to start is your local Craig's list. A boat is quite a big item, so you don't want to have to go far to get one, or the cost of delivery will become significant. If the boat is a real bargain, it may be worth traveling to get it. Even if the hull itself is worthless, what's on it may be very valuable indeed. For instance, the modern Dacron sail is a dramatic improvement over a canvass/cotton sail in terms of durability and function. If, at some time in the future, when modern synthetic fiber is no longer available or affordable, you try to fit out a sailboat, you will curse your lack of foresight in not obtaining a cheap old Dacron sail. Oars are not cheap or easy to make either, so if you see some cheap used oars, grab them.

Think about what might happen to you and your family in a collapse scenario, and also think about what boat might be useful for your location and situation. Even if you live miles from water, have you seen how useful boats become if you are caught in a flood? Right now, there is the opportunity to buy, or even to get for free, old sailboats that are sitting unused and deteriorating in backyards. I know this because I have collected quite a few of them myself, often for a fraction of the value of their fittings and construction costs. One of the reasons for this is that most people do not want small sailboats any more: they want big yachts or high performance racing sailboats such as Lazers and Hobie cats, which leaves the older class of boats unloved and unwanted. Owners also do not want wood, or plywood, for the maintenance problem; so these go cheaply too. There are two types of sailboats available that I think are most suited to the "survivalist" and these are the small trailer sailer and the small sailing dinghy. I am not talking about a boat to live on, but a boat that you can use for fishing, perhaps to make short coastal passages, on lakes and rivers: something that might carry you plus a small load of cargo for trade if such conditions arose. A boat has huge carrying capacity compared to a cart, and, once it is supported by the virtually frictionless water, takes very little energy to move. The trailer boat is mobile, compared to a boat on a mooring or at a marina, and mobility gives you choice of location. The ongoing cost and worry of boats sitting in the water is a killer. I don't recommend them, unless you know that you are going to use them a lot, and have plenty of money. A boat sitting on a trailer, under a tarp, in your back yard, will cost you nothing.

If you study the canal boat industry, you will discover that boats have enormous energy efficiency and cargo weight advantages over the horse and cart and the pack horse. The canal boat was only replaced by rail because of its low speed. Take away cheap oil, and the boat will make an instant comeback as a freight carrier. Take away the roads, and suddenly the rivers and the seacoast will provide the only access. I grew up in a town called "Te Awamutu". Which literally translates from the Maori language as "The Path End". It was the point at which the local river was no longer deep enough to navigate by canoe. That's the way it was; and it soon may become that way again.

The practical, useful sailboat you should be looking out for is a 10 to 14-foot open sailing dinghy or a 14- to 18-foot cabin trailer sailer. These are boats of a size that you can manhandle to launch if necessary. You could drag then up a beach on rollers with manpower or block and tackle. A 20 foot boat is getting pretty big, but may be manageable if you have lots of strong men. You can get a plywood boat very cheaply, but the reason for this is that it may be rotten. In fact, I usually assume that it is, and only agree to pay salvage value. If it is on a trailer, the value of the trailer may be as much as the boat. What comes with the boat, in terms of gear and fittings, may be worth even more than the boat. I paid $500 for a derelict 21-foot boat that had an anchor, chain and rode that were worth $250 second hand and easily $500 to replace new. It also had a mast and rigging, two sets of sails (one brand new), lots of stainless steel fittings, and safety gear. I will probably never repair this boat, but I have it blocked up as a little emergency "cabin". Did I mention that it has 500 lbs of lead in the keel? (Lead now goes for about 90 cents a pound.) All this gear is worth something to me as I have other boats worthy of repair. In a survival situation, all this stuff will be gold. To be a collector like me, you have to have space to store the boats, and I am lucky as I have a small farm and some old barns. But there must be a few of you out there who have the space to store one boat at least.

An 11 or 12-foot dinghy is a good size for a fishing boat that can be sailed or rowed. A boat like this could be either plywood or fiberglass. Fiberglass will cost you more and be heavier, but it will also be virtually indestructible if it is well-made. An aluminum mast, with stainless wire rigging, and a Dacron sail are all standard on modern sailing dinghies. There should be a mainsheet and a pulley set for the mainsail, which vary in quality and can be expensive to buy new, and maybe a foresail jib with sheets. In New Zealand there is a dinghy of this type, called a Sunburst. The Mirror Dinghy would be the British equivalent. It was designed in the 1960s as a "family boat": mom, dad and the kids could go out for a sail or fishing. The kids could learn to row and to sail. It could take a little 3-horsepower outboard for longer trips. Great concept! What happened? It became a racing class. The boats were "refined," made self-bailing, no seats, redesigned for speed and minimum weight, and now cost $14,000 for a competitive boat. They are fragile and completely useless for fishing. This has been the pattern for modern sailing dinghies: they are fast, unstable, and uncomfortable. Most are unsuited to use as our "survival" utilitarian boat. You might be able to adapt one of these racing machines, making it useful by reducing the sail, fitting oarlocks for oars and adding seats and floorboards to give it strength. But even if you can't, at least you will get a mast and sails. I actually got one racing skiff with 4 sets of sails for $100. I figure the sails could be used on a big family trailer sailer for light wind days. But there are also perfectly reasonable sailboats out there if you look.

