Tom wrote (see below):
Good post!
On the other hand, we have enough coal to last us 4,000 years. In England
they discovered what is supposed to be the largest coal resource ever found
in Europe. They aren't doing anything with it. Why should they with North
Sea oil?
There again, there is nuclear. In the US, the safest practical source of
power. And the newer designs are apparently very good and a lot safer than
coal. And the country is practically made of uranium.
I wish we wouldn't immerse ourselves in pop-dread. Let's leave it to
National Enquirer and the Globe.
Harry
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>Will My Daughters Be Serfs?
>
>I have just spent a couple of hours reading Fossilgate which was on the
>FutureWork List. It was about as exciting as a trip through Dante's
>Inferno on your deathbed, in fact it could be an industrialized version of
>the future for consumers rather than souls.
>
>The facts are simple, as simple as the amount in your bank account.
>Anything we withdraw from the petroleum reserves after the year 2000
>diminishes the capital stock. There will be no new deposits. When it is
>gone - it is gone. The second truth is that when a resource becomes
>scarce, its value increases. The third fact is that everything we make has
>a petroleum content. Therefore, logic says that everything will go up as
>soon as the news is out. For those who hold petroleum, the longer they
>hold it the more it is worth, therefore expect countries with reserves to
>become very restrictive about selling their reserves and also, that they
>will charge a continually escalating premium as the reserves continue to
>deplete.
>
>Forget our economic fiddling about inflation of 1 - 3%, those days will be
>history. Instead, expect inflation to jump drastically, let's put a figure
>on it, let's say 50% - yep, chew on that for a minute. Oil has twice
>reached the $40 per barrel level, in 1974 and 1982 for short periods,
>that's a precedent. Expect the first increase to be at least that,
>doubling the price of the petroleum content of every good and service you
>consume. This will cause a major deflation of your wealth and income.
>Because the prices are going up due to scarcity, there will be no
>corresponding increase in wages. Therefore, be prepared to try and exist
>on 50 - 70% of your current income.
>
>The worst is yet to come, massive industrial unemployment will follow
>within months. As everyone loses 30 -50% of their income, they will
>purchase less of non-essentials because they won't have the money. As the
>capitalistic model strives for efficiency, large production runs have lower
>prices. When those runs fall below a certain volume, efficiencies of scale
>disappear. To stay in business, many businesses will be forced to raise
>prices astronomically because of a shortage of consumer money - many will
>close their doors.
>
>Governments will not have the revenue or credit to maintain social services
>even if they keep them at their current dollar level, their actual level
>will be 50% less, not enough to even provide subsistence. Expect massive
>crime and rioting as people are literally fighting for life and the lives
>of their families. The model of self interest and competition we have all
>grown up with will throw societies into Darwinian situations as the
>strongest, formed into gangs, will prey on the weakest or god forbid,
>actually gang up on the rich.
>
>But a funny thing happens on the way to disaster. As petroleum energy, in
>all its manifestations from gasoline to plastic bags become more expensive,
>human labour gains in value also. Lets go back to 1600, when the world was
>run on solar power. (Yes, no matter how rich or blest you are, the bottom
>line is that human life runs on solar power in that we take in food and
>water that is the result of natural processes.) The only excess energy
>over human muscle was a horse, ox, dog or wind - all solar power energy
>sources. Now between 1600 and 2100, we discovered alternate energy
>sources, first coal, then steam, then electricity, then petroleum and then
>nuclear. All stored energy of the planet rather than solar dependent
>energy. This allowed, along with technological innovation, a man to do
>considerably more work than he could with real time solar power.
>Therefore, the more efficient we became in using this stored energy, in a
>manner of speaking, the less value human muscle energy became. For
>example, one small tractor, a plow and one man, might do two acres of
>plowing per hour. Using muscle power, it might take a horse, a man and a
>plow 8 hours to do two acres. Therefore, if the market price for the
>tractor is $20 per acre, then $40 dollars worth of work was done because of
>cheap energy. If a man, horse and plow did this, at the end of a day, we
>would have to divide the 8 into 40 for an hourly rate of $4.50, one could
>say, not enough wages for a man to live on therefore it is more viable to
>use the cheap petroleum energy rather than the expensive solar energy.
>
>But, if the cost of petroleum energy doubled, causing the cost to rise to
>$80, then a man and a horse are now competitive at $10 per hour, an
>adequate sum to buy the necessities of life. So we can see that the
>possibility exists that as the cost of petroleum rises, many things will
>become more economical through human labour that have been eliminated by
>our use of cheap powerful energy.
