End of the Binge

American Conservative ^ | September 12, 2005 Issue | James Howard Kunstler

[RATkiller]

Among the strange delusions and hallucinations gripping the body politic these days is the idea that the so-called global economy is a permanent fixture of the human condition. The seemingly unanimous embrace of this idea in the power circles of America is a marvelous illustration of the madness of crowds, for nothing could be farther from the truth.

The global economy is, in fact, nothing more than a transient set of trade and financial relations based on a particular set of transient, special sociopolitical conditions, namely a few decades of relative world peace between the great powers along with substantial, reliable supplies of predictably cheap fossil fuels. The result, as far as America is concerned, has been an extended fiesta based on suburban comfort, easy motoring, fried food in abundance, universal air conditioning, and bargain-priced imported merchandise acquired on promises to pay later—a way of life described by Vice President Cheney as “non-negotiable.”

Of particular concern ought to be the 12,000-mile-long merchandise supply lines from Asia that American retailers such as Wal-Mart depend on and from which American “consumers” (as opposed to citizens, i.e., people with duties, obligations, and responsibilities) get most of their household goods these days. Wal-Mart now gets 70 percent of its products from China.

[RATkiller]

For Discussion

[SteveMcKing]

Fall, decadence, fall.

Though to the brash claim that there won't be a hydrogen economy, H2 may be produced by electrolysis of water, with current supplied by nuclear power. This is a scheme that has no technological barriers, only political knots due to wrong perceptions of atomic energy.

[dimquest]

Woe is us bump.

[AZLiberty]

What a whiner! Technology, in thousands of forms, is making consumer products cheaper and/or better at a rate that would make this author's head spin -- if he had one. Energy-wise, coal and nuclear power will keep us going for 200 or 300 more years, at which point we'll simultaneously have better sources of energy and less need for them. The current high price of oil is only accelerating our migration to these longer-lasting resources -- assuming we can overcome the political barriers.

[civis]

I don't like it but it appears very well thought out. Would that someone convincingly refute this!

[Billthedrill]

The Peak Oil proponents are certainly crawling out of the woodwork of late. That tends to happen whenever the price of oil takes a sudden jump - in this case as a result of factors having nothing to do with production and everything to do with refinement and distribution.

However, postulating that it's true is harmless enough as long as it's realized that nobody is going to fall dead in the next five minutes as a result of dry pumps. What will happen is that the countries most able to diversify their energy sources will weather the eventual shortages better than those whose dependence is still on petroleum. The innovators will win again and the rest will purchase their technology, just as they did with oil, and steam before that.

[elmer fudd]

As the price of oil increases we will find alternatives to it. Until recently they haven't been economically viable, but if oil prices continue to go up Canada will begin to tap it's tar sands, more corn will be grown for ethanol, more nuclear plants will be built and more houses will make use of solar panels. It will be painful economically to have to pay more for inferior fuels, but the world economy will continue anyway.

That's just the way human society works. When a resource becomes scarce we find new ones to take it's place. 150 years ago whale oil was essential to our economy.

[Travis McGee]

150 years ago we didn't have a whale oil based economy. Very poor comparison, not even close.

Anybody who can't grasp the significance of global demand (China and India industrializing etc) far outstripping global production of oil is in for a rude awakening.

[elmer fudd]

We don't have an oil based economy today either. If we did we would be in an economic depression. Instead we have a growing economy despite record oil prices. Even at it's current price our oil consumption is only about 4% of our GNP.

Most OPEC countries do have oil based economies. When oil goes up they do well. When oil goes down they suffer.

[Wonder Warthog]

"For Discussion"

Tripe. The "global economy" has been ongoing ever since the European powers discovered there WAS a "globe". That trade has boomed with modern transport techniques doesn't change much, except volume.

Before there was oil, there was (and still is) coal, and for ship use, coal is perfectly feasible.

[Shalom Israel]

I don't like it but it appears very well thought out. Would that someone convincingly refute this!

