THREE
Briefing
for the
Descent
In the wide space between the myth of perpetual progress and the myth of imminent apocalypse, we can begin seeking a clearer and more nuanced sense of the possible futures open to industrial civilization as the age of cheap, abundant energy comes to an end. Any such exploration has to start from a sense of the possibilities of civilization — the form of human society that includes such things as cities, schools, market economies, and the combination of literacy and book distribution that makes it possible for you to encounter my ideas in the first place — because those possibilities define crucial limits on what can be achieved as the deindustrial age begins.
It’s long been fashionable to claim that civilized societies are better by definition than the less complex tribal societies from which civilizations emerge and to which, in times of decline and disintegration, they tend to revert. In recent years, it’s become just as fashionable in some circles to stand the equation on its head and insist that civilized societies are by definition worse than tribal societies. Both these claims reduce history to a morality play in which all human cultures, in their richness and moral complexity, are forced into two-dimensional roles as good guys or bad guys. This sort of moralizing is fine if your goal is cultivating self-righteous–indignation, but it’s a good deal less useful in the quest for understanding.
It’s clear from the historical record that some civilizations have, on the whole, been good places for human beings to live, and others have been much less so. It’s also clear that civilization can flourish indefinitely with minimal ecological damage in certain bioregions, and equally clear that in other bioregions civilization is a mayfly phenomenon that flits past and vanishes in a blink of ecological time. Visit eastern China, where the same rice paddies, villages, and cities have been in use for five thousand years, and the potential continuity of civilization is hard to dispute; visit the ruins of Tikal in the Yucatan jungle, where classic Maya civilization crashed and burned a thousand years ago, and the potential fragility of civilization is just as obvious. Trying to force both these examples to fit the Procrustean bed of a single story requires so much stretching and lopping that the results have much more to do with the prejudices of the storyteller than the facts on the ground.
One of the keynotes of history, though, is that a long rhythm of rise and fall seems to shape the lives of civilizations. Over the five thousand years they have witnessed so far, for instance, the cities and villages of eastern China have seen Chinese civilization expand and contract numerous times. Periods of economic growth and cultural creativity have been followed by periods of economic contraction and social disintegration. The same rhythm appears in other civilizations around the world with astonishing regularity. On average, civilizations take between five hundred and one thousand years to rise out of the ruins of some past civilization, then decline and fall in their turn over a period of one to three centuries, and give way to a new cycle that follows the same trajectory.
This rhythm offers little support to either the progressive or the apocalyptic faith. Fortunately, there are other options. The rise and fall of civilizations has been a central preoccupation of historians since not long after history first emerged as a distinct form of scholarship. Many of the greatest historians of the past, from –Polybius (c. 200–118 bce) through ibn Khaldun (1332–1406) to Giambattista Vico (1688–1744), focused much of their efforts on the question of why civilizations rise and fall. These three historians were among those who pointed out that wildly different societies followed very similar trajectories, and they tried to tease out general laws that defined the expansion and contraction of civilizations.
Their lead was taken up by two of the leading figures in 20th century historical studies, Oswald Spengler (1880–1936) and Arnold Toynbee (1889–1975).1 Spengler, surveying the casualty list of past societies, concluded that civilizations were organic entities with lifespans like any other living thing. He has been roundly condemned for that, but as an observation of facts rather than a theory about causes it has much to recommend it. Toynbee, building on Spengler’s insights while rejecting his biological metaphor, took the argument one step further and proposed that what drives the cycle is a factor he called “the nemesis of success.”2 Each human society faces challenges; when a society meets its challenges with successful responses, it opens up a space of possibility that allows for growth. The greater the success won by any given response, though, the greater the chance that the society will become locked into that response and will keep on trying to solve new challenges with old methods. To use terms introduced in Chapter 2, the society gets stuck in a single story and enters a spiral of repeated failure that ends in collapse.
More recently, in The Collapse of Complex Societies, (1988), Joseph Tainter critiqued Spengler and Toynbee harshly but argued for what, in many ways, is simply a more precisely worked out version of Toynbee’s theory. To Tainter, the rising costs and dwindling payoffs of social complexity form the two jaws of the nemesis of success. Each civilization starts out at a low level of social complexity and, as it develops, adds complexity to respond to challenges and take advantage of the results of its success. Like everything else, though, complexity taken too far reaches the point of diminishing returns; the cost/payoff ratio goes negative, and each additional layer of complexity costs the civilization more than it produces. Since increasing complexity has always worked in the past, though, most civilizations keep on adding new layers of complexity to deal with problems that are caused by complexity itself. Finally the sheer cost of maintaining complexity outruns the available resources, and the result is collapse.
Around the same time Tainter’s book saw print, environmental historians began to point out that the nemesis of success could easily take the shape of a head-on crash between a civilization and the limits of its environment. Clive Ponting’s A Green History of the World (1992) and Jared Diamond’s Collapse (2005) (among many other books) present a strong case that many past societies committed suicide by wrecking the ecological systems on which they depended for their survival. The collapse of the Maya civilization, as outlined back in Chapter 1, is the poster child for this theory, and the close resonance between the Maya collapse and our own predicament make it particularly relevant here.
Tainter’s theory and the environmental hypothesis can easily be combined into a single narrative of how civilizations fall. My attempt to frame that narrative is the theory of catabolic collapse.
Catabolic Collapse
The word “catabolism” comes from the Greek, by way of the life sciences. In today’s biology it refers to processes by which a living thing feeds on itself. One of the most striking features of the dead civilizations of the past is that they go through precisely this process as they move through the stages of decline and fall. In the course of the Maya collapse, for example, a complex, literate society with an abundance of practical, scientific, and religious knowledge reduced itself step by step to scattered villages in a jungle dotted with ruins. In some cases, the process of collapse has erased the vast majority of a civilization’s legacy, leaving only sparse fragments for later peoples to puzzle over.
At the same time, there are other examples where collapse stopped short of this point, and a new civilization picked up where its predecessor left off. The Maya heartland went through this cycle at least once before the final collapse, and Mayan successor states in the northern Yucatan managed the same thing on a smaller scale after the classic Maya collapse.3 China is perhaps the most remarkable example of this less disastrous form of collapse on record; from the Hsia dynasty’s origins well before 2000 bce right up to the present, a slow drumbeat of collapse and recovery has given Chinese civilization its measure, without impairing cultural continuity.4 The theory of catabolic collapse started off as an attempt to understand the difference between these two possible outcomes of the cycle of rise and fall.
My original essay on catabolic collapse5 bristles with equations, footnotes, and all the other impedimenta of the modern academic paper. Still, the basic idea is simple enough, and it’s best communicated through a metaphor: imagine that, instead of the fate of civilizations, we’re discussing home ownership. Until recently, when people went shopping for a home, most of them were sensible about it and bought one within their means. The housing bubble of the last few years, though, encouraged many people to buy much more house than they could afford, on the assumption that appreciating real estate values and the other advantages of home ownership would make up the difference.
