Spend an afternoon reading peak oil doomer sites on the Internet and you may alternate between the desire to reach for a kitchen knife and end it all and the inclination to dismiss the information on the sites as complete bunk. Hence the often voiced criticism of this approach to the peak oil issue: It creates a mental paralysis in some readers who conclude that nothing can be done and causes many others to reject peak oil as the invention of unbalanced survivalists living on the fringe of society.
There is certainly something to this criticism even if the caricature of the doomers is overblown. Most of the doomers I know live in city neighborhoods, hold regular jobs and involve themselves in their communities like so many of us. In this piece I'm going to take the contrarian side and suggest that so-called "doomer porn," that is, extreme Mad Max-style scenarios concerning the human destiny, serves important purposes.
If peak oil preparation is about anything, it is about scenario planning. Since no one knows the future, we can only imagine possible outcomes. Planning for a single possible outcome is not planning at all. Experience tells us that almost nothing ever goes according to plan. This is even more true when our plan is based on the trajectory of all of human civilization. So the wise course is to imagine many scenarios that seem to be within the realm of possibility and maybe a few that don't. In doing so we can evaluate the consequences of those possible outcomes and judge whether their severity warrants some preparation.
Let me explain. If I believe my actions could at worst result in a hangnail for me, I might dismiss this concern as something not worth worrying about. But if I risk losing an arm, I'm going to be far more attentive. I may decide that what I'm about to do isn't worth the risk or that I need to take special precautions if I choose to proceed.
The key element in scenario planning in my view is not the probability of a particular scenario--something which is impossible to calculate and can only be guessed at. The key element is the severity of the consequences of any one scenario. If the consequences are favorable or at least the harm is negligible, then we need to make few preparations. But if we judge that a possible scenario could result in catastrophic consequences--say, a complete loss of our livelihood or death for ourselves or our family members--and even if the probability seems small, it is well worth taking some precautions. And, in fact, most people already do take precautious for unlikely but high-impact events such as house fires. They buy fire extinguishers, plan escape routes and purchase homeowners insurance.
The next question is whether those precautions we might take to shield ourselves from extreme consequences might be useful in less extreme circumstances. Quite often this is the case. With our doomer colleagues we find that they advise such things as forming alliances with neighbors and friends; growing food, fiber and possibly fuel; learning food preservation techniques; becoming less car-dependent; and generating energy on premises with a wind generator, solar panels and possibly wood. All of these steps can be useful and even rewarding no matter what happens.
Another thing that becomes apparent as one peruses the peak oil preparation sites is that there is no clear line between a doomer and a sensible person thinking about preparations for a post-peak oil world. And there are, of course, plenty of sites about organic gardening and farming, local production of food and biofuels, solar and wind power, and myriad other sustainability related topics that make no mention of peak oil or an impending civilization-wide collapse.
What so-called doomers do is provide an imagination for the worst. If we are to consider the entire range of possible outcomes in a post-peak oil world, then we must consider the worst that could happen. That doesn't mean we need to assign a very high probability to such a scenario. But, in fact, one aspect of the most extreme peak oil scenarios is playing out right before our eyes: worldwide economic collapse. Whether one can attribute the collapse to the highest oil prices ever recorded last year or whether it is primarily a financial phenomenon, one thing that cannot be denied is that it is extremely severe. So already the doomers' vision is coming in handy though the most worrisome aspects of their various predictions--for example, a breakdown of the public health and food systems leading to plagues and widespread starvation--may be a long ways into the future or never materialize.
A friend of mine suggested to me that one simply cannot prepare for the swift and total collapse of civilization; one can only improvise in such circumstances. But it is still possible to prepare for something short of that, and in this quest the doomers remind us of just how far we might have to go to meet the challenges of a post-peak oil world.
Even a stopped clock is right twice a day. Let the doomers have their say. They have plenty of good ideas. They think we should prepare for the worst, an attitude any boy scout would recognize. Perhaps the doomers might fare better in the eyes of the public if they also added more often that we should hope and work for the best possible outcome.
Having said all this, I recognize that those who hear the peak oil message from me for the very first time and listen to the possible implications may regard me as a doomer. And perhaps I am for I believe that the turbocharged, energy-intensive, consumer-oriented lifestyle of contemporary society is doomed. Whether we can replace it with something better and sustainable is the basis for a vigorous debate to which doomer porn has added a necessary and useful counterweight to the techno-optimism of the age.
Sunday, March 29, 2009
Friday, March 27, 2009
Is thorium an energy alchemist's dream?
My latest column on Scitizen entitled "Is Thorium an Energy Alchemist's Dream?" has now been posted. Here is the teaser:
Advocates say that already existing thorium fuel and reactor technology could provide centuries and perhaps millennia of safe, abundant nuclear power. Are they right?......Read more
Tuesday, March 24, 2009
The return of the middleman
(Blogger failed to post this week's piece automatically in my absence. To my regular readers I apologize for the delay in posting.)
The middleman has gotten a terrible name.
Not too long ago I attended a meeting on food policy where I heard sharp comments about the negative role of middlemen. One farmer wanted a better and closer relationship with her customers and felt that the current system was working against her and against the very survivability of the small farm.
In this she is correct. The vast agribusinesses which now dominate our food economy tend to lock farmer and consumer alike into a system that forces high-cost inputs on farmers while giving them low prices for their produce and that pushes poisoned, unhealthy and overly packaged foods on the public.
But there are many different kinds of middlemen. Unfortunately, they have all been lumped together through years of advertising by companies that claim they have eliminated the middleman and so can bring you large savings. But the process by which those middlemen were eliminated and the effects of that process are rarely discussed.
Yes, it's true that costs for manufactured goods have come down greatly in the globalized economy. The giant retailers that include Wal-Mart and Costco have abetted the export of manufacturing to the Far East in a game of labor arbitrage that pits workers around the world against each other. But lower wages and lax labor rights and safety laws haven't been the only lure. Weak environmental laws have also made it cheaper to manufacture products in developing countries.
