Saturday, September 28, 2013

Thoughts on living through a period of collapse

This post is based on a collapse scenario that I briefly outline at the outset.   If you have read any posts in this blog over the past few years, then the basis of the scenario will be familiar to you. I will also quote throughout, the words of some thinkers that have informed my viewpoint on what to expect living through this scenario.

The world is entering a period when continued increases in the net amounts of energy available for human use will plateau and then decline.  This is mainly due to our inability to continue to produce fossil fuels (that is, extract and refine, oil, gas and coal), at ever-increasing rates and at an ever-increasing net energy profit.  In particular, a decline in the net energy in the form of petroleum consumption (that is, the consumption of oil or its products), will occur first among the fossil fuels.  A significant decline in economic output will occur concurrently and proportionally to the declining rate of petroleum consumption.  The rate of petroleum consumption decline, however, will vary from region to region, because petroleum made available from domestic production, plus imports, varies from region to region.  Consequently, the decline in the rate of petroleum consumption, and, the economy in general, will be non-uniform. 

What should someone living through the 21st century expect based on this scenario? 

Expect the economy to trend downwards erratically

There really is a level of denial about the problem we've got.  Conventional economics doesn't factor in this term energy return-on-energy investment.... Unconventional oil mean you have to put in much more energy in to get energy out....This is not an economics issue.  This is an issue of the biophysical characteristics of the reservoirs....The political and business world look at this problem in 20th century economic terms: that somehow, if you put the price up, everything will be solved.  We will find substitution from all sorts of different sources to replace the cheap oil we've been accustom to using. And that is not happening.  We have recession in the US, Europe.  We are desperately trying to get a way out by basically printing money. And it is not working.  ... If you look at what has happen since 2008, the oil industry has poured vast amounts of money into increasing levels of exploration and getting into more expensive sources, and we haven’t been able to lift production.  And so the price of oil has stayed at about $100 per barrel.  And at that price it is very hard to kick-start the economy.  Every time we have got to $100 per barrel previously, the economies of the world have gone into recession.

Ian Dunlop  ABC RN Big Ideas ASPO-Australia  Australian Oil Vulnerability Risk Management Conference Brisbane  June 4th 2013

There really is no viable replacement for conventional cheap oil, in my opinion. 

Every new potential alternative source, deep off shore oil, tar sands, shale/tight oil, arctic oil etc..., will be heralded by investment advisors, economists, businessmen, politicians and their media outlets as THE thing that will allow the economy to grow to great new highs.  But, the price of oil needed to support the production of these alternative sources of oil will also strangle the economy, and so, the consumption of oil will go down.  As this so-called petro-business cycle, or more aptly, petro-business spiral, continues, the baseline of conventional cheap oil continues to be consumed and depleted.  For each new upwards cycle, the economic recovery will be a little bit weaker than last time because the cost to fuel that cycle will be more and more expensive.

Expect the standard-of-living to trend erratically downwards, and, don’t expect anyone in power to acknowledge that this is happening. 

It's clear that fossil fuels cannot power us forever because our net energy return on fossil fuels is declining, and at the same time, renewables by themselves don’t have the capacity to give us the energy per person that we are accustom today. So, what does this tell us about the future?  It tells us that either we are going to have a future in which there is less energy per person than we have today and that will probably mean a lower standard of living, or, it tells us that we have to use energy much more efficiently and parsimoniously than we do now.

—Joseph Tainter, October 2012 interview on What Now

A declining standard-of-living means a declining gross-domestic product per capita.  This will get manifest as a decline in purchasing power for most individuals, declining employment opportunities, a declining ability to save for retirement, and a break-down of social welfare system. 

Kathy McMahon has referred to this as sucky collapse, and, she's right.  Working  longer hours and/or harder for less pay; taking care of indigent children/parents/relatives, who didn’t know how to live within their means, and now are broke; continually being nickel-and-dimed to death by higher prices for goods and services, increased taxes and government fees, in a word, sucks.

Maybe the elites of society can expect to get an ever-more affluent standard of living, but, for most people, the “American dream,” really is a fantasy. 

Dreams can be hard to let go of.  Most people have not or will not accept that their standard-of-living has declined and is still declining, even as is happens.  And, no one in power wants such awareness to occur, because this would just tighten the steepness of the spiral of economic decline as people correctly react by pulling back on their spending and saving more.  Governments of the world are united in a war against savers by keeping interest rates low.

