What I've Been Reading, November 2017

Links

These links appear in the order I read them, rather than any more refined sort of organization. You may find some of the best ones are near the bottom—it varies from month to month.

• What you need to know about growth hormones in meat, by Farm Babe, Ag Daily
• US Gross National Debt Spikes by $640 billion in 8 Weeks, by Wolf Richter, Wolf Street
  But the debt-ceiling charade is back.
• After Universal Basic Income, The Flood, by Simon Sarris, Aeon
  What if we implement UBI and it makes everything worse?
• 5 Frustrating Science Myths That Need To Die, by Kris Noble, Buzzfeed
• Why do I have a hard time understanding liberal arguments on a lot of issues?, answered by 100+ people on Quora.
  The answer I like best was by Mike Rightmire, over half way down in the list. But most of the answers aren't bad.
• What Explains U.S. Mass Shootings? International Comparisons Suggest an Answer, By Max Fisher and Josh Keller, The New York Times
• Ways of Life 3: Indigenous Anarchism, by DJ Zhao, African Identity
  "In literally every debate about communism or anarchism in the Western world, we run into the same repeated sentiment: 'It works only in theory or in small scale, but practically impossible for large societies, without becoming authoritarian nightmares'. But the existence of these indigenous egalitarian democratic syndicates with “citizens” numbering in the millions, and the fact that they have functioned very well for longer than anyone can remember, is clear evidence to the contrary."
• The Unforgiving Math That Stops Epidemics, by Tara C. Smith, Quanta Magazine
• The Doomsday Prepper’s Time Has Finally Come , by Elmo Keep, Mel Magazine
  "Eventually, a dark thought wormed its way into my mind: Not everything the preppers are saying is deranged. And not everyone who preps is fond of separatist rhetoric, though plenty of them are. Buried beneath the xenophobic fears of invasion and a nearly sociopathic dedication to the American myth of self-reliance are small kernels of truth. Believing in the healing power of colloidal silver and essential oils for the treatment of cancer, as one seminar insisted on in a rambling, fact-free diatribe, is dangerous and stupid. Figuring out how to convert your home into an energy-efficient, zero-emissions dwelling is not. Thinking that the federal government is illegitimate so you don’t have to pay taxes and that you’ll defend that “right” with armed resistance is illegal domestic terrorism. Knowing how to perform basic first aid and change a tire are sensible life skills we should all cultivate. Stockpiling 10 years’ worth of canned goods is extreme; reducing our reliance on mass-market food and disposable consumption is necessary if we don’t want to blow the carrying capacity of the planet."
• A Deep Springs College for Women, by Carrie Battan, The New Yorker
  At the Arete Project, located in the North Carolina mountains, cohorts of female students are invited to govern themselves.
• Despite Big Push From Beijing, Electric Cars Struggle in China, by Trefor Moss, Wall Street Journal
• Motor Mouth: The inconvenient truth about Tesla’s truck, by David Booth, Driving.ca
  Do the math: Elon Musk's claims of fast charging and 500-mile range just don't add up
• The Far Right Has Come For The Working Class. How Should The Left Respond?, by Elizabeth Finne, Medium, Arc Digital
  A morally purist approach that won’t budge on immigration or terrorism opens the door for the far-right to gain power
• The Top Five Cold Remedies That Do Not Work, by Steven Salzberg, Forbes
• Canada's economic growth has come at a price — its debt level is now highest in the developed world, by Geoff Zochodne, Financial Post
• World faces wave of epic debt defaults, fears central bank veteran, by Ambrose Evans-Pritchard, The Telegraph
• Free Money: The Surprising Effects of a Basic Income Supplied by Government, by Issie Lapowsky, Wired
• Forget the Nordic Diet. Try the Nordic Tax Plan, by Keith Payne, Inequality.org
  The biggest health advances of the twentieth century — antibiotics, sanitation, vaccines — were biological. The biggest public health insights of this century, in contrast, are social. Societies that allow extreme inequality to shred the social fabric pay the price in illness, unhappiness, and mortality.
• The anti-GMO movement is infested with climate change deniers, by Stephan Neidenbach, Medium
• Six reasons to always buy organic, by Stephan Neidenbach, Medium
  This is satire, in case there is any doubt, and well deserved satire.
• On Shill Accusations and Misogyny, by Dr Alison Bernstein, Dr Anastasia Bodnar, Jenny Splitter, Kavin Senapathy, Dr Layla Katiraee, and Natalie Newell, SciMoms on Medium
• The driver assistance system is to blame for the crash--Tesla driver demands extenuating circumstances, by Timothy Pfannkuchen, Blick (translated by Google.)
  Discussion on Reddit.
  As I've been saying, people are mistaking "driver assistance systems" for "self driving cars", which are as yet a long way in the future. This results in accidents and will give self driving systems a bad name before they have even been fully developed.
• Do civilisations collapse? by Guy D Middleton , Aeon
  The idea that the Maya or Easter Islanders experienced an apocalyptic end makes for good television but bad archaeology.
• Is goodness natural? by Nakul Krishna, Aeon
  