All of this is well known by those who've watch the process evolve. But perhaps less well-understood is the destruction of the dense network of "middlemen" who used to make up the bulk of the leadership in our communities. (Here I borrow generously from the thinking of James Howard Kunstler.) The man or woman who ran the local hardware store before it was obliterated by Home Depot was a "middleman." The man or woman who ran the local bookstore before it was obliterated by Barnes & Noble was a "middleman." The man or woman who ran the local grocery before it was bankrupted by Wal-Mart was a "middleman." These middlemen (and middlewomen) tended to be connected to a more regional or at least national supply network.
They were contributors to the softball league, the symphony and the school play. They sat on the city council, the school board and the county commission. They raised money for local charities and building projects.
Today, they've been replaced largely by minimum-wage clerks who know little about what they are selling and have difficulty meeting their own needs let alone making substantial contributions to the communities in which they live. It's not their fault. It's our fault for acquiescing to such a system--for being seduced by the lure of cheap prices without understanding the collateral damage we were inflicting on our communities.
But now as the globalized economy withers--never to return in its present form in my view--we are bereft of that dense network of local shopowners, brokers of all kinds of goods, hometown bankers, small equipment repairmen who can restore broken goods to useful work and so many others whom we will be needing in the future that is now unfolding.
Far from needing to eliminate the middleman, we are now going to be obliged to repopulate our communities with them for they were the glue that made our intricate regional and even national economies work. As we return to a more localized existence in the wake of a financial disaster brought on in part by energy stringency--stringency that is only temporarily in retreat--we have two related tasks ahead of us: First, to rebuild the network of middlemen that we will need for the future, and second, to rehabilitate the idea of the middlemen through both words that elevate their role and deeds that support their return to our communities.
The middleman has gotten a terrible name.
Not too long ago I attended a meeting on food policy where I heard sharp comments about the negative role of middlemen. One farmer wanted a better and closer relationship with her customers and felt that the current system was working against her and against the very survivability of the small farm.
In this she is correct. The vast agribusinesses which now dominate our food economy tend to lock farmer and consumer alike into a system that forces high-cost inputs on farmers while giving them low prices for their produce and that pushes poisoned, unhealthy and overly packaged foods on the public.
But there are many different kinds of middlemen. Unfortunately, they have all been lumped together through years of advertising by companies that claim they have eliminated the middleman and so can bring you large savings. But the process by which those middlemen were eliminated and the effects of that process are rarely discussed.
Yes, it's true that costs for manufactured goods have come down greatly in the globalized economy. The giant retailers that include Wal-Mart and Costco have abetted the export of manufacturing to the Far East in a game of labor arbitrage that pits workers around the world against each other. But lower wages and lax labor rights and safety laws haven't been the only lure. Weak environmental laws have also made it cheaper to manufacture products in developing countries.
All of this is well known by those who've watch the process evolve. But perhaps less well-understood is the destruction of the dense network of "middlemen" who used to make up the bulk of the leadership in our communities. (Here I borrow generously from the thinking of James Howard Kunstler.) The man or woman who ran the local hardware store before it was obliterated by Home Depot was a "middleman." The man or woman who ran the local bookstore before it was obliterated by Barnes & Noble was a "middleman." The man or woman who ran the local grocery before it was bankrupted by Wal-Mart was a "middleman." These middlemen (and middlewomen) tended to be connected to a more regional or at least national supply network.
They were contributors to the softball league, the symphony and the school play. They sat on the city council, the school board and the county commission. They raised money for local charities and building projects.
Today, they've been replaced largely by minimum-wage clerks who know little about what they are selling and have difficulty meeting their own needs let alone making substantial contributions to the communities in which they live. It's not their fault. It's our fault for acquiescing to such a system--for being seduced by the lure of cheap prices without understanding the collateral damage we were inflicting on our communities.
But now as the globalized economy withers--never to return in its present form in my view--we are bereft of that dense network of local shopowners, brokers of all kinds of goods, hometown bankers, small equipment repairmen who can restore broken goods to useful work and so many others whom we will be needing in the future that is now unfolding.
Far from needing to eliminate the middleman, we are now going to be obliged to repopulate our communities with them for they were the glue that made our intricate regional and even national economies work. As we return to a more localized existence in the wake of a financial disaster brought on in part by energy stringency--stringency that is only temporarily in retreat--we have two related tasks ahead of us: First, to rebuild the network of middlemen that we will need for the future, and second, to rehabilitate the idea of the middlemen through both words that elevate their role and deeds that support their return to our communities.
Saturday, March 14, 2009
We must make a lot of mistakes quickly
We often think of progress these days as coming from carefully planned research conducted by government- or corporate-funded laboratories with large staffs of scientists and technicians. As it turns out, many of the key innovations in history have arrived serendipitously or resulted from trial and error.
Most people know the story of Alexander Fleming's discovery of penicillin. He wasn't looking for antibiotics, but simply noticed that a certain area on one of his cultures was devoid of bacteria. He deduced that the mold he observed was producing a substance that inhibited bacterial growth.
As for trial and error, when we think of modern airplanes, we don't normally imagine that their current configuration is largely a product of trial and error. In fact, the Wright brothers spent much of their time testing models in wind tunnels to observe their performance. This method is still used today for modern aircraft design though computer simulations have made it possible to evaluate the most promising designs before going to the expense of building and testing actual models. Today, an occupation called test pilot still survives, proving that despite all of our vaunted technology, we must yet rely on trial and error even in the most technological of pursuits. The modern management argot for this is: "Fire, ready, aim."
It should come as no surprise then that efforts to create a sustainable society will require a lot of trial and error. This is true in part because we are still only starting to understand what practices in areas such as building, farming, transportation and energy production might be sustainable in the long run. (It is also true because people differ on what they mean by "sustainable" though that deserves a discussion all its own.)
The rather leisurely pace of early 20th century life in which the Wright brothers did their first experiments with aeronautical engineering has been replaced by the breakneck pace of modern 21st century society, a society which finds itself hurtling toward a rendezvous with limits in energy, water, soil and population. Hence, the admonition from Pat Murphy, the current executive director of what is now called the Arthur Morgan Institute for Community Solutions, that we must make a lot of mistakes quickly.