Whatever you can get in the way of a hull, a mast and some sails will be vastly supeior to anything that you might construct if you were to start from scratch. Of course is possible to build a wooden boat from timbers, make a mast from a straight pole, weave a sail from flax or cotton, and make the rigging from wire and rope. But this is a skilled task way beyond most of us, and I can assure you that having some kind of boat ready made -- any kind -- will be a lot easier. What I see as most important in a collapse situation is being able to make the transition from being completely dependent on the supermarket as your main food source to becoming self sufficient, and from the motor car and airplane to the horse and the boat for transport (and bicycles while they last). Eventually we, or the community we are part of, will have to re-learn the skills to make things from scratch with hand tools, and to croos oceans hand-made boats, as we had done for centuries. That's fine, but meanwhile, in the short term, we need to eat, and there is good fishing on that reef a mile offshore.

So if you have a driveway or a back yard you can use to store a boat, start looking now. A good size for trailer yacht is in the 16 to 22-foot range; they run up to 25-30 feet but these are expensive monsters, and you would need a big SUV or truck to haul and launch them. You would have to pay more for a fiberglass hull, but if you look on Craig's List or other local sources you will find the odd one going cheap for various reasons. Sometimes the owner just wants to move an unused boat and does not have the time or energy to "sell" it. Wives sometimes have a role in these decisions to sell boats. You just have to be there at the right time. Right now, people are under pressure financially, and need to sell their unused stuff, which may include their boat. I have bought some very well-made plywood boats a fiberglass outer layer (GOP, glass over plywood). I have also seen hulls that you could punch your fist through, as they were not made of marine ply. I see smaller, older fiberglass (GRP, glass reinforced plastic) trailer yachts on Craigs list in the $1000 to $2500 range. A new boat, provided someone is still making them, would cost $20,000 or more. Depending on your level mechanical skill, an outboard motor that comes with the boat may be worth having, especially if it is a simple 2-stroke. A new outboard may cost more than an old boat. Post cheap oil, an old, inefficient 2-stroke outboard may be expensive to run, but even when fuel is very expensive, a small engine may be a lifesaver when needed in an emergency, and worth having. If you only use it as a backup, fuel cost is minimal.

The trailer yacht usually has a small cabin with sleeping space for two (or more, but they have to be very good friends) and a minimal setup for cooking. It can be used for overnight trips, and is secure and dry in bad weather. It can be used as a sleeping "cabin" even on land. If it is raining and blowing hard, it will be more secure than a tent. There is usually a lifting centerboard, which allows the boat to be beached and sailed in shallow waters, which is a very useful feature. A conventional keelboat is very restricted as to where it can navigate. It is possible to capsize some trailer sailboats as the ballast is usually not as massive as with a keelboat, so be aware these boats are not bombproof, and sail conservatively until you really know what you are doing. With these boats, you have to be aware of what's happening with the wind and react quickly and appropriately. They are not ocean going yachts unless so equipped and sailed by experienced sailors. The reason I suggest older and second hand boats is that you get a lot of boat for your money. You don't want to spend a lot on something you might not use. Recycling is always a good principle.

Even if you plan to sail whenever possible, fuel efficiency is still an important consideration. One small trailer sailboat I bought has a small air cooled 3HP diesel engine in it. I would think you could hardly get a more energy efficient fishing boat than this. At slow speed, it goes for miles on a pint of diesel. The problem with many fishing vessels these days is that the cost of fuel is not covered by the value of the catch. Whole fleets of them sit tied up at the dock. This relates to the depletion of fish stocks as well as to fuel costs, but the result is the same: only a very appropriately sized and fuel efficient boat will remain economic on a cost/catch ratio. I think that my boat, with sail backup, might actually be efficient enough. The key to the fuel efficiency of small trailer sailboats is that they are displacement hulls being driven at less than their hull speed. This means they are slow, 5-6 mph, but very efficient. The faster you try to go, the less efficient they will be. In certain conditions, you can use motor and sail together. When fuel gets really expensive, motoring in a small boat may actually be the most efficient way of maximizing the load/mile of the fuel. It won't be fast, but it may be cost effective.

Other boat options to consider, which may be appropriate to individual situations, are kayaks, canoes, folding boats (Portabote is one company that makes them), and inflatable boats. I recently bought an inflatable kayak with the idea that I could carry it deflated on my back on a bike explore waterways that I can bike to. I can use it as a platform for spear fishing or shellfish collecting. Kayaks and canoes are good for small shallow rivers and lakes and can be carried by hand across or around obstacles. But people also make long ocean trips in appropriately equipped kayaks, and they make good fishing platforms with the right gear. Modern plastic kayaks are very durable.

Inflatable boats can be stored in small spaces, carried more easily deflated, and are very stable and great load carriers. They are harder to row, especially upwind, because of their high windage. When I was in the islands, I had a 10-foot inflatable which I could carry inflated on my back. I could carry it down steep banks and launch in places you could never get a trailer. The boat would carry 4 men and scuba gear for 4. A similar size hard dinghy would not do that safely. It was appropriate to the task and situation. But an inflatable is not as durable or long-lasting as aluminum or fiberglass, and is only good as a short-term survival boat. Portabotes, on the other hand, are made of thick dense plastic and fold up. You can row them and there is the possibility of a small sail, or a small motor. They are quite durable, and may be appropriate for your circumstances. Have a look at them on their website.

I hope I have given you some food for thought. The time to prepare is now, an the time to practice self sufficiency is now. And besides, boating and fishing are fun, an what could be a better incentive than that?