• Europe still burns witches — if they’re named Monsanto, by Mark Lynas, Cornell Alliance for Science
  The glyphosate saga is a fascinating case study in how easily politics can derail science. In watching the glyphosate issue evolve I found myself gradually becoming more and more aghast at how quickly and thoughtlessly evidence-based policymaking was thrown away in European centers of power.
• Oil production capex: is a rebound in sight? by Elif Kutsal, Jingrui Fang, Energy Insights by McKinsey
  Perhaps, but it seems not a big enough one.
• Short of capital? by John W. England, Deloitte center for Energy Solutions
  The risk of underinvestment in oil and gas is amplified by competing cash priorities. Around $3 trillion of capital expenditures are needed 2016 to 2021 to keep up with declines. We are likely to come up over $1 trillion short.
  And that's with a pretty optimistic view of the difficulty of making new discoveries.
• Global crude oil discoveries plunge to record low, and it's gonna get worse, by Tom diChristopher, CNBC

Books

Fiction

• World Without End, by Ken Follet
• The Lathe of Heaven, by Ursula K. Le Guin
  I think I read at least parts of this one in serialized form in a science fiction magazine in the early seventies, but such memories as I have of it are very vague.
• All Systems Red, by Martha Wells
  Just an action adventure really, nothing very profound.

Non-Fiction

• Mendel in the Kitchen, by Nina Federoff and Nancy Marie Brown
  A scientists view of genetically modified foods.
• 1491, by Charles C. Mann,
  New Revelations of the Americas Before Columbus.

Collapse Step by Step, Part 8

Lake Huron Waves Breaking Along South Pier, Kincardine

The Bumpy Road Down, Part 1

The term “bumpy road down” refers to the cyclic pattern of crash and partial recovery that I believe will characterize the rest of the age of scarcity and make for a slow step by step collapse, rather than a single hard and fast crash. Indeed, that is where the "step-by-step" in the title of this series of posts comes from. And yes, many of the individual steps down will happen quite quickly and seem quite harsh. But it will likely take many steps and many decades before we can say collapse is essentially complete, and between those steps down there will (in many areas) be long periods when things are stable or even actually improving somewhat.

The fast collapse is a favourite trope of collapse fiction and makes for some exciting stories, in which stalwart heroes defend their group from hungry hordes and evil strong men. And if the story happens in the U.S. the characters get to do their best to stop a whole lot of ammunition from going stale. But it seems to me that in most parts of the world things will progress quite differently when disaster strikes. Indeed there is a branch of sociology which studies how people and societies respond to disaster, and it has identified a set of incorrect beliefs, known as "the disaster mythology" that much of the general public holds on the subject. In particular, the expectation of looting, mass panic and violence is not borne out in really. Here are some further links on the subject: 1, 2, 3, 4.

Dysfunctional as today's world may seem to many of us, it is working fairly well for those who are in power. They have a great deal invested in maintaining the "status quo", and in making sure that whatever changes do happen don't have any great effect on them. They also have a lot of resources to bring to bear on pursuing those ends, and a lot of avenues to go down before they run out of alternatives.

The other 80% of us, who are just along for the ride so to speak, still rely on industrial society for the necessities of life. We are hardly self sufficient at all, dependent on "the system" to a degree that is unprecedented in mankind's history and prehistory. As unhappy as we may be with the way things are at present, it's hard to imagine collapse without a certain amount of trepidation. Denial is a very common response to this situation.

Some of us, though, aren't very good at denial. Even if we only follow the news on North American TV, which largely ignores the rest of the world, we've seen lots of disturbing events in the last year or two and it is hard not to wonder if they are leading up to something serious. Many people in the "collapse sphere" are predicting a major disturbance in the next few years, and some think that this will be the one that us takes down—all the way.

I definitely agree that something is about to happen, but I don't think it is going be the last straw. Just one more step along the way.

