How Do We Unite?

s300_rail-track-image-large-4I don’t know. It requires that people come to understanding.

Understanding requires respectful communication.

Communication is continually interrupted by strong emotion.

There are so many emotional causes that people could get behind right now that the one cause that should unite everybody is overshadowed.

That one cause is to change how we live so we can react to the slow breakdown of life as we know it over the next few decades. It may not feel like it now, maybe it does, but we’re at the pinnacle of the roller-coaster track and we’ve just begun the way down.

Our way of life requires a buttload of energy and that energy isn’t going to be nearly as available as it is today.

We’re going to have to deal with a lot less than we’re expecting to. Systems we rely on now are going to stop working. This is so general it is hard to picture. Let me help that…

You turn on the tap. No water comes out. If water does come out it is full of chemicals and microbes that you have to remove first.

You turn on the lights. The lights don’t come on. If they do come on it will only be for periods of time.

You go to the store. It is closed because the gigantic corporation that operated it couldn’t afford to keep it open. They had to close because too many people in your area can no longer afford to shop there either because they lost their job or the goods were simply too expensive to profit from.

You turn on the heat and nothing happens. Even if the electricity worked to power the heater’s fan, it would blow freezing cold air because there are natural gas shortages.

You go to the ATM and after waiting in line for hours you’re only allowed to take out $100 each day. They’re restricting withdrawals because they don’t have enough capital to cover their other liabilities. People with large deposits are having their savings stolen to pay for bad bets that the banks made.

Everything on the list above is happening now somewhere. It is a thermodynamic certainty that it will happen almost everywhere in the next century or so.

There are effective responses to all of the issues above but they’ll be ignored and remain, for the most part, unimplemented.

The ones who have climbed the highest have the furthest to fall and should expect a very large jolt.

That is the main problem. The jolt is going to feel like failure and it will be depressing and oppressing and feel very unfair.

There will still be some people unaffected by the collapse and they’ll continue to believe that it is their deeds alone, instead of luck, that are keeping them on the right side of this thing.

They’re currently called the, “elites.”

The elites will blame the downtrodden for their own misfortunes and will be blamed by the downtrodden for the very same thing.

All of this tension and stress will be so distracting that we’ll forget to respond to this collapse correctly.

We’ll continue to believe that, if somebody would change something, things will go back to being OK or even continue their relentless trajectory towards, “better.”

That is a delusion and should be crucified.

 

And another.

I’ve got to learn to write something that won’t be so controversial should I actually publish it.

Tonight I know exactly what I’m going to do. Well I’m writing right now but soon I’ll be cleaning.

I’ve got to do dishes, wipe down counters, sweep, vacuum and fold laundry. Oh and pickup bedroom.

But until I start on that shit, here I sit at the computer putting words into it.

Feeding it information that will likely never be read again. If it is it will likely just be re-read by myself.

But here I sit anyway.

I’ve been thinking about consciousness. Would everything, “out there,” exist if there were nothing to observe it?

I don’t know that I’m as certain of that answer as I used to be. I used to be certain that an, “out there,” existed and would whether or not it was observed.

Now I’m thinking that so long as there is something to observe, it is being observed. “Out there,” is observing its self. The universe observing itself.

Out there has a self. It has consciousness. I wonder what the world looks like to it.

I bet it looks while we’re dreaming. It looks while we’re creating. It is there when we’re feeling. It is there when we’re doing anything that matters.

Oh my fuck I hope the universe is has more mental stability and empathy than us fucking humans.

I pray it does. I should make sure the universe gets a healthy dose of logic and reason every day. And empathy and philosophy and love.

But instead of that right now I’m importing violence and blood and gore and hate and anger and stress directly into my mind.

No wonder the universe stopped talking to me for so long.

Thermodynamic Consequences (Why the children of Boomers are going Bust)

I found this on Facebook…

There’s gotta be something more to this millennial “I can’t adult” thing than my generation simply being bad at simple tasks. An entire generation can’t unanimously be lazy, unmotivated, blase, apolitical pieces of internet trash. An entire generation can’t not know how to drive, let alone haggle affordability at a car dealership. An entire generation can’t overwhelmingly lack the know-how to find a viable apartment and continue living in it for more than 6 months. An entire fucking generation can’t be going to school more than ever and facing lower wages than ever at the same time and have it be their own fucking fault. My generation can’t possibly be the ones fucking things up for ourselves, since my generation doesn’t have political or economic control over jack shit.

It’s almost like the generation that raised us didn’t prepare us at all for the world they created. It’s almost like there wasn’t a chance in hell we could have been prepared for this in the first place. It’s almost like it’s being blamed on us before we could even have the chance to fuck up. It’s almost like it’s not our fault we’re failing.

The author of that post is right, for the most part.

The situation that the millennial generation finds itself in is one that could have been avoided. The boomers (and others) were told repeatedly that the current trajectory of the US economy was unsustainable. They continued anyway and then misinformed their children about what they could realistically expect from the future while, at the same time, preventing their children from learning from their own mistakes.

Millennials are making and learning from the same mistakes we all made. The difference is that they’re being forced to make those mistakes as adults in an economic environment where even minor failure can leave you with nothing.

It gets worse from here because there is absolutely no hope of economic recovery. The American Dream is fossil fueled and that fuel is frighteningly finite.