Monday, August 25, 2008

When All Your Best Employees are Going Broke

This piece started out as a solicited submission to Harvard Business Review for their "List of Breakthrough Ideas." After careful review, it was decided that the senior executives that are the target audience of this publication would find my breakthrough idea "counterintuitive," and I was asked to look for evidence of my breakthrough idea's effectiveness. UPDATE: My editor at HBR wrote: "We LIKE its counterintuivity – that’s what’s attractive about it. In fact, your idea beat out many dozens of others. I think it’s important and timely... The article also deserves more space than we could allot to it in the section. Likewise, the HBR has a fairly high bar…We just need more evidence, if you can find it." So, if you are a senior executive and would like to try a novel approach to running your business, please give this a try, and let me know how you make out.

The combination of skyrocketing food and energy costs, rising medical costs, falling real estate values and stagnant wages is putting increasing numbers of workers in financial distress. A distressed workforce can hardly be a productive workforce, and companies must do whatever it takes to make it physically possible for their employees to function. What can companies do to remedy this situation? The obvious step of increasing wages not only puts additional pressure on the bottom line, but can also fuel wage inflation. Also, It may not be the most effective approach.

A better approach is to treat the company and its employees as an economic unit: a single household, with a common set of costs. These costs can be cut very effectively by trading off slightly higher company costs against significantly lower employee costs. Each additional dollar paid out in wages is taxed as income, trimming it by about a third. It is then spent in the retail chain, generating profits for retailers and service providers, trimming it by another half or more. This same dollar can be stretched much further if the company uses it to buy products wholesale and makes them available to its employees either free of charge or for a nominal fee.

Many families are struggling with rising food costs. To help them, the company commissary can provide not just breakfast and lunch, but take-home dinners for the entire family. Periodically, it can provide other take-home items such as frozen chickens purchased in bulk, fresh organic vegetables from local CSA (Community-Supported Agriculture) farms, or a basket of popular foodstuffs purchased wholesale and assembled in-house.

Many employees are finding that their daily commute is eating ever deeper into their budgets because of the increasing price of fuel. In many cases, their ability to relocate closer to work is complicated by the stagnant real estate market and the higher price of housing closer to population centers. Telecommuting can help, but is only feasible for certain types of work. Here, the company can help by providing dormitories close by, which would allow employees to commute every other day, or even just once a week. For the younger, single employees, this may allow them to avoid spending money on housing altogether.

There are numerous other ways that a company can use its vastly greater negotiating power to effect significant savings for its employees while incurring a comparatively small additional cost. Examples run from directly providing family medical care through a company clinic to providing vacation packages at cost by renting out an entire vacation resort at a lower, negotiated group rate.

But perhaps the greatest opportunities for cost reduction lie in areas where employees' own efforts can replace services or products they would otherwise be forced to purchase, be it taking care of their elderly relatives instead of putting them in assisted living, or spending time with their children instead of paying for day care, or growing their own food in a community garden instead of shopping at a supermarket. Here, the company has to be willing to accommodate shorter working hours, trading off the slightly lower efficiency of having more part-time employees against the resulting vastly greater efficiency of the company community when it is viewed as a single household.

There is no need to couch such initiatives in purely negative terms of cost containment. Here is how Eric Schmidt, CEO of Google, sees it: "The goal is to strip away everything that gets in our employees' way. We provide a standard package of fringe benefits, but on top of that are first-class dining facilities, gyms, laundry rooms, massage rooms, haircuts, car washes, dry cleaning, commuting buses - just about anything a hardworking employee engineer might want."

If you feel that such special treatment may be required for the pampered software artists at prosperous Google, but not for your own employees, then take a look at the long list of benefits enjoyed by the enlisted men and women of the US Air Force, which includes 30 days a year of paid vacation and unlimited free air travel. This is a fine example of making the best use of what you have to make a difference for your employees: if what you have is plenty of jets, then why not let your employees travel as much as they want?

Although the results of such efforts may at first be difficult to quantify, should they succeed, the resulting competitive advantage is likely to become obvious. Let your hard-nosed competitors try to run their businesses with distressed, disgruntled, overworked employees, while you reap the benefits of loyalty, solidarity and ésprit de corps. In due course, this should make your competitors attractive as acquisition targets.

One ready objection that this proposal normally encounters runs along the lines of “If everybody did this, the economy would collapse.” If it were implemented across the board, this would cut retailers and the government out of their share of your earnings, reduce both corporate profits and government expenditures, shrink the overall size of the economy, making it unable to sustain a large and growing national debt, and hasten economic collapse and national bankruptcy.

But it is clearly a mistake to consider it likely that this proposal would be implemented by more than a handful of companies. Overwhelming numbers of corporate executives would regard it as professional suicide, because financial markets punish companies that put the interests of their employees ahead of those of their investors. And it seems equally outlandish to think that the actions of a few mavericks could significantly hasten economic collapse and national bankruptcy. In short, the macroeconomic effects of this proposal are not interesting. It is far more interesting to consider the notion that it is possible to safeguard a company and its employees against a continuously worsening economic environment, even onto complete economic and political collapse. The steps proposed in this article can be regarded as baby steps in that direction. The remaining steps are varied and far more difficult, and are beyond the scope of this article.

Combler le « retard d'effondrement »

Everything sounds better in French, even collapse:

L'Union soviétique était mieux préparée à l'effondrement que les États-Unis !

I am happy to announce that my Closing the Collapse Gap slide show has finally breached the language barrier into the francophone world: Combler le « retard d'effondrement » is now available on Qu'y a-t-il sur orbite ?


Friday, August 15, 2008

Radio Interview

I was recently interviewed by Marianne Barisonek of KBOO-FM in Portland, Oregon. The MP3 is available here. Marianne did a great job of pulling key points out of my book and letting me comment on them.

