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Why Standard Economic Models Don’t Work - Our Economy Is A Network

Tyler Durden's picture




 

Submitted by Gail Tverberg of Our Finite World blog,

The story of energy and the economy seems to be an obvious common sense one: some sources of energy are becoming scarce or overly polluting, so we need to develop new ones. The new ones may be more expensive, but the world will adapt. Prices will rise and people will learn to do more with less. Everything will work out in the end. It is only a matter of time and a little faith. In fact, the Financial Times published an article recently called “Looking Past the Death of Peak Oil” that pretty much followed this line of reasoning.

Energy Common Sense Doesn’t Work Because the World is Finite 

The main reason such common sense doesn’t work is because in a finite world, every action we take has many direct and indirect effects. This chain of effects produces connectedness that makes the economy operate as a network. This network behaves differently than most of us would expect. This networked behavior is not reflected in current economic models.

Most people believe that the amount of oil in the ground is the limiting factor for oil extraction. In a finite world, this isn’t true. In a finite world, the limiting factor is feedback loops that lead to inadequate wages, inadequate debt growth, inadequate tax revenue, and ultimately inadequate funds for investment in oil extraction. The behavior of networks may lead to economic collapses of oil exporters, and even to a collapse of the overall economic system.

An issue that is often overlooked in the standard view of oil limits is diminishing returns. With diminishing returns, the cost of extraction eventually rises because the easy-to-obtain resources are extracted first. For a time, the rising cost of extraction can be hidden by advances in technology and increased mechanization, but at some point, the inflation-adjusted cost of oil production starts to rise.

With diminishing returns, the economy is, in effect, becoming less and less efficient, instead of becoming more and more efficient. As this effect feeds through the system, wages tend to fall and the economy tends to shrink rather than grow. Because of the way a networked system “works,” this shrinkage tends to collapse the economy. The usage of  energy products of all kinds is likely to fall, more or less simultaneously.

In some ways current, economic models are the equivalent of flat maps, when we live in s spherical world. These models work pretty well for a while, but eventually, their predictions deviate farther and farther from reality. The reason our models of the future are wrong is because we are not imagining the system correctly.

The Connectedness of a Finite World 

In a finite world, an action a person takes has wide-ranging impacts. The amount of food I eat, or the amount of minerals I extract from the earth, affects what other people (now and in the future) can do, and what other species can do.

To illustrate, let’s look at an exaggerated example. At any given time, there is only so much broccoli that is ready for harvest. If I decide to corner the broccoli market and buy up 50% of the world’s broccoli supply, that means that other people will have less broccoli available to buy. If those growing the broccoli spray the growing crop with pesticides, “broccoli pests” (caterpillars, aphids, and other insects) will die back in number, perhaps contributing to a decline of those species. The pesticides may also affect desirable species, like bees.

Growing the broccoli will also deplete the soil of nutrients. If 50% of the world’s broccoli is shipped to me, the nutrients from the soil will find their way around the world to me. These nutrients are not likely to be replaced in the soil where the broccoli was grown without long-distance transport of nutrients.

To take another example, if I (or the imaginary company I own) extract oil from the ground, the extraction and the selling of that oil will have many far-ranging effects:

  •  The oil I extract will most likely be the cheapest, easiest-to-extract oil that I can find. Because of this, the oil that is left will tend to be more expensive to extract. My extraction of oil thus contributes to diminishing returns–that is, the tendency of the cost of oil extraction to rise over time as resources deplete.
  • The petroleum I extract from the ground will consist of a mixture of hydrocarbon chains of varying lengths. When I send the petroleum to a refinery, the refinery will separate the petroleum into varying length chains: short chains are gasses, longer chains are liquids, still longer ones are very viscous, and the longest ones are solids, such as asphalt. Different length chains are used for different purposes. The shortest chains are natural gas. Some chains are sold as gasoline, some as diesel, and some as lubricants. Some parts of the petroleum spectrum are used to make plastics, medicines, fabrics, and pesticides. All of these uses will help create jobs in a wide range of industries. Indirectly, these uses are likely to enable higher food production, and thus higher population.
  • When I extract the oil from the ground, the process itself will use some oil and natural gas. Refining the oil will also use energy.
  • Jobs will be created in the oil industry. People with these jobs will spend their money on goods and services of all sorts, indirectly leading to greater availability of jobs outside the oil industry.
  • Oil’s price is important. The lower the price, the more affordable products using oil will be, such as cars.
  • In order for consumers to purchase cars that will operate using gasoline, there will likely be a need for debt to buy the cars. Thus, the extraction of oil is tightly tied to the build-up of debt.
  • As an oil producer, I will pay taxes of many different types to all levels of governments. (Governments of oil exporting countries tend to get a high percentage of their revenue from taxes on oil. Even in non-exporting countries, taxes on oil tend to be high.) Consumers will also pay taxes, such as gasoline taxes.
  • The jobs that are created through the use of oil will lead to more tax revenue, because wage earners pay income taxes.
  • The government will need to build more roads, partly for the additional cars that operate on the roads thanks to the use of gasoline and diesel, and partly to repair the damage that is done as trucks travel to oil extraction sites.
  • To keep the oil extraction process going, there will likely need to be schools and medical facilities to take care of the workers and their families, and to educate those workers.

Needless to say, there are other effects as well. The existence of my oil in the marketplace will somehow affect the market price of oil. Burning of the oil may affect the climate, and will tend to acidify oceans. It would be possible to go on and on.

The Difficulty of Substituting Away from Oil 

In some sense, the use of oil is very deeply imbedded into the operation of the overall economy. We can talk about electricity replacing oil, but oil’s involvement in the economy is so pervasive, it can’t possibly replace everything. Perhaps electricity might replace gasoline in private passenger automobiles. Such a change would reduce the demand for hydrocarbon chains of a certain length (C7 to C11), but that only reduces demand for one “slice” of the oil mixture. Both shorter and longer chain hydrocarbons would be unaffected.

The price of gasoline will drop, (making Chinese buyers happy because more will be able to afford to use motorcycles), but what else will happen? Won’t we still need as much diesel, and as many medicines as before? Refiners can fairly easily break longer-chain molecules into shorter-chain molecules, so they can make diesel or asphalt into gasoline. But going the other direction doesn’t work well at all. Making gasoline into shorter chains would be a huge waste, because gasoline is much more valuable than the resulting gases.

How about replacing all of the taxes directly and indirectly related to the unused gasoline?  Will the price of electricity used in electric-powered vehicles be adjusted to cover the foregone tax revenue?

If a liquid substitute for oil is made, it needs to be low priced, because a high-priced substitute for oil is very different from a low-priced substitute. Part of the problem is that high-priced substitutes do not leave enough “room” for taxes for governments. Another part of the problem is that customers cannot afford high-priced oil products. They cut back on discretionary expenditures, and the economy tends to contract. There are layoffs in the discretionary sectors, and (again) the government finds it difficult to collect enough tax revenue.

The Economy as a Networked System

I think of the world economic system as being a networked system, something like the dome shown in Figure 1. The dome behaves as an object that is different from the many wooden sticks from which it is made. The dome can collapse if sticks are removed.

Figure 1. Dome constructed using Leonardo Sticks

Figure 1. Dome constructed using Leonardo Sticks

The world economy consists of a network of businesses, consumers, governments, and resources that is bound together with a financial system. It is self-organizing, in the sense that consumers decide what to buy based on what products are available at what prices. New businesses are formed based on the overall environment: potential customers, competition, resource availability, services available from other businesses, and laws. Governments participate in the system as well, building infrastructure, making laws, and charging taxes.

Over time, all of these gradually change. If one business changes, other business and consumers are likely to make changes in response. Even governments may change: make new laws, or build new infrastructure. Over time, the tendency is to build a larger and more complex network. Unused portions of the network tend to wither away–for example, few businesses make buggy whips today. This is why the network is illustrated as hollow. This feature makes it difficult for the network to “go backward.”

The network got its start as a way to deliver food energy to people. Gradually economies expanded to include other goods and services. Because energy is required to “do work,” (such as provide heat, mechanical energy, or electricity), energy is always central to an economy. In fact, the economy might be considered an energy delivery system. This is especially the case if we consider wages to be payment for an important type of energy–human energy.

Because of the way the network has grown over time, there is considerable interdependency among different types of energy. For example, electricity powers oil pipelines and gasoline pumps. Oil is used to maintain the electric grid. Nuclear electric plants depend on electricity from the grid to restart their operations after outages. Thus, if one type of energy “has a problem,” this problem is likely to spread to other types of energy. This is the opposite of the common belief that energy substitution will fix all problems.

Economies are Prone to Collapse

We know the wooden dome in Figure 1 can collapse if “things go wrong.” History shows that many civilizations have collapsed in the past. Research has been done to see why this is the case.

Joseph Tainter’s research indicates that diminishing returns played an important role in the collapse of past civilizations. Diminishing returns would be a problem when adding more workers didn’t add a corresponding amount more output, particularly with respect to food. Such a situation might be reached when population grew too large for a piece of arable land. Degradation of soil fertility might play a role as well.

Today, we are reaching diminishing returns with respect to oil supply, as evidenced by the rising cost of oil extraction. This is occurring because we removed the easy to extract oil, and now must move on to the more expensive to extract oil. In effect, the system is becoming less efficient. More workers and more resources of other types are needed to produce a given barrel of oil. The value of the barrel of oil in terms of what it can do as work (say, how far it can move a car, or how much heat it can produce) is unchanged, so the value each worker is producing is less. This is the opposite of efficiency.

Peter Turchin and Sergey Nefedov have done research on the nature of past collapses, documented in a book called Secular Cycles. An economy would clear a piece of land, or discover an approach to irrigation, or by some other means discover a way to expand the number of people who could live in an area. The resulting economy would grow for well over 100 years, until population started catching up with resource availability. A period of stagflation followed, typically for about 50 or 60 years, as the economy tried to continue to grow, but bumped against increasing obstacles. Wage disparity grew as wages of new workers lagged. Debt also grew.

Eventually collapse occurred, over a period of 20 to 50 years. Often, much of the population died off. An inter-cycle period followed, during which resources regenerated, so that a new civilization could arise.

Figure 2. Shape of typical Secular Cycle, based on work of Peter Turkin and Sergey Nefedov in Secular Cycles.

Figure 2. Shape of typical Secular Cycle, based on work of Peter Turkin and Sergey Nefedov in Secular Cycles.