Too many of these people, however, didn’t take the time to work out just how much their new McMansion would cost to own, maintain, and repair, and soaring real estate prices made it very difficult to remember that every boom sooner or later ends in a bust. Once these realities began to sink in, many people who expected to get rich off their houses found themselves in an awkward predicament as their monthly paychecks no longer covered their monthly expenses. Home equity loans offered one popular way to cover the gap, but once housing prices began to slump and banks cut back on easy credit, that option shut down. From that point on the possibilities narrowed sharply, and every option — taking on more debt, deferring repairs and maintenance, leaving bills unpaid — eventually adds to the total due each month. Sooner or later, the rising tide of expenses overwhelms available income, and the result is foreclosure.
That’s catabolic collapse in a nutshell. Like suburban mansions, civilizations are complex, expensive, fragile things. To keep one going, you have to maintain and replace a whole series of capital stocks: physical (such as buildings); human (such as trained workers); informational (such as agricultural knowledge); social (such as market systems); and more. If you can do this within the “monthly budget” of resources provided by the natural world and the efforts of your labor force, your civilization can last a very long time. Over time, though, civilizations tend to build their capital stocks up to levels that can’t be maintained; each king (or industrial magnate) wants to build a bigger palace (or skyscraper) than the one before him, and so on. That puts a civilization into the same bind as the homeowner with the oversized house. In the terms used in the original paper, production falls short of the level needed to maintain capital stocks, and those stocks are converted to waste: buildings become ruins, populations decrease, knowledge is lost, social networks disintegrate, and so on.
What happens then depends on whether the civilization’s most important resources are being used at a sustainable rate or not. Resources used at a sustainable rate are like a monthly paycheck; in the long run, you’ve got to live within it, but as long as you can keep expenses on average at or below your paycheck, you know you can get by. If a civilization gets most of its raw materials from ecologically sound agriculture, for example, the annual harvest puts a floor under the collapse process. Even if things fall apart completely — if the homeowner goes bankrupt and has her house foreclosed on, to continue the metaphor — that monthly paycheck will allow her to rent a smaller house or an apartment and start picking up the pieces. Civilizations such as imperial China, which were based on sustainable resources, cycled through this process many times, from expansion through overshoot to a self-limiting collapse that bottomed out when capital stocks got low enough to be supported by the stable resource base.
Diagram 3.1. How Catabolic Collapse Works
In a growing or stable society, the resource base is abundant enough that production can stay ahead of the maintenance costs of society’s capital – that is, the physical structures, trained people, information, and organizational systems that constitute the society. Capital used up in production or turned into waste can easily be replaced.
In a society in catabolic collapse, resources have become so depleted that not enough is available for production to meet the maintenance costs of capital. As production falters, more and more of society’s capital becomes waste, or is turned into raw material for production via salvage. If resource depletion can be stopped, the loss of capital brings maintenance costs back down below what production can meet, and the catabolic process ends; if resource depletion continues, the catabolic process continues until all capital becomes waste.
If the civilization depends on using resources at an unsustainable rate, though, the situation becomes much more serious. In terms of the metaphor, our homeowner bought the house with lottery winnings, not a monthly paycheck; his income is only a fraction of the amount he spends each month. In the first flush of prosperity, it’s all too easy for our lottery winner to commit to far bigger monthly expenses than his income can cover. By the time the problem becomes clear, very little can be done about it. The money is gone, our homeowner is faced with bills his monthly income won’t even begin to cover, and by the time the collection agencies get through with him he may very well end up living on the street. Civilizations such as the Maya, which used vital resources at an unsustainable rate, went through this process; the “collection agencies” of nature left nothing behind but crumbling ruins in the Yucatan jungle.
This is not good news for our modern industrial civilization because its capital stocks are supported by winnings from the geological lottery that laid down fantastic amounts of fossilized solar energy in the form of coal, oil, and natural gas. Even the very small fraction of our resource base that comes from the “paycheck” of agriculture, forestry, and fishing depends on fossil fuels. Since the late 1950s, scientists have been warning that what’s left of our fossil fuel resources won’t sustain our current industrial system indefinitely, much less support the Utopia of perpetual economic growth we have grown up expecting. For the most part, these warnings have been roundly ignored. If they continue to be ignored until actual shortages begin, we may be in for a very ugly future.
That future may be closer than most people like to think. The collapse of New Orleans after Hurricane Katrina drew attention from around the world, but few people seem to have noticed the implications of the Big Easy’s fate. The United States suffers catastrophic hurricanes every decade or so. In the past, the destruction was followed by massive rebuilding programs — but not this time. The French Quarter and a few other mostly undamaged portions of the city have reestablished a rough equivalent of their former lives, but much of the rest of the city has been bulldozed or simply abandoned to the elements. The ruins of the Ninth Ward, like the hundreds of abandoned farm towns that dot the Great Plains states and the gutted cities of America’s Rust belt, may be a harbinger of changes most Americans will find it acutely uncomfortable to face.
The housing metaphor breaks down in two places, though. First, even in societies dependent on unsustainable resource use, catabolic collapse unfolds gradually, in a distinctive rhythm of crisis followed by partial recovery. It’s similar to a homeowner who, facing financial ruin, sells his existing house and uses the proceeds to buy a smaller one; when he can no longer afford that, he repeats the process, until eventually he either moves into a home he can afford, or he ends up in a cardboard box on the street. In terms of the model, the mismatch between production and the maintenance costs of capital causes a certain fraction of a civilization’s capital stock to be turned to waste. Since that fraction no longer has to be maintained, and because some of it can be recycled into raw materials, each wave of collapse is followed by a respite, as costs drop far enough to give the declining civilization breathing room. The result is the stairstep pattern of decline found in the histories of nearly every dead civilization.
Second, a civilization has a fractal structure — that is, the same patterns that define it at the topmost level also appear on smaller scales. The cities of eastern China that were mentioned at the beginning of this chapter maintained urban life through the fall of empires precisely because of this fractal structure; a single city and its agricultural hinterland can survive even if the larger system comes apart. The recent spread of peak oil resolutions and projects by cities and towns across America is thus a very hopeful sign. It’s going to take drastic changes and a great deal of economic rebuilding before these communities can get by on the more limited resources of a deindustrial future, but the crucial first steps toward sustainability are at least on the table now. If our future is to be anything but a desperate attempt to keep our balance as we skid down the slope of collapse and decline, these projects may well point the way.
Four Facets of Catabolic Collapse
How will the process of catabolic collapse work itself out in the present situation? Prophecy is among the chanciest of arts, but a careful eye on current trends allows some educated guesses to be made about the way the near future is likely to unfold. Though the future we face is far from apocalyptic, four horsemen still define the most likely scenario.
First out of the starting gate is declining energy availability. Around 2010, according to the best current estimates, world petroleum production will peak, falter, and begin an uneven but irreversible descent. North American natural gas supplies are predicted to start their terminal decline around the same time. Some of the slack can be taken up by coal, wind and other renewables, nuclear power, and conservation — but not all. As oil depletion accelerates, and other resources such as uranium and Eurasian natural gas hit their own production peaks, the shortfall widens, and many lifestyles and business models that depend on cheap energy become nonviable.