Monday, August 11, 2008

The Trouble with Georgia

Ryan suggested that I weigh in on the current conflict in South Ossetia and in the former Soviet republic of Georgia, which I mention in passing in my book as one of the bigger post-Soviet political fiascos.

It turns out that I am somewhat qualified to write on the subject: when I was in grad school (linguistics) I studied Abkhaz, the curious language spoken by the indigenous population of the separatist republic of Abkhazia. (Abkhazia is involved in the current conflict, working to flush Georgian forces out of the Kodor gorge, which is the one piece of their territory that remains under nominal Georgian control, as well as providing volunteers to help the South Ossetian side.) Later, finding that the Abkhaz side was woefully underrepresented, I started a web site, Apsny.org ("Apsny" being the Abkhaz word for Abkhazia), where, with help from Prof. Hewitt of the School of Oriental and African Languages in London, Prof. Chirikba, an Abkhaz linguist, and many others, I tried to present facts uncurried by extreme nationalist sentiments. At that time, the internet was dominated by the Georgian side, which was eager to accuse the Abkhaz of atrocities while discounting their own role in the bloody and ultimately unsuccessful attempt to regain control of the breakaway republic, in which some ten thousand people had died and many more had been displaced. For my diligent service, which spanned more than a decade, I received voluminous hate mail and many death threats from the Georgian side, as well as official expressions of gratitude from the Abkhaz side. Be that as it may, I find both the Georgians and the Abkhaz quite amazing, I am sure that the world would be much poorer without them, and I wish they would leave each other in peace, so that I can go and visit either place as I wish.

For obvious reasons, my view of the Caucasus region has always been colored by my interest in linguistics. While the Caucasus mountains are certainly some of the highest and most impressive in the world, it is also a mountain of exotic and often unrelated languages. While Abkhaz, Chechen, and some others form a single North Caucasian family of languages, Georgian (Kartvelian) is only vaguely related to Basque, spoken in France and in Spain, while Ossetian is distantly related to Persian. For thousands of years, the region has been a mosaic made up of fiercely independent tribes, of which Georgians (Kartvelians) were only one of the largest. This made them more capable of forming a viable political entity (a kingdom, initially), but never could they aspire to dominating their neighbors, to whom they were not even vaguely related, either ethnically or linguistically. And language did play a big role: although bilingualism and even multilingualism were by no means rare, none of the tribes were too eager to learn the language of any other tribe en masse. For instance, prior to their being conquered and absorbed into the Russian Empire, the Chechens were a trilingual society, using Arabic in the mosque, Turkish in the market, and one of the "home languages" in the home village. After the Russian conquest, which was very bloody and resulted in the annihilation of several smaller tribes, among them the Ubykh, who simply would not surrender, the Russian language became the lingua franca of the entire region.

To the conquering Russians, Georgia represented the rich, creamy heart of the incredibly tough nut of the Caucasus region. In contrast to the many small and taciturn mountain tribes, many of them either Moslem or animist, here was an Orthodox Christian nation with great traditions of art, music, architecture, poetry, an unparalleled joie de vivre, and a delicious national cuisine. Georgians easily secured for themselves a pleasant role within the empire. Leaving administrative chores to the Russians and commerce and the trades to the Armenians, they were free to indulge in more pleasant pursuits, such as feasting, falconry, and entertaining foreign visitors. This trend had carried over into Soviet times, making Georgian Soviet Socialist Republic a favored tourist destination, a prosperous place complete with amusing wines, delicious food, an exuberantly friendly population that spoke your language, and majestic mountains for a backdrop. In the interest of maintaining public order, the Russians tried to be even-handed in their treatment of the non-Georgian tribes. Knowing full well just how much trouble they can be, they administered their territories as autonomous units within Georgia. One of the more glaring exceptions to this was the arbitrary administrative inclusion of Abkhazia within Georgia, which was done by Joseph Stalin (Dzhugashvili), who was a Georgian, and which in many ways laid the ground for the current conflict.

Their being so well coddled within the fold of the great empire cultivated in the Georgians a sense of exceptionalism and entitlement vis à vis their smaller and poorer neighbors, which, once the Soviet Union collapsed and the Russians departed, gave rise to a particularly rabid, venomous, and ultimately self-destructive brand of nationalism. The first post-independence Georgian leader, Zviad Gamsakhurdia, was killed rather quickly. Part of his nationalist rhetoric involved labeling other tribes, such as the Abkhaz and the Ossetians, as newcomers and gypsies, who are only welcome as "guests" on Georgian soil. Next up was Eduard Shevardnadze, who was Foreign Minister of the USSR under Gorbachev, and who was more or less handed Georgia as his personal fiefdom by the West, as his reward for idly standing by and smiling pleasantly while the Berlin wall was being torn down. He was given UN recognition and foreign aid, and told to go ahead and try to preserve "Georgia's territorial integrity." At this he failed miserably, causing a senseless bloodbath and a flood of refugees. Shevardnadze slowly sank into a morass of corruption and national decay, until finally even the West decided that he smelled bad and unceremoniously replaced him with a shiny new face: the American-educated Mikhail Saakashvili. And this brings us to the current conflict, which he started. It is unclear why he decided to start it, but then his American education might offer a clue: the US doesn't seem to need good reasons to start wars either.