The idea behind this nightmare situation is pretty simple and deep down we all want to believe it.

Everybody that gets educated and works hard can become an economic success because…economic growth.

That statement is false and evokes the archetype of the perpetual motion machine. It is physically impossible.

But it does feel right when the economy actually is growing which is why so many people came to believe it despite all of the evidence against the idea.

If the economy could continue to grow there would be room for the horde of college graduates to have and hold jobs that would allow them to have the life their boomer parents dreamed of.

But it can’t because economic growth requires growth in the amount of fossil fuel consumed and as I stated earlier, fossil fuels are finite.

So what can millennials expect?

Unfortunately… a New Dark Age

Learn to, “I,” differently.

What do you refer to when you say or think the word “I”?

That word encapsulates a great many things. If the speaker is an artist named Jan then “I” likely refers to a female human who enjoys creating creatively. If this female Jan has two kids and a husband then “I” hopefully includes the roles of mom and wife. If Jan was emotionally abused as a youngster then “I” may, under certain sad circumstances, refer to somebody who feels worthless.

You are what you identify with.

By the time you’re grown up most of the “I’s” you identify with are reliant upon others. Jan, for instance, might not be an artist today if she hadn’t had so much pain to work through from the emotional abuse.

These are all things that Jan identifies as part of her, “self.”  That is why, when any of these things are threatened, Jan feels threatened.

Jan recently read Cosmos by Carl Sagan. Seven sentences had a profound effect on her. Those sentences are quoted below…

“The surface of the Earth is the shore of the cosmic ocean. On this shore, we’ve learned most of what we know. Recently, we’ve waded a little way out, maybe ankle-deep, and the water seems inviting. Some part of our being knows this is where we came from. We long to return, and we can, because the cosmos is also within us. We’re made of star stuff. We are a way for the cosmos to know itself.” – Carl Sagan, Cosmos

When Jan read that she felt what Carl Sagan was describing when he wrote…

“The Cosmos is all that is or was or ever will be. Our feeblest contemplations of the Cosmos stir us — there is a tingling in the spine, a catch in the voice, a faint sensation, as if a distant memory, of falling from a height. We know we are approaching the greatest of mysteries.” – Carl Sagan, Cosmos

…because she realized that she was a bit of cosmos. Her next thought caused the exact same reaction only more intense because she realized that she was a bit of cosmos that had gained awareness of its own existence and was also aware that it was aware. She literally became the cosmos, self-aware.

She realized that when she used the word, “I” she was ultimately referring to the Cosmos itself. The Universe literally had a, “self,” of which she was a part. From that moment on Jan I’d differently.

She is now a bit of the Cosmos painting a portrait of another bit of Cosmos.

She is now a bit of the Universe wiping her hung-over-as-fuck-husband’s face with a cool, damp cloth. He was a bit of Cosmos having a very bad time after having a very good time.

She is now a bit of sentient Universe giving birth to and raising other sentient bits of Universe.

She is now the Cosmos bewildered by the fact that the Cosmos has the capacity to be bewildered at all.

She is now a Versling.

Reblog: Darwin’s Casino

Originally posted: WEDNESDAY, JULY 08, 2015

http://thearchdruidreport.blogspot.com/2015/07/darwins-casino.html

Darwin’s Casino

Our age has no shortage of curious features, but for me, at least, one of the oddest is the way that so many people these days don’t seem to be able to think through the consequences of their own beliefs. Pick an ideology, any ideology, straight across the spectrum from the most devoutly religious to the most stridently secular, and you can count on finding a bumper crop of people who claim to hold that set of beliefs, and recite them with all the uncomprehending enthusiasm of a well-trained mynah bird, but haven’t noticed that those beliefs contradict other beliefs they claim to hold with equal devotion.

I’m not talking here about ordinary hypocrisy. The hypocrites we have with us always; our species being what it is, plenty of people have always seen the advantages of saying one thing and doing another. No, what I have in mind is saying one thing and saying another, without ever noticing that if one of those statements is true, the other by definition has to be false. My readers may recall the way that cowboy-hatted heavies in old Westerns used to say to each other, “This town ain’t big enough for the two of us;” there are plenty of ideas and beliefs that are like that, but too many modern minds resemble nothing so much as an OK Corral where the gunfight never happens.

An example that I’ve satirized in an earlier post here is the bizarre way that so many people on the rightward end of the US political landscape these days claim to be, at one and the same time, devout Christians and fervid adherents of Ayn Rand’s violently atheist and anti-Christian ideology.  The difficulty here, of course, is that Jesus tells his followers to humble themselves before God and help the poor, while Rand told hers to hate God, wallow in fantasies of their own superiority, and kick the poor into the nearest available gutter. There’s quite precisely no common ground between the two belief systems, and yet self-proclaimed Christians who spout Rand’s turgid drivel at every opportunity make up a significant fraction of the Republican Party just now.

Still, it’s only fair to point out that this sort of weird disconnect is far from unique to religious people, or for that matter to Republicans. One of the places it crops up most often nowadays is the remarkable unwillingness of people who say they accept Darwin’s theory of evolution to think through what that theory implies about the limits of human intelligence.

