[backstop]

The Geopolitics of Energy

With respect to all concerned with the discipline of economics, given that it has been at the core of what has got us into the present fine mess, I'm interested in the emerging Geopolitics of Energy getting a fresh start with regard to its understanding of economics.

To this end the C20 economics that still prevails warrants criticism both in the round and in pieces.

Through an interest in interdisciplinary studies I've met scientists from many fields who laugh at the idea of economics being a science, since it doesn't conform with some fairly basic tenets, such as measuring an experiment 's net inputs and outputs (including non-monetary ones) before declaring the observation.

My own study of it has been very limited: I took a degree involving it as a mature student about ten years ago. One of the the first lectures I heard was very memorable. In it we were told that the word economics is rooted in the ancient Greek, "Oikos" which refers to the wellbeing of the community as the extended household. We were further told that an ancient Greek philosopher (whose name escapes me) wished to demonstrate the impact on Economics (as described) of Chremastics, which is the study of the accumulation of personal wealth.

To this end he bought up all of the mills in a rural area of ancient Greece, bought the local annual grain harvest and then, rather than selling it back out as milled product as expected, sat on it. The local price of milled grain rose greatly, as transport was very limited. People began to starve. When it had risen to his satisfaction, he began to sell, slowly. By this means he accumulated significant personal wealth, at the expense of the communities' suffering. His point was made.

This account is I understand common knowledge among students of what now passes for 'Economics', when its title should properly be Chremastics.

The central failing of the C20 'economics' has been its failure to account and compensate for the 'externalities' of transactions: who suffers what as a result, including all those who have no voice in the transaction, which must logically include future generations. On a macro-scale this includes both society and planetary ecology. This failure has meant that what passes for economics has served the centalization of monetary wealth into ever fewer hands, via ever larger corporations, with an utter disregard for its impacts or their feedback effects.

A first class of these impacts is their effect on billions of people and their cultures. For example, the US & EU subsidized agribusiness product being channelled into developing countries is profiting while destroying small scale farming's viability and generating dependence on future imports, i.e. converting free enterprise societies that are largely self-reliant in food into dependent customers or 'clients'.

This is a process of 'Expansion & Divergence' whereby monetary growth is employed to channel wealth into as few hands as possible, leading to escalating disparity between rich & poor. I understand from UN figures that the richest 10% of global population held 17 times the wealth of the poorest in 1900, while by the early '90s this ratio had risen to 85 to 1. It is an ongoing exponential process.

A second class of impacts is on the planet's natural ecology, where the sustainable harvest of species is brazenly ignored in favour of maximizing thruput in the interests of accumulating private wealth. The cant that this is done primarily to feed people is just that, cant, as not only do those societies who can't pay for food tend to face starvation but also there are no cases of famine (in peacetime) in wealthy countries. On a global scale, you are fed if you can pay, i.e. contribute to the operation's profits. If this were not the case, the efficiency of land-use and food distribution could readily be raised to ensure that the present global population gets fed.

The mining out of the world's fisheries is a classic example of the impact on the ecosphere's organic resources. Cosmetic efforts at amelioration, such as reserves being set up after stocks have been mined out (e.g. off Newfoundland and in the North Sea) are just that, cosmetic, as they simply transfer attritive impacts onto remaining stocks in other parts of the world.

A third class of impacts is on the planet's finite resources, be they material, such as on fossil fuel deposits, or systemic, such as on the stability of the planetary climate system. The depletion of these resources not only (like the other classes of impact) robs coming generations of their rightful inheritance, it is also in process of auto-regulating (halting) the global system of 'economics' itself, due to the latter's utterly brittle dependence on continued growth for investor confidence, i.e. on continual 'Expansion & Divergence.'

The process overall has thus been one of discounting both the present and future commonwealth by mining out the planet's societal, ecological and geospheric resources, converting them into monetary wealth, and channelling that wealth into private hands, from where it is dissipated in decadence and in the exponentially rising costs of the propaganda and the coercion needed to maintain the system.

It is notable that nothing significant has been done by wealthy societies to begin to internalize the costs of these economic 'externalities' until the third class of impacts visibly threatens the controlling system, by which time we are very probably committed to catastrophic outcomes on a global scale.

It is equally notable that at every step highly respected 'economists' have not merely offered advice to governments and corporations, in recent decades theirs has been the controlling discipline worldwide by which these entities have operated.

I suggest therefore that we don't yet have a Science of Economics. What we have is a perverse and globally perilous Ideology of Chremastics, whose brazenly flimsy self-justification consists merely of the 'Trickle-Down' hypothesis, as if vast sums were not invested annually to ensure that the financial plumbing is as water-tight as legions of lawyers and accountants can make it.

For those willing to look around themselves, each new round of machinery displacing labour, of chemical farming displacing traditional farming, of imported product displacing local product, of fossil fuelled heating displacing wood-stoves, of synthesized materials displacing organic materials, of private welfare displacing social welfare and of corporate enterprise displacing local enterprise can be seen effectively as a further advance of that financial plumbing.

As oil prices now head into turbulence on a rising trend, our task is nothing less than to reclaim the economy, one job at a time if need be, and raise it into sustainable productivity for the common good.

Roll on the discrediting of Expansion & Divergence !