It may be difficult for some people to grasp why it is that the Abkhaz or the Ossetians do not much fancy suddenly becoming Georgian, so let me offer you a precise analogy. Suppose Los Angeles, California, were to collapse as the USSR once did, and East L.A. quickly moved to declare its independence. Suppose, further, that the 88% of its population that is Hispanic/Latino voted that the other 12% were free to stay on as "guests," provided they only spoke Spanish. The teaching of English were to be forbidden. After some bloody skirmishes, East L.A. split up into ethnic enclaves. Then some foreign government (say, Russian, or Chinese) stepped in and started shipping in weapons and providing training to the Latino faction, in support of their efforts to restore East L.A.'s "territorial integrity." As a non-Hispanic resident of East L.A., would you then (1) run and hide, (2) stay and fight, or (3) pick up a copy of "Spanish for Dummies" and start cramming?

The Abkhaz and the South Ossetians have made their preference very clear by applying for and being issued with a Russian passport. That's right, the majority of the present native population of these two "separatist enclaves" are bona fide citizens of the Russian Federation with all the privileges appertaining thereto. Lacking any other options, they are happy to accept protection from Russia, use Russian as their lingua franca, and fight for their right to be rid of Georgians once and for all. One of the privileges of being a Russian citizen at this stage, when Russia has recovered from its political and economic woes following the Soviet collapse, is that if some foreign entity comes and shells a settlement full of Russian citizens, you can be sure that Russia will open one amazingly huge can of whoop-ass on whoever it feels is responsible. Add to that the atrocities allegedly perpetrated by the Georgian forces, such as finishing off wounded Russian peacekeepers, and you can see why the normally shy and reticent Russian army might get behind the idea of making sure Georgia no longer poses a military threat to anyone. The Georgians have really done it to themselves this time, and we should all feel very sorry for them. They are not evil people, just incredibly misguided by their horrible national politicians. The West, and the US in particular, bear responsibility for enabling this bloodbath by providing them with arms, training, and encouraging them to fight for their "territorial integrity."

This, it will no doubt turn out, was the wrong thing to do. The term "Georgia's territorial integrity" has been bantered about and proffered lamely as an excuse for an untenable status quo for almost two decades now, with poor results. In the meantime, the territorial integrity of another semi-defunct state, Serbia has been sacrificed on the altar of geopolitics. Kosovo, which is Serbia's historical homeland, has been cleansed of Serbians, and alienated from Serbia proper. For those who are vague on the details of that conflict, here is a summary. Kosovo became majority-Albanian due to Albanians' higher birth rate. The Albanians then formed Kosovo Liberation Army, which fought Serbians for independence and lost. Albanians then fled en masse to Albania. The US and NATO then intervened, bombed Kosovo and Serbia, repatriated the refugees, and turned Kosovo into a UN protectorate. The next step from the West's point of view is to recognize Kosovo's independence, taking it away from Serbia forever.

If Kosovo is to Serbia as Abkhazia and South Ossetia are to Georgia, what, you might ask, is the key difference that mandates a different outcome for the latter? Well, there are quite a few (neither is Georgia's historical homeland, both fought for independence and won, both are populated by indigenous tribes rather than newcomers from across the border), but the most salient seems to be this one: Serbia, Abkhazia, and South Ossetia are all BAD (aligned with Moscow) while Georgia is GOOD (aligned with the West and US, and wants to join NATO). Morality, which, I am sure, underpins Western and US foreign policy, dictates that the bad be punished, and the good rewarded. I submit to you that such self-serving logic is a political dead end, and that if senseless bloodshed is to be stopped and peace is to be restored to the Caucasus, Western and US leaders will have to activate several additional brain cells, and stop mindlessly repeating the meaningless phrase "Georgia's territorial integrity."

Sunday, July 20, 2008

A boondoggle to end all boondoggles?

Tim Auld of Queensland, Australia, wrote to me and raised some very good questions about Al Gore's latest energy initiative to shift 100% of electricity generation in the US to renewable energy sources, which Al rather pompously called "A generational challenge to repower America." Al is a pompous guy, but that's OK. I give him credit for the nice double-entendre on "generational" (human and electric). Here's what Tim wrote:

I would like to hear your opinion on Al Gore's new call to action. He wants to power America using entirely renewable energy within 10 years. [...] The US is broke, there is little spare capital globally (perhaps except that held by oil exporters, [and] why would they help?), and already has a backlog of infrastructure maintenance it can't fund. It seems the first problem would be financing such an unprecedented project. [...] Conservation and efficiency seem like a footnote in his speech, but I think it would have to underpin the whole exercise on an epic scale. Finally, no question seems to be asked if this situation is the perfect excuse to ditch the old auto centric and high energy lifestyle to gain a whole swag of benefits. Is this a case of aim for the moon to make it over the trees, or is it the boondoggle to end all boondoggles?
I read through the speech, and it's not bad as such speeches go. It says all the right things about the problems we face - things quite a few of us already know - and it makes us feel good to hear them said well and to a large audience. Whether that audience is capable of absorbing the message is another matter. Al is careful to avoid proposing to slaughter any of the sacred cows of the "American way of life," such as private automobile ownership, or the right to squander as much energy as you can afford, be it by cranking up the air conditioning or cruising around in a motor yacht. In this, Al Gore and Dick Cheney seem to be soul-mates: to them the American way of life is non-negotiable.