If Darwin’s right, as I’ve had occasion to point out here several times already, human intelligence isn’t the world-shaking superpower our collective egotism likes to suppose. It’s simply a somewhat more sophisticated version of the sort of mental activity found in many other animals. The thing that supposedly sets it apart from all other forms of mentation, the use of abstract language, isn’t all that unique; several species of cetaceans and an assortment of the brainier birds communicate with their kin using vocalizations that show all the signs of being languages in the full sense of the word—that is, structured patterns of abstract vocal signs that take their meaning from convention rather than instinct.

What differentiates human beings from bottlenosed porpoises, African gray parrots, and other talking species is the mere fact that in our case, language and abstract thinking happened to evolve in a species that also had the sort of grasping limbs, fine motor control, and instinctive drive to pick things up and fiddle with them, that primates have and most other animals don’t.  There’s no reason why sentience should be associated with the sort of neurological bias that leads to manipulating the environment, and thence to technology; as far as the evidence goes, we just happen to be the one species in Darwin’s evolutionary casino that got dealt both those cards. For all we know, bottlenosed porpoises have a rich philosophical, scientific, and literary culture dating back twenty million years; they don’t have hands, though, so they don’t have technology. All things considered, this may be an advantage, since it means they won’t have had to face the kind of self-induced disasters our species is so busy preparing for itself due to the inveterate primate tendency to, ahem, monkey around with things.

I’ve long suspected that one of the reasons why human beings haven’t yet figured out how to carry on a conversation with bottlenosed porpoises, African gray parrots, et al. in their own language is quite simply that we’re terrified of what they might say to us—not least because it’s entirely possible that they’d be right. Another reason for the lack of communication, though, leads straight back to the limits of human intelligence. If our minds have emerged out of the ordinary processes of evolution, what we’ve got between our ears is simply an unusually complex variation on the standard social primate brain, adapted over millions of years to the mental tasks that are important to social primates—that is, staying fed, attracting mates, competing for status, and staying out of the jaws of hungry leopards.

Notice that “discovering the objective truth about the nature of the universe” isn’t part of this list, and if Darwin’s theory of evolution is correct—as I believe it to be—there’s no conceivable way it could be. The mental activities of social primates, and all other living things, have to take the rest of the world into account in certain limited ways; our perceptions of food, mates, rivals, and leopards, for example, have to correspond to the equivalent factors in the environment; but it’s actually an advantage to any organism to screen out anything that doesn’t relate to immediate benefits or threats, so that adequate attention can be paid to the things that matter. We perceive colors, which most mammals don’t, because primates need to be able to judge the ripeness of fruit from a distance; we don’t perceive the polarization of light, as bees do, because primates don’t need to navigate by the angle of the sun.

What’s more, the basic mental categories we use to make sense of the tiny fraction of our surroundings that we perceive are just as much a product of our primate ancestry as the senses we have and don’t have. That includes the basic structures of human language, which most research suggests are inborn in our species, as well as such derivations from language as logic and the relation between cause and effect—this latter simply takes the grammatical relation between subjects, verbs, and objects, and projects it onto the nonlinguistic world. In the real world, every phenomenon is part of an ongoing cascade of interactions so wildly hypercomplex that labels like “cause” and “effect” are hopelessly simplistic; what’s more, a great many things—for example, the decay of radioactive nuclei—just up and happen randomly without being triggered by any specific cause at all. We simplify all this into cause and effect because just enough things appear to work that way to make the habit useful to us.

Another thing that has much more to do with our cognitive apparatus than with the world we perceive is number. Does one apple plus one apple equal two apples? In our number-using minds, yes; in the real world, it depends entirely on the size and condition of the apples in question. We convert qualities into quantities because quantities are easier for us to think with.  That was one of the core discoveries that kickstarted the scientific revolution; when Galileo became the first human being in history to think of speed as a quantity, he made it possible for everyone after him to get their minds around the concept of velocity in a way that people before him had never quite been able to do.

In physics, converting qualities to quantities works very, very well. In some other sciences, the same thing is true, though the further you go away from the exquisite simplicity of masses in motion, the harder it is to translate everything that matters into quantitative terms, and the more inevitably gets left out of the resulting theories. By and large, the more complex the phenomena under discussion, the less useful quantitative models are. Not coincidentally, the more complex the phenomena under discussion, the harder it is to control all the variables in play—the essential step in using the scientific method—and the more tentative, fragile, and dubious the models that result.

So when we try to figure out what bottlenosed porpoises are saying to each other, we’re facing what’s probably an insuperable barrier. All our notions of language are social-primate notions, shaped by the peculiar mix of neurology and hardwired psychology that proved most useful to bipedal apes on the East African savannah over the last few million years. The structures that shape porpoise speech, in turn, are social-cetacean notions, shaped by the utterly different mix of neurology and hardwired psychology that’s most useful if you happen to be a bottlenosed porpoise or one of its ancestors.

Mind you, porpoises and humans are at least fellow-mammals, and likely have common ancestors only a couple of hundred million years back. If you want to talk to a gray parrot, you’re trying to cross a much vaster evolutionary distance, since the ancestors of our therapsid forebears and the ancestors of the parrot’s archosaurian progenitors have been following divergent tracks since way back in the Paleozoic. Since language evolved independently in each of the lineages we’re discussing, the logic of convergent evolution comes into play: as with the eyes of vertebrates and cephalopods—another classic case of the same thing appearing in very different evolutionary lineages—the functions are similar but the underlying structure is very different. Thus it’s no surprise that it’s taken exhaustive computer analyses of porpoise and parrot vocalizations just to give us a clue that they’re using language too.