As always, I am directing this mainly to those who are not highly "collapse aware", so a closer look at what's going on and what this next big bump might look like would seem to be a good idea. And of course I am making generalizations in what follows. As always, things will vary a good bit between different areas and at different times, and all of this will affect people of the various social classes differently. Also beware that I am not an economist, just a layman who has been watching the field with keen interest for some time. What follows is a summary of what I have learned, in a field where there is lots of disagreement and where the experts themselves have been wrong again and again.

Despite all the optimistic talk about renewable energy, we are still dependent on fossil fuels for around 82% of our energy needs, and those needs are largely ones that cannot be met by anything other than fossil duels, especially oil. While it is true that fossil fuels are far from running out, the amount of surplus energy they deliver (the EROEI—"energy returned on energy invested") has declined to the point where it no longer supports robust economic growth. Indeed, since the 1990s, real economic growth has largely stopped. What limited growth we are seeing is based on debt, rather than an abundance of surplus energy. And various adjustments to the way GDP is calculated have made the situation seem less serious that it really is.

Because of the growth situation, investors looking for good returns on their money have been hard pressed to find any and so have turned to riskier investments, which has resulted in speculative bubbles and subsequent crashes. The thing about bubbles is they are based on trust. Trust in some sort of investment that in saner times would be recognized for the risky proposition it really is. But always there comes a day when the risk becomes obvious, people rush to get out, and the bubble crashes.

The dot com bubble was the first to burst in this century, and the real estate bubble in the US was the next, leading to the crash of 2008.

After 2008 many governments borrowed money to bailout financial institutions (banks) which were in danger of failing, since that failure would have had a very negative effect on the rest of the economy. To control the cost of that borrowing and stimulate the economy, they lowered interest rates. These low interest rates have made it possible to use debt as a temporary replacement for surplus energy as the driver of the economy. Unfortunately this is pretty inefficient—it takes several dollars of debt to create a dollar's worth of growth, and the result has been debt increasing to totally unprecedented levels.

Meanwhile, much of the ill advised risk taking in the financial industry that led to the crash in 2008 has continued on unabated. You may wonder why responsible governments didn't enact regulations to stop that sort of thing. And indeed they did, to a limited extent. I suspect, though, that really effective regulations would have stopped growth cold, and no one was willing to accept the negative results of that. Better to let things to go on as they are, leaving future governments to worry about the consequences.

So, in 2017 we are deep into what might be called a "debt bubble." It relies on trust that interest rates will remain low and that any day now there will be a return to robust growth so that we can all make some money and pay off our debts. Those are risky propositions, to say the least.

On top of that, low interest rates have made it much more of a challenge for pension funds to raise enough money to meet their obligations, a vital concern for retired baby boomers like myself.

Those same low interest rates have made it possible for many non-viable or barely viable businesses to continuing operating on borrowed money, where under more normal circumstances they would have been forced out of business. This makes for a weaker economy, not a stronger one.

Here in Canada we still have a real estate bubble going on, especially in cities like Toronto, Calgary and Vancouver, and that despite recent government efforts to cool the real estate market by making it more difficult to get a mortgage, and by applying a tax on foreign real estate investors.

And over the last year that have been a long list of natural disasters which have increased the financial stress on governments, insurance companies and even re-insurance companies (who insure the insurance companies themselves).

The more conventional economists have come to think that all this is a normal situation and that it can just keep on keeping on. But there are others who think that this will lead to a crash of even greater magnitude that 2008. And many kollapsniks think this crash will mean the end of industrial civilization.

Some commentators expect this crash to take the form of a rash of debt defaults by governments who can no longer carry the debt loads they have built up. And a similar wave of bankruptcies of those shaky businesses I was just talking about, when they finally get to the point where they can no longer hold on. Tim Morgan, one of my favourite economists (who is certainly aware of the possibility of collapse), speculates that this bubble may burst in a different way than those of the past, with the collapse of one or more currencies. He points to the British pound as a prime candidate for the first to go and thinks that the U.S. dollar may follow it.

Other experts I've asked say that while the U.S government does have huge debts, they are not so large in comparison to the size of its economy—an economy that is strong enough that trust in it is unlikely to fail. I am not so sure. Much of the strength of the U.S. dollar comes from the fact that all trading of oil is done in it. If you want to buy oil then you need U.S. dollars, so the demand for them is always high. But a number of countries who are not allies of the US have proposed abandoning this system, suggesting that they are willing to accept other currencies for their oil. If this were to happen on a large scale it would significantly weaken the US dollar.

But it takes some sort of unusual event to start a crash like this, to initiate the loss of trust. And that brings us back to the fossil fuel industry.