A downward spiraling economy can be obscured from public view in many different ways. Examples include, printing money, lying or changing the definition of various economic and employment statistics, decreasing the size or quality of goods and services while increasing the price of those goods and service, and, by providing an infinite number of entertaining, mindless, distractions. 

A declining economy and declining standard-of-living are even easier to hide when the decline is not smooth.  Don’t expect a steady decline in the economy or standard-of-living any more than you should expect that petroleum production and consumption rates will steadily decline.  I don’t even except a stair-step shaped decline—more of a saw-tooth pattern. Upward spikes in the petro-business cycle will be reported as periods of “hope,” “growth,” or “green sprouts,” even if that growth is just fake nominal growth due to money printing.  Downward spikes will be reported as “temporary set-backs,” with new highs in growth just around the corner. 

A declining economy and standard-of-living are also easier to hide when different regions undergo economic decline at different points in time and at different rates.  Politicians in charge of a region in steep decline will blame another region for its troubles and then foment anger and hatred of its citizens against the citizens of the other regions with softer decline, thereby deflect anger away from themselves.  

Get used to living simultaneously in two different worlds

The problem with the philosophy of MORE is that MORE, as already noted, doesn’t have any intrinsic meaning. After all, once you have it, you then want—MORE! That’s the American Dream. But the awareness of this dynamic—assuming we ever get to that point—puts us in a particular bind, at least as far as serious social change is concerned. We are finally talking about a kind of conversion experience; and beyond the individual level, which is itself no small achievement, that can only happen when history presents us with a no-win situation. The bald fact is that we cannot maintain the American Dream...because we are running out of resources, oil in particular. The American Dream cannot survive without energy, and lots of it.
—Morris Berman In Praise of Shadows
In psychology, cognitive dissonance is the discomfort experienced when simultaneously holding two or more conflicting cognitions: ideas, beliefs, values or emotional reactions. In a state of dissonance, people may sometimes feel "disequilibrium": frustration, hunger, dread, guilt, anger, embarrassment, anxiety, etc.

I experience the cognitive dissonance of living in two worlds every day.  I hear media/government reports about how great things are going, and how the “dream” is still alive, but at the same time, see people in the neighborhood or friends and family members getting into serious trouble.  For instance, the US is supposed to be having an economic recovery right now, and, I do see some improvements. 

At the same time, I know of people who have lost their jobs but continue living the same lifestyle, in denial, until they run out of money, or their working spouse gets sick or loses their job, and even then, they continue to live in their house in the same way as before.  Maybe eventually they just disappear, moved out or evicted, I guess.  I know of people that go on lavish vacations and eat out nearly every night, but when a basic appliance or their car breaks down, they have to take out a loan to get it fixed or replaced. 

The Future Has Arrived — It’s Just Not Evenly Distributed Yet

attributed to William Gibson

Gibson’s 1980s fiction novels were based on a view of the future that extrapolated the trends at the time and this resulted in the prediction of highly technologically complex society forming in some countries, Japan, while other countries, the USA, languished in old technologies.  The differences were not just regional differences in advanced technologies: there were also vast differences in populations within in each region.   In today’s parlance, a small elite class, (“1 percenters”) had access to the latest technology and a larger non-elite class (“99 percenters”) had comparatively little access to technological advances. 

But there has always been an elite class and they have always had first access to the latest technology—in fact this tends to drive and fund technological innovation.  I think that the future that has already arrived, and ongoing, is a shift within the 99 percenters, from middle class to poor class.

It happened 4 years ago, almost a year after the December 2001 crisis. It was a social studies class and this teacher... was explaining the different kinds of social pyramids. ... We even had a text book with those darn, cruel pyramids! The first pyramid explained the basic society. A pyramid with two horizontal lines, dividing those on top (high social class) those in the middle (middle class) and the bottom of the pyramid (the poor, proletarian). The teacher explained that the middle of the pyramid, the middle class, acted as a cushion between the rich and the poor, taking care of the social stress. The second pyramid had a big middle section, this was the pyramid that represents 1st world countries.


Then we turned the page and saw the darned fourth pyramid. This one had arrows from the middle class dropping to the low, poor class.


“What is this?” Some of us asked. The teacher looked at us. “This is us”

“It’s the collapsed country, a country that turns into 3rd world country like in pyramid five where there is almost no middle class to speak, one huge low, poor class , and a very small, very rich, top class.”

“What are those arrows that go from the middle to the bottom of the pyramid?” Someone asked. You could hear a pin drop. “That is middle class turning into poor”.

—ferfal, Studying the SHTF at the University: Dark omens.