The takeaway point I hope my readers have grasped from this is that the human mind doesn’t know universal, objective truths. Our thoughts are simply the way that we, as members of a particular species of social primates, to like to sort out the universe into chunks simple enough for us to think with. Does that make human thought useless or irrelevant? Of course not; it simply means that its uses and relevance are as limited as everything else about our species—and, of course, every other species as well. If any of my readers see this as belittling humanity, I’d like to suggest that fatuous delusions of intellectual omnipotence aren’t a useful habit for any species, least of all ours. I’d also point out that those very delusions have played a huge role in landing us in the rising spiral of crises we’re in today.

Human beings are simply one species among many, inhabiting part of the earth at one point in its long lifespan. We’ve got remarkable gifts, but then so does every other living thing. We’re not the masters of the planet, the crown of evolution, the fulfillment of Earth’s destiny, or any of the other self-important hogwash with which we like to tickle our collective ego, and our attempt to act out those delusional roles with the help of a lot of fossil carbon hasn’t exactly turned out well, you must admit. I know some people find it unbearable to see our species deprived of its supposed place as the precious darlings of the cosmos, but that’s just one of life’s little learning experiences, isn’t it? Most of us make a similar discovery on the individual scale in the course of growing up, and from my perspective, it’s high time that humanity do a little growing up of its own, ditch the infantile egotism, and get to work making the most of the time we have on this beautiful and fragile planet.

The recognition that there’s a middle ground between omnipotence and uselessness, though, seems to be very hard for a lot of people to grasp just now. I don’t know if other bloggers in the doomosphere have this happen to them, but every few months or so I field a flurry of attempted comments by people who want to drag the conversation over to their conviction that free will doesn’t exist. I don’t put those comments through, and not just because they’re invariably off topic; the ideology they’re pushing is, to my way of thinking, frankly poisonous, and it’s also based on a shopworn Victorian determinism that got chucked by working scientists rather more than a century ago, but is still being recycled by too many people who didn’t hear the thump when it landed in the trash can of dead theories.

A century and a half ago, it used to be a commonplace of scientific ideology that cause and effect ruled everything, and the whole universe was fated to rumble along a rigidly invariant sequence of events from the beginning of time to the end thereof. The claim was quite commonly made that a sufficiently vast intelligence, provided with a sufficiently complete data set about the position and velocity of every particle in the cosmos at one point in time, could literally predict everything that would ever happen thereafter. The logic behind that claim went right out the window, though, once experiments in the early 20th century showed conclusively that quantum phenomena are random in the strictest sense of the world. They’re not caused by some hidden variable; they just happen when they happen, by chance.

What determines the moment when a given atom of an unstable isotope will throw off some radiation and turn into a different element? Pure dumb luck. Since radiation discharges from single atoms of unstable isotopes are the most important cause of genetic mutations, and thus a core driving force behind the process of evolution, this is much more important than it looks. The stray radiation that gave you your eye color, dealt an otherwise uninteresting species of lobefin fish the adaptations that made it the ancestor of all land vertebrates, and provided the raw material for countless other evolutionary transformations:  these were entirely random events, and would have happened differently if certain unstable atoms had decayed at a different moment and sent their radiation into a different ovum or spermatozoon—as they very well could have. So it doesn’t matter how vast the intelligence or complete the data set you’ve got, the course of life on earth is inherently impossible to predict, and so are a great many other things that unfold from it.

With the gibbering phantom of determinism laid to rest, we can proceed to the question of free will. We can define free will operationally as the ability to produce genuine novelty in behavior—that is, to do things that can’t be predicted. Human beings do this all the time, and there are very good evolutionary reasons why they should have that capacity. Any of my readers who know game theory will recall that the best strategy in any competitive game includes an element of randomness, which prevents the other side from anticipating and forestalling your side’s actions. Food gathering, in game theory terms, is a competitive game; so are trying to attract a mate, competing for social prestige, staying out of the jaws of hungry leopards, and most of the other activities that pack the day planners of social primates.

Unpredictability is so highly valued by our species, in fact, that every human culture ever recorded has worked out formal ways to increase the total amount of sheer randomness guiding human action. Yes, we’re talking about divination—for those who don’t know the jargon, this term refers to what you do with Tarot cards, the I Ching, tea leaves, horoscopes, and all the myriad other ways human cultures have worked out to take a snapshot of the nonrational as a guide for action. Aside from whatever else may be involved—a point that isn’t relevant to this blog—divination does a really first-rate job of generating unpredictability. Flipping a coin does the same thing, and most people have confounded the determinists by doing just that on occasion, but fully developed divination systems like those just named provide a much richer palette of choices than the simple coin toss, and thus enable people to introduce a much richer range of novelty into their actions.

Still, divination is a crutch, or at best a supplement; human beings have their own onboard novelty generators, which can do the job all by themselves if given half a chance.  The process involved here was understood by philosophers a long time ago, and no doubt the neurologists will get around to figuring it out one of these days as well. The core of it is that humans don’t respond directly to stimuli, external or internal.  Instead, they respond to their own mental representations of stimuli, which are constructed by the act of cognition and are laced with bucketloads of extraneous material garnered from memory and linked to the stimulus in uniquely personal, irrational, even whimsical ways, following loose and wildly unpredictable cascades of association and contiguity that have nothing to do with logic and everything to do with the roots of creativity.