One of the major issues in past collapses was difficulty in funding government services. Part of the problem was that wages of common workers were low, making it difficult to collect enough taxes. Part of governments’ problems were that their costs went up, as they tried to solve the increasingly complex problems of society. Today these costs might include unemployment insurance and bailing out banks; in ages past they included larger armies to try to conquer new lands with more resources, as their own resources depleted.

Today’s Situation 

Our situation isn’t too different. The economy started growing in the early 1800s, abut the we started using fossil fuels, thanks to technology that allowed us to use them. Oil is the fossil fuel that is depleting most quickly, because it is very valuable in many uses, including transportation, agriculture, construction, mining, and as a raw material to produce many goods we use every day.

Our economy seems to have hit stagflation in the early 1970s, when oil prices first began to spike. Now, some of the symptoms we are seeing are looking distressingly like the symptoms that other civilizations saw prior to the beginning of collapse. Our networked system has many weak points:

  • Oil exporters Governments can collapse, as the government of the Former Soviet Union did in 1991, if oil prices are too low. The fact that oil prices have not risen since 2011 is probably contributing to unrest in the Middle East.
  • Oil importers Spikes in oil prices lead to recession.
  • Governments funding Debt keeps expanding; infrastructure needs fixes but they don’t get done; too many promises for pensions and healthcare.
  • Failing financial systems Debt defaults are likely to be a major problem if the economic system starts shrinking. Debt is needed to keep oil prices up.
  • Contagion if one energy product is in short supply This happens many ways. For example, nearly all businesses rely on both electricity and oil. If either one of these becomes unavailable (say oil to supply parts and ship goods to customers), then the business will need to close. Because of the business closure, demand for other energy products the business uses, such as electricity and natural gas, will drop at the same time. Direct use of energy products to produce other energy products (mentioned previously) also contributes to this contagion.

Unfortunately, when it comes to operating an economy, it is Liebig’s Law of the Minimum that rules. In other words, if any required element is missing, the system doesn’t work. If businesses can’t get financing, or can’t pay their employees because banks are closed, businesses may need to close. Workers will get laid off, and the inability to afford energy products (economists would call this “lack of demand”) will be what brings the system down.

Modeling our Current Economy 

Everywhere we look, we see models of how the energy system or the economy can be expected to work. None of the models match our current situation well.

Growth will Continue As in the Past It is pretty clear that this model is inadequate. Every revision to growth estimates seems to be downward. In a finite world, we know that growth at the same rate can’t continue forever–we would run out of resources, and places for people to stand. The networked nature of the system explains how the system really grows, and why this growth can’t continue indefinitely.

Rising Cost of Producing Energy Products Doesn’t Matter In a global world, we compete on the price of goods and services. The cost of producing these goods and services depends on (a) the cost of energy products used in making these goods and services (b) wages paid to workers for producing these services (c) government, healthcare, and other overhead costs, and (d) financing costs.

One part of our problem is that with globalization, we are competing against warm countries–countries that receive more free energy from the sun than we do, so are warmer than the US and Europe. Because of this free energy from the sun, homes do not need to be built as sturdily and less heat is needed in winter. Without these costs, wages do not need to be as high. These countries also tend to have less expensive healthcare systems and lower pensions for the elderly.

Governments can try to fix our non-competitive cost structure compared to these countries by reducing interest rates  as much as possible, but the fact remains–it is very difficult for countries in cold parts of the world to compete with countries in warm parts of the world in making goods. This cost competition problem becomes worse, as the price of energy products rises because we are competing with a cost of $0 for heating requirements. If cold countries add carbon taxes, but do not surcharge goods imported from warm countries, the disparity with warm countries becomes even worse.

In the early years of civilization, warm countries dominated the world economy. As energy prices rise, this situation is likely to again occur.

Price is Not Important  Apart from the warm country–cool country issue, there is another reason that energy cost (in real goods, not just in financial printed money) is important:

The price of the energy used in the economy is important because it is tied to how much must be “given up” to buy the oil or anther energy product (such as food). If energy is cheap, little needs to be given up to obtain the energy. Because of energy’s huge ability to do “work,” the work that is obtained can easily make goods and services that compensate for what has been given up. If energy is expensive, there is much less benefit (or perhaps negative benefit) when what is given up is compared to the work that the energy product provides. As a result, economic growth is held back by high-priced energy products of any kind.

Supply and Demand Leads to Higher Prices and Substitutes  Major obstacles to the standard model working are (a) diminishing returns with respect to oil supply, (b) recession and even government failure of oil importers, when oil prices rise and (c) civil unrest and even government failure in oil exporters, if oil prices don’t keep rising. If there isn’t enough oil supply, oil prices rise, but there are soon so many follow-on effects that oil prices fall back again.

Reserves/ Production This ratio supposedly tells how long we can produce oil (or natural gas or coal) at current extraction rates. This ratio is simply misleading. The real limit is how long the economy can function, given the feedback loops related to diminishing returns. If a person simply looks at investment dollars required, it becomes clear that this model doesn’t work. See my post IEA Investment Report – What is Right; What is Wrong.

IPCC Climate Change Model Estimates of future carbon emissions do not take into the networked nature of the energy system and economy, so tend to be high.  See my post Oil Limits and Climate Change – How They Fit Together.

Energy Payback Period, Energy Return on Energy Invested, and Life Cycle Analysis These approaches look at the efficiency of energy production, comparing energy used in the process to energy produced in the process. In some ways, they work–they show that we are becoming less and less efficient at producing oil, or coal, or natural gas, as we move to more difficult to extract resources. And they can be worthwhile, if a decision is being made as to which of two similar devices to purchase: Wind Turbine A or Wind Turbine B.

Unfortunately, modeling a finite world is virtually impossible. These approaches use narrow boundaries–energy used in pulling oil out of the ground, or making a wind turbine. It doesn’t tell as much as we need to know about new energy generation equipment, together with (a) changes needed elsewhere in the system and (b) whatever financial system is used to pay for the energy generated with that system, will actually work in the economy. To really analyze the situation, broader analyses are needed.

Furthermore, there are the inherent assumptions that (a) we have a long time period to make changes and (b) one energy source can be substituted for another. Neither of these assumptions is really true when we are this close to oil limits.

Where the Peak Oil Model Went Wrong

Part of the Peak Oil story is right: We are reaching oil limits, and those limits are hitting about now. Part of the Peak Oil story is not right, though, at least in  a common version that is prevalent now.  The version that is prevalent is more or less equivalent to the “standard” view of our current situation that I talked about at the beginning of the post. In this standard view, oil supply will not disappear very quickly–approximately 50% of the total amount of oil ever extracted will become available after the peak in oil production. There will be considerable substitution with other fuels, often at higher prices. The financial system may be affected, but it can be replaced, and the economy will continue.

This view is based on writing of M. King Hubbert back in 1957. At that time, it was commonly believed that nuclear energy would provide electricity too cheap to meter. In fact, in a 1962 paper, Hubbert talks about “reversing combustion,” to make liquid fuels. Thus, not only did his story include cheap electricity, it also included cheap liquid fuels, both in huge quantity.

Figure 3. Figure from Hubbert's 1956 paper, Nuclear Energy and the Fossil Fuels.

Figure 3. Figure from Hubbert’s 1956 paper, Nuclear Energy and the Fossil Fuels.

In such a situation, growth could continue indefinitely. There would be no need to replace huge numbers of vehicles with electric vehicles. Governments wouldn’t have a problem with funding. There would be no problem with collapse. The supply of oil and other fossil fuels could decline slowly, as suggested in his papers.

But the story of the cheap, rapid nuclear ramp-up didn’t materialize, and we gradually got closer to the time when limits were beginning to hit. Major changes were needed to Hubbert’s story to reflect the fact that we really didn’t have a fix that would keep business as usual going indefinitely. But these changes never took place. Instead the view of how little change was needed to keep the economy going kept getting downgraded more and more. “Standard” economic views filtered into the story, too.

There is a correct version of the oil limits story to tell. It is the story of the failure of networked systems.

 

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Mon, 06/23/2014 - 21:33 | 4887872 orangegeek
orangegeek's picture

thumbs up to whomever read this entire article

Mon, 06/23/2014 - 21:48 | 4887927 NidStyles
NidStyles's picture

Cliffs: It basically said that the economy is dynamic and will find it's own way to solve the issues presented to humanity despite the players trying to control the outcomes. 

 

Have no fear Mighty Mouse is here....

Mon, 06/23/2014 - 22:18 | 4888000 aVileRat
aVileRat's picture

The only real way the econometric models can improve is with larger data sets, the only problems is those same data sets will not be used just for real time adjusting for oil or global base load demand. Which is why even if the data were gathered via meta census, it would never really work long enough since everyone would drop out of the tracking study as soon as they knew it could be subverted (to push more resources to your lobby) or perverted (think Communism down to the microscale).

A few good ideas where we may go someday:

http://io9.com/12-futuristic-forms-of-government-that-could-one-day-ru-1...

The article discounts the main problem with Peak oil: Cheap plastics/olifens & chemical half steps are made mainly by structurally impossible long-chains which are only found in oils. Governments are dependent on oil revenues (even down to your local civic highway slush fund), but not to the degree the global middle class and non-OECD's are reliant on cheap plastics for drug coatings, basic tools and marginal corporates (Automotives) on cheap finishings. Kill oil-Fuel demand and you only set back the curve a few hundred years, or push the curve forwards since the fresh supply of cheap oils due to the slack in transport demand encourages substitution into more plastics by rational corporations seeking to max. profits. If a gov. were to try and block the increased use of plastics and/or alternative feedstocks, then you are only going to lead to the mother of all Taper-tantrums.

The only way off cheap oil, is to find a new cheap feedstock for Tools and discretionary purchases. Just like how the scarcity of Bronze led to alternative metals (steel's) and later, Iron to Al/Pb alloys, which: led us to plastics. Sadly, the only way out is to go back to the front, which means off-planet mining. Which is itself a circular reference, because to do that we will need to focus alot of current materials & fuel reserves on earth (and carbon tax credits!!) on beyond-lunar exploration. And once we get there, we likely will need to start up a few new methane extraction projects to heat & power the whole joint; starting the cycle all over again.

Don't bother saying 3d printing will save us all: retail 3d printers use plastics. it's only going to accelerate the problem. If someone can figure out how to fuse methanes together to make C9+'s using nano's. But good luck given the false starts in this field since 2001.

