Escape routes: Fleeing Vesuvius – which way should we go?

All contributors

Compiled by Caroline Whyte

The editors and I asked this books’ contributors to send us their recommendations for things that could be done on a personal, community, national and international level to help prepare for the future. Naturally enough, our request was interpreted differently by different people: some contributors focused exclusively on the subject of their articles in the book, such as the need to curtail greenhouse gas emissions or undertake financial reforms, whereas others took the opportunity to provide much more general advice.

Additionally, not everyone was convinced that it’s helpful to think in terms of escape routes at all. Lucy McAndrew wrote in this regard that “the bottom line is that there is no escape route. If we have created an unstoppable economic domino effect, we’ve also created, with more devastating consequences, an unstoppable environmental effect — in terms of climate change and in terms of biodiversity collapse”. As we’ll see though, she doesn’t think we should just despair over this situation; she has some ideas for concrete action which I’ve included further down.

Emer O’Siochru also believes that “there is nowhere to escape to”, but her reasoning is somewhat different. She goes on:

“We are already reasonably well placed here in Ireland compared to anywhere else in the developed world. We should instead stand our ground […] There is no single cataclysmic [event] to escape from. The events we fear are in the now, happening daily and weekly, all the time. These events will build, breach a threshold, cause major disruption followed by a re-adjustment and form a new baseline from which events will build again. Whether we allow the disruption/s to be so complete that substantive recovery is not possible is entirely in our own hands. The future is ours to create out of this process; nothing is predetermined.”

On that note, let’s start looking at recommendations for the different levels of action.

Personal action

Re-skilling and staying healthy

Most of the contributors share a belief in the importance of developing skills that would make us less reliant on the industrialised economy. David Korowicz suggests that “an investment in knowledge and skills is the wisest and cheapest of investments”. Brian Davey describes how most people in low-energy civilisations are skilled in basic food growing and preparation, making and repairing clothes and maintaining their shelter: “Activities and training that pre-figure these basics are most useful — and many people [in industrialised countries] don’t have these skills, which are not valued.”

In a similar vein, Nate Hagens believes that “novelty activities” that are plentiful in the oil age will die out and be replaced by “activities more aligned with human time scales — like gardening, or art, or sports”, and he too believes that it’s a good idea to get involved with such activities sooner rather than later. He adds that “human capital — one’s health, skills and talents — will start to replace the security of being able to buy anything with enough digits in the bank — indeed getting back to top physical health is one of the best investments of time and resources one can make, irrespective of future resource availability”.

Oscar Kjellberg suggests that we should “take an interest in basic food growing and preparation and shelter maintenance”, while Lucy McAndrew says we need to “practice basic husbandry.” Anne Ryan comments that “with gardening, transport, technology, recycling, cooking and growing, you can pass on what you know and learn from others.” More detailed ideas for developing food security can be found in Bruce Darrell’s panel immediately below.

Developing a food security strategy

Bruce Darrell

Start by assuming that the land producing your food is deficient in essential minerals and has an imbalance of major nutrients. Assume that the food produced will be deficient in key minerals and will be of minimal nutritional value. Assume that this food may prevent you from starving, but will not sustain or improve your health. Your key task is to correct mineral deficiencies and balance soil fertility.

Educate yourself about the relationship between:

  • the availability and balance of the minerals in the soil
  • the productivity and health of plants grown in that soil
  • the nutritional quality of the food produced
  • the health of the animals and humans that consume that food
  • the amount of resources expended on healthcare
  • the extent of nutrient cycling used
  • the overall resilience of your family/community/society

Develop a Food Security Strategy. Determine what food security would look like for your family and community in two, five and ten years’ time. Develop a map or plan on how to achieve these goals which would answer the following questions:

  • How much food will be produced and what type of diet is most appropriate?
  • Who will be producing food and how are they going to get the necessary skills?
  • Where will the food be produced and what facilities and transformations are needed?
  • How will knowledge and information be obtained, recorded and shared?
  • How will access be secured to the land, facilities and seeds needed to produce food?
  • How will the water, minerals and fertility be sourced and cycled?
  • How will supplies of food be stored, processed and distributed?
  • How will surpluses and deficiencies be exchanged within the community and with other communities?

Map your land and the surrounding landscape to determine which areas are needed for ecological services and biodiversity, which areas can be best used for intensive food production, and which areas can be mined for nutrients, material and soil to improve the first two. This ecological triage will see the long-term degradation of parts of the landscape but the significant improvement in the quality and productivity of other areas.

Test the soil to determine the fertility availability and balance, the deficiencies of trace minerals and potential toxicity caused by excessive amounts of heavy metals and pollutants. Develop strategies for dealing with both the deficiencies and toxicity, including changing the location and method of food production if necessary.

Concentrate efforts on smaller areas of land rather than having a diffuse effect over a larger area. It is better to produce smaller amounts of higher-quality food than to try to produce large amounts of low-quality food with increased risk of losing everything.

Use remaining access to money and affordable energy to import fertility and trace minerals, to make major structural changes to the landscape, to build necessary infrastructure and to purchase tools and equipment that will assist in future food production.

Import the broad spectrum of trace elements in the form found in seaweed or other plant materials, ground rock dust or sea salt. Import concentrated forms of specific nutrients that you know are deficient in your soil and carefully incorporate them, ideally through the composting process. Do not let a strict adherence to organic principles or beliefs in natural gardening methods prevent you from quickly fixing what is deficient.

Increase the nutrient-retention capability and biological activity of your soil by increasing the organic content of the soil, incorporate biochar if appropriate, and change the land-management practices to reduce soil erosion and leaching of minerals.

Capture the fertility and carbon that currently flows through your community. This can be done through composting, sheet mulching, anaerobic digestion, production of biochar, and through fungal decomposition. Incorporate this material into the land designated to produce your food, or store it until this land becomes available.

Restrict exports of fertility from your land and community, unless you have an abundant and sustainable supply of fresh minerals and fertility to replace what is exported. If minerals are difficult or expensive to obtain, do not sell or trade food as a means of obtaining cash or other materials and goods.

Develop sustainable and robust nutrient cycling systems so that all of the minerals and fertility that are harvested is returned to the land. This includes human wastes.

Test the nutritional density of your food by using a simple refractometer to determine the amount of sugars, vitamins, minerals and other solids that are dissolved in the juice of vegetables, fruit and plant sap. The nutritional density should increase as mineral deficiencies are corrected, fertility is balanced and production methods are changed to increase the biological health of your soil. If it doesn’t, you are doing something wrong. Food with high nutritional density will improve your health, and is a sign of a healthy and abundant ecosystem.

Wise spending

Dan Sullivan thinks we should consider whether we are reinforcing existing power structures with our spending, or helping to change them: “Regardless of the environmental consequences, money spent on land and natural resources is money given to privileged title holders, while money spent on labor products is money given to your fellow producers. Although all products involve both labor and natural resources, the proportions vary widely.”

Patrick Andrews emphasises the effects of our decisions as individual consumers on the economy and environment. He writes “I recommend you really reflect on who you are supporting when you spend money. What is the nature of the businesses you are engaging with? What’s their purpose and what is your relationship to them? What impact do they have in your community? Can you influence them? We tend to underestimate what impact we can have as customers — by being more conscious of all the choices we make each day when we spend our money, we can have a positive influence on the businesses we engage with.”