Murphy and his organization have been promoting German passive house design, a design that can reduce energy use by 80 to 90 percent. A builder by trade, he experimented with retrofitting a carriage house standing behind the offices of his organization. He said he used several types of insulation and made many mistakes. But his trial and error endeavor has advanced his thinking enormously about the problems of and solutions for passive house design in North America.
The "quickly" part of his admonition comes from his concern that world peak oil production is near or has already arrived, and that it will be followed by peak natural gas and peak coal production. That means that the trial and error process somehow needs to be speeded up in the area of sustainability.
Fortunately, many people around the globe are busy with wide-ranging experiments in building design, intentional communities, local food production, alternative energy, new forms of transportation, traditional neighborhood design, energy efficiency and the whole host of issues that fall under the rubric of sustainability for a lower-energy world.
It is important to keep in mind then that sustainability efforts are not likely to move from success to success, but as with every other endeavor will be marked by many useful failures and partial successes. That is why it is imperative that we "make a lot of mistakes quickly" so that successful formulas can be found soon in order to help others to avoid elementary mistakes that will slow our evermore urgent movement toward a sustainable society.
Most people know the story of Alexander Fleming's discovery of penicillin. He wasn't looking for antibiotics, but simply noticed that a certain area on one of his cultures was devoid of bacteria. He deduced that the mold he observed was producing a substance that inhibited bacterial growth.
As for trial and error, when we think of modern airplanes, we don't normally imagine that their current configuration is largely a product of trial and error. In fact, the Wright brothers spent much of their time testing models in wind tunnels to observe their performance. This method is still used today for modern aircraft design though computer simulations have made it possible to evaluate the most promising designs before going to the expense of building and testing actual models. Today, an occupation called test pilot still survives, proving that despite all of our vaunted technology, we must yet rely on trial and error even in the most technological of pursuits. The modern management argot for this is: "Fire, ready, aim."
It should come as no surprise then that efforts to create a sustainable society will require a lot of trial and error. This is true in part because we are still only starting to understand what practices in areas such as building, farming, transportation and energy production might be sustainable in the long run. (It is also true because people differ on what they mean by "sustainable" though that deserves a discussion all its own.)
The rather leisurely pace of early 20th century life in which the Wright brothers did their first experiments with aeronautical engineering has been replaced by the breakneck pace of modern 21st century society, a society which finds itself hurtling toward a rendezvous with limits in energy, water, soil and population. Hence, the admonition from Pat Murphy, the current executive director of what is now called the Arthur Morgan Institute for Community Solutions, that we must make a lot of mistakes quickly.
Murphy and his organization have been promoting German passive house design, a design that can reduce energy use by 80 to 90 percent. A builder by trade, he experimented with retrofitting a carriage house standing behind the offices of his organization. He said he used several types of insulation and made many mistakes. But his trial and error endeavor has advanced his thinking enormously about the problems of and solutions for passive house design in North America.
The "quickly" part of his admonition comes from his concern that world peak oil production is near or has already arrived, and that it will be followed by peak natural gas and peak coal production. That means that the trial and error process somehow needs to be speeded up in the area of sustainability.
Fortunately, many people around the globe are busy with wide-ranging experiments in building design, intentional communities, local food production, alternative energy, new forms of transportation, traditional neighborhood design, energy efficiency and the whole host of issues that fall under the rubric of sustainability for a lower-energy world.
It is important to keep in mind then that sustainability efforts are not likely to move from success to success, but as with every other endeavor will be marked by many useful failures and partial successes. That is why it is imperative that we "make a lot of mistakes quickly" so that successful formulas can be found soon in order to help others to avoid elementary mistakes that will slow our evermore urgent movement toward a sustainable society.
Sunday, March 08, 2009
Complications
Some advocates for a sustainable future claim that the fulfillment of their vision will result in a simpler, healthier, happier existence when compared to our current consumption- and status-oriented unsustainable present. They may very well be right about healthier and happier. But will that sustainable future seem simpler to the individual?
The bright green high-tech globalized future imagined by some may result in lives that will seem no simpler than what we currently experience (that is, assuming we could achieve such a future). But a future characterized by a reversal of globalization and a return to more regional and local economic activity, or relocalization as it is often called, may actually make life suddenly much more complicated than we are used to. Let me explain.
Right now the relationship that most people have with their electricity and heat providers is simply a monthly bill. Their participation in the system amounts to flipping the light switch or adjusting the thermostat.
Their food is provided primarily by the chain grocery store, and their gasoline is available from ubiquitous service stations which sit on many corners of our cities and along every highway.
The software on their computers is neatly bundled to provide an all-in-one, ready-to-use solution acceptable to the vast majority of computer users.
Even the trash and recycling are hauled away on a regular schedule by a municipal or private hauler.
How might that change in a relocalized world? Currently, few people are involved very deeply in the provision of their most critical services: food, fuel, communication, waste disposal and recycling. But a relocalized world would probably mean a more complicated existence. Instead of having others simply take care of these things for us, we would have to become much more actively involved.
Take food. A relocalized food system means more food grown locally, of course. At a minimum that implies a different distribution system which would likely involve building a relationship with one or more local growers or at least the owners of the farmstands that service them. It might also mean growing food in one's own yard, a vastly complicated task for the uninitiated.
How about fuel? If your community installs its own wind or solar power, you may at the very least have to contribute funds in advance of actual power production. But you might also install solar panels on your house or in your yard. You might even be involved in installing a wind generator in your neighborhood or your subdivision. And, these sources of power require maintenance, of course. For example, the solar cells on your roof or mounted on your lawn would need periodic looking after as would batteries used to store that energy for later use.
What about communications? As the computer and the Internet become the avenues of most communication, how could mere mortals be called upon to maintain the infrastructure and programs that make them possible? This is actually already happening in a small way. Growing up alongside the multinational software behemoths are the "open source" and "free software" movements. The software produced by these related movements require the active collaboration of their users who do everything from suggest improvements and new features to actually writing the code for such improvements and features. It's a layer of complication that most computers users do not experience today.