The alternative is we just have a big old war, cut the world population by 89%, and sit around until the next Newton is born, hopefully not in the middle of Sudan.

TLDR: One of the better reposts in a while Tyler. Thank you.

 

 

 

Mon, 06/23/2014 - 22:32 | 4888046 flacon
flacon's picture

Suspension of reality is the paradigm we live under... until reality hits... but then we are all dead, in Keynes own words.... 

Mon, 06/23/2014 - 23:13 | 4888133 Cliff Claven Cheers
Cliff Claven Cheers's picture

Peak Oil is as fake as Climate Change.

Mon, 06/23/2014 - 23:44 | 4888171 Radical Marijuana
Radical Marijuana's picture

Both are real, but distorted by the fact that civilization is controlled through a social pyramid system, by which means a tiny minority are able to control the majority through lies backed by violence. In my opinion, Cliff, you confuse the layers of lies that are operating through society. You mistake some of the relatively scientific facts as not being facts, because you correctly perceive that some aspects of those facts are being selectively promoted in order to serve an ulterior evil agenda.

As the cliche goes, you are "throwing the baby out with the bathwater." You are mistaking the deliberate distortions of the issues by the ruling classes with over-generalizations that the problems themselves to do not exist. Those problems really exist, and actually are way worse, because they manifest in the context of a criminally insane society, dominated by the ruling classes who are not good at anything except being sufficiently dishonest and violent to wipe out their opposition, or control most of the opposition that is left. Merely because our society is actually controlled by systems of legalized lies, backed by legalized violence, does NOT mean that none of the chronic problems actually exist.

Tue, 06/24/2014 - 01:08 | 4888342 ebworthen
ebworthen's picture

After Three Mile Island, Chernobyl, and Fukushima the Nuclear Energy pipe dream has been smoked.

Nuclear fusion, if they can contain the reaction, would possibly be the answer.

Imagine, however, what a perfect target a reactor would be for bad guys.

Other problems are water and arable land.

Not enough food = fewer people.

Always a limit on growth.

Not in economics.

I know.

Tue, 06/24/2014 - 01:20 | 4888360 mrpxsytin
mrpxsytin's picture

You really have no imagination do you?

Tue, 06/24/2014 - 03:45 | 4888463 Occident Mortal
Occident Mortal's picture

Let's get one thing clear about our "finite world".

 

 

If we cannot feed 10 billion people, there will NEVER be 10 billion people. There will only ever be as many people as we can feed.

 

If there isn't enough gas for 3 billion cars, there will NEVER be 3 billion cars.

Tue, 06/24/2014 - 06:51 | 4888569 geekz_rule
geekz_rule's picture

well, there may be 10 Billion people, and 3 Billion cars, but it wont last long..

/sarc

but your point is spot on

Tue, 06/24/2014 - 03:50 | 4888467 ebworthen
ebworthen's picture

I've got a great imagination, but I know for certain that 10 people and 1 bathroom is a problem.

Tue, 06/24/2014 - 08:15 | 4888672 max2205
max2205's picture

I love this....propose a model that has a 250 year cycle.....by the time it's proven to be crap you've been dead for 150 years.     Yo!

Tue, 06/24/2014 - 08:15 | 4888674 max2205
max2205's picture

I love this....propose a model that has a 250 year cycle.....by the time it's proven to be crap you've been dead for 150 years.     Yo!

Tue, 06/24/2014 - 15:18 | 4890333 daveO
daveO's picture

How many US citizens were killed at Three Mile Island versus Iraq? On the flip side, how much money did Big Oil make? There's plenty of energy. Tesla once said we'd plug into the environment to get all we want. Unfortunately, he didn't understand Rockefellers.

Mon, 06/23/2014 - 22:50 | 4888089 NidStyles
NidStyles's picture

I find it odd that I am getting junked for merely explaining what the article said, but whatever. Haters are gonna hate.

 

The future of engineering is in Materials Science, and it's for the very reasons you outlined in your post. While I agree with you on the difficulties you elaborated on and a bit more than that, I agree with the author of this article in that humanity will always find a way. A lot of the limiting structures put in place to keep a few select participants in a few select industries in power thanks to political favors will have to go away first, but there are possibilities that using composites and plant based oils in the here and now will offset and real issues in the future thanks to eventual advancements.

Being able to process methane and recycle it and use it as fuel is the future though, of that I am certain. It's the only reasonable option we have ATM. 

 

 

Mon, 06/23/2014 - 23:07 | 4888120 aVileRat
aVileRat's picture

I'm the +1, don't look at me. I chose to post under you for that very reason as I think you started a good sub-thread tonight which expands on the main point policy wonks should be talking about.

 

 

Mon, 06/23/2014 - 23:10 | 4888127 CrazyCooter
CrazyCooter's picture

You must work in sales ...

I find it odd that I am getting junked for merely explaining what the article said, but whatever. Haters are gonna hate.

... and not engineering.

You got a couple junks by the time I started on the thread (after RTFA). People pride themselves on much higher junk rates. You just wanted to continue to not contribute, or sell whatever you are selling.

I do not disagree materials science (Nanotechnology: A Gentle Introduction to the Next Big Idea by Ratner and Ratner for anyone looking for a gentle, non-engineering introduction to implications) is a potential K-Wave, but the article (if you bothered) clearly highlights the role of energy in keeping people fed and existing industries (which can't roll backwards to buggy whips) supplied with resources necessary to support a very complex economy of goods and services.

Humanity won't find a way without significant downsizing. Go have a three martini lunch.

Asshat.

Regards,

Cooter

Tue, 06/24/2014 - 00:06 | 4888185 NidStyles
NidStyles's picture

Neither, I work in trends and analysis. My background is in physics. 

Material Science is not just plastics and hard materials, it's also how chemicals interact on different levels and through differing mechanisms. The next great energy revolution is always predictable before it occurs, and right now that is the field that is making the most headway towards solving our energy needs.

 

 

Here check this out too:

http://phys.org/news/2014-06-barrels-biology-scientists-cost-competitive...

Tue, 06/24/2014 - 00:52 | 4888320 Thorny Xi
Thorny Xi's picture

You're getting junked because you missed the point Gail's making.  Completely. 

Tue, 06/24/2014 - 01:23 | 4888364 mrpxsytin
mrpxsytin's picture

Nidstyles, when are you arriving in Australia? We should catch up when you get over here. I get what you're trying to tell these guys. But they can't listen to you, it's too painful for them.

Tue, 06/24/2014 - 09:17 | 4888767 Flakmeister
Flakmeister's picture

Still lying through your teeth eh? 

Nice link BTW, I guess even a blind squirrel finds a nut every now and then...

Tue, 06/24/2014 - 00:55 | 4888324 I Write Code
I Write Code's picture

There's a large noise element in ZH scores this is the Internet y'know and they let anyone in here.

Materials science?  Hey tennis rackets have come a long way since the wooden rackets with cat gut when i was a kid, if the material gets much better it's going to have to swing itself, just by its crystal structure.

Tue, 06/24/2014 - 01:11 | 4888346 ebworthen
ebworthen's picture

Over optimistic extrapolation.

The growth of the past 100 years can't be sustained with "technology".

There are physical limits to the carrying capacity of the planet that have nothing to do with technology, nor a solution from it.

Tue, 06/24/2014 - 01:21 | 4888363 mrpxsytin
mrpxsytin's picture

The ones downvoting you are the ones who are on their way to extinction. Their choice. 

Tue, 06/24/2014 - 01:35 | 4888374 Seer
Seer's picture

" I agree with the author of this article in that humanity will always find a way."

Huh?

Tue, 06/24/2014 - 08:01 | 4888641 Matt
Matt's picture

NidStyles: 

"I find it odd that I am getting junked for merely explaining what the article said, but whatever. Haters are gonna hate."

"Cliffs: It basically said that the economy is dynamic and will find it's own way to solve the issues presented to humanity despite the players trying to control the outcomes."

Your summary misrepresents the article. The article is saying the economy is a complex network that will fall apart due to declining oil production / increased cost of energy, and that the economy, as a vast network, is too complex to accurately model.

The problems probably will not be solved (well, in the end, it will work itself out, but it will be pretty messy). This is mainly due to too much government, and too many people demanding too much for the amount of resources available to governments, since governments are all built around infinite exponential growth.

I think the article is saying we are facing a collapse in civilization, and in this case, the civilization is global.

Tue, 06/24/2014 - 15:13 | 4890307 daveO
daveO's picture

One Rockefeller trumps a hundred Newtons. 

Tue, 06/24/2014 - 09:13 | 4888825 taketheredpill
taketheredpill's picture

 

 

I know you're probably screwing with me/us but anyway....what the author is saying is that our society has grown into a complex network that is based on cheap fossil fuels.

The author also states that complex systems fail, and ours is likely to fail as well.

Substitutes for oil is a theory that works on paper but in real finite world the system that would finance/develop the substitute system will not exist/function.

Complex systems are not designed to adapt.  They are not designed at all.  They just grow more and more complex until they fail.

 

We're fucked.  Probably.

 

 

Tue, 06/24/2014 - 09:25 | 4888874 Flakmeister
Flakmeister's picture

Nid, it said absolutely no such thing....

Tue, 06/24/2014 - 03:06 | 4888437 Serenity Now
Serenity Now's picture

orangegeek,

I tried, but there's no f-ing thesis.  She lost me at the paragraph about how we're competing with warm countries that have free energy from the sun, and yet they somehow manage to be THIRD WORLD.  It was a non-sensical paragraph, so I stopped there.  

In order to attempt to add something to the discussion, economics has always been about the allocation of scarce (finite) resources which have alternative uses.  The author seems to try to make that point in the beginning of the article, but she goes off the reservation after that.

Tue, 06/24/2014 - 08:06 | 4888651 Matt
Matt's picture

As energy costs rise, warm countries will gain competitive advantage over cold countries, since housing and heating costs are far lower. Food production can be higher, and more solar power and natural light is available.

On the flip side, it depends on how hot. Productivity is lower in tropical places because it is much harder to do intense manual labour at 35 celsius than at 15 celsius.

The article as a whole, as I understand it, is saying the economy is a complex network, which is why existing models are inadequate and why the system is doomed to failure.