Corinna Byrne has a specific suggestion along those lines: “if consumers insist on detailed food-labelling based on the carbon footprint of products, this would help to drive agriculture to reduce emissions.”

Material investments: choosing frugality and reducing greenhouse gas emissions

Dmitry Orlov, among others, discusses spending more in terms of its personal effects than its effects on the economy as a whole. This fits with his general analysis, which suggests that the larger economic system will probably collapse so there’s little point in large-scale consumer activism. He thinks you should “make arrangements to lose your money slowly over time rather than all at once in a single financial confidence hiccup. Withdraw your money from circulation by tying it down in durable objects that are guaranteed to have residual use value in a non-industrial context.”

Dan Sullivan shares this emphasis on frugality: “Personally, use as little land and natural resources as you can without unduly hampering yourself. Repair rather than replace, and look for products whose value reflect labor costs rather than resource costs.”

John Sharry believes you should “remember to make the most of the wealth and resources you currently have, as these will be much more scarce in the future.” Oscar Kjellberg advises you to “get rid of your unsustainable assets and make yourself debt free. Involve yourself and your money in a community with natural resources to fall back on in case something happens.” Richard Douthwaite also believes that we need to cultivate frugality and build community bonds: “Each family should try to reduce its outgoings as far as possible because it will not be able to rely on an outside income in future. It should therefore link with its neighbours to meet common needs.” As we shall see, this theme of building community is a very popular one.

David Korowicz comments that “we will never be materially richer than now, what we have is a precious resource to be used wisely.” He describes what he calls “resilient investments”, the aim of which, he says, “is not to give a conventional return-on-investment. It is to preserve your welfare in an uncertain future by providing something that is likely to be useful and important in that future. It does not have to make financial sense now.” He believes that “now is the time to liquidate assets held abroad (property, investments); and non-resilient ones at home.” He also thinks that “real assets, production & skills” will hold more value in relative terms than “cash, equities, bonds and much property.”

He has some suggestions for specific things to invest in: “Just because energy and food have the most direct impact on the collapse of systems does not mean that we should just think only in terms of investing directly in renewable energy and food. We might also think of workhorses, trailers, and harnesses; containers and demi-johns; barges and sail boats; shovels & hoes; basic chemicals; waste re-cycling; curing & preserving; bottling & canning; forestry & hydro-saws; reserve communications systems; storage facilities; and so on.”

Corinna Byrne stresses the need for personal investments that reduce greenhouse gas emissions: “Switching from the use of peat for home heating to renewable technologies such as solar and geothermal power is recommended. The installation of small wind turbines to power one’s home will also help. When it comes to food, much of what we eat is produced under emissions-intense conditions. Growing your own and purchasing locally may contribute to reducing emissions.”

With regard to energy use, it may be better to keep things as simple as possible, even if that means losing some efficiency. David Korowicz writes “Don’t be seduced by the most efficient technology. It is far better to have something simple and locally repairable, even if inefficient, than something highly dependent upon globalised systems for upgrades, components and repairs.”

Dmitry Orlov thinks we should “consider what’s coming in the context of emergency preparedness — except that this emergency is not expected to end. Stockpile supplies and learn skills to maintain and repair your most important possessions and equipment for as long as possible after new products and replacement parts and supplies are no longer manufactured. Devise alternatives for heating, cooking and transportation that do not rely on fossil fuels. Find alternatives to inhabiting the landscape that do not rely on current built-up infrastructure and provide you with direct access to food (plants and animals).”

Avoiding a bunker mentality

A number of the contributors believe that there is a danger of over-emphasising the role that self-sufficiency should play. Graham Barnes is one of them. He writes that “despite a personal predilection for living in the moment, I would place ‘taking an interest in the future’ as #1 on a personal action level — above the other contender — reskilling/self-sufficiency — which I support and admire but can be part of a bunker mentality.”

Lucy McAndrew makes a moral argument for building community: “[…] we must, for the sake of all that is valuable in the human, resist the urge to shrink our moral circle. We must overcome the tendency that fear will imbue us with to fortify our own ‘castles’ at the expense of community.”

She goes on to suggest: “Instead, and against every fear-mongering product and media-call, we must create links within villages and towns and recognise that even those who think they are against us are actually for us, since they, too, are for survival.” Some readers might question whether being for survival means being for everyone’s survival, or for the survival of one’s own community, or even just one’s own self.

But in any case, there are other practical reasons to avoid a bunker mentality, some of which David Korowicz identifies: “Your wealth will not provide you with a separate peace. Firstly, because most of what is regarded as wealth will vanish. Secondly, we are all dependent on the globalised economy, if it fails, if fails us all. Thirdly, you are unlikely to survive without the skills and networks of others. Finally, sitting upon your hoard surrounded by the anxious and destitute is not safe.”

Emer O’Siochru describes the negative effects of a bunker mentality on the larger community: “Attempting to recreate self-sufficiency at family level in basic food, energy and shelter is not a realistic strategy if generally adopted. Others have pointed out its flaws if adopted unilaterally. Its widespread adoption would certainly accelerate knowledge destruction and social breakdown. It is exactly the same failed strategy adopted by the Congested District Board and the later Land Commission that so undermined the village communities on the Western seaboard, caused centuries of emigration and destroyed the Irish language.”

The role of specialisation

Emer O’Siochru writes that “specialisation fostered by the growth of settlements is still the same powerful wealth and well-being building tool it was when it pulled Europe out of the Dark Ages. Increasing local life-support system integration requires more and better specialist technical knowledge, not less.”

In apparent contrast, Brian Davey believes that “most of us are too specialised for our own good. The chief danger is to think that we are special and that our unique information and skills, which currently fit a high-energy, highly specialised economy, will remain indispensable.”

It seems likely that in the future almost all of us will spend more of our time on activities that are geared to basic day-to-day survival, such as growing food, chopping wood, making and mending clothes, maintaining shelters and looking after livestock. However, specialisation will have an important role to play as well; it just won’t be dependent on high-energy inputs anymore.

Davey is probably right in suggesting that people who spend a great deal of their time in front of a computer screen, such as myself, will experience some big changes in their lives. Instead we’ll need people like coopers, a profession that’s not very much in demand at the moment but that used to be quite important (my great-grandfather was one). Another profession likely to experience a resurgence in popularity is blacksmithing. And some existing professions will remain too, of course: we’ll need expert plasterers to build the kind of ship hulls that Dmitry Orlov describes in his second article, midwives, potters, architects who know how to use local building materials, vets, bakers — the list goes on.

An uncluttered mental landscape

Anne Ryan emphasises simplicity, both in material and in psychological terms: “it is always easier to cultivate hope if one is coping well with present circumstances. We can all use enough to create personal stability. Avoid being too busy, or having a surfeit of possessions; cut down on unnecessary decisions. It is true liberation to know how to live well with just the right amount of material accumulation. Talk to friends and family members about these issues.”