As for trash and recycling, it is certainly conceivable that in the not-to-distant future composting could become obligatory in some communities. I can attest that it is not as simple as throwing garbage into a box. To successfully compost one has to understand how to achieve the proper carbon-nitrogen balance among others things. More complications!
What these complications really mean is that each person is taking on more responsibility for his or her own critical needs and the critical needs of the immediate community. That can have many positive effects as people in communities get to know and trust one another in a way not currently necessary or encouraged. It can also mean more resilience for every community as the production of the necessities of life become more decentralized and thus less vulnerable to disruption by, say, a crop failure in some distant place.
Implied in this decentralization is a rebuilding what James Howard Kunstler calls the local networks of retail and wholesale trade which existed before the devastation wrought on them by the national, big-box retailers. This is yet another complication that will require the active involvement of individuals in each community--not only those who seek to establish businesses based on slowly reviving local networks, but also from others who must make a conscious effort to patronize these establishments to help them succeed.
All of these things mean more, not less thinking. They are in some ways vastly more complicated than what most of us are used to. Up until now we have been largely content to let governments and large corporations fashion solutions for our basic needs, often without much input from us. This has led to a hugely complicated globalized system, but one which we rarely experience as such.
We have been sold the idea that a life filled with "low-maintenance" objects and processes is better than one filled with objects and processes that require our frequent attention. But as psychologist James Hillman has said, this is really an escape from care of the objects and processes most important to our existence. For it is in caring for things both animate and inanimate--the soil, the solar panel, the house we live in, the neighbor we live next to--that we come to love and understand their nature and experience them more fully. We also become connected to their pain or at least the pain we feel when even inanimate objects in our lives are in disarray.
In this way the complications which are about to enter our lives as the fossil fuel age winds down will move us away from the one-dimensional, disconnected, simplified life we now lead, and toward a richer life in which objects and people call upon us to care for them much more deeply than we have in the past.
The bright green high-tech globalized future imagined by some may result in lives that will seem no simpler than what we currently experience (that is, assuming we could achieve such a future). But a future characterized by a reversal of globalization and a return to more regional and local economic activity, or relocalization as it is often called, may actually make life suddenly much more complicated than we are used to. Let me explain.
Right now the relationship that most people have with their electricity and heat providers is simply a monthly bill. Their participation in the system amounts to flipping the light switch or adjusting the thermostat.
Their food is provided primarily by the chain grocery store, and their gasoline is available from ubiquitous service stations which sit on many corners of our cities and along every highway.
The software on their computers is neatly bundled to provide an all-in-one, ready-to-use solution acceptable to the vast majority of computer users.
Even the trash and recycling are hauled away on a regular schedule by a municipal or private hauler.
How might that change in a relocalized world? Currently, few people are involved very deeply in the provision of their most critical services: food, fuel, communication, waste disposal and recycling. But a relocalized world would probably mean a more complicated existence. Instead of having others simply take care of these things for us, we would have to become much more actively involved.
Take food. A relocalized food system means more food grown locally, of course. At a minimum that implies a different distribution system which would likely involve building a relationship with one or more local growers or at least the owners of the farmstands that service them. It might also mean growing food in one's own yard, a vastly complicated task for the uninitiated.
How about fuel? If your community installs its own wind or solar power, you may at the very least have to contribute funds in advance of actual power production. But you might also install solar panels on your house or in your yard. You might even be involved in installing a wind generator in your neighborhood or your subdivision. And, these sources of power require maintenance, of course. For example, the solar cells on your roof or mounted on your lawn would need periodic looking after as would batteries used to store that energy for later use.
What about communications? As the computer and the Internet become the avenues of most communication, how could mere mortals be called upon to maintain the infrastructure and programs that make them possible? This is actually already happening in a small way. Growing up alongside the multinational software behemoths are the "open source" and "free software" movements. The software produced by these related movements require the active collaboration of their users who do everything from suggest improvements and new features to actually writing the code for such improvements and features. It's a layer of complication that most computers users do not experience today.
As for trash and recycling, it is certainly conceivable that in the not-to-distant future composting could become obligatory in some communities. I can attest that it is not as simple as throwing garbage into a box. To successfully compost one has to understand how to achieve the proper carbon-nitrogen balance among others things. More complications!
What these complications really mean is that each person is taking on more responsibility for his or her own critical needs and the critical needs of the immediate community. That can have many positive effects as people in communities get to know and trust one another in a way not currently necessary or encouraged. It can also mean more resilience for every community as the production of the necessities of life become more decentralized and thus less vulnerable to disruption by, say, a crop failure in some distant place.
Implied in this decentralization is a rebuilding what James Howard Kunstler calls the local networks of retail and wholesale trade which existed before the devastation wrought on them by the national, big-box retailers. This is yet another complication that will require the active involvement of individuals in each community--not only those who seek to establish businesses based on slowly reviving local networks, but also from others who must make a conscious effort to patronize these establishments to help them succeed.
All of these things mean more, not less thinking. They are in some ways vastly more complicated than what most of us are used to. Up until now we have been largely content to let governments and large corporations fashion solutions for our basic needs, often without much input from us. This has led to a hugely complicated globalized system, but one which we rarely experience as such.
We have been sold the idea that a life filled with "low-maintenance" objects and processes is better than one filled with objects and processes that require our frequent attention. But as psychologist James Hillman has said, this is really an escape from care of the objects and processes most important to our existence. For it is in caring for things both animate and inanimate--the soil, the solar panel, the house we live in, the neighbor we live next to--that we come to love and understand their nature and experience them more fully. We also become connected to their pain or at least the pain we feel when even inanimate objects in our lives are in disarray.
In this way the complications which are about to enter our lives as the fossil fuel age winds down will move us away from the one-dimensional, disconnected, simplified life we now lead, and toward a richer life in which objects and people call upon us to care for them much more deeply than we have in the past.