Tue, 06/24/2014 - 15:27 | 4890378 daveO
daveO's picture

The author went off the rails by not accounting for monopolistic businesses that stifle competition and lead to the inevitable collapse. I still remember Hanoi Jane's 'China Syndrome' propaganda coming out under Carter's administration. The same administration that used Three Mile Island as an excuse to shut down nuclear construction. All the while, the Ad Council(a taxpayer funded group) was running ads about oil running out in 20 years. Carter was a Rockefeller puppet who pulled the plug on nuclear. The biggest insult was Carter was a nuclear engineer in the Navy(never had an accident). He was the original Obama. 

Tue, 06/24/2014 - 21:51 | 4891744 Matt
Matt's picture

The United States still has no long term storage and is now going to use the spent fuel ponds for decades or even centuries. Good thing they didn't keep building more of those old designs.

Tue, 06/24/2014 - 09:14 | 4888827 taketheredpill
taketheredpill's picture

 

 

I think she was trying to get people who live in countries where the seasonal low in temperature is below freezing to try and imagine life without heat (oil, NG, wood stoves etc.).

 

Mon, 06/23/2014 - 21:33 | 4887873 zorba THE GREEK
zorba THE GREEK's picture

You can say that again.

Mon, 06/23/2014 - 21:40 | 4887894 kaiserhoff
kaiserhoff's picture

Rubbish.

Standard economic models don't work because government is now 50% of nominal GDP,

  and government sucks ape shit.

Mon, 06/23/2014 - 22:17 | 4888004 Seer
Seer's picture

Am I the only zero-govt person who can comprehend that the world is finite?

Mon, 06/23/2014 - 22:39 | 4888059 samsara
samsara's picture

No, there are a couple of us...

"You can lead a man to Knowledge,

But you Can't make him think"

ps

You'd appreciate this SEER

http://www.theoildrum.com/node/10242

Tue, 06/24/2014 - 01:07 | 4888341 Seer
Seer's picture

Thanks, sam.  I wasn't aware of Bartlett's passing.  He was the real deal.  Great comments there from folks.  Knowing brings peace of mind...

Mon, 06/23/2014 - 23:16 | 4888138 CrazyCooter
CrazyCooter's picture

No, this is an infinite growth troll-trot.

I already deduced, based on the low post volume and the few posters at the top, that this post is unfortunately not appreciated by the ZH audience. Gail does excellent work and always presents things I know in ways I don't see. Few authors do that.

I am gonna smack .49 cents on this bad boy tomorrow and send to my old man who refused to get a computer. He loves this shit (72 yo Vietnam vet and finance major, heckles the libs at the senior center).

<shrugs>Nature will sort it all out in time.</shrugs>

Regards,

Cooter

Tue, 06/24/2014 - 00:31 | 4888288 Seer
Seer's picture

Something that I'd always wanted to ask:  Is that avatar a picture of your dog?

If you're a dog person then perhaps you might appreciate this (picture of my dog):

https://www.dropbox.com/s/pl37i2kskiio0qw/P1090015.JPG

Tue, 06/24/2014 - 03:10 | 4888439 Serenity Now
Serenity Now's picture

Awww, cute!  What kind of dog is that ? Me want!  :)

Tue, 06/24/2014 - 11:43 | 4889506 Citxmech
Citxmech's picture

Looks like a "Mastador" (See "Old Yeller" aka "Spike").

Beautiful pup btw.

Tue, 06/24/2014 - 00:52 | 4888319 Slarti Bartfast
Slarti Bartfast's picture

You're not alone. But it seems to be almost instinctively ignored by most.

Tue, 06/24/2014 - 02:00 | 4888401 Serenity Now
Serenity Now's picture

+1

Tue, 06/24/2014 - 01:54 | 4888392 goldsansstandard
goldsansstandard's picture

There is an infinity in knowledge.
There is an infinity in small
There is a whole lot of room left.

All of humanity, all seven billion of us , if shredded would not fill one small mountain .

It's a long long way to filling up the planet.

and smart people and organizations are tinkering all the time, figuring out how to do more with less stuff and less mess.

The way forward is so bright we would need shades , if people just left each other alone.

The first stp in the right direction is helping the malthusians see the way.

Malthus has been wrong for over 200 years, and will be for a very long time.

Tue, 06/24/2014 - 08:57 | 4888778 Flakmeister
Flakmeister's picture

Wow, that sounds like Nirvana....

No, the other Nirvana...

Tue, 06/24/2014 - 10:12 | 4889046 PeakOil
PeakOil's picture

Yes, well in the past 150 years humanity has managed to mostly burn through a once-in-history cornocopia of fungible, easily transportable & extractible, extremely versatile non-renewable high density energy. Consider equivalence in human energy terms. How many man-slave-years equivalents do we get from a gallon of gas going to and from the grocery store? Fossil fuel energy is *the* capital upon which our modern civilization is based. (it's called "petro-dollar" for a reason) No energy - no economy. And we have been eating our seed-corn for 150 years. Energy wise what long lived, sustainable return do we get from burning oil? In the long-term none. We burn up our seed-corn to support a modern, energy intensive, JIT, extremely complex, networked, interdependent, highly nonlinear & unstable, requiring huge energy inputs, unsustainable economy. A poster child for everything that is counter to Taleb's notion of anti-fragile. We are extremely vulnerable to systemic collapse and are growing more so by the day. Commuting to and from work to jobs that are equivalent (energy-wise) to shuffling deck chairs on the Titanic. That is, providing no lasting benefits as our primary energy sources deplete - which they are, rapidly. When those barrels of oil are burned they're gone. They ain't coming back. The cheap oil is gone and now we're on to the expensive stuff. The stuff we can no longer afford in $ terms in addition to EROEI.

We're not hunter gatherers anymore. Asking how many complex human civilizations using concentrated methods to extract resources from the environment have not collapsed is perhaps analogous to asking how many fiat money systems survive in the long run. None. Both suffer from flawed assumptions and willful ignorance of human nature.(we choose to ignore what we would rather not acknowledge)

Uncritical faith in technological "progress" to save our asses due to our squandering wasteful ignorance is just that. Uncritical faith. Another failed religion.

Malthus was early.

Tue, 06/24/2014 - 15:36 | 4890424 daveO
daveO's picture

Brazil's current ROEI on cane fuel isn't going any lower and with technology will likely rise. There is a floor. Coal was replaced, it never ran out. TPTB must talk up oil prices by scaring the herd. If they don't, debt levels cannot increase thanks to the Petro Dollar. When debt defaults, their lies collapse, along with their strangle hold on the economy.

Tue, 06/24/2014 - 10:00 | 4889058 Citxmech
Citxmech's picture

Environmental constraints on populations are a lot more subtle than just volume and space.  The whole point is that you can't just "do more with less."  Efficiency gains in any system are limited by thermodynamics.  

Basing our economy on oil is a form of deficit spending.  That can't be addressed by squeezing an extra few percent out of existing tech.

If you think you need to help the Malthusians see the way - why don't you shed some light - what energy source will pick-up where oil leaves off?

BTW If you can't see it yet - it's probably already too late.

Mon, 06/23/2014 - 21:42 | 4887901 logicalman
logicalman's picture

Standard economic models don't work because they are based on bullshit.

Hope this saves people some valuable time.

Mon, 06/23/2014 - 23:18 | 4888146 CrazyCooter
CrazyCooter's picture

Yup!

I love the asshat up thread that was all "models yo" like he could pick his ass with a finger and then tell which one.

Regards,

Cooter

Mon, 06/23/2014 - 21:48 | 4887912 pakled
pakled's picture

US solution to fix economy:

 

1) 'Manhattan project' style push for new non-polluting, abundant, energy source

2) Open up north slope reserves (temporary stop gap / full environmentalist oversight)

3) Develop native nat gas supplies and convert anything possible to natural gas

4) Stop buying oil from the Middle East (or any unstable political countries)

5) Round up the top oil executives, tar and feather them, handcuff them around the National Monument -- as a warning to what will happen to those who lobby Congress to block any of the above.

 

Insane?

Mon, 06/23/2014 - 21:50 | 4887938 NidStyles
NidStyles's picture

Thorium. 

Mon, 06/23/2014 - 22:36 | 4888057 samsara
samsara's picture

Come on man,  EVERYBODY knows that

"Fusion is the Energy of the Future* "

 

*and always will be....

Mon, 06/23/2014 - 22:53 | 4888096 Seer
Seer's picture

Once upon a time I was a HUGE fan of fusion.  Then I came to understand that we'd already had abundant cheap energy and we didn't become better humans for it.  And, well, fission was supposed to be the "energy solution" too...

Human hubris.  I think that it's got the "devil" beat hands down.

Tue, 06/24/2014 - 10:09 | 4889094 PeakOil
PeakOil's picture

This.

I'll never forget as an undergrad listening to a Physics prof musing in a lecture once that the human race was not ready for fusion. We lacked the maturity. 30+ years later nothing has changed.

Mon, 06/23/2014 - 23:22 | 4888153 CrazyCooter
CrazyCooter's picture

Not sure why the down votes. As best I can tell, petro-chem industry aside, thorium is absolutely the best way to proceed.

Won't happen though, too many vested parasites, er, I mean interests, in milking the current system.

Folks have to realize that no major energy development happens in the US (I hope your gov't is better!) without shitloads of permitting from the Fed. They can shut down, and do shut down, anything they want. Pipeline? Only with permission. Hydro dam? Only with permission. Free energy for all? Only with permission.

Fuck, American's can't even feed the fucking homeless anymore in some parts of the country.

Regards,

Cooter

Tue, 06/24/2014 - 08:10 | 4888663 Matt
Matt's picture

China and India are heavily invested into Thorium, if it works out, great. If America collapses due to the establishment, fine.

Tue, 06/24/2014 - 09:29 | 4888901 Flakmeister
Flakmeister's picture

Nid, funny that you would be thinking thorium is the answer...

A concept with no working commercial design that will require massive state intervention and subsidy is going to save us....

Another shining example of intellectual bankruptcy on your part...

Mon, 06/23/2014 - 22:30 | 4888042 Seer
Seer's picture

#1 assumes we have capital to do so.  We don't. (we're fucking broke!)

#2 Won't do shit unless we nationalize oil in order to force these resources to be available for the US [only].  Can't be for "free trade" and for this.

#3 "Develop" means "expolit" existing reserves.  We're doing that, and they're rapidly being exhausted (low-hanging fruit).  And for "converting anything possible to [utilize] natural gas," um... - we're fiucking broke, no capital.