Lucy McAndrew discusses the need for imaginative thinking: “Remember that empathy is reaching out with your imagination, it is a stretch, an extravagance, and therefore it is characteristic, essential to what we are as animals. What extravagant humanity has done is to reach out into the material realm and ensure its comfort, at the cost of the future. Now we have to use our imaginations extravagantly to square the circle of how we can maintain our own comfort in the face of increasing discomforting environmental realities, and in the face of an increasing knowledge of the effects of our actions.”

Graham Barnes, as already mentioned, believes it is important to try to think clearly about the future. He points out that “most of us lead busy lives. Much has been written about the work/life balance and there has been a tempering of the American Dream ‘work for success’ ethic with a search for ‘quality time’. But the zeitgeist is changing more fundamentally than that now. Work and quality of life are two legs of the stool; the third is future. Securing a sensible work/life balance on its own is a self-centred agenda and only an unstable equilibrium is possible without the third leg.”

Nate Hagens also emphasises the need to take an accurate view of the future: “Ultimately, we have been living beyond our aggregate means for sometime and are presently in a society wide ‘Wile E. Coyote’ moment. Given the prevalence of ‘unexpected reward’ as a driver of our behavior, to lower our expectations of the future, and redefine for ourselves and our family what we consider ‘success’ will be a psychological robust strategy that will serve us well in many ways. Who knows, if enough people get healthy, make new friends, redefine wealth, and change their skill sets to something useful for when the fossil pixie dust starts to disappear, we will have not only improved our individual futures but in doing so made a more resilient, sustainable culture as well.” As we’ve seen in Davie Philip’s article, movements such as the Transition Towns one are built on the premise that the future need not be uniformly worse than the present, but rather, as Hagens implies, that progress will be measured in more accurate ways than the present practice of conflating it with an increase in GDP and personal spending.

John Sharry comments that “being aware of the coming peak oil/climate crises can take its personal toll on an individual’s mental health. Seriously contemplating the consequences can cause you to feel anxiety, depression and at times despair. Further, because your awareness will take you outside the large-scale denial in mainstream society, you are likely to feel an ‘outsider’ or marginalised. Certainly if you talk publicly about the problems you can be perceived as a bit of ‘crank’ or even a ‘kill joy’ socially. Preserving your own mental health and well-being is as important as taking action and there are many things that can help.”

He advises us to “seek support from like-minded people who are share your concerns and who don’t belong to the mainstream denial. Joining an environmentally aware organisation such as Transition Towns, Cultivate or Feasta will bring you into contact with a support community.” He believes we have to “accept that the majority of people will not accept the problems and be largely in denial until a major crises hits. See your job as building an ‘oasis’ of awareness and preparedness with a small group of like-minded people.”

He continues: “Many people who face a ‘fatal diagnosis’ report that after an initial period of grief or despair, the news can make their daily life more precious as they learn to appreciate what they have. Learn to enjoy the moment and to prioritise the things that matter the most to you in your daily life such as connection with family and friends etc.”

David Korowicz also emphasises the importance of friendship, in particular its psychological benefits: “you will have to stand up and put your neck on the line [since the longer you wait to take action the more options will be lost]. It can be lonely. Find some fellow travellers to share in the trials and triumphs; and the hilarious predicament in which you find yourselves.”

Nate Hagens adds that “for many reasons if there is less stuff to go around, and higher possibility of certain stuff not being available, having more friends, (and a variety of them) will help both individual and community trajectories.” Let’s go on then to investigate how some of those community trajectories might play out.

Local/community action

Almost all contributors place particular emphasis on community-level action. Emer O’Siochru writes that “the most effective scale to intervene is the local or community scale so I will disregard the others to give it its due prominence. A resilient local community can act as a circuit breaker to halt or slow a cascading collapse of the larger systems and provide absolutely essential support for individuals and families while they adjust to the new reality. My recommendations are both practical and political […] Get thee to a village or small rural town. A ghost estate house might be got very cheap. If you can afford to, hold on to your rural house as a summer dacha and/or your city house as the best place to be in a sudden or single emergency event.”

Dan Sullivan thinks that when you’re deciding where to live you should “vote with your feet but vote intelligently. The municipalities, states and countries that get the biggest shares of their revenue from taxes on land, natural resources and pollution will have more stable economies and more affordable lifestyles for productive citizens than those which tax productivity.” He believes we need to “show local governments how they can prosper from untaxing productivity and up-taxing land, pollution, and resource extraction to the degree that those things happen in their neighborhoods.”

Building community

Dmitry Orlov suggests you “make connections with people around you and work to identify ways to gain access to what you need to survive in absence of an official economy. Convert virtual communities to face-to-face interaction. Make enough personal connections so that you can go “electronically dark” if the network fails or take yourself off the map if the political climate turns predatory.”

Brian Davey also takes a pragmatic approach: “the issue is not: what can I (or I and my family) do to survive the coming crunch?” — it is what can the communities and networks that I belong to do to survive? And what is my contribution to the collective process? As a rule of thumb, if you play a role looking after the community in these basic activities, it is likely that the community will look after you. Important in this respect is to provide support for those members of communities that are vulnerable — the elderly, disabled, sick.”

He believes that at present we tend to neglect our ties with neighbours in favour of more geographically distant relationships: “[…] many of us are members of very widely dispersed communities who keep in touch via electronic and digital communications and we may have very limited near contact with people who live in close geographical proximity. In a crunch situation distant relationships may remain important but, for the provision of essential supplies, it is obviously closer communities, and what they are doing collectively, that are important. Many of us don’t really belong to local communities, so the first step may be getting to know neighbours. People eating together is a good start — the word companion comes from the Latin ‘com pani’ — with bread.” Neighbourhood street parties and potlucks, where everyone contributes something, have a role to play here.

Davey continues: “This may seem very banal and we may see ourselves as having a more important leadership role, becoming a hero or heroine of local, national or international enviromental politics. In fact, it is not the leading lights who make fine speeches and internet videos that are the most important when things start to get difficult — but the ones who can train others how to bake bread, and how to grow the grain to make it with….”

“Anyone reading this book is unlikely to be a complete social isolate and without any practical skills at all — but if you are — then just join something. A community garden is ideal. If you look you will find a few odd people out there who have also seen the chaos coming…like those in the Transition Initiatives. Far more than worrying about how you are going to invest your remaining money, though that’s important — get involved!”

Similar approaches to building community are suggested by Anne Ryan: “Join any of the existing movements: for local food, a local credit union, a local exchange system, swap club or transition-town group. Or join a group campaigning for carbon quotas or a citizens’ income. You can also bring your knowledge and your questions into groups to which you already belong, such as church, trade union, sports club, study group or workplace.”

How big should a community be?

The answer to this depends on what the community is trying to do. Graham Barnes comments that “actions appropriate for a ‘precinct’ of maybe 150 people are rather different from those appropriate for a ‘demos’ of 30,000. Feasta is arguably a precinct; a Liquidity Network [for developing a local currency] probably needs a catchment area of 30,000 or so for critical mass and substantial self-sufficiency. Community currencies are an important part of the emerging localist agenda, but only a part of it.”