Friday, March 06, 2009
Jeffrey Brown and the net oil exports crisis
My latest column on Scitizen entitled "Jeffrey Brown and the Net Oil Exports Crisis" has now been posted. Here is the teaser:
With peak oil comes peak oil exports. Why Texas oilman Jeffrey Brown thinks the world is headed for a drastic energy downsizing and soon.......Read more
Sunday, March 01, 2009
Apollo 13: A Guilty Pleasure in the Age of Scarcity
I was watching the movie Apollo 13 recently for what was probably the fifth time, consuming it in the manner of a guilty pleasure. I say guilty pleasure because this movie is the paradigmatic technofix movie. And, I have little faith that the mounting challenges of resource depletion and climate change can be addressed by technology alone.
But still I revel in the technical mastery and the astonishing ingenuity of the NASA scientists portrayed in the film who saved a crippled spacecraft and brought its crew safely home. Perhaps, I think to myself, just maybe perhaps, these technofix advocates have a point. Maybe when circumstances get really, really desperate, we will somehow pull off an energy transition while at the same time addressing climate change and a host of other issues in one transformative ingenuity-filled marathon. They did it in Apollo 13, didn't they?
Unfortunately, that is precisely what many people believe. I've been having an exchange with someone who works in the computer industry about the potential supply problems for two key but rare metals used widely in electronics: gallium and indium. He rightly points out that the information we have about the reserves of both are sketchy and that the decline in the production of gallium in the last few years could be due to decreasing demand. It could also be the case, he says, that new technology will make gallium easier to get in the future and the decline will be reversed. (He makes the same argument for oil.)
He insists that indium simply can't be that scarce because--get this--there is indium in billions of electronic devices including cellphones and computer screens, in fact, in nearly everything that has a flat-screen display associated with it.
This is curious logic. It says that because we are using a resource ubiquitously and at an exponentially increasing rate, it must be plentiful. Now, I would conclude that such a situation would, in fact, be likely to result in the very scarcity I fear. Of course, it is always possible that everything will turn out all right with regard to the supply of critical metals and energy. But given the risks and uncertainty, is it wise to bet the future of civilization on the most optimistic assumptions?
I realized later that what this computer professional actually meant was that the corporate and government planners charged with thinking about resource supply issues couldn't possibly have made a colossal blunder which would lead to a catastrophic shortage of key metals in the electronics industry. He presumed, I think, that such an outcome was simply out of the question given the competence and intelligence of the people in his industry.
I think this is really the hardest kind of denial to cut through. If one admits this kind of incompetence is possible, then it implies that we could be hitting limits all over the place which have not been foreseen by corporate and government planners. That would mean a complete readjustment of one's world view and a concentrated dose of fear and uncertainty to boot.
Now, I feel that fear and uncertainty on a regular basis. And, I think that's why I occasionally take refuge in the technofix triumphalism found in such movies as Apollo 13 and in quite a few science fiction ones as well. Wouldn't it be nice to be cruising the galaxy with everything one needs at the touch of a button, or better yet, via voice command? Wouldn't it be nice never to have to even think about how much energy one uses?
Yes, it would be nice...and it is nice for a couple of hours to imagine such a life. But then, that's why such interludes are really a guilty pleasure. None of us who understand the real risks we face can afford more time than that lost in a fantasy that has so thoroughly crippled the thinking of even very intelligent people on the planet and which threatens to condemn us all to an unpleasant future.
But still I revel in the technical mastery and the astonishing ingenuity of the NASA scientists portrayed in the film who saved a crippled spacecraft and brought its crew safely home. Perhaps, I think to myself, just maybe perhaps, these technofix advocates have a point. Maybe when circumstances get really, really desperate, we will somehow pull off an energy transition while at the same time addressing climate change and a host of other issues in one transformative ingenuity-filled marathon. They did it in Apollo 13, didn't they?
Unfortunately, that is precisely what many people believe. I've been having an exchange with someone who works in the computer industry about the potential supply problems for two key but rare metals used widely in electronics: gallium and indium. He rightly points out that the information we have about the reserves of both are sketchy and that the decline in the production of gallium in the last few years could be due to decreasing demand. It could also be the case, he says, that new technology will make gallium easier to get in the future and the decline will be reversed. (He makes the same argument for oil.)
He insists that indium simply can't be that scarce because--get this--there is indium in billions of electronic devices including cellphones and computer screens, in fact, in nearly everything that has a flat-screen display associated with it.
This is curious logic. It says that because we are using a resource ubiquitously and at an exponentially increasing rate, it must be plentiful. Now, I would conclude that such a situation would, in fact, be likely to result in the very scarcity I fear. Of course, it is always possible that everything will turn out all right with regard to the supply of critical metals and energy. But given the risks and uncertainty, is it wise to bet the future of civilization on the most optimistic assumptions?
I realized later that what this computer professional actually meant was that the corporate and government planners charged with thinking about resource supply issues couldn't possibly have made a colossal blunder which would lead to a catastrophic shortage of key metals in the electronics industry. He presumed, I think, that such an outcome was simply out of the question given the competence and intelligence of the people in his industry.
I think this is really the hardest kind of denial to cut through. If one admits this kind of incompetence is possible, then it implies that we could be hitting limits all over the place which have not been foreseen by corporate and government planners. That would mean a complete readjustment of one's world view and a concentrated dose of fear and uncertainty to boot.
Now, I feel that fear and uncertainty on a regular basis. And, I think that's why I occasionally take refuge in the technofix triumphalism found in such movies as Apollo 13 and in quite a few science fiction ones as well. Wouldn't it be nice to be cruising the galaxy with everything one needs at the touch of a button, or better yet, via voice command? Wouldn't it be nice never to have to even think about how much energy one uses?
Yes, it would be nice...and it is nice for a couple of hours to imagine such a life. But then, that's why such interludes are really a guilty pleasure. None of us who understand the real risks we face can afford more time than that lost in a fantasy that has so thoroughly crippled the thinking of even very intelligent people on the planet and which threatens to condemn us all to an unpleasant future.
Sunday, February 22, 2009
Why your investment adviser can't advise the world
As stock markets around the world continue to plummet, most investment advisers are telling their long-time clients to stay put and wait for a rebound. With the world overflowing with newly printed (actually, electronically created) money waiting to be invested, a rebound might come despite sentiment that is now so extremely negative.