#4 Refer to my comments for #2.  The US gets most of its oil from it's own part of the globe.  By boycotting ME oil you effectively are forcing a closure of the global oil markets- not going to help keep costs/pricing low.

#5 What about the "bottom oil executives?"  But seriously, they aren't placing guns to anyone's heads (other than to keep pipelines open).  It would be like killing off big drug dealers, another one will pop up to fill the gap.  Further, it's THE SYSTEM!  And that "system," as Gail writes for all the blind people to ignore, is predicated on growth: the US is not and has not been any different than the communist countries by setting high-level "growth" goals; and it's growth that tells the oil executives to "drill baby drill" or walk the plank- and these folks KNOW that at some point they're going to have to look at all their customers and tell them that they can no longer do what is being demanded.

"Insane?"

Not if viewed within the very framework that is based on an improbable premise: perpetual growth on a finite planet.

Tue, 06/24/2014 - 00:57 | 4888326 Slarti Bartfast
Slarti Bartfast's picture

#5 What about the "bottom oil executives?"

What exactly is "bottom oil"? Do I want to know?

Tue, 06/24/2014 - 01:39 | 4888377 Seer
Seer's picture

Sorry, subtle humor (or attempts at it).  I was refering to it as in the bottom echelon of oil executives.  The post gave unequal treatment based to oil executives: my rebuttal is that bad people don't exist only at the top.

Mon, 06/23/2014 - 22:33 | 4888043 samsara
samsara's picture

" Insane? "

No, Just vacant of any knowledge of energy or geology.

1. Hint... There isn't one that is a one to one replacement for Petroleum.

2. Not enough there.  They would be there already, instead of going down 7000 feet of gulf water THEN 5000 feet if drilling.  Nor would they be anywhere dodging bullets to drill...

3. What do you think they been doing the last 5 years? Where you been?

4. Currently Russia, the ME and "Unstable" countries are the ONLY ONES LEFT THAT HAVE OIL.  Do you think companies which only exist to make money wouldn't do it where it was safe and a short drive from home if they could???

5.  I agree with but not for the reasons you state.

 

Start here, and read for 6-12 months, then, come back with something constructive....

http://www.theoildrum.com/

 

Mon, 06/23/2014 - 22:42 | 4888069 Seer
Seer's picture

sam, I DO believe that the US has a fair amount of reserves yet.  HOWEVER, only the most brain-dead would think that burning through it would make us better off.  In the 1970s one of the Forbes' stated that the US should use everyone else's oil first [before it's own].  How's That for a Big Capitalist?  That's nationalizing oil! (the same thing we've been off-ing various of out-of-favor dictators over).  No then, tossing ideologies aside, the logic that Frobes was using was fairly sound: though, only IF the "nation" would understand that once they were on their last tank that it would be time to get busy for the day in which they hit "E." (the tipping point happens a lot sooner/quicker than most realize- and with the global trade linkage things would be a bit on the sticky side as far as exports would go if the rest of the world was sitting on the road-side out of fuel.)

Mon, 06/23/2014 - 23:22 | 4888152 pakled
pakled's picture

You seem to be reacting as though I suggested we develop [depleted] native oil reserves. That's not what I said. North slope and nat gas are stop gaps to maybe stave off crashing the economy until #1 breaks through. The idea is at least make an attempt to get off oil. We need to do something different from what we're doing now.

Mon, 06/23/2014 - 23:52 | 4888214 Seer
Seer's picture

"You seem to be reacting as though I suggested we develop [depleted] native oil reserves."

That's a pretty stupid interpretation.

Back on topic... The logic is still lacking.

"The idea is at least make an attempt to get off oil. We need to do something different from what we're doing now."

When we cannot even comprehend the problem it would seem quite illogical to attempt to offer up "solutions."  This reaction is pretty much that provided by just about any politician: "We MUST do something!"

The System is totally unsustainable.  Trying to maintain it only delays the inevitible.  LOTS of people are going to die: THIS SUCKS!

Reminds me of this guy I knew who installed solar power systems in residential homes.  He has some rather well-to-do guy ask how much it would cost to convert his home to operate on solar only.  The solar guy confirmed that the home owner wanted to operate just the way he was with on-grid power; so, he tells the guy the costs and the guy just about shit his pants.  Not unless you're able to manage a ruthelss energy policy that caps the shit out of what everyone can use are you going to have an "positives" from cranking open the taps on all the reserves: people will lobby and obfuscate to the point that there will be sufficient traction in propaganda claiming that there's "plenty of oil/energy for everyone, forever!"  Jimmy Cater was laughed out of office: to be replaced by someone who yanked off the solar panels and invited the banking sector to start the party.  That's how it's going to go down again should any restrictions set in.

The economy is dead for all intents and purposes.  Hell, the US went bankrupt in 1971 and STILL haven't admitted it defaulted!

AND, we WILL get "off oil."

Perhaps its the countless years of hearing the same old refrain and seeing the [non] results.  Regardless, it's not that I would not like to see this happen, it's just that you're talking about things that are pretty much antithetical to all that currently exists.  And again, without understanding the core of the issue -that growth will ALWAYS lead to depletion of resources- we would only get back on that runaway train (and with the mindset that is pervasive I'd have to say that that would mean that there's little chance for that bunder to occur because we'll never get past the current blunder).

You call out for providing "stop gap" measures. I see it as calling out for "false hope."  The rich will make extra money off of it as people continue to stay addicted.  Admitting you have a problem is the first step: I don't see any real owning up to this.

Tue, 06/24/2014 - 10:08 | 4889091 Citxmech
Citxmech's picture

See the Hirsch Report.  The time to start replacing was 10-20 years ago.  

PS  I completely agree that we need to be doing something different than what we're doing now (which seems to be mainly driving the bus off a cliff at full throttle).

I think the "we" might have to be reimagined however (ie time to start loading your own personal and community lifeboats).

Mon, 06/23/2014 - 23:25 | 4888161 CrazyCooter
CrazyCooter's picture

Idiot?

Let's see

1) free energy, its easy!

2) look at import figures much?

3) look at production figures much?

4) look at import figures much?

5) what problem do you think you are solving?

Regards,

Cooter

Mon, 06/23/2014 - 21:53 | 4887948 disabledvet
disabledvet's picture

"It's worth ZERO sitting on the shelf."

So sure...we live in a "finite world"...but only a lunatic sees "infinite demand."

Interesting Oracle has just purchased a Point of Sale company for 5 billion...but you won't here this stupid bitch say anything about that.

ZERO IS NOT JUST A WORD.

There's overhead, costs, customer service, taxes, fees..."Zero is in fact quite expensive."

Can there be any doubt that's why we have trillion dollar deficits? Because not a single living economist can understand the expense of Little Sally Sue's Lemonade Stand?

In short...you can print dollars but you can't print demand.

There is an ASSUMPTION (especially here) that "the war machine is demand"...having seen and been up to my eyeballs in the war machine however "this is very bad assumption."

Real demand is driven by consumers...."the internet"...and the study of "wants, needs, desires."

So indeed...this is a "networked economy"...but the cost of that "network" totally collapsed last year.

With no recovery in sight...how do we "shoot oir way to prosperity" again? "By adding more to the debt load"?

Really?

Where is the demand for your money Wall Street and Washington?

There is no loan growth!

Mon, 06/23/2014 - 22:05 | 4887973 Dublinmick
Dublinmick's picture

America was taken by the crown long ago. It is no longer a nation but a job fair.

Mon, 06/23/2014 - 22:11 | 4887990 Pairadimes
Pairadimes's picture

Correction: standard economic models don't work because our economy isn't an economy.

Mon, 06/23/2014 - 22:20 | 4888015 samsara
samsara's picture

Thanks Tylers,  Another Great article by GailTheActuary

 

Mon, 06/23/2014 - 22:35 | 4888054 Seer
Seer's picture

Gail is great.  This article, however, she appeared to be really trying to stretch.  I understand what she was going for, but it's quite the complex situation, and when people can't fucking understand simple math it should be of no surprise to see all the idiots around here jumping all over the weak points as though that derails the very premise (it does not).

I need to contact Gail and see if she'd take my "economies of scale in reverse" and do something with it (I'm not a writer).

Mon, 06/23/2014 - 22:46 | 4888083 samsara
samsara's picture

I'd have to agree with you on this particular article. Just nice to see her get some more exposure...

The mental picture I get is like a 3D Cats Cradle made out of a bunch of rubber bands.

Snip one rubber band and the whole structure shifts to a new homostasis.   I do think there are some key "Grains of Sand" that when removed or disturbed, the whole structure makes a radical  restructuring...

When is the last snowflake before she lets loose?

Mon, 06/23/2014 - 22:48 | 4888087 Seer
Seer's picture

What happens when an insane person goes insane?  That's kind of how this will all end up looking like.  Most won't have a fucking clue what happened: for those who actually had an opportunity but dissmissed it, well, I hope they make good compost.

Mon, 06/23/2014 - 23:51 | 4888128 Radical Marijuana
Radical Marijuana's picture

Indeed, Seer!

The question:

"What happens when an insane person goes insane?"

The most important feature of our civilization is that it was built on the success of warfare based on deceits, which enabled building a political economy based on enforced frauds. The crucial point is that the social success of being able to back up lies with violence can never make those lies become true. At the present time, the world is dominated by systems which are about 99% legalized lies, backed by legalized violence. Therefore, that has become runaway criminal insanity, magnified many orders of magnitude by advances in technology.

However, since the vast majority of people have adapted to live inside of social systems which were based upon lies backed by violence, wherein social success was achieved by agreeing with the biggest bullies' bullshit, while disagreeing was punished, that pattern of carrots and sticks, due to those systems of rewards from frauds, versus negative results from truth, drove the established and entrenched systems of organized lies operating robberies to run away at an exponential rate, resulting in our civilization being more and more controlled by huge lies, which have become more and more psychotically detached from relatively objective realities, except that those huge lies continue being socially successful, in the ways that wars based on deceits, and finance based on frauds, were successful for the people engaged in doing that the most.

Our civilization is headed towards a series of psychotic breakdowns, due to the paradox of final failure from too much success at enforcing frauds. An economic system based on enforced frauds is like a metastasizing cancer, or a parasite killing its host. The successes of the frauds are extremely profitable, for those who first benefit from them. However, the civilization as a whole is then directed to behave on the basis of believing bullshit. As the whole civilization becomes more and more controlled by huge lies, that civilization becomes more and more criminally insane.