The second horseman, hard on the hooves of the first, is economic contraction. Energy prices are already beginning to skyrocket as nations, regions, and individuals engage in bidding wars driven to extremes by rampant speculation. The global economy, which made economic sense only in the context of the politically driven low oil prices of the 1990s, will proceed to come apart at the seams, driving many import- and export-based industries onto the ropes, and setting off a wave of bankruptcies and business failures. Shortages of many consumer products will follow, including even such essentials as food and clothing. Soaring energy prices will have the same effect more directly in many areas of the domestic economy. Unemployment will likely climb to Great Depression levels, and poverty will become widespread even in what are now wealthy nations.
The third horseman, following the second by a length or two, is collapsing public health. As poverty rates spiral upward, shortages and energy costs impact the food supply chain; energy- intensive–health care becomes unaffordable for all but the obscenely rich; global warming and ecosystem disruption drive the spread of tropical and emerging diseases; malnutrition and disease become major burdens. People begin to die of what were once minor, treatable conditions. Chronic illnesses such as diabetes become death sentences as the cost of health care climbs out of reach for most people. Death rates soar as rates of live birth slump, launching the first wave of population contraction.
The fourth horseman, galloping along in the wake of the first three, is political turmoil. What political scientists call “liberal democracy” is really a system in which competing factions of the political class buy the loyalty of sectors of the electorate by handing out economic largesse. That system depends on abundant fossil fuels and the industrial economy they make possible. Many of today’s political institutions will not survive the end of cheap energy, and the changeover to new political arrangements will likely involve violence. International affairs face similar realignments as nations whose power and influence depend on access to abundant, cheap energy fall from their present positions of strength. Today’s supposedly “backward” nations may well find that their less energy- dependent economies turn into a source of strength rather than weakness in world affairs. If history is any guide, these power shifts will work themselves out on the battlefield.
The most important thing to remember about all four of these factors is that they’re self-limiting in the near term. As energy prices soar, economies contract, and the demand for energy decreases, bringing prices back down. Even as the global economy comes apart, human needs remain, so local economies take up the slack as best they can with the resources on hand, producing new opportunities and breathing new life into moribund sectors of the economy. As public health fails, populations decline, taking pressure off other sectors of the economy. As existing political arrangements collapse, new regimes take their place, and, like all new regimes, these can be counted on to put stability at the top of their agendas.
Thus in the near future, at least, we’re most likely facing a period of crisis, followed by a period of renewed stability, with another round of crises waiting in the wings. That’s how the process of catabolic collapse unfolds, in a stair-step process alternating periods of crisis with breathing spaces at progressively lower levels of economic and political integration. If past examples are anything to go by, the approaching period of crisis will likely last around 25 years, with the breathing space following it around the same scale or a little longer. The great challenge of the present, then, is to deal with the immediate crisis in each of its manifestations.
The Energy Predicament
Of all the many aspects of the predicament of industrial society, the peak of world petroleum production will likely have the most drastic impact in the short and middle term. Now it’s true, as The Limits to Growth pointed out, that unlimited growth on a limited planet bids fair to run into many shortages, not just one. On cue, plenty of other resources are also running short worldwide, from fertile topsoil and fresh water to dozens of minor but economically important minerals.6 In the latter days of industrial civilization, shortages are inevitable, but no other globally traded commodity is as central to the world’s industrial economies as oil — and no other commodity faces so imminent and irreversible a decline.
Thus the end of the age of cheap oil promises a sea change in the world’s economies and societies as significant as the beginning of the fossil fuel age some three hundred years ago. Its impact can easily be overstated, though, and indeed it has been overstated by quite a few writers on the survivalist end of the peak oil community. Many of these writers insist that the inevitable result of declining petroleum production will be the rapid collapse of civilization in an uncontrollable spiral of violence, anarchy, and mass death.
This is as mistaken as it is counterproductive. It’s certainly possible to dream up worst case scenarios that result in sudden collapse, but these scenarios run headlong into an awkward historical fact: declines in petroleum use equal to the ones we face on the downslope of Hubbert’s peak have occurred many times in recent history, without producing anything like the consequences the survivalist theory predicts. In America, World War II saw gasoline rationing and sharp reductions in the use of oil throughout the civilian economy; the energy crises of the 1970s set in motion a 15% decline in petroleum use worldwide that lasted for most of a decade. Unlike the future we face today, those periods of declining petroleum use proved to be temporary, but they show that American society can use less oil without collapsing.
Overseas, far more drastic reductions in petroleum supplies and energy use have often been made. The results included hard times and human suffering, but the collapse of civilization? Hardly. Two world wars, the greatest depression in modern history, and plenty of less global but no less severe crises have forced individuals and economies to make do with much less for extended periods. Except in a few exceptional and very short-term situations, social order has remained intact and economies have adapted to extreme conditions, shedding energy- and resource-intensive sectors and establishing new networks to get food and other necessities to those who need them. This, rather than the total social collapse of the survivalist fantasy, is what we face in the next few decades.
Here in North America, the end of cheap oil will be made more complex by another factor: a large fraction of electricity and home heating nowadays comes from natural gas, and North American natural gas reserves are depleting fast.7 Over the next decade or so, as the inevitable shortages hit, the rising prices and dwindling availability of natural gas will make both these uses unaffordable for most people. Some writers have claimed that this will lead to the total collapse of electric power grids nationwide, but this hardly follows. As the supply of electricity decreases, prices rise, and demand goes down as people cut their usage or are disconnected for failure to pay their bills. As shortages become more severe, grid operators and governments have plenty of options varying from mandatory conservation programs to rationing schemes to cutting entire sectors out of the grid so that power can be saved for other uses. None of these will allow current rates of energy use to be maintained, but all of them will cushion the descent into a dein-dustrial world.
Where electrical power is concerned, in fact, the 21st century may well look like a film of the 20th century run in reverse. As the 1930s were the decade of rural electrification in America, when electricity finally made its way to farm families nationwide, the 2030s may turn out to be the decade of rural de-electrification, when rural America goes off the grid for good. Well before 2100, electricity will be what it was in 1900, an urban amenity generated by hydroelectric, wind, and coal-fired plants — and used mostly by the wealthy. Not long after that most of the coal will be gone and other fossil fuels will be a fading memory, but wind and running water will remain, and cities will likely have their own sustainably powered electrical grids providing modest amounts of light and power to the homes and businesses of the well-to-do.
Transportation is a more complex matter. A transportation network of the sort we have today requires not only fuel and vehicles, but a sprawling and energy-intensive infrastructure of highways, bridges, gas stations, tanker truck fleets, storage depots, highway police, and more, all demanding constant investment — and all vulnerable to the impact of catabolic collapse. As costs soar and resources run short, expect to see that network come gradually unraveled. Rural areas far from major routes are already seeing infrastructure disintegrate as roads are no longer repaired and gas stations far from the freeways go out of business. As this process speeds up, resources will most likely be concentrated on a network of critical freeway corridors and urban regions. This network will then contract over a period of several decades until resource availability drops below a critical value and truck transport stops being economically viable.
The private car never did make much sense, except as a way to maximize employment in the manufacturing and construction sectors of the economy,8 and the complex of industries centered on the automobile can be counted on to go the way of the dodo in short order. Soaring gas prices will render most of American human geography worse than useless, as people no longer can afford to shuttle among retail cores, employment centers, and suburban bedroom communities that are many miles from one another.