But the problem with investing (as opposed to saving) is that it is primarily a social phenomenon (rather than an individual one) and therefore has some of the characteristics of both a Ponzi scheme and a zero-sum game. Our savings usually go these days into bank accounts that are insured. The value doesn't fluctuate or rather fluctuates very gradually upward with each interest payment. No matter how many people choose to open savings accounts or CDs at a bank, your principal can neither go up nor down. (The interest payment you receive, however, might go down if too many people flood the bank with money that it cannot deploy profitably in the form of loans.) And, even if some choose to save in part through the purchase of, say, jewelry, gold coins or land, we insure these against loss and liability. Their market price can't be controlled, but loss from theft, damage or lawsuit can be. And, only a fool would think to put all of his or her savings into any one of these alternatives to bank accounts.
The same things can't be said for what most people call investments. Here people were advised to pile into the stock and bond markets with all of their savings. And, in these markets it is essential that there be people who continuously bid for what we have chosen to invest in in order for its value to increase or at least be maintained. Hence, investing is a social phenomenon. A sharp investment adviser will put his or her clients into the next profitable thing early and then have them sell to the latecomers before the trend reverses. And who are the latecomers? Some of them are undoubtedly people put into the same investment by other investment advisers who see the next profitable thing only somewhat later than our aforementioned sharp investment adviser. As each new cohort of investors piles into an investment, the early ones have an opportunity to bail out. This is what I mean when I say investing has some resemblence to a Ponzi scheme. The new investors pay off the original investors by buying their assets at a higher price.
Now, some will complain that if there is overall continuous growth in the economy, the latecomers will make money as the economy continues to expand. There is some truth to this, and yet the fabulous expansion of the world economy in the 20th and early 21st centuries hasn't prevented wide swings in markets that have made paupers of the latecomers. Whether that growth can continue is an open question since we are facing mulitple resource limits and the headwind of climate change.
But setting aside the growth question, we can still see that the social aspects of investing make it far more hazardous than what we call saving. For if a lot of people decide all at once to sell assets similar to what we ourselves own, they can create a panic that leads to much lower prices. And, that, of course, is what we've seen in the past several months.
But not everyone is poorer for this happening. There are short-sellers who have been making gobs of money. Those are the people that remind us of the zero-sum aspect of investing. They only make money if we who are in the market lose it.
The current market meltdown makes clear that the risks faced by amateur investors were much higher than they were told. Professional investors understand the risks better (but not much better, it seems!). Investing is really a form of gambling. If you go into a casino and lose your money, you will, of course, be disappointed. But you shouldn't be surprised. Unprepared, many amateur investors were surprised by recent events.
The upshot is that the vast majority of people are not fit to participate in the casino of investing. Their talents lie elsewhere. We are about to return to a world where a much smaller group of people risk capital in the stock, bond and commodity markets, people who can afford to or at least think they can afford to do so. For everyone else it will be back to the staples of savings: bank accounts, savings bonds, perhaps some gold coins, silverware, jewelry or a little land.
And, what of all those people who are currently being told that they should hang on for a rebound in the market? Well, it might very well come. And, if it does, will they be counseled to sell after a 20 or 30 percent rise? And, if they take such advice, it will turn out like every other socially-driven market move. Some will act first--perhaps from a special premonitory insight--and reap the rewards. Others will follow in successive waves. It is logistically impossible for everyone can sell at once because, as in every Ponzi scheme and zero-sum game, there has to be someone to sell to.
Unfortunately, there is a bell curve that describes the success of financial advisers just as there is in every other profession. This has less to do with talent than with the structure of the investment game. If your doctor tells you to eat right, exercise and get plenty of rest, it's advice that every one of his or her patients can profit from. But if everybody acted at once on the basis of one adviser's counsel, the investment game wouldn't work. And, that's why your investment adviser will never be able to advise the world.
But the problem with investing (as opposed to saving) is that it is primarily a social phenomenon (rather than an individual one) and therefore has some of the characteristics of both a Ponzi scheme and a zero-sum game. Our savings usually go these days into bank accounts that are insured. The value doesn't fluctuate or rather fluctuates very gradually upward with each interest payment. No matter how many people choose to open savings accounts or CDs at a bank, your principal can neither go up nor down. (The interest payment you receive, however, might go down if too many people flood the bank with money that it cannot deploy profitably in the form of loans.) And, even if some choose to save in part through the purchase of, say, jewelry, gold coins or land, we insure these against loss and liability. Their market price can't be controlled, but loss from theft, damage or lawsuit can be. And, only a fool would think to put all of his or her savings into any one of these alternatives to bank accounts.
The same things can't be said for what most people call investments. Here people were advised to pile into the stock and bond markets with all of their savings. And, in these markets it is essential that there be people who continuously bid for what we have chosen to invest in in order for its value to increase or at least be maintained. Hence, investing is a social phenomenon. A sharp investment adviser will put his or her clients into the next profitable thing early and then have them sell to the latecomers before the trend reverses. And who are the latecomers? Some of them are undoubtedly people put into the same investment by other investment advisers who see the next profitable thing only somewhat later than our aforementioned sharp investment adviser. As each new cohort of investors piles into an investment, the early ones have an opportunity to bail out. This is what I mean when I say investing has some resemblence to a Ponzi scheme. The new investors pay off the original investors by buying their assets at a higher price.
Now, some will complain that if there is overall continuous growth in the economy, the latecomers will make money as the economy continues to expand. There is some truth to this, and yet the fabulous expansion of the world economy in the 20th and early 21st centuries hasn't prevented wide swings in markets that have made paupers of the latecomers. Whether that growth can continue is an open question since we are facing mulitple resource limits and the headwind of climate change.
But setting aside the growth question, we can still see that the social aspects of investing make it far more hazardous than what we call saving. For if a lot of people decide all at once to sell assets similar to what we ourselves own, they can create a panic that leads to much lower prices. And, that, of course, is what we've seen in the past several months.
But not everyone is poorer for this happening. There are short-sellers who have been making gobs of money. Those are the people that remind us of the zero-sum aspect of investing. They only make money if we who are in the market lose it.