I recommend social psychiatry, and radical truth, as cures for that disease. However, refusing to take treatment is one of the central features of "What happens when an insane person goes insane?"

Of course, that pattern is ancient, &

described in ancient Greek tragedies:

"Whom the gods would destroy, they first drive mad."

One of the deeper reasons why our civilization has become apparently insane is that the controlled opposition groups are similarly insane, and therefore, the whole system appears to be terminally sick and insane. Those few who recognize the problems caused by private banks creating the public "money" supply out of nothing as debts, in ways which flatly contradict the basic laws of nature (because that is actually an enforced fraud), still tend to never look deeper into how and why that problem developed, and therefore, tend to recommend superficial treatments of the symptoms, without addressing the deeper causes directly.

Mon, 06/23/2014 - 23:57 | 4888231 Seer
Seer's picture

Back during the early days of the "get the evil-doers" I recall this e-mail from someone (it was a business connection) that was pushing some obvious flag-waving patriotic BS, something about some soldier's patch or such, and I replied that it was bogus.  I get this response from one person on that mailing  (I NEVER pass up an opportunity to communicate with EVERYONE who is "invited" to a "discussion" [people don't use Bcc and I'll make 'em pay!) that they didn't care if it was a lie.  Yes, the "symbol" was all that mattered, and, of course, that symbol was of pure govt/MIC propaganda.  I concluded after that that people like being lied to.  The liars, therefore, have a willing audience...

Tue, 06/24/2014 - 00:26 | 4888277 Radical Marijuana
Radical Marijuana's picture

Yeah, Seer. It at first it seems paradoxical, but the bullies tended to be popular. Almost all politicians are liars, because almost the only ways to be successful politicians are to be a good liars. It is easy to tell people the lies that they want to hear. It is hard to tell them more truth, that they do not want to hear.

These days, more and more, the formula to become successful politicians are to find out what lies people want to hear, and then tell them those lies. Those lies have the most willing audience, and receive the greatest applause. (Of course, Obama was the most recent example.)

That is one of the major reasons why our fake democracy is already almost dead. It is way too easy to fool enough of the people enough of the time, because there are enough people who want to be fooled. That is an especially vicious spiral after those frauds enable those liars to become more wealthy and powerful, and therefore, more able to reward those who promote their bullshit, while able to punish those who oppose their bullshit.

That is why I think our current civilization has become terminally sick and insane. Too many people have been turned into incompetent political idiots, that are too easy to lie to, and get away with that. Indeed, collectively we have reached the point where more radical truth is axiomatically one of the most unpopular articulations possible. After all, we are now in an Orwellian world, pumped up on steroids!

Tue, 06/24/2014 - 00:51 | 4888318 Seer
Seer's picture

I gave up trying to "save" the world when my wife pointed out that I wasn't Jesus.  There's humor in there, but it's a bit too personal to expose here...

I tend to think that the lies need to increase in intensity as the mounting pressures of facts (some would say "truths," but "truth" is subjective) ultimately break through the veils.  At such a point, however, the build-up of divisioning (creating tensions between groups of people- it's TPTB's "break in case of emergency, pull a rabbit out of the hat free" card) gets unleashed by the liars as a way of casting attention away from the liars.  I think that there's also something in astrology that says that for each new whatever-its-called era we completely ditch all previous "beliefs" and pretty much start anew; the timeframe is in thousands of years, so nothing in our history can really relate to it.

Tue, 06/24/2014 - 10:17 | 4889132 Citxmech
Citxmech's picture

Sometimes I think it's harder to save ones self and family than to try and save the world, Seer.  

Most of the peak oil "prophets of doom," for instance, don't seem to be shining examples of resiliancy in their personal lives.  Ironically, it's the "slow food," localization folks that seem to be the best model of future community resiliancy and sustainability.  

Of course running a real homestead is a fulltime job that frowns on too many time-intensive external hobbies.  The upside is that "leading by example" can teach very a powerful lessons without much extra effort. 

Mon, 06/23/2014 - 22:49 | 4888088 Radical Marijuana
Radical Marijuana's picture

I agree that Tverberg is one of the better authors that gets republish on Zero Hedge.

Mon, 06/23/2014 - 22:58 | 4888107 Seer
Seer's picture

I have a soft spot for anyone who can deal in true fundamentals.

The funny thing is that people here can comprehend growth as it applies in the "positive," with regard to "wealth," but when the same math concepts are applied to our PHYSICAL WORLD they tend to completely discover math anxiety and start pulling out the "technology will solve it" or "it's the govt's fault" or "it's the oil folks' fault" or "it's the illegals' fault" lame-ass shit.  Sigh, I suppose that this is all explainable when viewed as typical responses by addicts defending their addiction.

Mon, 06/23/2014 - 22:48 | 4888084 Seer
Seer's picture

Looks like a serial junker in denial is on the loose.  Careful to not make too much noise lest your parents open the basement door...

Mon, 06/23/2014 - 23:34 | 4888184 Vidar
Vidar's picture

The problem is the desire for control. As long as people are unable to accept that they must trust the spontaneous order of the universe and give up the need to control everything around them, we will be on the serial roller-coaster of boom and bust, over both the long and short terms.

The author of this piece writes about "governments" as if their existence was somehow divinely ordained and inevitable, and woe to humanity if they are unable to steal enough in "taxes" to satisfy the parasites at the top. The opposite is the reality: a free market system(without violent theft by parasites and control freaks) is perfectly capable of dealing with the reality of limits to growth through the adjustment of the price system (given market-produced and priced commodity money), but a true market system does not allow anyone to be "in control" and the control freaks can't accept that reality.

The only system of exponential growth that we need be concerned with is that of the parasites in Washington and their like across the globe, at every level and scale. The sun alone produces enough energy to fuel a million Earths, and all it takes is improved technology to access all of it (not to mention Thorium and other possibilities), if humanity is allowed to develop without the cages (both literal and figurative) of the control freaks someone will discover a way to replace oil and all other fossil fuels. It is not a technological or a physical barrier that we face, but a social and mental one: we must give up the desire to control others, on both an individual and a social scale.

Tue, 06/24/2014 - 00:06 | 4888244 Seer
Seer's picture

"a free market system(without violent theft by parasites and control freaks) is perfectly capable of dealing with the reality of limits to growth through the adjustment of the price system (given market-produced and priced commodity money), but a true market system does not allow anyone to be "in control" and the control freaks can't accept that reality."

Good god, do you work in academia?

Declaring something would work and that it hasn't existed is somehow PROOF?

Go ahead and demonstrate how people are going to adhere to "order" when they find themselves starrving.  Or, what about all the thugs who will, as thugs do, do thuggery?

"The sun alone produces enough energy to fuel a million Earths"

Oh, and it's all waste energy, yes?  I have this hunch that you you're no farmer, as if you were you'd have an understanding of the lack of understanding that you demonstate in this regard.

"It is not a technological or a physical barrier that we face, but a social and mental one"

And how does your "logic" differ from the folks who believe that if we all hold hands and sing kumbaya that all will be fine?

3,000 fucking years of history.  Read all about why empires, the highest order of "order," collapse:

http://www.rexresearch.com/glubb/glubb-empire.pdf

Sorry, it IS about the PHYSICAL.  Always has been, always will be...  Growth, it's what leads to collapse.

Tue, 06/24/2014 - 00:15 | 4888257 Radical Marijuana
Radical Marijuana's picture

Vidar, does it not bother you that what you are recommending is an impossible ideal, which will surely backfire and cause the opposite to happen in the real world?

Some people CAN use lies, backed by violence, to control other people. Those who CAN control benefit from doing that. It is NOT possible to "give up the desire to control others, on both an individual and a social scale." Maybe it is asymptotically possible for some enlightened individuals to approach that, however, in the context of society as a whole, there are always going to be some people who will desire to control, and will use dishonesty backed by destruction in order to achieve that control, which will then enable them to be the slave masters that thereby become ever more wealthy and powerful, and so, even more able to control others.

In the real world, there are organized systems of lies, operating robberies, and the only realistic ideals are to try to achieve better dynamic equilibria between the different systems of organized lies and robberies.

What you are proposing, Vidar, is the same old reactionary revolution propositions, based on false fundamental dichotomies and related impossible ideals, which always actually make the opposite happen in the real world. It is Black Sheeple like you, whose notions for "solutions" are for everyone to become better Sheeple, that constantly have backfired badly throughout history. Your views are the classic ones promoted by the controlled opposition groups, found throughout all the old fashioned religions and ideologies, which can never work, but actually make things get worse, not better.

There already IS a "free market system," but that includes a de facto "free market" for the methods of organized crime, to engage in frauds and murders. Therefore, the government became the biggest form of organized crime, controlled by the best organized gangs of criminals. However, "solutions" that will miraculously have EVERYONE "give up the desire to control others, on both an individual and a social scale" are impossible, since the more that happened, then the more that the few who did not would have a field day, which is pretty well the situation that exists now, because of people like you, the reactionary revolutionaries, or Black Sheeple, recommending that the "solutions" are for EVERYONE to become better Sheeple.

The only genuine solutions are for everyone to become better Wolves, in order to organize more resistance, to change the path of least resistance, so that the real rates of social robberies would be changed. However, the Vicious Wolves, and their more Domesticated Dogs, have already so dominated the society, for so long, that there tends to only be controlled opposition left, spouting the same old false fundamental dichotomies, and related impossible ideals, as being the preferred "solutions," which is what the co-opted and compromised old-fashioned religions and ideologies have been doing for a long, long time, while the real socio/political situation constantly got more and more unbalanced, because it is NOT possible for those ideals to ever actually work!

Mon, 06/23/2014 - 23:45 | 4888204 falconflight
falconflight's picture

Return the federal budget to 2008 levels and watch it actually begin to grow.  Remove all regulations promugated since 2008 and watch the economy take off.  The federal gov't is killing America.

Tue, 06/24/2014 - 00:09 | 4888252 Seer
Seer's picture

The US defaulted in 1971 and has yet to admit it.  Same year it's oil production peaked.  Same year "trade relations" with China opened up.

2008 is no pivital year.  It's just another step down the staircase...

Tue, 06/24/2014 - 09:58 | 4889049 Flakmeister
Flakmeister's picture

And you have a very selective memory...