Community size can make a difference in the ease of spreading information. Barnes explains that “in a precinct you may be preaching to the converted. In the process the precinct becomes better informed but can create more distance between the group and the man in the street. In a demos, you have to spread the word with more accessible and less ‘technical’ messages, and [the Liquidity Network] must become expert at this type of dialogue.”

Community activities

Laurence Matthews thinks communities need to engage in meaningful debate about climate change: “The need at local level is […] to change public opinion: for people to argue in the pubs, in the shops, in the churches, and not least to their local political representatives, for the need to take climate change seriously; to counter the complacent feeling that recycling and cutting down on plastic bags are in some way an adequate response to climate change. Profligate use of carbon, e.g. frequent air travel, has to be seen as irresponsible and socially unacceptable, in the same way that drink-driving has become. This will take courage, persistence and diplomacy.”

In order to discuss important issues effectively, we sometimes need to take a step back and discuss the discussion itself. In this vein, Patrick Andrews reminds us to reflect on the manner in which communities function, and to try and ensure that everyone is getting a say: “At community level, I suggest you pay attention to the ways that individuals interact when they get together in your community. Are the discussions dominated by a few people, or is everyone’s voice heard. Do the structures encourage proper conversations? Are the voices of both men and women able to be heard? What about young and old?”

Lucy McAndrew also focuses on the emotional health of communities: “we must practice trust and empathy, not at the expense of ourselves (we must learn self-defence, too!) but so that we can create a meme, a mental virus which will infect and inspire the people around us and allow us to deal with any forthcoming crisis in the most dignified, the most respectful and, in the highest sense, the most human way imaginable.”

In addition to these ideas, what tangible actions should communities take? Richard Douthwaite believes they should strive to become as economically independent as possible: “Every community should try to meet its basic needs from its own resources and any necessities brought in from outside should be largely to increase choice and balance by similar goods going the other way — exchanging apples for oranges, for example.” One can imagine a scenario such as that described in Orlov’s second article, where apples and oranges are transported by small sailing boats, along with spices and other goods that travel relatively easily and are in high demand.

Several contributors discuss the topic of community finance. David Korowicz suggests that “investing within your community makes you safer by making the community stronger.” He thinks we should “invest to avoid stranded assets. At some stage in an investment cycle there may be a major disruption that will halt the project. Ensure that useful assets will be left behind. For example, don’t front-load grid infrastructure investment; develop localised energy generation first.”

Richard Douthwaite elaborates on the idea of investing within one’s community: “Every community should have its own investment organisation to allow its residents to invest in activities in their own community. This will enable them to take a holistic view of possible investments. They will be able to assess their social and environmental return as well as the income they are likely to generate.”

Oscar Kjellberg has a similar proposal for developing local investment unions: “Stimulate people to reflect on who they are supporting when they are saving money. Find ways to attract savings from investors who want to save with your community and its assets rather than paper assets at stock exchanges or in equity funds that will lose even more of their value as the oil crunch worsens. Develop local enterprises through a community investment bank which should be a place where savers and entrepreneurs can socialise and discuss the development of the community. Create a local business alliance around it.” Community-supportive investment tools such as the equity partnerships and local energy bonds described in this book would fit in neatly with this approach.

To these suggestions we can add the many that Davie Philip makes in his article on the Transition Towns movement. One that particularly struck me is that “as a community [you need to] identify and strengthen your physical, social and human assets. Value the tangible and the intangible, especially the skills and talents of local people.” As mentioned above, setting up a local currency could help with this.

Limits to community action

For certain issues, however, it seems clear that action on a local or community level is insufficient; one of these is climate change. This cannot be tackled by local initiatives alone as one community’s good work could very easily be undone by another’s negligence. Laurence Matthews writes, with regard to this, that “developing local resilience etc. is all very well in itself and as an awareness-raising exercise, but the urgent need is for serious national and global action.” So now let’s look at those types of action in more detail.

National action

The differences in contributors’ approaches become more pronounced at this level. Anne Ryan writes that “if you find you are having success with a local movement, you could go a bit further afield, into national civil society, international civil society, even into government. That is not to say that we should all try to get elected; it is also important to maintain civil society — all those groupings and activities that exist outside the state and the free-trade market — so that government is always reminded of its responsibilities.”

This approach assumes that the current political system, with its emphasis on the roles played by different stakeholders such as governments and business, will be viable in the future. However, Graham Barnes believes that it cannot deal adequately with the problems we are facing. He writes: “It is impossible to know whether politicians are dim, lazy or think they perceive a self-interest in the dysfunctional status quo. And pointless trying to find out. It seems likely that the nation state will be more of an obstacle than a progressive partner for the changes needed. It is in any case relatively powerless compared to international business. So I wouldn’t exactly say ‘don’t bother’ with national action agendas, but I would demand proof of seriousness from any national politicians before spending any time with them.”

In contrast, Dan Sullivan thinks we need to avoid demonizing those in power: “[we should] focus on what is right or wrong rather than who is right or wrong. Some of the great changes of history were triggered by people from among the privileged elite realizing that their privileges were wrong and doing something about it.”

Emer O’Siochru, for her part, believes that “politics really do matter. The Nation State is not dead nor should we wish its demise. Political power is useful, at the very least to remove bureaucratic obstacles, and at best to undertake the fiscal and monetary reforms that could really help us. People who are aware of the crisis should not be too proud nor too clever to march in the streets.”

Anne Ryan agrees with O’Siochru that large-scale collective action is worthwhile: “Efforts for change are most successful when people work together. Solidarity can amplify the voice of the movement of enough; and when your voice has a better chance of being heard, your hope is maintained.”

When one remembers that, just prior to the current war in Iraq, record numbers of people marched in the streets all over the world to oppose it but that they were nonetheless ignored by most of the politicians involved, it’s tempting to conclude that this kind of action is a waste of time. However, the historical record provides plenty of examples where popular pressure did produce political results.

Of course, popular pressure is a double-edged sword: sometimes it brings about results that are highly undesirable, as Brian Davey points out in the article he co-authored with Mark Rutledge. But in my view this should not be taken as a reason to refrain from political activism — rather the opposite. People will need to have accurate information and to know their options in order to avoid mass panic.

John Sharry writes in this regard that “while the general population is largely in denial about the nature and scale of the problems we face, this will change very quickly once a series of major crises hit. At this point people will become devastated, angry and very volatile. It is crucial at this point to have a worked-out and well-communicated understanding of what is happening that provides a pathway forward that brings people together. We need to prepare to provide leadership to a devastated population so as to avoid large scale social unrest and a dangerous social vacuum, and instead inspire people towards constructive action.” In this context, Davie Philip’s definition of leadership as “the ability to inspire initiative and new thinking with those around us” seems appropriate.

Although Sharry provides a strong practical argument for political involvement, we might well wonder whether we have enough time for this kind of strategy. Dmitry Orlov doesn’t think so. He writes that we should “stop wasting time and energy on conventional activism or political involvement. It is more efficient to simply wait for people to come round than to actively try to persuade them. Take “Believe me now, or believe me later!” as your motto. Time is on your side, not on the side of those who insist that they be persuaded.”

While it’s certainly clear that time and energy are scarce, we’ve already seen how the nature of some of our problems — climate change in particular — is such that the need for large-scale action appears to be inescapable. Specifically, there need to be enforceable global caps on greenhouse gas emissions, plus a global framework to encourage carbon sequestration and the preservation of existing carbon stocks.