While the falling EROEIs of fossil fuels have hurt economic growth, it is a mistake to think that those fuels are not still the life blood of our civilization. The success of modern industry is based on the productivity boost provided by cheap energy. The price of oil, for many years, was a fraction of its worth in terms of what could be made with the energy embodied in that oil. But when the price of energy goes up, it reduces the profitability of industry, often leading to a recession.

The oil prices I quote here are for Brent crude, just to keep things simple. In fact, oil trades at a dizzying variety of different prices, depending on where it comes from and its quality, among other things. If you look back over the history of recessions since the 1950s it is interesting to note almost all of them were preceded by a spike in the price of oil. In the summer of 2008 the price of oil, which had been going up for several years, topped out just before the crash at almost $140 per barrel.

After the crash, the economy slowed down significantly, and the price of oil dropped to around $30 per barrel due to falling demand. Starting in mid-2009 the economy began to recover and the price of oil increased to over $100. This appeared to be a straight forward case of supply and demand—an indication that the supply of oil was barely keeping up and suppliers were being forced to turn to more expensive sources of oil to meet the demand.

Then in mid 2014 something surprising happened— the price of oil and many other bulk commodities began to go down. By early 2016 the price of oil was under $40/barrel, and it stayed in the range between $40 and $60 until quite recently when it edged up over $60.

All kinds of ideas have been put forth as to why this drop in the price of oil happened, many of them contradictory. It is my thought that two things have been happening. First, demand destruction—a slowing down of the world economy caused by high energy prices. Second, a temporary increase in the supply of oil, mainly from fracking in the continental US and tapping of unconventional oil—tar sands in Canada, heavy oil in Venezuela, and deep offshore oil in various place around the world, that were suddenly profitable when the price was around $100 per barrel.

Whatever is the cause, it is clear that we have had a surplus of oil for the last few years, and this has kept the price down. OPEC discussed limiting supply to force the price back up, but very little came of it, even though the lower price was severely hurting the economies of the OPEC nations.

In the short run, lower oil prices have had a beneficial effect on economic growth. But unfortunately, the big oil companies were making so little profit that they couldn't afford to invest much in oil discovery.

Regardless of what you may think of the idea of "peak oil" on a global basis, it is a simple fact that the output of any individual oil field declines as it ages. Exploration for new oil aims to match that natural decline with new discoveries. For conventional oil, that has not happened since 1963 and by the start of this century this was becoming a problem. A problem that likely had something to do with the run up of oil prices prior to 2008.

Following 2008, higher prices and improved technology (like fracking and the syncrude process for getting oil out of the tar sands) made more oil accessible. But with the current lower prices, that is no longer the case. Furthermore the wells opened up by fracking are proving to have very high decline rates.

So it seems that sometime in the next year or two, the decline rate of the world's oil fields will have eaten up the surplus of oil. Discovery of new oil fields doesn't happen overnight, so there will be a crunch in oil supply. Not that there will be no oil available, but oil suppliers will be hard pressed to keep up with the demand and the price will spike upward. There may even be shortages of some petroleum products until those higher prices pull demand back to match the available supply.

It seems very likely that such a spike in the price of oil will touch off a loss of trust leading to a recession of such severity as to make 2008 look minor.

In my next post in this series I'll look at how that recession—might as well call it a crash—might proceed and what will likely be done to mitigate its effects.

Links to the rest of this series of posts:
Political Realities / Collapse Step by Step / The Bumpy Road Down

• Collapse Step-by-Step, Part 1: Unevenly, Unsteadily and Unequally , Tuesday, 23 May 2017
• Collapse Step by Step, Part 2: End Points, Friday, 16 June 2017
• Collapse Step by Step, Part 3: Political Compasses , Saturday, 29 July 2017
• Collapse Step by Step, Part 4: Political Positions, Sunday, 6 August 2017
• Collapse Step by Step, Part 5: Political Realities, Wednesday, 30 August 2017
• Collapse Step by Step, Part 6: More on Political Realities, Monday, 9 October 2017
• Collapse Step by Step, Part 7: More on Political Realities, Continued, Friday, 13 October 2017
• Collapse Step by Step, Part 8--The Bumpy Road Down, Part 1, Sunday, 26 November 2017
• The Bumpy Road Down, Part 2, Sunday, 7 January 2018
• The Bumpy Road Down, Part 3, Monday, 15 January 2018
• The Bumpy Road Down, Part 4: Trends in Collapse, Friday, 26 January 2018
• The Bumpy Road Down, Part 5: More Trends in Collapse, Tuesday, 20 February 2018