If it were, his speech might run something like this:

Folks, oil is starting to run out, and we can't afford to keep on driving like we're used to. So, let's stop making and importing new cars, let's stop with the highway expansion, stop maintaining all those highway lanes at public expense, and move those resources to funding public transportation. Second, we've got to stop burning so much coal before the planet's climate blows up on us (of course, it may anyway, because of all the coal we've burned already) so let's build some wind mills, to provide, say, 75% of electricity within 10 years (100% won't work, because wind is intermittent, so you need some gas-fired power plants, for when it isn't blowing). But most importantly we must cut our energy use, before we're bankrupt as a nation (which we may be already) and we must do so very quickly. So let's regulate the use of air conditioning in businesses (ceiling fans, anyone?), stop illuminating roads and parking lots at night, and make a lot of other, sensible measures to cut energy use. And once we've done all these things, we will realize what sort of country we are now: not one that's driving off a cliff at breakneck speed with eyes shut tight, but an older, poorer, troubled country, not one likely to ever go to the moon again, but one that is perhaps capable of learning to live within its means without collapsing altogether. Thank you, and drive safely."

Al couldn't have given a speech like that for two reasons. For one, it wouldn't have gone over too well. For another, he is a product of a system - a national politician who is the son of a national politician. Politicians always try to perpetuate the system that got them into power.

So, no, building windmills is not a boondoggle to end all boondoggles, although the likelihood of getting the stable financing and permanent support tariffs in an era of high inflation and bankrupt federal government is not great. It's all the things that All doesn't mention that makes his proposal less significant than it might otherwise be.

Thursday, July 10, 2008

Nicest review ever

A lot of people might miss this one, because it is only on amazon.co.uk, so I am posting it here. I like it, because, for one thing, just like my book, it is short and easy to read. The other reasons should be obvious. Cheers, M. Lyster!

NOT just another doom-monger book

There are just too many books about peak oil and other imminent economic, social and ecological crises, which all seem the same. They go over familiar ground and display no new insight or real depth of thought. I'm tired of reading them. Too often the author is a recent convert to these views and lacks the authority or background to contribute anything new, concluding feebly that the reader should learn about gardening and drive a smaller car. Well, duh! as my kids would say.

What a refreshing change to read Orlov's quirky and thought-provoking book which takes the basic premise of looming crisis for granted, and gets straight into delivering his first-hand insight into the collapse of the Soviet economy in a fresh, non-mathematical way (there are no graphs or tables of data) and how most people survived it. Not only that, but all delivered with the wickedly dry wit of a native Russian, living in the USA, who is clearly tired of hearing Americans crowing that they won the Cold War.

To give an example from the introduction, Orlov mentions a survey of Americans which asked, "Will you be able to afford to retire?" (one third said no). Without stopping to go over familiar arguments, Orlov proceeds immediately to strip away the euphemisms and assumptions, and translate the question as "Will you survive when you are too old to work, if not, what are you doing about it?". From his Russian experience, he then adds "Here is a bad solution: get drunk a lot."

Although aimed squarely at an American audience, this book is just as valuable for Europeans, and I recommend it to anyone who realises that our high-consumption, supermarkets-and-jet-planes society cannot last much longer, and is interested in thinking right through what that really means. Orlov treats his readers as intelligent people who will reach their own conclusions, and do not need to be spoon-fed with fatuous recommendations. It's a treat.

M. Lyster, Oxford, UK

Thursday, July 03, 2008

Questions for Economists

Let's take a hypothetical Joe Blow. He is married and has a teen-age son. Like many Americans, Joe likes to live big: a big suburban mansion, a gigantic SUV, and, pièce de résistance, a sportfishing boat with not two but three 325-hoursepower Yamaha outboards on the back! Joe sells vacation/investment properties: condo units in partially completed new neighborhoods overlooking scenic brackish swamps in a hurricane zone. I have some questions about the effects of macroeconomic shifts on the financial outlook of the Blow family.

1. Joe's savings and retirement funds are tapped out, and he doesn't seem to be able to get any more loans. Nobody wants accept his prized possessions as collateral. What effect will rising interest rates have on Joe's ability to borrow?

2. The condos that Joe is trying to move are dropping in value. He hasn't been able to move a single one in many months. What effect will continuing asset depreciation have on his ability to earn commissions?

3. Joe's wife's credit cards are maxed out, and she doesn't seem to be able to get any more. What effect will inflation in China have on her ability to continue buying those stylish Chinese-made outfits she likes to surprise Joe with?

4. Joe's wife has planted some potatoes and squash in the back yard. What effect will rising food prices have on the cost of the produce she is growing?

5. To keep warm in the wintertime, the Blow family plans on burning their furniture. What effect will the rising heating oil and natural gas prices have their family budget?

6. Joe's son hasn't been able to get the student loans he needed to go on to college, so his Plan B is to develop a heroin habit and spend his days sitting in his room nodding out to music. He plans to pay for his habit by dressing up in some of his mom's sexier outfits and turning tricks. What effect will the economic policies of the two presidential candidates have on his business plan?

I am guessing that, in tackling these questions, an economist would most likely want to discuss whether what we have should properly be called inflation or deflation. Joe's assets are decreasing in value, and that is deflationary. There is also a great deal of volatility in food and energy prices, which might look like inflation, but then Joe's wages aren't rising to keep up, so there is no wage inflation. So perhaps it's a wash. What then is the optimum interest rate? There will certainly be some short-term pain, but it will make the economy more efficient in the long run. What was the question again?

It seems to me that a perfectly reasonable answer to all these questions is "none at all," but then I am not an economist. I am an engineer by training. And so here's a question I should be able to answer. Joe's stereo system is on fire. It kept blowing fuses, so he wrapped the fuse in tin foil, and then rats chewed through the speaker wires and shorted them out. What effect will graphic equalizer settings have on the sound quality of his stereo system?