Each human society tries to give its children some approximation of its own culturally defined set of representations—that’s what’s going on when children learn language, pick up the customs of their community, ask for the same bedtime story to be read to them for the umpteenth time, and so on. Those culturally defined representations proceed to interact in various ways with the inborn, genetically defined representations that get handed out for free with each brand new human nervous system.  The existence of these biologically and culturally defined representations, and of various ways that they can be manipulated to some extent by other people with or without the benefit of mass media, make up the ostensible reason why the people mentioned above insist that free will doesn’t exist.

Here again, though, the fact that the human mind isn’t omnipotent doesn’t make it powerless. Think about what happens, say, when a straight stick is thrust into water at an angle, and the stick seems to pick up a sudden bend at the water’s surface, due to differential refraction in water and air. The illusion is as clear as anything, but if you show this to a child and let the child experiment with it, you can watch the representation “the stick is bent” give way to “the sticklooks bent.” Notice what’s happening here: the stimulus remains the same, but the representation changes, and so do the actions that result from it. That’s a simple example of how representations create the possibility of freedom.

In the same way, when the media spouts some absurd bit of manipulative hogwash, if you take the time to think about it, you can watch your own representation shift from “that guy’s having an orgasm from slurping that fizzy brown sugar water” to “that guy’s being paid to pretend to have an orgasm, so somebody can try to convince me to buy that fizzy brown sugar water.” If you really pay attention, it may shift again to “why am I wasting my time watching this guy pretend to get an orgasm from fizzy brown sugar water?” and may even lead you to chuck your television out a second story window into an open dumpster, as I did to the last one I ever owned. (The flash and bang when the picture tube imploded, by the way, was far more entertaining than anything that had ever appeared on the screen.)

Human intelligence is limited. Our capacities for thinking are constrained by our heredity, our cultures, and our personal experiences—but then so are our capacities for the perception of color, a fact that hasn’t stopped artists from the Paleolithic to the present from putting those colors to work in a galaxy of dizzyingly original ways. A clear awareness of the possibilities and the limits of the human mind makes it easier to play the hand we’ve been dealt in Darwin’s casino—and it also points toward a generally unsuspected reason why civilizations come apart, which we’ll discuss next week.

Reblog: What Greece, Cyprus, and Puerto Rico Have in Common

Posted on by  at http://ourfiniteworld.com/2015/07/08/what-greece-cyprus-and-puerto-rico-have-in-common/

We all know one thing that Greece, Cyprus, and Puerto Rico have in common–severe financial problems. There is something else that they have in common–a high proportion of their energy use is from oil. Figure 1 shows the ratio of oil use to energy use for selected European countries in 2006.

Figure 1. Oil as a percentage of total energy consumption in 20006, based on June 2015 Energy Information data.

Greece and Cyprus are at the bottom of this chart. The other “PIIGS” countries (Ireland, Spain, Italy, and Portugal) are immediately above Greece. Puerto Rico is not European so is not on Figure 1, but it if were shown on this chart, it would between Greece and Cyprus–its oil as a percentage of its energy consumption was 98.4% in 2006. The year 2006 was chosen because it was before the big crash of 2008. The percentages are bit lower now, but the relationship is very similar now.

Why would high oil consumption as a percentage of total energy be a problem for countries? The issue, as I see it, is competitiveness (or lack thereof) in the world marketplace. Years ago, say back in the early 1900s, when countries built up their infrastructure, oil price was much lower than today–less than $20 a barrel (even in inflation-adjusted dollars). Between 1985 and 2000 there was another period when prices were below $40 barrel. Back then, the price of oil was not too different from the price of other types of energy, so an energy mix slanted toward oil was not a problem.

Figure 2. Historical World Energy Price in 2014$, from BP Statistical Review of World History 2015.

Oil prices are now in the $60 barrel range. This is still high by historical standards. Furthermore, much of the financial difficulty countries have gotten into has occurred in the recent past, when oil prices were in the $100 per barrel range.

While countries with a large share of oil in their energy mix tend to fare poorly, at least some countries with a preponderance of cheap energy fuels in their energy mix have tended to do very well. For example, China’s economy has grown rapidly in recent years. In 2006, its share of oil in its energy mix was only 23.0%, putting it below Norway but above Poland, if it were included in Figure 1.

Let’s look a little at what it takes for an economy to produce economic growth, and what goes wrong in countries with high energy costs. I should mention that high energy costs can occur for any number of reasons, not just because a country’s energy mix includes a large proportion of oil. Other causes might include a high percentage of high-priced renewables or high-priced liquefied natural gas (LNG) in a country’s energy mix. The reason doesn’t really matter–high price is a problem, whatever its cause.

What Is Needed for an Economy to Grow

The following reflects my view regarding what is needed for an economy to grow:

1. A growing supply of energy products, either internally produced or purchased on the world market, is needed for an economy to grow.

The reason why a growing supply of these energy products is needed is because it takes energy (human energy plus supplemental energy) to make goods and services.