Can't specifically, of course, but it's worth considering that prices of Chinese-made goods certainly can rise, but the people making up the market will do their darndest to find the next-cheapest alternative. A "cheap Chinese stuff crisis" is no different in spirit than an "oil crisis", and in fact our use of petroleum was the solution to the earlier "oil crisis" in whale oil.

For example, there is already technology to fabricate almost any solid object from a single machine, called a "rapid prototyping machine". One guy is working on plans for RP machines to build new RP machines. That technology might become the means by which "manufacturing" becomes almost obsolete, and everyone has an RP in his basement to make essentially any desired plastic item. Metal and soft items would still be manufactured, and might go up in price, but they would be luxuries anyway. Practically anything you want could be made for the cost of a bag of plastic pellets and a jar of dye in your favorite eye-catching color.

So yeah, I guess this particular "global economy" can go away, but the author doesn't begin to prove that the result is poverty and suffering for all. Doomsayers have been predicting that for thousands of years, and they've been wrong so far.

[Shalom Israel]

That's just the way human society works. When a resource becomes scarce we find new ones to take it's place. 150 years ago whale oil was essential to our economy.

Great minds think alike! Or maybe, great minds all recently read "The Doomsday Myth"?

[dennisw]

Good article.

[PositiveCogins]

Replicators like on Star Trek? Take your "rapid prototyping machine" to a nano level and run a string command program like DNA. Let it replicate itself on a molecular level and you can make any thing from a Corvette to a hot babe to put in it. Man I cant wait for the future.

[Shalom Israel]

Replicators like on Star Trek?

Heh--not yet, but give it time. Today, you dump plastic pellets into the hopper, and the machine "paints" the plastic in layers to create whatever it's programmed to.

[Jim Noble]

No one, not even Rome, could have a worldwide commercial empire without Imperial troops of sufficient number and power to guard it.

The myth of globalization is the notion that our trade "partners" will wish us well because we make them rich.

If this is false (as it almost certainly is), the system will fall.

[raybbr]

ping

[driftless]

What you said. The problem with all the doomists is that they always fail to account for human ingenuity. They assume that humans when standing in a ditch as the water approaches will not move. The fact is the history of human civilization is recovering from disasters and/or adapting to new situations. I guess some people just love to be chicken littles.

[dimquest]

As the price of oil increases we will find alternatives to it. Until recently they haven't been economically viable, but if oil prices continue to go up Canada will begin to tap it's tar sands, more corn will be grown for ethanol, more nuclear plants will be built and more houses will make use of solar panels.
It will be painful economically to have to pay more for inferior fuels, but the world economy will continue anyway.

That's just the way human society works. When a resource becomes scarce we find new ones to take it's place.
7 elmer fudd

---

Anybody who can't grasp the significance of global demand (China and India industrializing etc) far outstripping global production of oil is in for a rude awakening.
8 Travis McGee

---

Travis, you need to talk to Meyer about the history of supposed irreplaceable commodities. Oil is replaceable, at a cost.
That cost will be paid, and the world economy will survive & prosper.
The 'rude awakening' will come to those who bet on Malthusian theory.


The Malthusian Trap - Mises Institute
Address:http://www.mises.org/fullstory.aspx?Id=1675

" -- Any numbskull can find statistics to show that if the resource base stays the same and population increases then all hell will break loose. This is the Malthusian mirage. Based on this sophisticated doctrine, believers go around telling people that we should desist from further folly, for the impending threat of doom is ever looming.
And government, of course, is our only hope. -- "

[A. Pole]

[...] we shifted into party-hearty suburban turbo-development overdrive and elaborated with greater recklessness than ever on a hyper car-dependent living arrangement that was profitable to construct but which has exceedingly poor prospects as an armature for daily life in the decades to come. To make matters worse, we surrendered the bulk of our manufacturing economy to other nations with cheaper labor and fewer environmental scruples and actually made the doomed suburban expansion project, and all its ancillary activities such as mortgage-lending, real-estate sales, strip-mall commerce, and easy motoring, the new basis of our economy. [...]

Free trade bump!