Roll on the formal adoption in the UN of Contraction & Convergence !


regards

Backstop


P.S. I shan't be responding to any post that tries to characterize the above as Communism. My beloved first wife escaped as a child from Hungary during the uprising in '56, and I know more than I'm happy to recall of the inhuman tyranny of communism. I know also just how valuable a foil it was to western Asset-Capitalism, until that seminal day at the UN when President Gorbachev publicly declared to US delegates :

"I'm going to do something terrible to you - I'm going to deny you an enemy ! "

[JohnDenver]

This screed has basically nothing to do with peak oil. You're just pushing an agenda, calling for a "revolution". There won't be any revolution, Backstop, at least not for your principles. Who's the natural constituency for your revolution? Who stands to better their own position by supporting your program? Nobody, as far as I can see. You want everybody to join hands together and fight to lower their standard of living???

Get rid of the rich, and make the poor poorer!! What kind of silly revolutionary slogan is that?

[backstop]

JD - The slogan you suggest is, I agree, a really dumb one and I'd have nothing to do with it.

I'm sorry you don't see what the analysis above has to do with peak oil; maybe I need to make the link clearer.

We face a number of limits to growth of which peak oil appears most pressing as it disrupts the system of the centralization of wealth directly.

How we respond to that depends on what we see as our options: if the reactionary ideologies of devil-take-the-hindermost are assumed to be the inevitable reality, then things are IMHO going to come apart very destructively, with the US and other industrialized nations quite likely collapsing to IIIW status and, as you say, the poor getting poorer.

If on the other hand we aspire to respond creatively to our predicament, which is essentially about acknowledging that all nations are in the same planetary boat and need to co-operate to develop mutually beneficial solutions, then the potential outcome is very different.

My post didn't, and I don't, call for a revolution as you aver; I'd say that by far our best chance is to fully utilize (and wherever possible improve) the democratic and international structures of governance that we have.

As to just who is the natural constituency of support for the principle of equity-for-survival, quite apart from those millions who've had nothing much to eat recently, the 'swing vote' consists of those nations who see very well the intensifying hazards of the status quo due to peak oil, climate destabilization, etc, and are recognizing that the international community must stand together, or hang separately.

As regards your own vote, I take it that you see that a large fraction of "the standard of living" around you is pretty inessential and even useless tat imported from China, with a significant fraction of it produced by slave labour ? And that hitting the limits to growth full tilt is liable to crash your economy into a depression that make the 1930s look like a picnic ?

Shifting intentionally to a society where the goods people need are largely produced within the US, by energies that are sustainable, would seem to me to be a real rise in US "standard of living", for all it will entail a stringent trimming of the fat of present decadent lifestyles.

Therefore I'd call for your vote for equity-for-survival on pretty much the same grounds as the rest of us: it's in your best interests, and in the interests of the rising generations, to co-operate productively for mutual wellbeing.

regards,

Backstop

[bart]

Good posting, backstop.

It sounds as if your viewpoint is similar to Herman Daly and the eco-economists. (An interview with Daly is at http://www.iisd.org/didigest/special/daly.htm .)

I've liked what I've read of the eco-economists, but the theory is rather abstract for public consumption. Your treatment is much more rousing!

I can affirm that your point of view has little to do with conventional, orthodox communism, which was dubious about environmentalism. Such heretical views as yours, would be sure to de-rail a professional career in one of the former communist states, just as it would in the current Bush administration.

The weak point of the program, I'm afraid, is what John Denver said:

Who's the natural constituency for your revolution? Who stands to better their own position by supporting your program? Nobody, as far as I can see. You want everybody to join hands together and fight to lower their standard of living???

The challenge will be to formulate a cogent reply to his objections. Not only is an intellectual argument needed, as in your original post, but we will need visions, compelling images and sound bites.

We need think tanks and communicators!

I think a quick reply to Denver would be to ask him to look at the recent history of South America. Venezuela and Brazil are now under populist governments. Public protests over water and natural gas have rocked the government of Bolivia. Political change is coming, but it won't be under the rubric of international communism.

There are several developments that make me think that we are on the verge of a sea change in our intellectual life.

1) The mass media, especially in the US, have become so powerful and so ideological, that there will be a reaction. Alternate media are arising, such as the Web (Tidepool, Znet, Common Dreams, UK Guardian, etc). Another example: Pacifica radio stations (such as KPFA in N. California).

2) Environmental crises that are on the verge of erupting (or which have already occurred in various countries). Peak Oil, of course, but also water, crop shortages, the effects of global warming, etc.

3) Impoverishment or economic stress on sectors of the population. In the U.S., factory workers have already gotten the shaft. Now, it's the turn of the middle class and professionals.

4) A re-discovery of the socialist tradition, which is much broader, much richer than orthodox communism. Without an awareness of what went before, we will be doomed to flounder and repeat the mistakes of the past.

- bart

[MonteQuest]

Great post, backstop!

It is notable that nothing significant has been done by wealthy societies to begin to internalize the costs of these economic 'externalities' until the third class of impacts visibly threatens the controlling system, by which time we are very probably committed to catastrophic outcomes on a global scale.

I am working on a post about those externalities as they pertain to the true cost s of fossil fuels. vs renewables.

Who's the natural constituency for your revolution?

Those who wish to see a future based upon something that will endure the test of time.