Mon, 06/23/2014 - 23:47 | 4888208 AdvancingTime
AdvancingTime's picture

 Sustainability means planning our future in a way that we do not set ourselves up to crash and burn at some future date. Long-term planning has not been something politicians excel at or are even good at. Our system is geared at getting politicians reelected and fulfilling the most pressing needs of today. 

Things like profit, greed, and quenching our unrelinquishing desire for growth are placed in front of longer term issues and needs. Mapping out a logical and sustainable long-term plan requires delving into some rather hefty philosophical questions like what brings real happiness. More on this important topic in the article below.

http://brucewilds.blogspot.com/2014/04/planning-sustainable-future-for-m...

Tue, 06/24/2014 - 00:17 | 4888264 Seer
Seer's picture

"Things like profit, greed, and quenching our unrelinquishing desire for growth are placed in front of longer term issues and needs."

"Profit" is subjective.  "Greed" is human nature.  The growth meme, however, MIGHT be something that we might have a chance of addressing: doing so would for sure encounter a TON of resistance from those driven by "profit" and "greed."

"Mapping out a logical and sustainable long-term plan requires delving into some rather hefty philosophical questions like what brings real happiness."

I don't prescribe "solutions."  And I would definitely NOT try to identify what should or should not bring "happiness."  Clearly, however, the areas of discovery most in need of exploration would tend to be those in the cerebral hemisphere... (finding inner peace is a good idea/plan)

Tue, 06/24/2014 - 01:36 | 4888375 Professorlocknload
Professorlocknload's picture

++ for the Zen in that.

Tue, 06/24/2014 - 08:26 | 4888697 headhunt
headhunt's picture

Very nice except when you look at the inner peace of a psychopath. Theirs is a bit different - ask Harry Reid what his inner peace may be.

Tue, 06/24/2014 - 00:55 | 4888325 kchrisc
kchrisc's picture

The only reason anyone or institution sets out to "model" an economy is to improve their robbery of that economy.

The reason the models don't work is that they never take in account, for obvious reasons,the thievery of those using the models.

 

"I don't care about the behavior of pheasants, unless I'm interested in eating pheasant."

Tue, 06/24/2014 - 01:00 | 4888333 starman
starman's picture

"the dome can collapse if the sticks are removed"?! Fucking ameeezing! Im gonna have a drink now.

Tue, 06/24/2014 - 01:11 | 4888347 Nexus789
Nexus789's picture

This is an issue that has been largely ignored as it does not fit into the ‘consumption’ view of the world. The impact of human social system to transform the earth in destructive ways has always recognised and is evident in the work of numerous scientific figures that date back to the early 18th Centrury. This includes Horace Bénédict de Saussure, Alexander von Humboldt, Matthias Schleiden, Charles Lyell, George Perkins Marsh, Charles Darwin, and Carl Nikolaus Fraas.

We are now accelerating the decline as we bounce around inside a constrained system and accumulate the seeds of a growing catastrophe. The notion that technology will save us is laughable as the mere act of expoloiting technology contributes to the problem as it is assumed that it is costless - it is not.

All mainstream economics is rubbish as it does not consider the physical constraints of the world.

 

Tue, 06/24/2014 - 14:42 | 4890186 Radical Marijuana
Radical Marijuana's picture

Good points, Nexus789!

"All mainstream economics" is rubbish because it is fundamentally based on enforced frauds, which "does not consider the physical constraints of the world," because recognizing the laws of nature, such as the conservation of energy and matter is NOT consistent with private banks making the public "money" supply out of nothing as debts.

Most of the people who post comments on Zero Hedge understand that well enough, however, the majority of the people do not understand, because they have been conditioned to not want to understand. A small group of intellectuals have always been aware of the range of problems discussed in this article, and your comment. However, the real world operates on the basis of enforced frauds, where the connection between human laws and natural laws is the ability to back up lies with violence.

"The notion that technology will save us is laughable" as long as that technology is primarily developed and deployed in order for the social pyramid systems to continue to enforce frauds.

While I believe it MIGHT EVENTUALLY be theoretically possible to develop better human and industrial ecologies, in ways similar to how many different natural ecologies developed, at the present time, our society is so totally dominated by enforced frauds, which enable those benefiting from those frauds to continue to back up their lies with violence, that there are no feasible solutions, while that whole situation WILL "accumulate the seeds of a growing catastrophe."

The problem that backing up lies with violence is very successful in the short-term, while that gets worse and and worse in the longer term, appears to be practically impossible to prevent working itself through. Indeed, the relatively few people who understand that constantly try to do something about it. However, many of them merely work their ways through stages of accepting the unacceptable, because there appears to actually be nothing that can stop economic systems of enforced frauds from continuing on their trajectory of mad self-destruction.

The basic debt slavery, backed by wars based on deceits, systems require that the majority of people deliberately ignore "the physical constraints of the world," other than the social situations that legalized lies ARE being backed up with legalized violence. Basic common sense physics recognizes that privatized fiat money made out of nothing as debts MUST be fraudulent. Similarly, basic common sense physics recognizes that the official stories about what happened to the three buildings in New York on 9/11/2001 were absurd impossibilities. But nevertheless, the social success of backing up lies with violence has made and maintained the established and entrenched systems of legalized lies, backed by legalized violence, which are automatically getting worse, faster, so that the debt slavery has become debt insanity, and the wars based on deceits have driven death insanities, both of which are still on runaway exponential growth paths!

In that situation, the few intellectuals that are still thinking, and aware of the frauds and deceits that are dominating society can not actually do anything, other than attempt to communicate that ... which tends to remain relatively useless to do, because the entrenched systems of enforced frauds already dominate everything, and automatically enable those doing that to become more wealthy and powerful, in the short-term, despite that the longer term the whole system becomes more and more madly destructive, since it is based on attitudes of evil deliberate ignorance, that tend, overall, to be getting worse, not better, despite whatever a small group of intellectuals may try to do to prevent that from continuing to happen!

Tue, 06/24/2014 - 01:18 | 4888355 Professorlocknload
Professorlocknload's picture

Simply complex!

Tue, 06/24/2014 - 05:53 | 4888518 Gigliola Cinquetti
Gigliola Cinquetti's picture

Standard models don't work because 1) they assume static equilibrium and 2) they are aggregated at noose bleed level . 

Leontieff showed the way out and we have more than ample computing resources available to do better than a regression model with 10 variables 

Tue, 06/24/2014 - 06:38 | 4888562 Eirik Magnus Larssen
Eirik Magnus Larssen's picture

It's interesting to contrast this blog post with the book "Abundance - The Future Is Brighter Than You Think" by Peter Diamandis and Steven Kotler. I'm not yet ready to commit to either side of the argument.

Tue, 06/24/2014 - 15:00 | 4890262 Radical Marijuana
Radical Marijuana's picture

Eirik, I AM committed to BOTH SIDES of the argument.

There are plenty of creative alternatives which could theoretically provide abundance, if they were all integrated. However, the actually existing systems are operated by death controls based on the maximum possible deceits, which back up debt controls based on the maximum possible frauds.

The essential problem with attempts to realize and integrate the creative alternatives, in order to achieve more abundance, is that those would have to be integrated through human and industrial ecologies, that were consistent with the natural ecologies. However, the REAL human ecology is dominated by death controlling murder systems based on the maximum deceits, while the REAL industrial economy is dominated by debt controlling money systems based on the maximum possible frauds.

The future could be brighter, but IF AND ONLY IF there were better death controls, to back up better debt controls, so that the systems of creative alternatives could be better integrated. Merely looking at bits and pieces of possible creative alternatives, which could theoretically provide more abundance, is much more pleasant and popular than looking at the central problems in human history, which were successful warfare based on deceits, upon which foundation was built a political economy based on enforced frauds.

All of the various creative alternative technologies are about the possible ways to apply design science, to solve problems better. Those can be arrayed in an idealized system that looks like it could theoretically provide abundance. However, when people did not agree, then they fought, and when they fought, then the people who were the best at backing up deceits with destruction tended to prevail.

The gap between the theoretical solutions to create abundance, versus the actual realities of aggravated scarcities, could only be bridged through better death controls, to back up better debt controls, so that the holistic systems of human and industrial ecologies could be integrated with natural ecologies. Without being able to better negotiate that, then the different organized crime gangs that currently dominate the world will madly destroy each other, rather than arrive at any better balanced abundance.

By and large, the people who focus on the good things, where design science could achieve wonderful progress, tend to deliberately ignore how that kind of design science would have to be applied to the murder and money systems, in order to actually work in the real world. As long as human ecology continues to actually be controlled by murder systems based on the maximum possible deceits (including that the controlled opposition groups share in the same basic deceitful frame of reference), then all the advancing technologies actually end up being primarily employed to become better at backing up lies with violence, which is quite the paradoxical kind of "abundance."

Tue, 06/24/2014 - 06:52 | 4888570 Last of the Mid...
Last of the Middle Class's picture

Prices will rise and people will learn to do more with less. All economic models now a days have this in them. And all financial talking heads rely on weather as a major reason goals are not met. Economic models don't work because our government has failed miserably at it's job which is to provide a level playing field and let economics sort out the winners and losers. The rest is bullshit smoke and mirrors designed to tell you to get by with less and the uber rich enjoy themselves.

Tue, 06/24/2014 - 07:21 | 4888604 22winmag
22winmag's picture

Will somebody tell the author that oil is much, much more than a fuel? The life sustaining chemicals, plastics, and other products made from oil can't be conjured up by a nuke plant or solar panel.

While you are at it, tell her imbedded isn't a word.

Tue, 06/24/2014 - 08:37 | 4888726 Matt
Matt's picture

FTFA:

"The petroleum I extract from the ground will consist of a mixture of hydrocarbon chains of varying lengths. When I send the petroleum to a refinery, the refinery will separate the petroleum into varying length chains: short chains are gasses, longer chains are liquids, still longer ones are very viscous, and the longest ones are solids, such as asphalt. Different length chains are used for different purposes. The shortest chains are natural gas. Some chains are sold as gasoline, some as diesel, and some as lubricants. Some parts of the petroleum spectrum are used to make plastics, medicines, fabrics, and pesticides. "

 

Please, learn to read. Missing entire paragraphs is far worse than mixing up and i and an e.

Tue, 06/24/2014 - 07:45 | 4888626 Notsobadwlad
Notsobadwlad's picture

Our economy is a network?

I would say that our (the US) economy does not work because:

1. It is not a closed system and looking at the US only in a global economy is stupid.

2. A disproportion of raw materials and labor come from outside the US and a disproportion of consumption and finance come from inside the US.