That’s the stick that forces us to engage in political action, but there are carrots as well. Anne Ryan comments in her article that “politics is about public, collective choices and is closely connected to morality.” Seen in that light, the implications of some of the international programmes that are suggested in this book are quite stunning. What if we combined the curtailing of greenhouse gas emissions with ending the Third World debt crisis and providing billions of people around the world with a nest egg for investing in renewable energy, healthcare and education? The world would likely become a considerably more stable place in political terms, which is an obvious improvement, but it would also be a better one in that we would have taken a step towards redressing many historic injustices. Personally I think that that would be quite a worthwhile thing to try and do, well worth a stab anyway.

The question of political strategy remains, though. Haranguing politicians to try and get them to adopt certain policies might well backfire, particularly if the general public isn’t convinced of them either. As Brian Davey says in his second article, sometimes a more oblique approach works better.

It’s also worth remembering that there isn’t always a clear cutoff between active attempts at persuasion and the simple relating of facts: often both things happen in the same conversation. What if a curious but not-entirely-convinced person asks questions about the decisions one has made about one’s life? How much time, if any, should one devote to answering such questions?

So what should governments do?

Well, let’s assume that governments are willing to act as we wish. What should they actually do? John Sharry is most concerned with the short- and medium-term challenge of dealing with system collapse:

“Whereas many people within the environmental movement are envisioning what a sustainable society might look like, the most dangerous time will [be] the transition time which will be experienced as societal and economic collapse. Preparing for managing this transition time is crucial to survival. […] In small informed groups, prepare a series of national emergency or ‘disaster’ plans that will attempt to anticipate the exact nature of the many near future crises that will occur so that a range of adaptive responses can be strategised and prepared. This can include plans for dealing with energy and food scarcity, mass unemployment, population migration, currency and financial collapse etc. Both community, national and international responses need to be considered […] so that informed community and national leaders as well as plans and policies can be available once the major crises hit.”

In order to deal with future problems we’ll obviously need to have competent people around, and so Emer O’Siochru argues that we need to “campaign politically to hold our young and well educated in Ireland. We will need all our various engineers, scientists, mechanics, medical professionals and even generalists like architects, planners and system engineers. It is very important for the middle aged amongst readers to note that a youthful population is the only real insurance of a modicum of comfort for our old age.”

On a more general level, Laurence Matthews emphasises the responsibility governments have to be honest. He writes that we need to “induce governments to speak out plainly to their populations, to tell them the truth in plain language, as in wartime. Can they not pay their people the compliment of treating them as adults rather than fickle children who must be shielded from the truth? We need some leadership, in fact.”

Of course, it is possible that many politicians are simply unable to comprehend the depth of the predicament we are in. One certainly gets that impression when one looks at the investments that governments are currently making. David Korowicz points out that we need to avoid unwise investments at the national level as well as the individual one: “Don’t dig a deeper hole — buying a new car, or building more airports, motorways and incinerators is just.. stupid.”

Dan Sullivan draws also draws our attention to the ways that governments allocate taxpayer money: “Avoid supporting subsidies for greener technology, for greener technology merely pollutes less, and subsidies for technology increase dependence on technology. Paying someone to pollute less is still paying someone to pollute. Those who have arranged their lives so they can travel mostly by walking and bicycling should not have to support those who drive cars with their tax money, even if they are supporting those who drive electric cars.”

He thinks national governments need to delegate more responsibility: “Politically, ask national governments to do less, and to allow local governments greater flexibility. Consider that an ordinary citizen can easily talk to all of his municipal officials, but has an increasingly […] difficult time reaching county, state and national officials. In contrast, the lobbyists for Exxon, which has gasoline stations in tens of thousands of municipalities across the United States, have influenced every US Senator and Congressman. Yet they have never spoken to the people who run most of the municipalities where their gas stations are located.”

Money and business

Richard Douthwaite focuses on the role played by a nation’s currency. He thinks that there needs to be at least two types of currency, one for saving and the other for spending. Moreover, countries should keep their income and capital flows apart, as was done in the Sterling Area in the past: “International capital flows should not be mixed up with income flows. Each country or region should ensure that its import/export account for consumption purposes is always in balance. Imbalances may be permitted in capital flows but only for the purchase of capital goods.”

He believes that we need to move away from debt-based money, and that the area which a currency serves needs to be smaller, for the most part, than at present: “Apart from short-term personal loans, debt-based lending should be phased out in favour of income- or output-sharing participation. Debt-free money systems should be introduced at regional level.”

Patrick Andrews also discusses finance, in particular changes to banking: “My biggest dream at the national level is to turn a bank into a social enterprise, one that is owned by the community (not by the government — it is very different!) and where the voice of customers, staff, the community and the environment are heard in the board room. We should all push for that. This is not an easy thing to set up and implement, there will be lots of resistance at all levels. But to have a bank truly focused on serving the community as a whole would be worth pushing for.”

This fits in closely with Oscar Kjellberg’s idea, described above in the section on community and in more detail in his article, of developing community investment banks where savers and entrepreneurs would make decisions about the development of their community together. As mentioned above, Kjellberg thinks that local business alliances should be built around these types of community banks. On a national level, he suggests that the local business alliances should be joined into a national network.

Land, energy and climate change

As described in Emer O’Siochru’s article, a basic change in the taxation system could help to address climate change and future energy shortages. Here are her recommendations for national-level action:

“Campaign politically for a site value tax on all developed and potential development land that will create the economic incentives to develop local integrated energy, food and waste systems in our rural settlements.” Dan Sullivan’s article explains how such a tax would also shelter communities from economic storms by discouraging speculation on property.

O’Siochru continues: “Campaign politically for a land value tax on the remaining agricultural, forest, bog land and scrubland that will create the economic incentives for preserving healthy eco-system services i.e. carbon capture and storage and biodiversity while maximising food production for local and export consumption. If we do not use our large area of fertile land productively, others in dire need will see that it is used, but perhaps in a way that might suit us less.” Of course it’s also possible that such land would be commandeered by people who aren’t in particularly dire need — i.e. rich people — to meet their energy demands, which adds to the urgency of the situation.

Richard Douthwaite suggests that “a Community Energy Agency should be established to provide advisory and management services to communities wishing to develop their local renewable energy resources. The Agency would also guarantee the bonds issued by communities to raise the necessary finance for as long as it was providing management services.” In his article he describes in more detail how the relationship between energy and money could play out in such a scenario.

Douthwaite also thinks that “each country should strive to become renewable energy self-reliant as rapidly as possible because the cost in terms of the share of national output that will need to be given up to make the switch later on will be much higher.” In this regard it’s important to take energy returns on investments into account. Tom Konrad, in his article, points out that demand-side technologies such as smart electric meters and well-designed public transport have a very high energy return on investment, and their adoption could therefore help us to overcome the difficulties caused by moving away from fossil-fuel use.

Corinna Byrne makes a number of specific recommendations for addressing climate change. She believes we need to “refocus the value of peatlands from energy to carbon storage and sequestration and utilise alternative renewable technologies such as wind and bio-refining to provide for energy needs.”