I don’t know exactly what pyramids ferfal was looking at in his class in 2002, but they were probably the so-called, “social class pyramids,” like this.  For a society with a large middle class the pyramid actually looks more like a diamond, with a fat center such as recently attained by Brazil. 

The uneven future arriving is the trend for large portions of the populations in the developed regions North America, Europe, Japan to shift from middle to poor class, with a shift in the opposite direction for the developing countries Brazil or China.  Again, I don’t expect the shift to be smooth and I don’t expect the developing countries will be able to hold onto their gains in the long term. 

I also except the same shift to play out unevenly, at smaller scales, within countries, within provinces/states, within cities, within neighborhoods and within families.

Don’t get too upset, its just human nature

It is important to understand that we did not evolve as a species to be broad scale thinkers, that is, to think broadly terms of time or space.  If you think about the conditions in which our hunter-gatherer ancestors evolved, these were conditions in which they only needed to know their own territory, perhaps the territory of adjacent hunting gathering bands.  And, they had no capacity to understand long term history.  They had only oral accounts, perhaps accurate for two or three generations, and so we never evolved the ability, or the inclination, to think broadly in terms of time or space.  It doesn't come naturally to us.


The high complexity that we have today is a fairly recent phenomenon in human history.  Our ancestors lived in much simpler societies. And we tend to equate the term complexity with the term civilization and think of complexity as progress.


Complexity is not free. ... There is no free lunch in the world of complex systems. Complexity always has a cost.  We express the cost in terms of currencies like: work, time, labor, many-that's a big one, standing in line at airports, annoyance....whereas in fact the ultimate currency is energy.  All of these come from energy.  Money comes from energy, work comes from energy, even time spent standing in line at an airport takes up your metabolic energy....  So, complexity comes from energy and complexity requires energy. But if complexity requires energy, then why does complexity grow?


Complexity grows because it is useful to solve problems. We usually solve problems by developing more complex technologies.


As complexity grows, society has to produce more and more energy to "fund" the complexity, to pay for the complexity. Conversely, during the rare periods when humans have had surplus energy—and we are in one of those periods now—that also allows complexity to grow. This relationship is what I call the energy-complexity spiral.  Surplus energy allows complexity to grow, but most of the time complexity grows to solve problems requiring more energy. ... Complexity and energy are the twin keys to the problems we have today and the problems in the future, and, how our societies can’t be as they are today.

—Joseph Tainter, October 2012 interview on What Now

Humans are short term thinkers, and, society certainly doesn’t reward long term thinking or decision-making with a view of historical contexts.  As the size of the group of humans being considered gets larger and larger, the group in the longer term, doesn’t behave too much differently that a group of bacteria when exposed to a new finite supply of energy, say some sugar cubes.  Those cubes are consumed as quickly as possible, the population grows, and when the cubes are gone, the bacterial population drops back down to the level that the environment could support before the cubes showed up.   

Of course, humans are smarter than bacteria, in that we can find hidden cubes of energy, for instance, in the form of cubic miles of oil.  Society as a whole is busily chewing through those cubes of oil, and becoming more complex with each passing year, with little regard to the longer term consequences when the number of cubes available starts to dwindle.  But that’s just human nature. 

If the energy problem can’t be solved, then it will be reframed as an opportunity

Our conversion to a different mental outlook will thus come in the form of a crunch, in which the subdued lights and the quiet shadows...will get praised because we can no longer afford to have the bright lights burning 24/7. The Russian-American sociologist, Pitirim Sorokin, called this the shift from a “sensate” culture to an “ideational” one, and it is this shift that we are now caught up in. If history is any guide, it won’t be a whole lot of fun, because when you’ve been doing something for a long time it becomes very hard to shift gears. It’s a little like detoxing from heroin, I suspect. But there could be a few benefits as well....

—Morris Berman In Praise of Shadows

If Tainter is right, and our complexifying society requires ever-increasing amounts of energy to support it, but, the available sources of energy are in decline, then society is in for a very rude awaking.  And, as Berman says, it won’t be a whole lot of fun.  

Still, collapse has to happen, and so, it will eventually.

Decreasing available energy means that societies will have to de-complexify and become simpler.  It means that new problems will not get solved, or, the solutions will have much higher human costs than they did in the past.

Perhaps economic de-growth will some day be acknowledged as inevitable and celebrated as a great opportunity. 

Who hasn’t at some point, during a crazy hectic day, thought that living at slower pace with more free time on one’s hands for more local community involvement and self-discovery, wouldn’t be a good thing, an opportunity, in fact?  