The availability of today’s jobs is also tied to the use of supplemental energy. High-paying jobs such as operating a bull-dozer, producing large quantities of food on a farm using modern equipment, or operating a computer, require supplemental energy in addition to human energy.  While jobs can be created that use little supplemental energy to leverage human energy (for example, manual accounting without electricity or computers, growing food without modern equipment, or digging ditches with shovels), these jobs tend to pay very poorly because output per hour worked tends to be low.

To obtain growth in the number of jobs available to workers, a growing supply of energy products to leverage human energy is needed. Looking at the world economy, we can see that historically, growth in energy consumption is highly correlated with economic growth.

Figure 3. World GDP in 2010$ compared (from USDA) compared to World Consumption of Energy (from BP Statistical Review of World Energy 2014).

In fact, we tend to need an increasing percentage growth in energy supply to produce a given percentage growth of GDP because the y intercept of the fitted line is -17.394, rather than 0.000. Back in 1969, 1.0% growth in the consumption of energy products produced 2.2% GDP growth. The fitted line implies that recently, the amount of GDP growth associated with one percentage growth in energy consumption is only 1.2% of GDP. This poor result is taking place, despite all of our efforts toward increased efficiency. Thus, as time goes on, we need more and more energy growth to produce the same level of GDP growth. This is a rather unfortunate situation that world leaders don’t mention. They tend to focus instead on the fact that the growth in GDP tends to be at least a little higher than the growth in energy use.

2.  This growing energy supply must be inexpensive, in order to be able to create goods that are competitive in the world market. 

Human energy is by its nature expensive energy. Humans require food, water, clothing, and housing to support their biological needs–we are not adapted to eating entirely uncooked food, or to living in climates that get very cold in winter, unless we have protection from the elements. Thus, wages must be high enough to cover these costs.

Cheap supplemental energy provides a great deal more leveraging power than expensive supplemental energy. If we can leverage human energy with cheap energy such as wood or fossil fuels, it is easy to bring down the average cost of energy. (This calculation is made on a Calorie or Btu basis, for the sum of the energy provided by human labor plus that provided by supplemental energy.) If we are dealing with supplemental energy that is by itself high-cost, it is very difficult to bring down this weighted average cost. This is why high-cost oil, or for that matter high-cost supplemental energy of any kind, is a problem.

If human energy can be leveraged with increasing amounts of cheap energy, it can produce an increasing amount of goods and services, ever more cheaply. In fact, this seems to be where economic growth comes from. These goods and services can be shared with many parts of the economy, including government funding, wages for elite workers, wages for non-elite workers, payback of loans with interest, and dividends to stockholders. If there are enough goods and services produced thanks to this increased leverage, all of the various parts of the economy can get a reasonable share, and all can adequately prosper.

If there is not enough to go around, then there are likely be shortfalls in many parts of the economy at once. It is likely to be hard to find good paying jobs, for ordinary “non-elite” workers. Governments are likely to find it difficult to collect enough taxes. Governments may lower interest rates, or may take other steps to make it easier for businesses to continue their operations. Even with lower interest rates, debt defaults may become a problem. See my post, Why We Have an Oversupply of Almost Everything. The entire economy tends to do poorly.

Ayres and Warr provide an illustration of how an increasingly inexpensive supply of energy can lead to greater consumption of that energy–in this case electricity–in their paper Accounting for Growth: The Role of Physical Role of Physical Work.

Figure 4. Ayres and Warr Electricity Prices and Electricity Demand, from "Accounting for growth: the role of physical work."

There is a logical reason why falling energy prices would lead to rising use of an energy product. If a person can afford to buy, say, $100 worth of energy and the cost is $1 per unit, the person can afford to buy 100 units. If the cost is $5 per unit, the person can afford to buy 20 units of energy. If it is the energy itself that aids growth in economic output (by moving a truck farther, or operating a machine longer), then lower energy prices lead to more energy consumed. This higher amount of energy consumed in turn leads to more economic output. This greater economic output is frequently shared with workers in the form of higher wages because of the workers’ “higher productivity” (thanks to the leveraging of cheap supplemental energy).

When it comes to the cost of energy production, there are “tugs” in two different directions. In one direction, there is the savings in costs that technology can provide. In the other, there is the trend toward higher extraction costs because companies tend to extract the cheapest resource of a given type first. As the inexpensive-to-extract resources are exhausted, the cost of resource extraction tends to rise. We can see from Figure 2 that oil prices first began to spike in the 1970s. After some temporary “fixes” (shifting much electrical production away from oil to cheaper fuels, shifting home heating from oil to other fuels, and starting new extraction in Alaska, Mexico, and the North Sea), the problem was more or less solved for a while. The problem came back in the early 2000s, and hasn’t really been solved. Thus, most of the tug now is in the direction of higher costs of production.1

Once oil prices rose, Greece and other countries that continued to use a high percentage of oil in their energy mix were handicapped because their products tended to become too high-priced for customers. Wages of customers did not rise correspondingly. Potential tourists could not afford the high cost of airline tickets and cruise ship tickets, because these prices depended on the price of oil. Even when oil prices dropped recently, airline companies have not reduced airline ticket prices to reflect their savings.