The “doughnut geography” common to so many North American urban centers, with decaying urban cores surrounded by prosperous suburbs, has already begun to reverse in many areas as –middle-class families move to gentrifying urban neighborhoods, while their former suburban homes are relegated to the lower classes. Expect this trend to accelerate over the next few decades, as today’s suburbs become slum districts like those surrounding Third World cities today, and the suburban tract housing spawned by the now-deflating–housing bubble turns into raw materials for the shantytowns of the permanently poor.
Trains, which require a much simpler infrastructure and use much less energy than trucks to move cargo, will potentially be viable much longer. Those countries that have maintained their rail networks will have a massive advantage as the automobile age comes to an end. In North America, by contrast, the railroad network has undergone many decades of malign neglect, and unless significant resources go into maintaining and upgrading it soon, it will likely disintegrate as resources run short. Even if the railroads get the emergency investment they need, it’s an open question whether rail travel can keep going over the long term without fossil fuels. If the railroad network unravels in the same way as the highways, the social and political consequences will be immense. Lacking cheap transcontinental transport, for example, it’s unlikely that the United States or Canada will maintain political unity for long.
The transportation network of last resort depends on water. North America’s navigable waterways have suffered at least as much neglect as the railroads, but they can be maintained and rebuilt at a much lower level of technology; several crucial links — above all the Erie Canal and St. Lawrence Seaway, connecting the Great Lakes with the eastern seaboard — remain intact. If the railways fail, the economically viable region of North America will contract by more than half because the inland West will lose any effective way to import goods or export its own produce. Still, waterways weave together the Atlantic seaboard, the Great Lakes states and provinces, and the Mississippi valley. The harsher topography of the west coast offers far fewer options for water travel; the Columbia and Sacramento watersheds connect agricultural regions in the far west to coastal ports, but a regional waterway network is out of reach even with today’s machinery, so regional and local devolution will be hard to prevent.
The end of cheap energy thus promises to remake the human geography of North America and reshape the lifestyles of almost everyone living on the continent. The transition to the new dein-dustrial society, though, will take place over decades, not overnight, as governments, businesses, and individuals scramble to deal with shrinking supplies of fossil fuel energy. So much time has been wasted, and so little has been done to prepare for the inevitable, that a great deal of human suffering and deprivation is inevitable at this point.
Avoiding the Y2K Fallacy
In all probability, the most sweeping dimension of the change we face is economic. For the last three hundred years, the key to prosperity has been the replacement of human skill with mechanical energy. The steam-powered factories of 18th century England heralded the arrival of a new economic order in which technological progress and fossil fuel extraction went hand in hand, and success went to those who pushed mechanical energy into new economic sectors — replacing sails with steam, farm horses with tractors, local theaters with movies and TV, folk culture with mass-produced pop culture, and so on.
Hubbert’s peak marks the limit of this process. If the last three hundred years funneled wealth to those who exploited fossil fuels to the fullest, and allowed them to build centralized, technologically driven economic structures, then the next three hundred years will see exactly the opposite. Success will go to those who get ahead of depletion curves by reducing their reliance on fossil fuels further than others, and by relying instead on human skills and sustainable, low-intensity energy inputs.
These changes won’t take place overnight, though, and the most likely future ahead of us is a long and uneven period of economic contraction and technological decline. There will be plenty of bumps and potholes in the course of the Long Descent, to be sure. Systems failures will likely play a significant role. The aftermath of Hurricane Katrina in 2005, which reduced large portions of coastal Louisiana and Mississippi to a deindustrial condition from which they show few signs of recovering as of this writing, offers an example of the sort of thing that can be expected in the future. Still, systems failures don’t automatically spiral out into total collapse.
This point has been notably lacking in many discussions about the economic impact of peak oil. It’s been argued, for example, that the financial shock imposed by rising energy costs will cause the entire global economy to come apart at the seams, leaving people unable to get food and other necessities, and turning them into the marauding hordes of survivalist fantasies. This is a classic example of what might as well be called the Y2K fallacy; revisiting the Y2K fiasco will cast some light on where current speculations about peak oil have run off the rails.9
In the late 1990s, as my readers will doubtless remember, computer experts began to warn that many older computer systems had no way to process year-numbers beginning with a 2 rather than a 1, so they could crash when the calendar rolled over from 1999 to 2000. Early surveys of the problem showed that a very large number of systems could be affected, especially in banking, telecommunications, and government. By the beginning of 1998 or so, it was clear that a major mess was in the making unless something was done.
This real and serious problem, though, quickly got blown out of proportion by believers in the myth of apocalypse. By early 1999, survivalist visions of social collapse and mass death via Y2K spilled out of this subculture and percolated through American society. I knew many people who confidently expected the end of civilization as we knew it on New Year’s Eve of 1999; they waited all night in their basements for the blackouts, systems failures, and rampaging mobs that never came.
Some pundits have used these failed predictions to argue that the whole Y2K crisis wasn’t real in the first place, but this misstates the whole lesson of the experience. The threat was real; believers in apocalypse simply missed the four most important words in the prediction — “unless something was done.” Faced with a credible threat, a hard deadline, and a clear course of action, people responded predictably by doing something about the situation. Sales of Y2K-compliant computers and software soared off the charts (powering a boomtime in high-tech industries that deflated dramatically once the crisis was over). Software jockeys made money hand over fist reprogramming old machines. Some of us used simpler fixes; I simply reset the calendar on my old and non-compliant computer to December 31, 1949, and went through the rollover to January 1, 1950 with no trouble at all.
The fallacy that bedeviled the Y2K survivalists was the belief that government, business, and citizens, faced with an imminent threat and presented with a clear, constructive response to it, would sit on their hands and do nothing until catastrophe overwhelmed them. This same odd belief can be found throughout current discussions about peak oil. As oil plateaus and then declines, energy prices will rise sharply; that’s the threat. The obvious response, which succeeded brilliantly in the 1970s, is to reduce energy use through conservation and increased efficiency.
The collision between declining fossil fuel production and increasing demand is far more likely to cause drastic swings in the price of energy than the sort of sustained rise imagined by some peak oil theorists. As energy prices rise, speculators dive into the market, driving up prices further than actual shortfalls in production capacity would justify. Many energy consumers respond by cutting back on their energy use by means of lifestyle changes and conservation technologies, while others are simply priced out of the market. The result is that demand drops, stockpiles rise, and prices start to slide. The speculators dive out of the market, driving down prices further than actual declines in demand would justify, and the cycle begins again. These whipsaw movements in the price of energy can cause plenty of economic damage all by themselves, but there again it’s possible to respond to volatility constructively — for example, by stockpiling fuel when it’s cheap and drawing down those stockpiles when prices spike.
The same logic needs to be applied to other aspects of our economic situation. The United States today, as many people have pointed out, is a spendthrift debtor nation. We borrow more than $2 billion a day from overseas to pay for imports that far exceed our exports, and for a standard of living that can’t be supported by our anemic manufacturing and resource-extraction base. Major shifts in the world economic order are inevitable as the resulting imbalances work themselves out. Those who claim that the result will inevitably be social collapse and a Road Warrior future, though, haven’t been paying attention to world economic affairs. Over the last fifty years or so, quite a few nations have borrowed and spent their way into fiscal crisis. Some responded with austerity and periods of recession; some inflated their currencies, went into hyperinflation, and came back out of it; some repudiated their foreign debts and weathered the international reaction; others simply muddled through. All of them survived the crisis and rebuilt afterward, and so will the United States.