She also describes a mechanism for dealing with livestock numbers in different countries: “Ireland, working through the EU, should seek to have global livestock numbers capped at their current level and to have the animal units allowed under the cap allocated to governments according to the number of animals kept in each country at present.”

These recommendations would obviously apply on an international level as well. Let’s move on to that now.

International action

Patrick Andrews writes: “Internationally, support “treeshaverightstoo” and push for the voice of the environment to be heard at the highest level of international decision-making”.

One of the reasons why the environment has so quiet a voice at present is that it is not recognised as a legal entity. To some readers, it may seem absurd to suggest that something that is not human, and not even a discrete object, could have legal rights. However, there is a precedent for this, albeit a rather notorious one: the corporation.

The treeshaverightstoo website was set up by Polly Higgins, an international environmental lawyer who addressed the UN in late 2008 on her proposal for a Universal Declaration of Planetary Rights. As she points out on her website, there has been a gradual evolution in the recognition of legal rights. Initially, they applied only to educated males with property, but over the centuries they were gradually extended to include all humans. The most recent extension was to include children.

Children can be represented legally by an advocate if they are not old enough to represent themselves, and Higgins believes that the same approach could be taken to represent the rights of species other than humans, and the planet as a whole. In late 2008, Ecuador became the first country to adopt a constitution that includes enforceable Rights of Nature. Many of the ideas described in this book, such as Cap and Share, land value tax, the Carbon Maintenance Fee and changes in the nature of legal tender, will need legal enforcement, and their cases would probably be considerably strengthened by such a measure.

However, other changes are necessary too. Another reason that the environment has such a quiet voice is that it can’t afford a big loudspeaker, unlike the CEOs of large companies and the politicians whose campaigns they fund. So many economists argue that environmental resources need to be priced more accurately. With the correct price signals, they believe consumers would make spending decisions that are much more in line with reality. Laurence Matthews uses this reasoning in his suggestions for global action on climate change:

“- we must get a price put on carbon — most of the other policies and technologies needed will then take care of themselves;

– this price must rise quickly until it curtails emissions and promotes ‘sinks’, enough to start reducing [carbon dioxide] concentrations;

– such a price will only be politically sustainable if it is not seen as a ‘tax’ and if it is seen to be equitable;

– Cap and Share is one of the simplest schemes to do all this, bypassing much of the Kyoto-style deadlocks and rendering superfluous much of the time-consuming and distracting Clean Development Mechanism/carbon-trading complexities.”

While the price of the carbon dioxide emissions under Cap and Share would certainly give people pause about spending money on fossil fuels, Matthews makes it clear in his article that Cap and Share would also set an absolute limit on emissions — the cap — which would remain in place regardless of their price. The fossil-fuel producers would have to buy emissions permits in order to sell their product, and there would only be a certain number of these permits available.

Thus, even if there was a recession that caused a slump in demand for fossil fuels, and the price of fossil fuels then went down accordingly, we couldn’t have a repeat performance of what has tended to happen in the past with such recessions — namely, the low prices of fossil fuels triggering a resurgence in demand for them which then undermines renewable energy development. The cap would remain in place no matter what the economic circumstances were, and so there would always be a constraint on the absolute quantity of emissions that could be produced. As the cap was tightened year by year, fewer and fewer permits would be issued and the amount of overall emissions would decrease accordingly. This would enable policymakers and developers of renewable energy to make realistic long-term plans and investments.

So, while price would play an important role in Cap and Share, it wouldn’t have to handle the task of reducing emissions all by itself. This approach seems sound because it reflects the general role that price plays in the economy: pricing things accurately can be useful but it can’t solve all our environmental and social problems, and you have to be careful with it.

Another shortcoming of pricing is that in the absence of additional measures it can’t reduce the instability of an economy that is dependent on debt. Richard Douthwaite writes in this regard: “The scarcity rents which fossil energy and other commodity producers enjoy must be limited to the amount they can spend with their customers on consumption goods and services. A system needs to be put in place to prevent this level being exceeded. With fossil fuels, this could be by Cap and Share, which would capture the rents and spread them as income around the world. Alternatively, the consuming countries could set up an energy-buyers’ cartel which would serve the same purpose.”

As Douthwaite says, the introduction either of an energy-buyers’ cartel or of Cap and Share would help to stabilise the world’s financial system by preventing capital from surging around the world, and by relieving debt. Cap and Share has other advantages as well: it would reduce greenhouse gas emissions, as we’ve already seen, and it could significantly reduce global poverty and income inequality, at least in the short term while the price of emissions was high.

Dan Sullivan would probably disagree with this analysis, though. He writes: “The poor nations of the world do not merely happen to be poor. Rather, they are poor because they are plundered by international financiers and by absentee landlords. End the plunder, and you end the poverty. Even the people of resource-poor nations need to establish systems of freedom and justice before compensation [for resource use] will do them any good. Otherwise, compensation will follow the pattern that US foreign aid has always followed, taxing poor people in rich countries to subsidize rich people in poor countries”.

Indeed, at present much foreign aid also has the effect of subsidizing the companies in rich countries that provide the aid. However, the commons-based philosophy behind the per-capita distribution of emissions permits dovetails rather neatly with current development theory, which emphasises individual agency, and there does seem to be good evidence that cash transfer programmes are an effective way to reduce poverty. [4] Moreover, the equitable nature of Cap and Share is a point in its favour in ethical terms as well as practical ones.

A scheme such as Cap and Share isn’t without risks, though. Douthwaite goes on to describe one of them: the possibility that “the higher prices for fossil fuels [triggered by a cap on emissions] will lead to increased deforestation and the release of carbon from soils as land is converted to bioenergy production.” He suggests a solution: “The introduction of a Carbon Maintenance Fee [would] preserve and increase the stock of carbon held in soils and the biomass growing on them.”

Corinna Byrne, similarly, emphasises the need to preserve current carbon stocks: she writes that we should “push for tropical deforestation to be reduced and for the global forest cover loss to be halted”, and she, too, suggests that “governments could introduce the Carbon Maintenance Fee as a reward for holding and sequestering carbon in soils and biomass and to penalise for carbon releases.”

In order for such a scheme to be effective it would be necessary to measure carbon stocks accurately, so she thinks we need to “advocate the development of remote sensing techniques to map carbon stocks with the aim of improving estimates of the standing stock of carbon in biomass and changes in those stocks through time.”

Byrne also draws our attention to the fact that carbon dioxide is not the only greenhouse gas. There are other gases whose emissions need to be curtailed:

“Nitrous oxide [emissions reduction] needs to be prioritised because an increased nitrous oxide concentration is likely to lead to an increased methane concentration and thus a greater total warming effect than from the nitrous oxide alone (as nitrous oxide destroys ozone which destroys methane). Policy should be focused on reducing nitrous oxide releases, taking in reductions in methane emissions whenever these are compatible, such as in the use of anaerobic digesters.” Such digesters could be used to produced energy for communities.