None at all.

Thursday, June 19, 2008

The Last Cars

An interviewer recently asked me whether I am a futurist. After all, in my book, I make many predictions about the shape of the future – a practice that is taboo among social scientists. What, the interviewer asked, would be my response to criticism from social scientists? I answered that my response would be to request that they put the book down and back away slowly. It was not written for them.

I am more of a “presentist” myself, and a reluctant one at that: I see the world around me, observe its general direction, and then make predictions about its destination, which, I hope, it will take a long time in reaching. In this I am often frustrated, and developments that I would wish to take the better part of a decade materialize in a mere year or two.

Still, the idea of futurism sounds lovely. I have enjoyed reading futurist writers, Olaf Stapledon especially. And so I see no harm in trying to channel Stapledon. In sincere imitation of his great work “The Last and First Men,” I present here “The Last Cars.” (As for the “First Cars,” should you find the subject interesting, I encourage you to visit your local public library.)

In the middle of the year 2008 C.E. information technology finally reached a point of development known as the Singularity. Beyond that point, the combined intelligence of networked computers made further technological developments fast and effortless. The Singularity had little or no impact on cars, which, being rather bulky and slow to replace, continued to move at or near the speed limit, which was usually much, much lower than the speed of light. Nor was the Singularity able to achieve much when it came to increasing oil production, in order to alleviate the gasoline and diesel shortages that were beginning to put the economy in a state of shock.

However, the Singularity did manage prove its worth organizationally, by enabling the swift and universal introduction of so-called “driving plans.” Fuel could no longer be purchased directly, but only by entering into a contract with one of the two remaining oil companies: ExxonMobilShellBP and RosNeftGazProm. A driving plan entitled a driver to obtain a certain number of gallons per month from a set of approved gas stations. Unused gallons became “roll-over gallons,” which could be used during one of the subsequent months, and which eventually expired. A driving contract could be cancelled simply by going to the nearst hospital and donating a kidney – a brilliant arrangement that made cancellations quite rare.

The introduction of driving plans likewise did nothing to improve the situation with regard to the availability of transportation, which by the autumn of 2008 was bordering on the disasterous. To remedy the situation using a quick, Singularity-powered techno-fix, American auto companies teamed up to quickly design and mass-produce much smaller cars. In this, they recruited the help of the Shriners – America’s secret weapon when it comes to small car design. After a kick-off prayer breakfast, the executives and the Shriners poured out into the parking lot, where they torched three effigies of America’s previous failed attempts at small car design: a Ford Pinto, an AMC Gremlin, and a Chevy Vega.

Again, thanks to the Singularity, the Shriner design team was able to produce a new product in less then a fortnight, and by Christmas America had a new car it could love: a NASCAR micro-racer. The enthusiasm of the early adopters was somewhat tempered by the realization that the new car could only turn left. This resulted from the design team’s use of a certain Rapid Development methodology which forbade impementing features that were not considered strictly necessary. In spite of such minor annoyances, millions of NASCAR micro-racers were manufactured in Japan, Chrina, India, and other countries where America did its manufacturing, and the Federal Reserve obliged by printing enough money for all Americans to be able to afford to import and purchase these cars. However, this strategy had the unfortunate side-effect of destroying what little value remained in the US Dollar, effectively cutting the country off from two-thirds of its oil supply.

Very little is known about the period that followed; apparently, the Singularity crashed when the power grid collapsed, and by the time it came back the one engineer who knew how to cold-boot it could not be found, and the page of instructions he taped to the side of the server rack could not be deciphered. And so nothing further is known about cars as we are used to thinking of them. But some information survives about some alternative meanings that the word "car" subsequently acquired.

For instance, the term "car" came to be applied to wheeled contraptions with straps used by obese Americans to paddle about, to position themselves in front of television screens, to watch videos of bunnies that baked and ate cupcakes. They made it easier for their Iraqi handlers to feed them, hose them down, and to push them into the liposuction pens when it came time to harvest the biodiesel.

Later on, the term "car" came to be applied to an ingenious confection, which emitted the "new car taste" when you bit down on it, and produced exquisite "Vroom-vroom!" sensations when rolled about on the tongue.

Tuesday, June 17, 2008

Interview on Radio Ecoshock

Yesterday, Alex Smith interviewed me for Radio Ecoshock. The interview can be downloaded here, and will eventually go out over actual airwaves on quite a number of local stations. We talked about things that the government could potentially do to make collapse survivable (but probably won't), why collapse is almost inevitable (not enough energy; downscaling means bankruptcy), what happens when foreign creditors and investors demand their pound of flesh, and how we can try to live our lives and do what we want anyway.

Saturday, June 07, 2008

Traffic! Weather! Sports! Collapse!

This blog has been quiescent for a couple of weeks (although the comments still keep flowing in on the older posts) because I have been busy promoting RC by giving radio interviews, while simultaneously finishing work on the boat that is our home and getting it ready for re-launch. As of yesterday, the boat is in the water, and the interviews seem to be settling down to a pattern, and so here I am, once again, bringing you an update.

It is only fair to warn you that over the next few weeks, you may be driving to work in the morning, listening to the radio, and hear something like this:

"Next we have Dmitry Orlov, the author of Reinventing Collapse: The Soviet Example and American Prospects." Dmitry is a "leading Peak Oil theorist; [it actually says that on the back cover: yikes!] Dmitry, what does that mean, Peak Oil theorist?"