Many people nowadays, it has to be said, underestimate the resiliency of the modern nation-state. A US government faced with a severe economic crisis has plenty of options. It can respond to a market crash by flooding the economy with cheap credit, as Japan did after the 1990 stock debacle. It can respond to currency collapse by abandoning its old currency and issuing a new one with solid backing, as Germany did in the 1920s to end its bout of hyperinflation. It can manipulate markets, nationalize industries, enact wage and price controls, levy punitive tariffs and embargoes, subsidize basic necessities for the population, and impose rationing of fuel and food. If necessary, it can declare martial law and use the military and National Guard to restore civil order. In the last half century or so, all of these tactics have been used by other governments around the world as they faced the possibility of chaos. Any or all of them could readily be employed here — and for that matter, some already have.
There are still very rough times ahead, to be sure. After a quarter century of reckless borrowing and waste fueled by absurdly extravagant use of the world’s finite energy resources, the United States is likely to face a period of contraction as bad as the Great Depression; an economic breakdown on the scale of the one that engulfed Russia after the collapse of the Soviet Union is far from impossible. Still, the United States continued to exist after the Depression, Russia still exists today, and millions of people came through each of these economic crises with their lives, families, homes, and livelihoods intact.
Thus we can expect the next few decades to see a great deal of economic volatility and wrenching change. Energy costs will be impossible to predict; prices will spike and crash, following a slow but very uneven upward trend. Economic sectors dependent on stable access to energy will face a very rough road indeed. On average, those people and industries that require more energy will do worse than those that can make do with less, and those professions that meet actual needs will do much better than those devoted to the mass production of the unnecessary. To make sense of these changes, though, it’s necessary to take a second look at the economy and draw some rarely noticed distinctions between the real economy of goods and services and the fictive economy that currently dominates the way goods and services are produced, distributed, and sold.
Hallucinated Wealth
I have no idea if kids still do this, but in my elementary school days in the late 1960s it was common practice to write IOUs for “a million billion trillion dollars” or some equally precise sum, and use those as the stakes in card games like Old Maid and Go Fish. Some of those IOUs passed from hand to hand dozens of times before they were accidentally left in a pocket and met their fate in the wash. Kids who were good card players amassed portfolios with very impressive face values, especially compared to the 25 cents a week that was the standard allowance in my neighborhood just then. If I recall correctly, though, nobody ever tried to convert their IOU holdings into anything more substantial than cookies from a classmate’s lunchbox. Apparently that’s the one thing that kept me and my friends from becoming pioneers of modern finance.
It surprises me how many people still seem to think that the main business of a modern economy is the production and distribution of goods and services. Far and away the majority of economic activity nowadays consists of the production and exchange of IOUs. The United States has the world’s largest economy not because it produces more goods and services than anyone else — it hasn’t done that for decades — but because it produces more IOUs than anyone else, and it sells those IOUs to the rest of the world in exchange for goods and services.
An IOU, after all, is simply a promise to pay a given amount at some future time. That describes nearly every instrument of exchange in today’s economy, from bonds and treasury bills through bank deposits and government-issued currency to credit swaps and derivatives. All these share three things in common with the IOUs my schoolmates staked on card games. First, they cost almost nothing to issue. Second, their face value needn’t have any relationship to the issuer’s ability to pay up. Third, they can be exchanged for goods and services — like the cookies in my example — but their main role is in exchanges where nothing passes from hand to hand except IOUs.
It’s harsh but not, I think, unfair to call the result an economy of hallucinated wealth. Like the face value of those schoolroom IOUs, most “wealth” nowadays exists only because everyone agrees it does. Outside the social game of the market economy, financial instruments have no value at all, and the game continues only because the players — all of them, from the very rich to the ones with scarcely a million billion trillion dollars to their name — keep playing. They have to keep playing, because access to goods and services, not to mention privilege, perks, and power, depend on participation in the game.
The resulting IOU economy is highly unstable because hallucinated wealth has value only as long as people believe it does. The history of modern economics is thus a chronicle of booms and busts, as tidal shifts in opinion send various classes of IOUs zooming up in value and then crashing back down to Earth. Crashes, far from being signs of breakdown, are a necessary and normal part of the process. They serve the same role as laundry day did in the schoolroom IOU economy: by paring down the total number of IOUs, they maintain the fiction that the ones left still have value.
All this leaves us in a historically unprecedented situation. Economies based purely on hallucinated wealth existed before the 20th century, but only for brief periods in the midst of speculative frenzies — the Dutch tulip mania, the South Sea bubble, and so on.10 Today’s hallucinated wealth, by contrast, has maintained its place as the mainspring of the global economy for more than half a century. Social critics who point to the housing bubble, the derivatives bubble, or the like and predict imminent disaster when these bubbles pop, are missing the wider picture: the great majority of the global economy rests on the same foundations of empty air.
Those who have noticed this wider picture, on the other hand, are fond of suggesting that sometime soon, given a suitable shock, the entire structure will come cascading down. Those of you who were reading the alternative press at the time of the 1987 stock market crash will recall predictions of economic collapse in the wake of that vertiginous plunge; I made some myself, within my circle of friends, and I ended up with egg on my face when nothing of the sort happened. Similar predictions have accompanied each of the notable fiscal crises since then — the Japanese stock market debacle of 1990, the Mexican debt crisis of 1995, the Asian currency crash of 1998, the tech-stock crash of 2000, and so on. Similar claims are now being made about the housing bubble, the US trade and credit deficit, and of course about peak oil as well.
Plausible as these claims of imminent disaster seem, I suspect they’re missing the core of the situation, as well as the lessons taught by twenty years of violent economic gyrations. It’s a mistake to expect hallucinations to obey the laws of gravity. It’s doubly a mistake when the institutions charged with keeping them in midair — the Federal Reserve Board in the United States and its equivalents in other industrial nations — have proven adept at manipulating markets, flooding the economy with cheap credit (that is, more IOUs) to minimize the effects of a crash, and inflating some other sector of the economy to take up the slack of a deflating bubble. It’s triply a mistake when the North American middle classes and, to a lesser extent, their equivalents in other industrial countries, display a faith in speculation so invulnerable to reality that their response to a crash in one market is to go looking for a new speculative bubble somewhere else.
To say that the economic empire of hallucinated wealth will continue to exist, though, does not imply that it will continue to produce the goods and services or the jobs that people need. Arguably, it doesn’t do that very well right now. The “jobless recovery” of recent years saw most economic statistics rise well into positive territory, while most people saw their expenses rise and their incomes shrink. Things could go much further in the same direction. It requires no great suspension of disbelief to imagine a future in which the stock market hits new heights daily and other measures of economic activity remain in positive territory, while most of the population is starving in the streets.
Partly, as Bernard Gross predicted decades ago,11 economic indicators have morphed into “economic vindicators” that promote a political agenda rather than reflecting economic realities. The statistical gamesmanship inflicted on the consumer price index and the official unemployment rate in the United States show this with a good deal of clarity.12 Partly, though, most of the common measures of economic well-being only track hallucinated wealth. The markets that keep the financial news agog with their antics are IOU markets disconnected from what remains of the real economy, where real people produce and consume real goods and services. Thus, trying to track the economic impact of peak oil, global warming, and other aspects of our predicament by watching markets and financial statistics may turn out to be as misleading as trying to track the supply of cookies in a schoolroom by watching the exchange of IOUs in card games.