The current market meltdown makes clear that the risks faced by amateur investors were much higher than they were told. Professional investors understand the risks better (but not much better, it seems!). Investing is really a form of gambling. If you go into a casino and lose your money, you will, of course, be disappointed. But you shouldn't be surprised. Unprepared, many amateur investors were surprised by recent events.
The upshot is that the vast majority of people are not fit to participate in the casino of investing. Their talents lie elsewhere. We are about to return to a world where a much smaller group of people risk capital in the stock, bond and commodity markets, people who can afford to or at least think they can afford to do so. For everyone else it will be back to the staples of savings: bank accounts, savings bonds, perhaps some gold coins, silverware, jewelry or a little land.
And, what of all those people who are currently being told that they should hang on for a rebound in the market? Well, it might very well come. And, if it does, will they be counseled to sell after a 20 or 30 percent rise? And, if they take such advice, it will turn out like every other socially-driven market move. Some will act first--perhaps from a special premonitory insight--and reap the rewards. Others will follow in successive waves. It is logistically impossible for everyone can sell at once because, as in every Ponzi scheme and zero-sum game, there has to be someone to sell to.
Unfortunately, there is a bell curve that describes the success of financial advisers just as there is in every other profession. This has less to do with talent than with the structure of the investment game. If your doctor tells you to eat right, exercise and get plenty of rest, it's advice that every one of his or her patients can profit from. But if everybody acted at once on the basis of one adviser's counsel, the investment game wouldn't work. And, that's why your investment adviser will never be able to advise the world.
Sunday, February 15, 2009
Please state the nature of your emergency
When a 911 operator answers a call, the operator often begins as follows: "Please state the nature of your emergency." As anyone who has called 911 knows, how you describe your emergency has everything to do with how the police respond.
I was speaking to a friend by phone recently who is very active in sustainability efforts where he lives. He's noticed that many of those who were showing interest in cooperating with his efforts last year have now withdrawn into concerns about their own immediate future. The growing economic crisis is concentrating their minds on such questions as: Will I keep my job? Will I be able to afford my house or apartment? What should I do with my savings, especially if they have declined significantly? For those running organizations the most basic question is one of survival. Can my business survive lower sales? Can my nonprofit survive declining donations and grants?
The emergency has been defined primarily as a financial emergency, and so all these people are reacting quite rationally under that definition, my friend conceded.
When faced with what we perceive is a crisis, we focus on the crisis first and worry about what we perceive are long-term problems later. Another contact, Nate Hagens of The Oil Drum, told me that he worries that as the economic crisis deepens, people will become even more focused on the immediate. That, of course, has serious implications for those concerned about long-term sustainability. He has written about why humans discount the future so steeply as follows:
I was speaking to a friend by phone recently who is very active in sustainability efforts where he lives. He's noticed that many of those who were showing interest in cooperating with his efforts last year have now withdrawn into concerns about their own immediate future. The growing economic crisis is concentrating their minds on such questions as: Will I keep my job? Will I be able to afford my house or apartment? What should I do with my savings, especially if they have declined significantly? For those running organizations the most basic question is one of survival. Can my business survive lower sales? Can my nonprofit survive declining donations and grants?
The emergency has been defined primarily as a financial emergency, and so all these people are reacting quite rationally under that definition, my friend conceded.
When faced with what we perceive is a crisis, we focus on the crisis first and worry about what we perceive are long-term problems later. Another contact, Nate Hagens of The Oil Drum, told me that he worries that as the economic crisis deepens, people will become even more focused on the immediate. That, of course, has serious implications for those concerned about long-term sustainability. He has written about why humans discount the future so steeply as follows:
If we didn't have mortgage payments and college funds for our kids, our discount rates might even be steeper. It's quite logical - animals that deferred opportunities to eat, might come back and their food was stolen, or they might have been eaten themselves in the interim - the long arm of selection would have favored organisms that valued immediacy over those who preferred to wait.
But the human penchant for focusing on the immediate is easily hijacked by modern forms of stimuli, Hagens adds:
Our culture presents a smorgasbord of options that allow us to 'feel' like our ancestors did when they were successful. Neuroscientist Robert Sapolsky likens the physiology of two grand master chess players to a marathon runner - the body is experiencing the same neurotransmitters (presumably, they did not have chess back on the Pleistoscene). Many of the options available to us that engage our neurotransmitters are maladaptive. Pornography, fast food, arcade games, lottery tickets, etc. all give us feelings identical to those our ancestors were good at pursuing. But now they often trick our brains into thinking they too will lead to evolutionary success.
For those who don't engage in the pursuits listed above, Hagens offers another illustration of a highly abstract human task which activates ancient neural circuits:
Take stock trading for example. Neuroscience scans show that stock trading lights up the same brain areas as picking nuts and berries do in other primates, suggestive of what our ancestors must have 'felt' as they tried to increase resources.
This last example suggests why so many people are focused on the financial aspects of our crisis. The very top leadership around the world is positively convinced that the crisis we face is primarily a financial crisis with financial solutions. Hence, the huge bailout and spending packages being simultaneously proposed by governments around the world. These policymakers may simply believe (unconsciously, of course) that getting out of this economic slump is merely a question of picking nuts and berries at a much faster rate.
Here we have the problem of how the nature of the emergency is defined. Because the economic crisis has been labelled primarily a financial crisis and because that type of crisis appears to activate well-worn pathways in the human brain, this interpretation has gained wide acceptance.
But if we were to state the nature of the emergency as a sustainability crisis, could such an interpretation gain wide acceptance? Given the presumed short-term focus of most human behavior, such an outcome seems unlikely.
Certainly, people will agree that our current financial system is not sustainable. That much has become obvious. Or has it? Even here we find that most of the solutions to the financial crisis currently being offered merely prop up or try to re-energize existing financial institutions and practices. So, even now--in the throes of a tremendous crisis in which basic institutions ought to be questioned--most leaders and most people in general are not currently examining how the "nuts and berries" are produced. We simply want more of them and hope that doing more of what we've done in the past (for example, expanding debt) will work.
If the current efforts to revive the economy do not work, perhaps then we as a society will look more seriously at setting up alternative financial structures. But, that leaves us a long way from considering urgent areas of sustainability: energy depletion, food production, water depletion, population and climate change.