This sounds fine, but, I don’t think that my grand-parents and great-grand-parents, or their contemporaries, thought too much about the benefits of simple life, or, of self-discovery.  Rather, unless one was in the idle gentry class, I think that people in the not too distant past were just worried about putting food on the table or making their next payment to their landlord or the tax collector. 

I think that idolizing a return to the “simple life” is manifesting a coping feature of human behavior—psychological reframing. 

Reframing is a very useful way of dealing with the trauma of an external problem that just can’t be solved.  A declining standard-of-living due to declining rate of energy production and available energy to consume is exactly such an external intractable problem.  I see the growing media and political attention to the “happiness index” as a form of reframing.

Don’t give up hope: you still may have a purpose

Live as if you were living already for the second time and as if you had acted the first time as wrongly as you are about to act now.

Victor Frankel, Man’s Search for Meaning

After all of this perhaps you think that you should just head for the hills and bide your time in a bunker until all hell breaks loose and collapse sets in, or, just go on a party binge because there is no tomorrow.

I think taking either of these actions would be a mistake. 

I suppose you can hide in a bunker for a while—until you run out of money or get sick.  Likewise I suppose that you could party—again, until you run out of money or get sick.  But, by then you will be in a much poorer position than now and make yourself a burden on someone else.  Don’t do that.

I expect this decline, for most regions except maybe Africa, to unfold over decades of time, and, people close to you, your friends, neighbors and family, are going to need your help. 

At present those people are probably blind to what is unfolding and why, and, they also are probably not ready to hear about it from you.  It’s just human nature—for most—so just get over it.  There’s not too much that you can do right now to help them see what you can see.  Accept that, and your relationship with those people will become a lot easier.  

So, what can you do?

1) First, you can adopt the purpose or goal of at least avoid making yourself a burden on others by not wasting your time and resources and by saving more. 

Accept it that most likely everyone of working age that you know, including yourself, is probably going to have to face extended periods of unemployment.  In the USA, the average duration of unemployment after losing a job is about 9 months; in Europe, that number jumps to 15.7 months.  I expect these statistics to worsen going forwards, but not in a straight line.   For most of those in their 50s and 60s, once they lose their jobs, then that will be it, unless you have a hobby that you can turn into work, or, have your own business. 

So, don’t give up your day-job just because you feel depressed about the future. 

And, if you unemployed now and eventually find work, keep that job as long as you can and build up a reserve of money to cover your living expenses for at least an extend period of unemployment in the future.  

Accept it that large portions of the population of older people have saved almost nothing for retirement and living on social security or old age pension benefits alone is a pretty Spartan lifestyle.  One interesting SSA statistic is that 23% of married couples and about 46% of unmarried seniors rely on Social Security for 90% or more of their income.  There are also reports that Social Security will “run out of funding” by the early 2030s.   But it has already been since 2010 that payroll taxes are not enough to cover the benefits paid out and so already the government has to borrow or print more money to pay some of these benefits.   The excess payroll taxes not spend on benefits from previous years got spend on other things. 


Does anyone still doubt, going forwards, that the promised benefits will be cut back, or, will purchase less then what they do now? 

So, once again, don’t give up your day-job just because you feel depressed about the future, or, because you are sick of your job, or, because you just feel tired.  Hang on for as long as you can, and do the best you can to get out of debt and build up some saving.  Your future self and your relatives will be grateful. 

2) Accept that most people in your life are not going to follow step (1), and, therefore they will need your help–that will be your second purpose.

As Tainter points out, most humans are very poor long-term planners and the idea of voluntarily setting aside money for a period of unemployment or for retirement doesn’t work very well for the vast majority.  Maybe after repeated cycles of downturns and partial recoveries, but never as good as last time, for most people it will finely sink in that we are living in different times, but, I’m not holding my breath.

You probably know people in your life, whose lives already look a financial train wreck waiting to happen, and you know that they are not going to listen to you until it is too late.   When their financial train wreck does occur, you will have to help them. 

The burden of doing this is high.  In my opinion it is, or will be, much harder to decide how to do (2) than just doing (1) because you likely won’t be able to help everyone that needs, or wants, help.  How many people can you afford to assist without putting yourself at risk of become a burden your self?  This is a tough question to answer. 

Here’s another tough question: should there be strings attached to giving help?   In my opinion, help, or continued help, should at least be conditional on a putting a rational budget and saving plan in place.  What I think should be avoid is a display of anger and resentment because of the unfairness of it all—that just isn’t going change anything.  Just be happy that it is not you in need of help and you are capable of helping.