In today’s world of hallucinated wealth, the theory that a massive market crash triggered by peak oil will bring down the real economy of goods and services is implausible at best. Crashes there will certainly be, and some of them may be monumental, since volatility in the energy markets tends to play crack-the-whip with the rest of the hallucinatory economy. Crashes aren’t threats to the system, though; crashes — and the recessions and economic turmoil that follow them — are part of the system.
The economy of markets and statistics has aptly been compared to a circus and, like any other circus, it serves mostly to distract. While interest rates wow the crowd with their high-wire act, and clowns pile into and out of various speculative vehicles, the real process of economic decline will unfold elsewhere — all but invisible behind a veil of massaged numbers, and discreetly unmentioned by the mainstream media — in the non-hallucinated economy of goods and services, jobs, and personal income.
As the boom and bust cycle accelerates on the downside of the Hubbert curve, we can expect each recession to push more people into poverty and each recovery to lift fewer out of it. As industries dependent on cheap, abundant energy fold, we’ll see jobs evaporate, lines form at the doors of soup kitchens, and today’s posh suburbs mutate into tomorrow’s shantytowns. Rising transport costs and sinking median incomes will squeeze the global trade in consumer goods until it implodes; shortages and ad hoc distribution networks will be the order of the day, and wild gyrations in currency markets could easily make barter and local scrip worth a good deal more than a million billion trillion dollars of hyper–inflated IOU-money. Poverty, malnutrition, and desperation will be among the few things not in short supply. Until waves of change rock the political systems that keep the IOU economy in place, though, it seems most likely that the circus of hallucinated wealth will continue performing.
Slow-Motion Disaster
Ironically, while economic failures are likely to prove less drastic than some recent predictions have made them appear, declining public health will likely turn out much worse than most people nowadays suspect. Though it’s all but unnoticed so far — outside of a small cadre of worried professionals — the coming disintegration of public health in coming decades promises a disaster in slow motion.13
It’s not surprising that this crisis has gotten so little air time. Public health is one of the least regarded — though it’s among the most necessary — of the basic services industrial society provides its citizens. It’s not exciting stuff. Sanitation, pest control, water treatment, food safety regulations, and the like are exactly the sort of humdrum bureaucratic activities that today’s popular culture ignores most readily. Even infectious disease control rarely achieves the level of intensity chronicled, say, in Randy Shilts’ history of the AIDS epidemic, And The Band Played On; more often it’s a matter of collecting statistics, tracing contacts, and sending local officials and hospitals e-mails that are easily and often ignored. On these pedestrian activities, though, rests the industrial world’s relative freedom from the plagues that visited previous societies so regularly and killed so many of our ancestors.
The impending collapse of public health, like most aspects of our current predicament, has an abundance of causes. One is the failure of government at all levels to maintain even the very modest financial support public health received through most of the 20th century. Lacking an influential constituency in the political class, public health departments came out the losers in the tax and budget struggles that dominated American state and local politics in the aftermath of the 1970s. Worse, food safety regulations were among the consumer protections gutted by business-friendly politicians, with results that often make headlines these days.
A second factor in collapsing public health is the end of the antibiotic age.14 Starting in the early years of the 20th century, when penicillin revolutionized the treatment of bacterial infections, antibiotics transformed medical practice. Dozens of once-lethal diseases — diphtheria, tuberculosis, bubonic plague, and many others — became treatable conditions. A few prescient researchers cautioned that microbes could evolve resistance to the new “wonder drugs” if the latter were used too indiscriminately, but their warnings went unheard amid the cheerleading of a pharmaceutical industry concerned only with increasing sales and profits and a medical system that had become little more than the pharmaceutical industry’s marketing arm. The result has been an explosion of antibiotic-resistant microbes. As current news stories report the rapid spread of lethal antibiotic-resistant organisms such as methicillin-resistant Staphylococcus aureus (MRSA) and extreme drug-resistant (XDR) tuberculosis, epidemiologists worry what the microbial biosphere will throw at humanity next.
A third and even more worrisome factor is the impact of ecological disruption on patterns of disease.15 As the number of people on an already overcrowded globe spirals upward and more and more of the Earth’s wild lands come under pressure, microbes that have filled stable ecological niches since long before our species arrived on the scene end up coming into contact with new hosts and vectors. HIV, the virus that apparently causes AIDS, seems to have reached the human population that way; Ebola and a dozen other lethal hemorrhagic fevers certainly did, along with many others. At the same time, global warming driven by our smokestacks and tailpipes has changed distribution patterns of mosquitoes and other disease vectors, with the result that malaria, dengue fever, and other tropical diseases are starting to show up on the edges of today’s temperate zones.
Loss of adequate government support, the end of the antibiotic age, and the ecological shifts bringing dangerous organisms into contact with human populations pose serious challenges to public health all by themselves. Add the impact of fossil fuel depletion and the results are unwelcome in the extreme. In a future of soaring energy costs and crumbling economies, public health is guaranteed less support from local government budgets than it has now, meaning that even the most basic public health services are likely to go by the boards. The same factors make it unlikely at best that pharmaceutical companies will be able to afford the expensive and resource-intensive process of developing new antibiotics that has thus far kept physicians one step ahead of most of the antibiotic-resistant microbes. Finally, ecological disruption will only increase as a world population dependent on petroleum-based agriculture scrambles to survive the end of cheap oil; many countries will likely switch to coal, putting global warming into overdrive in the next few decades.
The inevitable result is the return of the health conditions of the 18th and 19th centuries, when deadly epidemics were routine events, childhood mortality was common, and most people could expect to die from infectious diseases rather than the chronic conditions that fill the “cause of death” slot on most death certificates these days. If you factor in soaring rates of alcohol and drug abuse, violence, and malnutrition — all inevitable consequences of hard economic contraction — you have a situation where the number of people on the planet will take a sharp downward turn. Statistics from Russia, where a similar scenario played out in the aftermath of the Soviet Union’s collapse, suggest that population levels could be halved within this century.16 This doesn’t require massive epidemics or the like; all it takes is a death rate in excess of the birth rate — and that’s something we will certainly have as the deindus-trial age begins.
Imperial Sunset
The cascade of consequences that will follow the peaking and decline of world petroleum production can’t be understood outside the context of politics. One dimension of that context is likely to become the preeminent political fact of the age of peak oil: the impending decline — and, at least potentially, the catastrophic collapse — of America’s world empire.
Empires are unfashionable these days, which is why those who support the American empire generally start by claiming that it doesn’t exist, while those who oppose it seem to think that the simple fact of its existence makes it automatically worse than any alternative. Both these views deserve serious questioning. When the United States maintains military garrisons in more than a hundred nations, supporting a state of affairs that allows the five percent of humanity who are American citizens to monopolize a third of the world’s natural resources and industrial production, it’s difficult to discuss the international situation honestly without words like “empire” creeping in. It requires a breathtaking suspension of disbelief to redefine American foreign policy as the disinterested pursuit of worldwide democracy for its own sake.