Because of the high-cost energy structure, manufacturing costs have tended to be high as well. With fewer tourism jobs and few possibilities for making goods for exports, the number of good-paying jobs has tended to shrink. Without enough good-paying jobs, Greek demand for fuel products of all kinds dropped rapidly. (Demand reflects the amount of goods a person wants and can afford. Young people without jobs live with their parents, and thus do not buy new homes or cars, lowering consumption.)

Figure 5. Greece's energy consumption by fuel, based on BP Statistical Review of World Energy, 2015 data.

Other countries that were positioned to add huge amounts of inexpensive energy were able to continue to continue to grow. The country that did this best was China. It was able to cheaply and rapidly ramp up its coal supply, once it entered the World Trade Organization in 2001. If Greece now adds production of goods, it needs to be able to compete in price with China and other goods-producers.

Figure 6. China's energy consumption by fuel, based on data of BP Statistical Review of World Energy 2015.

3. If the energy supply that a country plans to use is cheap, it doesn’t matter whether the energy supply is locally produced or not.

If the energy supply that a country is locked into using is expensive, then using locally produced high-priced energy is “less bad” than using imported energy, but there is still a problem.

If a growing supply of cheap energy is available, this can be used to leverage local human labor to produce inexpensive goods. This works well, regardless of whether the fuel is imported or not. Because imported energy “works” in such a situation, many island nations (including Cyprus and Puerto Rico) were able to develop their economies using oil as the energy base. These island nations typically did not have natural gas available, unless they imported expensive LNG. Coal and nuclear were also difficult to use, because power plants of these types are built on too a large scale to be suitable for on an island. But oil generally worked well, even if imported.

Greece includes 227 inhabited islands, and thus is faced with many of the problems of an island nation. Back when oil was cheap, oil was an easy solution. It could be used for electricity and for many processes that require heat, such as baking bread, dying cloth, making bricks, and recycling metals.

If a county is using imported oil, once oil becomes high-priced, there is essentially nothing that can be done to fix the problem. Devaluing the currency doesn’t work, because then oil becomes higher-priced in the new devalued currency. As a result, it still is prohibitively expensive to make goods, even after the devaluation. In fact, devaluing the currency also tends to make other imported energy products, such as LNG and solar PV panels, more expensive as well.

With respect to previously purchased renewables, the ongoing cost is typically the debt payments for the devices used to generate this energy. How devaluation will affect these payments depend on the currency the debt is in. If these debt payments are in the country’s own currency, then devaluing the currency will not affect the payments (so devaluation won’t help reduce costs). If debt payments for renewables are in another currency (such as the dollar or Euros), then devaluing the currency will increase the cost, making the loans more difficult to repay.

Even for an oil exporter like Saudi Arabia, high-priced oil is a problem, for a number of reasons:

  1. If the oil exporter uses some of its oil itself, the revenue that would have been gained by selling this oil abroad is lost. The government may be able to purchase the oil for essentially the cost of extraction, but it loses the extra revenue that it would gain by selling the oil abroad. This revenue could be used to fund government programs and new oil investment.
  2. The countries that import this high-priced oil tend to find their economies depressed, leading to less use of the oil. Thus, oil exports tend to become depressed.
  3. The price of oil may fall (and in fact has fallen, and may fall more), because of low demand. With low prices, it becomes difficult for exporters to collect enough revenue for government projects and investment in new supply.

The reason why locally produced high-priced oil is “less bad” than imported oil is because jobs related to producing the oil tend to stay in the country. This is a plus, in itself. If there is a currency devaluation, wage costs and other local costs will be lower, making the energy product less expensive to produce. Unfortunately, production costs (including taxes needed to support government services) may still be above the market price, because of depressed demand.

4. Debt helps increase demand for goods. But to make the debt repayable, these goods need to be made with low-priced energy products. 

Ramping up debt for a country helps, but only if, with this debt, the country is able to profitably sell more goods and services in the world marketplace. Greece seems to have added debt, but wasn’t able to use this debt to create goods and services that could be sold cheaply enough that their prices would be competitive in the world market.

China clearly has been willing to add huge amounts of debt to support all of its new industry and new homes it has built with the coal it has been extracting. There is no doubt that the growth in China’s debt has played a major role in extracting growing quantities of coal. Now China’s coal consumption is slowing for a number of reasons including overbuilding of factories, too much pollution, and higher cost of coal production. China’s slowdown in energy consumption is leading to a slow-down in economic growth, and may even lead to a hard crash.

Greece has added a lot of debt in recent years, but this debt has not been used for ramping up the use of a new cheap supply of energy. Much of Greece’s debt seems to be for purposes such as bailing out banks. This doesn’t really tell us what is/was wrong with the economy to begin with. I would argue that high-priced fuel tends to make it difficult to make any kind of goods or services inexpensively enough to compete in the world market, and this is at least part of the problem. The result of this is that companies, no matter what they invest debt in, have a difficult time being profitable.

The Greek government tries to cover up the country’s problems with programs that are funded by debt. Hidden subsidies may be occurring in several government-owned energy-related firms: Public Power Corporation of Greece (Greece’s largest electric utility), Hellenic Petroleum, DEPA Natural Gas, and ADMIE Grid Operating Company. There have been proposals to privatize these companies because they are poorly run. Whether or not they are poorly run, I expect that it will be very difficult to run them profitably, simply because of the inherent high-cost nature of the products they produce and workers’ lack of disposable income. This problem reflects the high cost of the underlying products they are producing.