Each area has the potential to produce more than just local or regional crises. But until they are understood as urgent, I fear that little will be done on a national or international level. This, of course, does not preclude local efforts where people perceive these threats as immediate and ongoing. But I am reminded of Benjamin Franklin's saying, "We must all hang together, or assuredly we shall all hang separately." If some communities successfully address sustainability and other don't, it seems only a matter of time before those that don't become the predators of those that do.
So, my question remains. How can the sustainability crisis (of which the current financial crisis is most certainly a symptom) be framed as something that deserves our immediate and ongoing attention? What well-worn, evolutionarily successful pathways of thinking and feeling are available to motivate broader action?
The issue can't be merely that the problems we face in sustainability are too abstract. After all, stock trading is pretty abstract; but, it seems to map nicely to an already available pathway of thinking and acting. Can we find more of these and use them to communicate the sustainability imperative?
Clearly, simply stating the nature of the emergency as we have in the past is not enough.
Sunday, February 08, 2009
The information society and its limits
The breathtaking expansion of the Internet and the sources of information now available on it have served to conjure a cybernetic vision of unlimited growth--growth that can never be slowed for long by lack of physical resources because it is mostly virtual. The Internet has undoubtedly allowed people to find information readily that would previously have taken hours of meticulous searching in a library or might not be found at all.
The vast quantities of information now available require some kind of filtering, and so various filtering services including news aggregators, weblogs, and specialty sites of all kinds have arisen. All of that is to the good. True, much of the information on the Internet is of questionable veracity. And, much of what passes for information not only on the Internet, but also in the broader media is nothing more than polemic dressed up as analysis. And, of course, the sheer volume of it all would be overwhelming were it not mitigated by the available filters or by simply turning away from the computer, the television and the radio.
But so many people cannot or will not turn away for any extended period of time. Instead, they believe they need to be "updated" on a regular basis. I put "updated" in quotes since to me the news seems more or less the same every day with a few widely spaced and prominent exceptions. It is these exceptions that I pay attention to. But most stories fit into rather predictable categories which I label as follows:
The vast quantities of information now available require some kind of filtering, and so various filtering services including news aggregators, weblogs, and specialty sites of all kinds have arisen. All of that is to the good. True, much of the information on the Internet is of questionable veracity. And, much of what passes for information not only on the Internet, but also in the broader media is nothing more than polemic dressed up as analysis. And, of course, the sheer volume of it all would be overwhelming were it not mitigated by the available filters or by simply turning away from the computer, the television and the radio.
But so many people cannot or will not turn away for any extended period of time. Instead, they believe they need to be "updated" on a regular basis. I put "updated" in quotes since to me the news seems more or less the same every day with a few widely spaced and prominent exceptions. It is these exceptions that I pay attention to. But most stories fit into rather predictable categories which I label as follows:
- Prices are going up (or, more rarely, down).
- There's corruption in government. (Who knew?)
- The corporations are out to get us.
- It's dangerous out there. (Crime stories)
- Isn't that weird? (Human interest stories)
- GI Joe. (War coverage)
- How to lose 10 pounds without dieting. (Service stories)
Perhaps you can think of other categories. And, while stories in some of these categories are indeed important, those stories rarely provide the context or the intelligent analysis required to make them useful. On the other hand, crime stories are usually just sensationalism designed to attract subscribers and viewers.
Putting into the proper context what information we actually do need for something other than aiding and abetting our consumption--for, say, understanding public policy--requires conceptual training that can only come from reading well-written books and articles and engaging with other rigorous minds who challenge our own point of view. That is a much slower training process, and it will never occur at Internet speeds.
Environmental education giant David Orr likes to say that what we lack is "slow" knowledge. It is easy to learn how to take down a whole forest with a chainsaw. That's fast knowledge. But as I wrote in a previous post:
Teaching people the importance of trees in creating and protecting the soil, encouraging biodiversity, preventing runoff, storing carbon and influencing climate is a task that requires time, concentration and reflection. It assumes a body of knowledge about the natural world that most people simply don't have and therefore must acquire. And, it assumes an eye trained to look for subtleties in the natural landscape. Moreover, such learning does not yield the immediate and visible economic benefits of the chainsaw.
But even if we take the time to acquire the slow knowledge we need, we cannot solve the knowledge problem with more information. The world is too complex to comprehend by merely apprehending its parts. And, no human being can see all of the universe or even his or her part of it well enough to give anything but a very fragmentary account. We will always have huge areas of ignorance, particularly about the long-term consequences of the actions we take to reshape the ecosphere to our purposes.
And, even where we believe we have a lot of information--for example, the confident predictions about world oil and natural gas reserves or about the amount of uranium that can be extracted from the Earth's crust--we ought to look not to what we know for confirmation, but to what we don't know for guidance regarding the risks we face. Orr suggests that those lacunae in our knowledge should entreat us to employ wide margins of safety both in our daily actions and even more so in our collective policies.
It is possible, for example, that the optimistic estimates of the world's energy supplies are correct. The consequences of that would be that business as usual could proceed for a few more decades during which we could take a very leisurely attitude toward making the transition to a new energy economy. (I am, of course, setting aside the very serious risks related to climate change in this illustration.) The consequences of being wrong, however, could include catastrophic collapse. Hence, Orr's suggestion that we employ wide margins of safety when acting on what we think we know.
The hubris of the information society is that it imagines that data matter more than understanding and that we are moving closer and closer every day to completing the book of knowledge. The truth is we are creating vast new areas of ignorance. Two examples, one domestic and one industrial, illustrate the problem. Our highly productive modern farming and food production system has allowed the vast majority of people to forego learning anything about plants in their immediate area which are edible. And, since public policy in the United States (but no longer in Europe) puts the onus on the public to prove that a new chemical is harmful before it is banned (rather than putting the onus on industry to prove it is safe), industry releases thousands of new chemicals each year into the environment ignorant of their possible negative effects on humans and on ecosystems.
The most important first step in countering this trend is to recognize it and to act with the heightened sense of attentiveness, care and prudence which that recognition demands.
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