Still, portraying today’s American empire as the worst of all possible worlds (a popular sport on the left for the last fifty years or so) requires just as much of a leap of faith. If Nazi Germany, say, or the Soviet Union had come out on top in the scramble for global power that followed the implosion of the British Empire, the results would certainly have been a good deal worse: those who currently exercise their freedom to criticize the present empire would face gulags or gas chambers. The lack of any empire at all may be a desirable state of affairs, of course, but until our species evolves efficient ways to checkmate the ambitions of one nation to exploit another, that state of affairs is unlikely to obtain this side of –Neverland.
Ever since transport technology evolved enough to permit one nation to have a significant impact on another, there have been empires; since the rise of effective maritime transport in the 15th century, those empires have had global reach; and since 1945, when it finished off two of its rivals and successfully contained the third, the United States has maintained a global empire. That empire was as much the result of opportunism, accident, and necessity as of any deliberate plan, but it exists, and if it did not exist, some other nation would fill a similar role. So, like it or not, America rules the dominant world empire today — and that will likely become a source of tremendous misfortune for Americans in decades to come.
In part, the downside of empire is built into the nature of imperial systems themselves, because the pursuit of empire is as self-destructive an addiction as anything you’ll find on the mean streets of today’s inner cities. The systematic economic imbalances imposed on client states by empires, while hugely profitable for the empire’s political class, wreck the economy of the imperial state by flooding its markets with cheap imported goods and loading its financial system with tribute. Those outside the political class become what Arnold Toynbee has called an internal proletariat: the people who are alienated from an imperial system that yields them few benefits and many burdens. Meanwhile, members of the external proletariat — the people of the client states whose labor supports the imperial economy but who gain little or nothing in return — eventually respond to their exploitation with a rising spiral of violence that moves from crime through terrorism to open warfare.17 To counter the twin threats of internal dissidence and external insurgency, the imperial state must divert ever larger fractions of its resources to its military and security forces. Economic decline, popular disaffection, and growing pressures on the borders hollow out the imperial state into a brittle shell of soldiers, spies, and bureaucrats surrounding a society in free-fall. When the shell finally cracks — as it always does, sooner or later — nothing is left inside to resist change, and the result is implosion.
It’s possible to halt this process, but only by deliberately stepping back from empire before the unraveling has gone too far. Britain’s response to its own imperial sunset is instructive; instead of clinging to its empire and being dragged down by it, Britain allied with the rising power of the United States, allowed its colonial holdings to slip away, and managed to keep its economic and political system more or less intact. Compare that to Spain, which had the largest empire on Earth in the 16th and 17th centuries. By the 19th century it was one of the poorest countries in Europe, two centuries behind the times economically, racked by civil wars and foreign invasions, and utterly incapable of influencing the European politics of the age. The main factor in this precipitous decline was the long-term impact of empire. It’s no accident that Spain’s national recovery only really began after its last overseas colonies were seized by the United States in the Spanish-American–war.
In this light, the last quarter century of American policy has been suicidally counterproductive in its attempt to maintain the glory days of empire. That empire rested on three foundations: the immense resource base of the American land, especially its once-huge oil reserves; the vast industrial capacity of what was once America’s manufacturing hinterland and now, tellingly, is known as the Rust Belt; and a canny foreign policy, codified in the early 19th century under the Monroe Doctrine, that distanced itself from Old World disputes and focused on maintaining exclusive economic and military influence over Latin America. With these foundations solidly in place, America could intervene decisively in European affairs in 1917 and 1942 and launch an imperial expansion after 1945 that gave it effective dominance over most of the world.
By 1980, though, the economic impacts of empire had already gutted the American industrial economy — a process that has only accelerated since then — and the new and decisive factor of oil depletion added substantially to the pressures toward decline. A sane national policy in this context would have withdrawn from imperial commitments, shifted the burdens of empire onto a resurgent western Europe, and pursued military and economic alliances with rising powers such as China and Brazil. The economic and social turmoil set in motion by the energy crises of the 1970s could have been used as an opportunity to downshift to less affluent and energy-intensive lifestyles, reinvigorate the nation’s industrial and agricultural economy, and renew the frayed social covenants that united the political class with other sectors of the population in a recognition of common goals.
The realities of American politics, however, kept such a plan out of reach. In a society where competing factions of the political class buy power by handing out economic largesse to sectors of the electorate (which, as mentioned before, is what “liberal democracy” amounts to in practice), the possibility of a retreat from empire was held hostage by a classic “prisoner’s dilemma.” Any elite group willing to put its own short-term advantage ahead of national survival could take and hold power (as Reagan’s Republicans did in 1980) by reaffirming the imperial project and restoring access to the payoffs of the tribute economy. For that reason, especially since 2000, the American political class — very much including its “liberal” as well as its “conservative” factions — has backed the survival of America’s global empire using all available means.
This would be disastrous even without the factor of peak oil. No empire, even in its prime, can afford to pursue policies that estrange its allies, increase its overseas commitments, make its enemies forget their mutual quarrels and form alliances with one another, and destabilize the world political order, all at the same time. American foreign policy in recent years has accomplished every one of these things, at a time when America’s effective ability to deal with the consequences is steadily declining as its resource base dwindles and the last of its industrial economy fizzles out. To call this a recipe for disaster is to understate the case considerably.
Peak oil, though, is the wild card in the deck, and at this point in the game it’s a card that can only be played to America’s detriment. To an extent few people realize, every aspect of American empire — from the trade networks that extract wealth from America’s client states to the military arsenal that projects its power worldwide — depends on cheap, abundant petroleum. As the first nation to systematically exploit its petroleum reserves on a large scale, the United States floated to victory in two world wars on a sea of oil, learning the lesson that the way to win wars was to use more energy than the other side. That was possible in the first half of the 20th century, when America was the world’s largest oil producer and exporter. It became problematic in the 1970s, when domestic oil production peaked and began to decline while consumption failed to decline in step, making America dependent on imports. The arrival of worldwide peak oil completes the process by making America’s energy-intensive model of empire utterly unsustainable.
How this process will play out is anyone’s guess at this point. What worries me most, though, is the possibility that it could have a very substantial military dimension. The US military’s total dependence on energy-intensive high technology could easily become a double-edged sword if the resources needed to sustain the technology run short or become suddenly unavailable. At the same time, its investment — economic as well as intellectual — in a previously successful model of warfare could turn into a fatal distraction if new conditions make that model an anachronism.
Any student of history knows that people tend to overestimate the solidity of the familiar and are commonly taken by surprise when the foundations of an established order crumble away from beneath them. The possibility that the global political scene could change out of all recognition in the aftermath of military catastrophe is hard to dismiss. If that happens, those of us who live in today’s United States and its remaining allies could be facing a very rough road indeed.
The Slow Train To The Future
It bears repeating that the predicament outlined in this chapter is not primarily a set of technical problems. Rather, it is a social and intellectual challenge; I might even risk using an utterly unfashionable word and call it a spiritual challenge as well. There are massive technical issues involved in downshifting from an energy-wasting economy and society based on fossil fuels to an energy-conserving–economy and society based on renewable energy resources, but those issues could potentially have been solved if they had been tackled in earnest starting in the 1970s.