Along with several of the other contributors, she also believes that biochar production has important potential: “The use of biochar is one of the few strategies that gives any basis for optimism that the excess CO2 in the atmosphere can actually be removed.” If the claims that have been made for the benefits of biochar have any foundation, it could prove to be an enormous help in addressing climate change, and also as a fuel source. As Emer O’Siochru mentions in her chapter, it could help to revive local economies as well.

Byrne has some specific suggestions about REDD, the international system for offsetting emissions by allowing countries which emit beyond their allowances to compensate for this by paying for other countries to emit less. This system has significant flaws, which Byrne describes in her article. She recommends that we “reject offsetting via REDD altogether or tighten the limits on how much can be done with a view to phasing it out completely by 2020. Funding for whole-country REDD schemes should come from the proceeds of auctioning EU emissions trading system permits (EUAs) after 2012 until a global system can be put in place.”

Dan Sullivan writes that “it is not necessary to support elaborate international schemes to make resource-consuming nations compensate nations from which the resources have been taken. It is only necessary for resource-exporting nations to levy substantial royalty charges on their own land and resources, to tax pollution, to untax labor, and to get control of their own money.” REDD would probably qualify as one of the “elaborate international schemes” that he criticises.

A new international currency

As mentioned above, Richard Douthwaite believes that the scarcity rents for commodities should not be allowed to expand infinitely, but rather should be curtailed and then recycled back to the people and countries who are buying the commodities, preferably by means of trade rather than as loans. A system such as Cap and Share would not only guarantee this recycling of rents, but it would also divide them among the whole population.

However, this measure would not be sufficient for achieving greater financial stability, as we would still be using debt-based money for all of our transactions, and, as we have seen in the many articles in this book that discuss the financial system, that type of money is highly volatile and dependent on unsustainable economic growth.

So Douthwaite also believes that “a new international trading currency should be established to replace currencies like the dollar, the euro and sterling. It would be given into circulation according to the amount of trading a country was doing and its first use should be to discharge foreign debt. In times of disaster such as the Pakistan floods, additional money could be created to finance the relief effort, thus spreading the cost fairly around the world.” A change of this kind is not as radical as you might think. The world already has a non-debt quasi-currency which is given into circulation by the IMF. It is called Special Drawing Rights (SDRs) or more popularly “paper gold”. The IMF insists that SDRs are not a currency but an “international reserve asset” which can be sold for currencies such as the dollar and the euro. They were first issued in 1969 to supplement IMF member countries’ official foreign exchange reserves. Only two issues have been made since, the most recent on August 28, 2009 in response to the global financial crisis. This was because, after the previous distribution in 1979-81, the United States vetoed futher issues so that its dollars were used as reserves instead. Unfortunately, SDRs are not shared out on the basis of population but according the maximum amount of financial resources that each member state is obliged to contribute to the IMF. This means that the bigger, richer countries get most.

A new life in old places? – a personal comment

There’s been much discussion in this book of the possibility of sudden collapses in civilisations, with whole ways of life being brought to an abrupt end. However, it’s also true that in certain circumstances, ways of life can fizzle away slowly rather than going out with a bang.

That’s been the case in the area where I live, in southern Burgundy in central France. The interesting thing about this area is that, like Pompeii, you can get an unusually clear idea of what life was like in the past. Hereabouts, the high point was the Middle Ages, specifically the eleventh and twelfth centuries, when the great Benedictine abbey at Cluny was enormously wealthy and politically influential. At that time, the villages of the area almost all rebuilt their churches with the help of Italian masons who used hand tools and knotted ropes to measure the stones they worked with, and who left behind a rich legacy of intricate carvings. Such carvings appear not only on the churches but on people’s houses, and frequently depict scenes from everyday life.

The historian Edwin Mullins speculates that the reason for this sudden flowering of artistic expression was that everyone was relieved that the world hadn’t come to an end in 1000 AD, contrary to much dire prediction at the time.[5] But whatever the cause, the artistic frenzy wasn’t to be repeated. The power of Cluny began to wane from the thirteenth century on, and there were no more audacious building projects.

Village life continued, however, and the area remained modestly prosperous until well into the twentieth century. Recently I took a stroll around the village where my husband and I live with a neighbour who is in his seventies and who still lives in the house that he was born in. He pointed out various buildings in the centre of the village and told me “that was a café, that was a grocery, that was a smithy, that was another café, that was a carpenter’s workshop”.

Even though they’re eerily quiet now, the buildings left behind from the businesses are mostly in rather good shape. In fact, the villages as a whole have a bit of an unreal, fairytale look to them, almost too picture-perfect.

The cause of the businesses’ disappearance will probably be obvious to most readers. But just for the sake of thoroughness, I asked my neighbour why they had closed. He smiled wryly at me and said “the supermarkets” — which was of course a shorthand way of saying “the fossil-fuel-based economy”. Just as in many parts of rural Ireland, the arrival of private cars and the economies of scale used by supermarkets had undercut small local enterprises.

However, the dreamy quality of the villages remained unexplained. Eventually though it occurred to me that just as the volcanic ash which flooded Pompeii had a preservative effect on its buildings, these villages too had been flooded and preserved. But in their case it’s capital from elsewhere — money conjured up by the use of fossil pixie dust, to use Nate Hagens’ phrase — which has done the flooding. People from Paris and Lyon, and foreigners from Switzerland, Belgium, Germany, Britain, the United States and even New Zealand, have bought second homes here, most of them medieval dwellings that they’ve lovingly restored. They generally fly into Paris or Lyon or drive down and spend a few weeks of the year here, usually during the summer as the winters are fairly intense.

I don’t mean to vilify those people who have second homes in the area — they’ve helped to support the local economy by hiring local masons and roofers to work on their restorations. Their interest in the local culture and history is genuine, and some of them are our friends.

But the uncomfortable fact remains that, as with all communities that don’t have much year-round occupancy, it’s not possible to keep services such as shops going. Additionally, locals have been priced out of many of the more comfortable homes. And of course, there’s also the niggling matter of the whole setup being wildly unsustainable.

I asked my neighbour how long ago all of those small businesses closed down and, much to my surprise, he told me that some of them — even the blacksmith — lasted into the 1980s. He also explained that the land around our house had been a farm which served some of the villagers. He himself had worked with draught horses on farms in the area until the mid-1960s. The communally owned woods on the hillside above were, and still are, a source of game for hunters. In the not-so-distant past, the hunters would hike over the hills to Tournus, a town on the easily navigable river Saone, to sell furs.

All of this conjures up an image of a kind of rural paradise, overflowing with abundance, which I’m sure wasn’t entirely the case. But then again, it’s important not to over-romanticise the modern industrial system either.

Aptly enough, the other day I was in a local supermarket with my toddler daughter. It was busy and there were long queues at the checkouts. We’d been waiting for a few minutes in a queue that had barely moved when my daughter told me that nature was calling.

The aisles were completely blocked with loaded shopping trolleys, so I pushed our trolley aside and went to ask a couple of the staff, who were stacking shelves, if she could use the toilet in the back of the supermarket. They told me that I’d have to get a key from the welcome desk, so we made our way over to it. But there was nobody there; everyone was helping at the checkouts. It occurred to me then that we could just go out the automatic entrance door, which was nearby, and my daughter could fertilize a tree outside, but when we went over to the door it wouldn’t open.