There have been some proposals to try to get energy costs down, including a proposal to install a new lignite coal-fired electric power plant. There is also a plan to connect four of the islands to the electric grid, so that the islands won’t have to depend on oil-fired electricity. Even if these changes are made, it is not clear that Greece’s energy costs will be low enough to produce goods that are competitive in the world market. For one thing, airplanes and cruise ships operate using oil, not electricity produced by lignite, so will not be affected by additional inexpensive lignite electricity production.

From everything I can see, Greece’s debt needs to be written off. There is no way that the country can change its system to repay it. Greece can perhaps repay a little new debt, if it is channeled to support low-cost energy production to substitute for current high-cost energy.

Conclusion

Most people don’t understand that our world economy runs on cheap energy. High-priced energy is not an adequate substitute, even if the high-priced energy is “low carbon” or claims to have a reasonably high EROEI (Energy Return on Energy Invested) ratio. Our world economy is sensitive to prices and costs, even if the current “politically correct” discussion ignores these matters.

Economies that are part of our current system can’t get along without energy supplies, either. Humans have used supplemental energy since our hunter-gatherer days, when we learned to control fire. In fact, the use of large amounts of supplemental energy seems to be the way we are now able to support a world population of 7+ billion people.

Given that the world economy runs on “cheap” energy, adding expensive energy production, no matter how “green” it may appear to be, does not solve a country’s financial problems. In fact, it likely tends to make its financial problems worse. There is no way that high-priced energy will produce goods and services that are competitive in the world market. In fact, it is doubtful that high-priced energy will return a high enough “profit” to pay its own way, in terms of having the ability to pay suitable taxes to support required government services, such as schools and roads. High-priced energy is instead likely to need government subsidies, both for initially building the devices and for helping citizens pay the ongoing cost of electricity.

Greece clearly has a lot of problems besides its high-energy cost, including excessive pensions and inefficiently operated state-owned companies. To some extent, I expect that these other problems reflect the difficulty of creating goods that can compete profitably in the world economy. If there is no way businesses can successfully compete in the world economy, I can see why leaders would do whatever they could to keep the system operating. This might mean adding more debt, keeping staffing at government-operated companies at higher levels than needed, and providing overly generous pension programs.

The thing that Greece has going for it is a relatively warm climate and a history of doing well with relatively little supplemental energy. Ancient Greece was known for its philosophy, literature and theatre, music and dance, science and technology, and art and architecture. Northern Europe, because of its cold climate, was not able to do very much until it added peat moss and coal as supplemental energy. Once these cheap supplemental energies were added, Northern Europe was able to industrialize, while Southern Europe lagged behind. If we are running into obstacles now with respect to fossil fuels, perhaps the advantage will again go back to people who live in warm enough climates that they can mostly live without supplemental energy.

Note:

[1] While cost of oil production is rising, oil prices are not necessarily rising to match the cost of production, and in fact, have fallen below the cost of production. This occurs because costs are now too high relative to wages, so oil isn’t affordable. This is an important story in its own right, and is likely to eventually bring down the whole system. See for example my post, Ten Reasons Why a Severe Drop in Oil Prices is a Problem.

The Strong Force and The Elements

The Strong Force is the source of all barriers. It keeps what is together, together. It keeps what is apart, apart.

Flow from an area, to a point.

…The Strong Force of Earth

Oh Lun

The tip of the pointer finger of the dominant hand.

  • Cliffs
  • Gorges
  • Lava Flows
  • Wind Breaks
  • Earth’s Crust

…The Strong Force of Water

Oh Gen

The tip of the middle finger of the dominant hand.

  • Rivers that cannot be crossed.
  • Being stuck under ice.
  • Ice walls

…The Strong Force of Fire

Oh Zhun

The tip of the ring finger of the dominant hand.

  • The process of hardening something with fire. (i.e. bricks, steel, wood)
  • A Firebreak or tactical fire.
  • An unassailable desert.
  • A wall of fire you cannot go through.

…The Strong Force of Air

Oh Vin

The tip of the pinkie finger of the dominant hand.

  • A Balloon
  • A Wall of Wind
  • The strength of an idea.
  • Pressurized stadiums.

The Weak Force and The Elements

The Weak Force is a force of change and churning. A force that breaks barriers and rearranges all it touches.

Flow from a point, to an area.

…Weak Force Of Earth

Ah Mun

Tip of first finger of weak hand.

  • Tilling the soil.
  • Mining
  • Oil Extraction
  • Deforestation
  • Erosion
  • Desertification
  • Ecological Succession
  • Earthquakes

…Weak Force Of Water

Ah Pen

Tip of middle finger of weak hand.

  • The state changes of water from solid to liquid to gas.
  • Ocean Acidification
  • A river flowing out to sea.
  • Crossing water. Banishing it as a barrier.
  • Flooding
  • Mudslides

…Weak Force Of Fire

Ah Suhn

Tip of ring finger of weak hand.

  • Putting out a fire.
  • Getting out of a burning building.
  • Jumping over fire.
  • Fire burning down a barrier or otherwise clearing the way.
  • Death

…Weak Force Of Air

Ah Hin

Tip of pinkie finger of weak hand.

  • Climate change.
  • Breakthrough of inspiration.
  • Getting air when you really need it.
  • Strong winds that blow down barriers.