Even today, though it’s almost certainly too late to manage the transition without wrenching social disruptions and immense human cost, it might still be possible to deal with those challenges and make the leap to sustainability given the social and political will to do so. Every one of the challenges reviewed in this chapter could be mitigated substantially by responses that are well within the power of the leaders and citizens of today’s industrial societies. Yet it’s precisely the social and political will to deal with the crisis that is nowhere to be found. We need to talk more about why this has happened, and one place to start is precisely with what happened at the end of the 1970s, when the industrial world turned its back on the signs of crisis, and a great many promising steps toward sustainability went into the dumpster.
Part of that sea change in industrial society was political, of course. “Conservative” parties (the word belongs in quotation marks, since today’s conservatives have forgotten how to conserve just as thoroughly as their liberal counterparts have forgotten how to liberate) in most of the industrial world realized that they could cut their opponents off at the knees by proclaiming that limits to growth didn’t exist and by papering over the energy crises of the previous decade with short-term political and economic gimmicks. Part of the change, though, was a reflection of the success of the sustainability movement of the 1970s. In the aftermath of that movement, defying nearly all predictions, petroleum consumption and energy use per capita throughout the developed world went down and stayed down for much of a decade.
This movement toward sustainability, as much as anything else, made it possible for politicians in the United States and Britain to force down the price of oil to levels that, in constant dollars, were lower than ever before. When oil hit $10 a barrel, alternative energy and conservation technologies that had been profitable at higher energy prices became a quick ticket to bankruptcy. To the extent that the push for energy efficiency in the 1970s helped drive down the demand for oil, the sustainability movement of that decade dropped dead from the consequences of its own success.
It’s a useful experience to read through publications on energy issues from the 1970s and compare their confident predictions that permanent limits to growth had arrived with the very different realities of the decades that followed. One of the bits of 1970s nostalgia on my shelves is a thoughtful little book titled The Rise of the Welsh Republic by Derrick Hearne; it’s an attempt to imagine the first decade of the history of an independent Wales in the imminent Age of Scarcity.18 Hearne did not invent the idea of an Age of Scarcity; it was seen as the logical consequence of the emerging limits to growth by many other thinkers of the same period, and Hearne’s proposals mirrored those being discussed in now-forgotten–periodicals such as Rain and Seriatim, where appropriate technology and organic agriculture rubbed elbows with social criticism amid the last hurrah of the idealism of the 1960s.
Fast forward from these mostly forgotten visions to today’s peak oil debates and you might be forgiven a strong sense of déjà vu. Part of the received wisdom in the peak oil community these days is that once worldwide petroleum production peaks and begins its permanent decline, the mismatch between production and demand will cause exactly the same sort of Age of Scarcity that Hearne and so many other thinkers imagined in the 1970s. Now as then, the major issue under debate is whether the changeover to sustainability can be done quickly and thoroughly enough to prevent a crash.
There are good reasons to think that the effort put into this debate will turn out to be just as misplaced as it was in the 1970s — and for much the same reasons. Prophecy is risky business, but it’s a risk worth taking on occasion, so I would like to offer the following seemingly unlikely prediction: twenty years after the definite arrival of a peak in oil production, the price of crude oil in Euros will be no higher than it is today, and it may actually be quite a bit lower.
The time frame is more important here than it may seem at first glance. The likely immediate aftermath of a significant decline in world oil production, of course, is skyrocketing prices for oil and everything made or transported with it; the possibility that oil could hit €200 a barrel or higher (even corrected for inflation) is a real one. Price surges on that scale will be a body blow to the economies of most nations in the developed world. Such astronomical prices would also mean that any method of conserving energy or using alternative energy resources in place of oil will be worth much more than its weight in light sweet crude.
So far, these predictions match the conventional wisdom in the peak oil community, but it’s worth looking a step further into the future. If economies across the industrial world contract, the demand for petroleum will soften as people are forced to abandon the lifestyle choices that account for much of today’s extravagant energy usage. Especially in the United States, where 5% of the world’s people use 25% of its petroleum production, a severe economic contraction could readily cause what economists call “demand destruction,” which can be simply defined as the process by which people who can’t afford a product stop using it. Meanwhile, in a global market awash with effectively limitless amounts of paper capital, the chance for huge profits in the conservation and alternative energy sectors guarantees that entrepreneurs in these fields will have more money they know what to do with. The most likely result, as these trends start to bite, is that the price of oil will level off and then begin to decline.
Diagram 3.2. Cycles of Descent
This abstract model of a society in catabolic collapse shows the stairstep process of decline that historically is the most common way for civilizations to break down. Each period of crisis causes losses in infrastructure, social organization, information resources, and population; these losses are partly made up during the times of stability and recovery — but only partly. The industrial world has already experienced one period of mild crisis in the 1970s, and a period of stability and recovery in the following decades; the same process, with more severe crises and briefer pauses, is likely to shape the history of the next two centuries or so.
Does this mean that peak oil can be ignored, because it poses no threat to industrial society? Hardly. As oil production worldwide continues to contract, and conservation and alternative energy reach the point of diminishing returns, oil prices will spike upward in turn, rising even higher than before and unleashing another wave of economic and social disruption. Just as the economic contractions of the 1970s and 1980s spawned intractable unemployment in most industrial societies and launched a process of downward mobility from which many families never recovered, each wave of economic contraction will likely force more of the population into a permanent underclass for whom the abstract phrase “demand destruction” plays out in a downward spiral of impoverishment and misery.
In such a future, the periods of apparent recovery that will likely follow each round of energy shortages and demand destruction will provide little room to rebuild what has been lost. Those periods will, however, make it exceptionally difficult for any response to fossil fuel depletion to stay on course, so long as that response relies on market forces or politics for its momentum. Each time oil prices slump, the market forces that support investment in a sustainable future will slump as well, while governments facing calls for limited resources will face real challenges in maintaining a commitment to sustainability which, for the moment, no longer seems necessary. Thus the collapse of public and private funding for the alternative energy sector in the aftermath of the 1970s will likely be repeated over and over again as we stumble down the long downhill side of Hubbert’s peak.
Those planning for a future of peak oil, in other words, need to beware of the perils of linear thinking. Much more often than not, history moves in circles rather than straight lines; planning for a future that is like the present, only more so, is a good way to come to grief in the real world. Instead of the express trip to Utopia or oblivion on which so much prophecy and planning has been lavished, we are on board the slow train to the deindustrial future, and the scenery along the route is likely to be a good deal more complex and less predictable than either of our familiar myths have led us to believe.
The upside of this situation, as mentioned earlier in this chapter, is that the crises defined in this chapter will most likely prove self-limiting, at least in the short and middle terms. Energy prices will soar, but not indefinitely and not forever; the economy will come apart and then, slowly and painfully, come back together; public health will slump and then undergo some form of recovery as the economic situation stabilizes; political systems will shatter and then be replaced by others. To judge by past examples, the period of extreme crisis is unlikely to last much more than a quarter century or so. Thus the immediate problem we face isn’t how to survive the end of industrial civilization, it’s how to get through the next wave of crisis and make it to the period of renewed stability on the other side. This is a much more manageable task, and it makes room for possibilities that fashionably apocalyptic models of our predicament hide from sight.