"Peak Oil is the theory that accurately predicted the all-time peak of oil production in the US in 1970, as well as what will probably turn out to be the all-time peak in global conventional oil production in 2005. But let me start by mentioning another theory: the theory of gravitational attraction. A physics professor I had in college once suggested that if we freshmen had any doubts about this theory, we could test it by jumping off a table while keeping our knees perfectly straight, and observe what happens to our spines. I would like to propose a similar test with regard to Peak Oil, but it's even easier: just keep driving your car the way you are used to doing for a few more years, and observe what happens to your bank account."

"But people have come on this show to tell me that we have plenty of reserves right in this country that we can't tap because of some very extreme positions of certain environmentalists. Isn't this just a political problem? Can't we solve it if only we wanted to?"

"If all the environmentalists suddenly disappeared from the face of the earth, there would be a tragic loss of colorful calendars full of pictures of cute and majestic animals... Supposing we could proceed full speed ahead with the exploration of ANWR in Alaska, the continental shelf, and various other hopeful places within the continental US, then it would take up to 20 years for these new provinces to go on-stream, and then they would add up to no more than a few percent of our current consumption level. In the meantime, depletion in existing provinces would continue to run its course, adding up to a lot more than that. Also, by then, we will have lost access to most of our oil imports, because oil exporting countries are depleting their resources as well, and will need all of the remaining oil for themselves."

"You compare the US to the Soviet Union, but didn't the Soviet Union fail because of its backward Communist system? We have the free market, we can innovate and solve our problems in ways that they just couldn't even imagine!"

"The central planning system in the Soviet Union was quite inflexible and inefficient, and caused hoarding and black market trading. It directly allocated resources to things like central heating for entire neighborhoods, public transportation and government services. Market psychology had nothing to do with it: these were all physical flows of energy. Our system is certainly better during normal times, but when key resources become scarce, it suddenly becomes much worse: people are priced out of the markets for the things they need to survive, hoarding and profiteering become the norm, municipalities are driven into bankruptcy while oil companies make record profits and find nothing better to do with them than buy back their own stock, and so forth."

"But still, can't we innovate our way out of this? I was shopping for a new car yesterday, and there are all kinds of new hybrids and electric cars appearing on the market... when there is a crisis, the free market system responds, and gives us products that solve the problem!"

"The idea that the problem of too many cars and too much car dependence can be solved by making more cars is preposterous. What makes the problem insolvable is that Americans have been conditioned to treat access to private automobile as a birthright, and taking away their cars is about as advisable as trying to take away their guns. The most commonsense thing to do would be to ban the manufacture, import, and sale of new vehicles, except for some specific fleet vehicles used for public services, as was done during World War II. But this problem will work itself out to some extent: it takes a lot of energy to make a car, and new cars are still affordable only because the new oil prices haven't percolated through the entire economy yet."

"Some people are concerned about the falling dollar and what the Federal Reserve is doing. What do you make of their policies?"

"They are making a strenuous effort to make insolvent financial institutions look solvent by lending them bushels of newly printed dollars. The effect is ever more US dollars chasing after same or smaller quantities of key commodities, such as oil and food, causing huge run-ups in prices. This is what the start of hyperinflation looks like. Eventually, this will ruin our ability to continue borrowing and financing our huge trade and budget deficits. It will also cut off our access to key imports, such as two-thirds of the oil we use, because nobody will want to continue stockpiling our worthless dollars. If that happens, the US economy will go into a state of severe shock.

"The economists have suddenly been thrust into a world they can't understand. They are used to thinking of energy in terms of money, and in terms of driving economic growth. They can't possibly be expected to turn around and learn to think of money in terms of energy, and of driving a gradual powering-down of the economy in ways that will provide the population with the essentials and avoid needless suffering. What it means to the rest of us is that we should stop looking to the economists for answers. There would be too much retraining involved to make them into competent practitioners of this new discipline."

"If you were sent to Washington to fix this, what would you do?"

"Please don't send me to Washington: it's not the place to go to get anything useful accomplished. Centralized, political efforts are about as likely to succeed as Gorbachev's Perestroika. There, there was the one Communist party, which killed all private initiative and entrepreneurship. Here, we have the two Capitalist parties, which kill all public initiatives that impinge on the prerogatives of private capital or the free market. This makes just about any good proposal politically impossible. The best thing to do about national politicians is to completely ignore them and wait until they go away. This approach worked really well with the Communists in Russia."

"If this is really the case, then what can you possibly hope to accomplish?"

"I am trying to help people prepare psychologically. An economic collapse is the worst possible time to have a nervous breakdown, but that's what typically happens. If people have a chance to think about it ahead of time, they will be better prepared for it. On top of that, they will lose access to a lot of comforts and conveniences they are used to, and if they are serious, they could try living without them ahead of time, just to make sure they have the stamina and the skills to survive. But the tragic thing is, to prepare for collapse, you have to start living as if it already happened, and very few people are willing to do that. They will wait until it is too late, and then expect somebody to come to their rescue.

"Boy, you must be a real hit at cocktail parties! It's all doom and gloom, isn't it?"

"Yes, there is that aspect to it, but my message is really quite hopeful. What I want people to walk away with is the realization that it is possible to live a rich, happy, fulfilling life even in the midst of collapse. All it takes is some preparation and a different attitude. It is hard to get started, and shift from looking at the big picture to leaving it behind and making your own arrangements, but once you take a few steps in that direction, life actually gets easier, because with each step, you gain some peace of mind.