>
>Remember, there are no shortcuts, when we pass 2000, we are using up the
>last half of our capital stock of petroleum energy. Therefore, in a funny
>and unforeseen way, I see unemployment could be a temporary problem as the
>cost of energy rises, it becomes cheaper to hire humans than it does to
>burn petroleum - I didn't say nicer, as it is much nicer to sit in a
>tractor with air conditioning and your favorite stereo music playing than
>it is to follow the methane end of a horse.
>
>By 2030, petroleum may be so scarce, that we might be looking at gasoline
>at several hundred dollars a gallon. Humans only need 3000 calories a day
>of solar power energy.
>
>Petroleum energy has a natural limit on it. When it takes more energy to
>find, process and use it than the new energy supplies, you have a net
>deficit. This was the problem and is the problem with much of the tar
>sands in Alberta. The net gain is so small energy wise, that you invest
>100 gallons to make a 110 gallons or as Shakespeare would comment, "much
>ado about nothing." As our petroleum energy reserves wind down, we will
>have to make the difficult investment decisions about whether to use what
>we have to save labour or to develop more energy. However that is the next
>generations problem.
>
>Now back to my headline, "Will my Daughters be Serfs?" Let me tell you a
>sloppy story, I take a lot of liberties but this is to make a point, not
>good literature.
>
>I live in Canada, in the Ottawa valley which is quite agricultural. We can
>grow carrots, however we import carrots for most of the year because of our
>crop cycle. The imported carrots come from Arizona, California and Mexico.
> They use irrigation, high tech farming, intensive fertilization and they
>truck the carrots to Ottawa all year around. About 50 years ago, the only
>way we had carrots for most of the year was to grow our own and store them
>in root cellars, dark, cool underground storage areas. We managed to have
>carrots about 10 months of the year.
>
>Let's assume that the farmer can grow a ton of carrots in Arizona for $2000
>and it costs another $500 to truck that ton of carrots up to my grocery
>store. The cost to the grocer is $2500 per ton, or $1.25 per pound and
>then he adds his overhead and profit. Let's say that in the Ottawa Valley,
>you can get a ton of carrots per acre and that if I dug up by hand,
>planted, hoed and harvested my acre and delivered my produce to the
>supermarket, I could get $2,500 - the going market price. The reason we
>don't do this is that it takes 500 hundred hours of work and I can't work
>for $5.00 per hour or more to the point, it is not worth it to me to work
>that hard for only $5.00 per hour.
>
>Now, basic economics says that if his costs go up, the price of his product
>have to go up or he goes broke. Now, I want carrots, they are a basic
>food. If I want them, I will have to pay $2.50 per pound, so will you.
>Now, it become feasible for me to work my acre of ground and make $10.00
>per hour. The same holds true for digging a basement or mowing the lawn.
>As the price of petroleum goes up, so does the value of labour and at some
>point, for almost every item you can think of, there is an economic point
>where labour can compete.
>
>Will my daughters be serfs? I think so. I think that the world is about
>to de evolve back to a solar society. Oh yes, it won't be quite as grim as
>the middle ages, we have learned a lot about technology and we will still
>have electricity. However, within 100 years, petroleum will be gone and
>nuclear will probably be gone to. We will get better at non renewable
>resources but I don't think we will ever have the surplus that the 20th
>century gave us with the discovery of petroleum. I think future
>generations will look back at our lifestyle much as we look back at the
>most decadent Roman periods.
>
>All our present concerns about GDP, quality education, careers, the unity
>question will be subverted by a world that has to deal with the petroleum
>fact. This is the best, 1997, may very well be viewed as the pinnacle of
>cheap energy and human indulgence. We were there, we will say and we will
>forget that it wasn't so great because against what will then be facing,
>this will appear to be heaven.
>
>It would be nice to think that our futurists and politicians and our
>business community would face this altruistically, be honest, be fair to
>all the people of the world and strive to make this transition with as many
>souls as possible. However, we have spent the last 2000 years in
>hierarchical models of survival, so I don't expect any change. Those who
>come from a different model, the natives, the Quakers and those of
>communitarian mind, we have done our best to exterminate, convert or
>denigrate. Yes, authoritative governments of the military type, gangs in
>the hinterland, daily grind for those in the middle, massive starvation for
>those who chose the wrong place to be born, as Leonard Cohen says, "I've
>seen the future, brother: it is murder."
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Harry Pollard (818) 352-4141
Henry George School of Los Angeles
Box 655
Tujunga CA 91042
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