3. We do not have a free market. Without a free market, economies never really work. Our system is corrupted by finance and the threat of violence from government ... but without this threat, our government, in its present state, would be ignored.

Tue, 06/24/2014 - 08:14 | 4888669 headhunt
headhunt's picture

Its is said 'follow the money' but it really is 'follow the politics'.

No economic system or theory will ever work with a leftist political agenda.

Yeah - it's that simple.

Tue, 06/24/2014 - 15:04 | 4890284 Radical Marijuana
Radical Marijuana's picture

Follow the money to its SOURCE!

 

Tue, 06/24/2014 - 09:47 | 4889000 proLiberty
proLiberty's picture

We do not burn crude oil in our cars, trucks and airplanes. We burn very carefully refined fuel products made of molecules that are assembled, atom by atom, by a process that breaks down the molecules from some raw, hydrocarbon rich, feedstock.

Crude oil is the primary feedstock for the only reason that, for the time being, it is the least costly source of those atoms. But when crude oil was in short supply during World War II, the Germans used coal as the source of molecules. Based on today's prices, it becomes less expensive to convert coal to diesel fuel when crude oil costs more than $80/bbl. But we can use other sources of hydrocarbons. A company in Carthage, Missouri was selling a form of diesel fuel that was made by rendering the waste products of slaughtering turkeys. It went bankrupt not because the process didn't work, but because the resulting product was more expensive than customers wanted to pay. The company had previously run successful tests to convert municipal solid waste and sewage sludge into diesel fuel. They computed that there was enough sewage sludge in the US to supply around half of national diesel fuel needs if properly converted.

The end issue is cost. Presently, fuels made by refining crude oil cost less than fuels made by refining coal, sewage sludge, or turkey carcasses. But the instant those later sources are less expensive, the market will start to use them. We don't fret about 'peak whale' because when overhunting caused the price of whale oil to rise, other sources of oil for lamps was found from coal and crude oil. Then electricity came into use for lighting of homes and streets. Today, even the use of Coleman lamps (that burn a form of gasoline) for illuminating camp sites is giving way to lights that use efficient LEDs and batteries. We can no longer buy whale oil, and who would light their home with it anyway? Neither would they use an open gas flame, as was done for decades.

The plain truth is that we are awash in hydrocarbons that can be converted to usable fuel products. The only issue is cost, that is if government will not intrude and distort economic decisions like it presently does with corn-based ethanol.

"Peak Oil" is propaganda that is used in an attempt to stampede policymakers and the public into choices that cannot be productive in the long run, and certainly ones will raise costs and destroy liberty in the process.

Tue, 06/24/2014 - 17:43 | 4890384 Radical Marijuana
Radical Marijuana's picture

I agreed with most of your comment, proLiberty.

However, the real economic systems IS based on the enforced frauds operating through systems of legalized lies, backed by legalized violence. Neolithic civilizations were developments of the social pyramid systems based on small groups who specialized in dishonesty and violence being able to control larger groups. The basic technologies of domesticating animals and planets were built on the technologies of "human farming" or slavery systems. Nothing has changed, other that those systems became more sophisticated forms of slavery.

For instance, consider that the first automobiles were fueled with hemp oil. However, all cannabis cultivation was criminalized, due to the huge lies that "marijuana is almost as bad as murder." The most extreme example of the overall pattern of social facts was how the cultivation of the single best plant for people was completely criminalized. Similar absurd patterns can be found in how ethanol was made illegal, while now is subsidized.

The basic problem is that there is no way to have actually have any "free market" without some murder system. However, as soon as one includes murder into the "free market," then there is the ability to develop systems of enforced frauds, such as exist now. The central core to any and all possible alternative systems must necessarily be their death controls. However, those are now operated through the maximum possible deceits.

There are plenty of possible creative alternatives, however, none could work without them being inside systems, which had their death controls as the keystone or lynch pin that held everything else together. Right now, we have entrenched systems of death controls operating through the maximum possible deceits, backing up monetary systems based on the maximum possible frauds.

That is why approaching the limits to growth is so extremely problematic. There are no indications that people will be able to more sanely go through the transitions to adapt to those limits, other than by debt insanities, provoking death insanities, because the established systems are almost totally based on legalized lies, backed by legalized violence, which make any sane transformations to alternative systems practically impossible, especially since the crucial aspects of those transformations is how to develop different death controls, after there are weapons of mass destruction.

By and large, the thing we can actually count on more than anything else is that the established systems are headed towards Peak Insanities, because nothing within the established systems based on enforced frauds will admit more radical truth about themselves. The deeper problems are how and why did the actual death controls develop to be done by the maximum possible deceits, and after that has happened, how is it possible to develop better death control systems?

The most probable answer to that question is that society will go through a series of severe social storms, and psychotic breakdowns, because the only real way to integrate systems of alternatives to the established systems require alternative death controls to operate at their core, which issues are the most deliberately denied and ignored by the most people, while those who actually operate the existing systems do so through the maximum possible deceits about what they are really doing!

Peak Oil is a real problem, which is typically being dealt with through the established social pyramid systems through even more enforced frauds. Without better solutions, which require better death controls, then we must necessarily default down to death insanities, resulting from the debt insanities, which necessarily emerge out of the enforced frauds. We are on the verge of that happening now, because we are on the verge of Peak Oil, in the sense of diminishing returns, as explained in this article above.

Tue, 06/24/2014 - 11:43 | 4889030 The Wizard
The Wizard's picture

 

It's nice to have economic models to track and support data from the past concerning consumer behavior. However, such data is not always beneficial for projecting the future of consumer behavior. Those who write about a social structure where certain government, financial and corporate elitism exist are identifing a major problem with existing economic models. This article does not discuss as to how to model the manipulation and motivation of those who control financial affairs of the planet. The centralization of monetary control is a major factor in what is to be produced, how it is to be produced, where it is to be produced, how distribution of production will happen, along with all the other standard questions in economics.

For example, this article is dealing with the primary souce of energy for the planet, oil. It does not discuss the creation of OPEC and the players involved nor their motivations. There is no discussion of the military industrial complex and its desire for wars to keep their fiat game producing huge profits and what part that plays in controlling the supply and demand for oil.

Further, there is no discussion of alternative forms of energy based on the research and work of one Tesla. If 10% of the funds allocated in R&D for oil and other forms of energy would have been dedicated to perfecting Tesla type technology, we most likely would not be too concerned over the supply and demand for oil or its diminishing returns.

Yes, new models to analyze the transactions in society are required but they must factor in what is mentioned above and much more. Yes, Virgina manipulation and control deires do exist in a conspiratorial form.

http://www.youtube.com/watch?v=PVFMv4A_Rbs
Tue, 06/24/2014 - 17:55 | 4890430 Radical Marijuana
Radical Marijuana's picture

Thanks for that link, The Wizard, I will add it to my thread about Alternative Energies & Society Adapted to Them?

The Quantum Energy Generator (QEG) plans are "open source." IF that worked, to scale it up would take huge amounts of the conducting materials! Maybe graphene could be substituted for the copper that is shown in prototypes?

Tue, 06/24/2014 - 11:12 | 4889329 Blazed
Blazed's picture

or not

Tue, 06/24/2014 - 11:25 | 4889407 UrbanBard
UrbanBard's picture

There is a lot of 'Club of Rome "Limits to Growth"' thinking here.

The author misses so much, because his Socialist ideology gets in the way. He has no appreciation for how high prices in markets stimulate people to find technologies which  lower costs by expanding supply.

He never predicted the Shale Oil and Gas boom, so he exaggerates its cost of production while this technology is still new. He badly forecasts how fast those fields will be depleted. Every year, the costs of production declines as new techniques are discovered and new fields are found. A new shale oil field has been discovered below the existing Bakken Shale Fields of No. Dakota and Manitoba. It is six times as large as the current field and may contain 20 to 50 times as much oil and gas as the the fields we are utilizing. The current fields are not close to being played out yet. They are producing over a million barrels a day with no roll over in production.

http://www.aei-ideas.org/2014/06/another-energy-milestone-for-north-dako...

The author makes the point that the amount of oil in the world is finite. This is true, but that amount is huge and is mostly still undiscovered. We can say that the amount of water on the earth is finite, but it covers 70% of the earth's surface. Will we likely run out soon? Not within a half billion years.

We are not tapping large amounts of resources that we know about because other oil is more accessible. That inaccessibility is often due to politics, such as the US Department of Interior not allowing drilling on the Continental shelves of the East and West Coast, plus Alaska and on public lands.

Another thing he ignores is that Oil is sold in terms of US Dollars and dollars are rapidly depreciating. As the purchasing power of the dollar vanishes, the price of commodities must rise. That rise has nothing to do with the scarcity of resources. If you compare Oil to other commodities, its price has never been lower. Oil in terms of gold, or as a percentage of the average worker's income, is at historic bottoms.

He makes an unpersuasive case. That is because his beliefs are motivated by politics, not reason.

Tue, 06/24/2014 - 15:34 | 4890406 Radical Marijuana
Radical Marijuana's picture

Back at you, Urban Bard.

YOUR "beliefs are motivated by politics, not reason."

Personally, I WISH that I could still believe in your summarized list of superficial assertions, which may well be partially correct, but do not add up to enough to make any significant difference. My view is that things are actually way worse than this article presented, as explained in several of my comments above.

Fri, 06/27/2014 - 02:01 | 4901237 potato
potato's picture

A new shale oil field has been discovered below the existing Bakken Shale Fields of No. Dakota and Manitoba. It is six times as large as the current field and may contain 20 to 50 times as much oil and gas as the the fields we are utilizing. 

What formation is it? I cannot find any information about it. 

Tue, 06/24/2014 - 12:11 | 4889629 waterdude
waterdude's picture

Frack that

Tue, 06/24/2014 - 15:40 | 4890436 PiratePiggy
PiratePiggy's picture

Good article but it only briefly refers to Peak Regulation - the point that a society clapses under the weight of a growing mountain of conflicting rules and regulations that only "influence" can resolve on a case-by-case basis.   Look at Africa, Latin America and the Middle East for examples of that.

Wed, 06/25/2014 - 02:59 | 4892254 tekmike13
tekmike13's picture

"In a complex system, small, seemingly benign input changes can have large, unpredictable outcomes"....Chaos Theory

Do NOT follow this link or you will be banned from the site!