There was an electronics stand laden with gleaming gadgets right next to the door, and I asked the young woman who was behind it if she could open the door for us. She looked up distractedly from her mobile phone and told me that she was sorry, but it wasn’t possible. I assumed she meant that it was against some kind of shop rule to open the door, so I explained why we needed to go out. She apologized again and told me that if she had been able to, she would have opened the door, but it only opened from the outside and the staff had no control over it.

Thankfully my daughter and I did manage to get out eventually by running the gauntlet of the shopping trollies in a checkout aisle. But the whole little episode got me thinking about escape routes, and unnecessarily complex labyrinths designed to suck people so that they consume more resources, and the relative powerlessness of the people working in the labyrinth.

This was just a minor incident, of course, but the contrast between our experience at the supermarket and at our local farmer’s market, which takes place once a week, could hardly be greater. There, many of the vendors know my daughter by name, and if you end up waiting a long time in a queue it’s likely to be because the vendor is having a chat with someone, rather than because some unfortunate customer didn’t have quite enough cash on them to pay for everything in their trolley and the cashier is having to call up the supermarket manager in order to get permission to cancel part of the sale transaction.

The emptiness of material abundance without enough human connection is made very clear when we consider the things that small children really need, as opposed to the things that advertisers say they need. And there’s another group besides children that is particularly badly served at present. Those houses in the villages around here that aren’t second homes are generally occupied by people like my neighbour — people in their seventies and eighties who have witnessed the slow death of their communities. It would be wonderful if they could see life in the villages again; children playing, adults working and socialising.

Of course I don’t mean to imply that I think everything should revert to the way it was before the era of fossil fuels. There’s plenty of room for anaerobic digestors and solar water heaters here and elsewhere, and even if there wasn’t, we’ve seen in this book that going back to the past is not an option. But there are a great many rural places in the world waiting to be occupied again, in a somewhat different manner from before, and there’s still time — just about — to learn valuable skills from the older generation.

It’s interesting to note that most of the inhabitants of Pompeii did realise in time that they were experiencing a true emergency. They managed to flee to safety, escaping the volcano’s ashes. So let’s hope that this parallel with our present situation also holds.


  1. In the course of preparing this conclusion I asked the person who administers the transactions in our local currency, Mathilde Béguier, if it’s overly time-consuming, and she said that she doesn’t find it a problem. I asked what she would do if there was a big increase in transactions. She said that she would divide the work up with others, but that if membership increased as well, the best solution would be to start up more local currencies in order to deal with the overflow.
  2. A History of Money from Ancient Times to the Present Day, Glyn Davies, University of Wales Press, 2002, p 642.
  3. The Ascent of Money, Niall Ferguson, Penguin, 2008, p 358.
  4. See for example “The Social Protection Floor :A joint Crisis Initiative of the UN Chief Executives Board for Co-ordination on the Social Protection Floor”, UNDP/ILO, 2009 and Just Give Money to the Poor: The Development Revolution from the South, Joseph Hanlon, Armando Barrientos and David Hulme, Kumerian Press, 2010.
  5. In Search of Cluny: God’s Lost Empire, Edwin Mullins, Signal, 2006

Featured image: Cluny Rue Desbois fenetre. Author: Jan Sokol. Source:

On the cusp of collapse: complexity, energy, and the globalised economy

David Korowicz

The systems on which we rely for our financial transactions, food, fuel and livelihoods are so inter-dependent that they are better regarded as facets of a single global system. Maintaining and operating this global system requires a lot of energy and, because the fixed costs of operating it are high, it is only cost-effective if it is run at near full capacity. As a result, if its throughput falls because less energy is available, it does not contract in a gentle, controllable manner. Instead it is subject to catastrophic collapse.

Fragments from a globalised economy

  • The eruption of the EyjafjallajÖkull volcano in Iceland led to the shut-down of three BMW production lines in Germany, the cancellation of surgery in Dublin, job losses in Kenya, air passengers stranded worldwide and dire warnings about the effects the dislocations would have on some already strained economies.
  • During the fuel depot blockades in the UK in 2000, the supermarkets’ just-in-time supply-chains broke down as shelves emptied and inventories vanished. Anxiety about the consequences rose to such an extent that the Home Secretary, Jack Straw, accused the blockading truckers of “threatening the lives of others and trying to put the whole of our economy and society at risk”.
  • The collapse of Lehman Brothers helped precipitate a brief freeze in the financing of world trade as banks became afraid to accept other banks’ letters of credit. [1]

Just as we never consider the ground beneath our feet until we trip, these glimpses into the complex webs of inter-dependencies upon which modern life relies only come when part of that web fails. When the failure is corrected, the drama fades and all returns to normal. However, it is that normal which is most extraordinary of all.

Our daily lives are dependent upon the coherence of thousands of direct interactions, which are themselves dependent upon trillions more interactions between things, businesses, institutions and individuals across the world. Following just one track; each morning I have coffee near where I work. The woman who serves me need not know who picked the berries, who moulded the polymer for the coffee maker, how the municipal system delivered the water to the café, how the beans made their journey or who designed the mug. The captain of the ship that transported the beans would have had no knowledge of who provided the export credit insurance for the shipment, who made the steel for the hull, or the steps in the complex processes that allow him the use of satellite navigation. And the steel-maker need not have known who built the pumps for the iron-ore mine, or how the oxygen for the furnace was refined.

Every café has customers like me who can only buy coffee because we are exchanging our labours across the world in ways that are dependent upon the globalised infrastructure of IT systems, transport and banking. The systems and the myriad businesses upon which they depend are only viable because there are economies of scale. Our global infrastructure requires millions of users across the world, the ship needs to carry more than coffee beans, and my café needs more than a single customer. The viability of my morning coffee requires the interactive economic and productive efforts of the globalised economy.

Thinking this way enables us to see that the global economy, and thus our civilisation, is a single system. This system’s structure and dynamics are therefore central to understanding the implications of ecological constraints and, in particular for this analysis, peak oil.[2] Here are some of its principal features.

The global economy is self-organising

The usually seamless choreography of the global economy is self-organising. The complexity of understanding, designing and managing such a system is far beyond our abilities. Self-organisation can be a feature of all complex adaptive systems, as opposed to ‘just’ complex systems such as a watch. Birds do not ‘agree’ together that arrow shapes make good sense aerodynamically, and then work out who flies where. Each bird simply adapts to its local environment and path of least effort, with some innate sense of desire and hierarchy, and what emerges is a macro-structure without intentional design. Similarly, our global system emerges as a result of each person, company and institution, with their common and distinctive histories, playing their own part in their own niche, and interacting together through biological, cultural and structural channels.

The self-organisation reminds us that governments do not control their own economies. Nor does civil society. The corporate or financial sectors do not control the economies within which they operate. That they can destroy the economy should not be taken as evidence that they can control it.

The global economy has growth-dependent dynamics

We have come to regard continued economic growth as normal, part of the natural order of things. Recessions are viewed as an aberration caused by human and institutional weakness, the resumption of economic growth being only a matter of time. However, in historical terms, economic growth is a recent phenomenon. Angus Maddison has estimated that Gross World Product (GWP) grew 0.32% per annum between 1500 and 1820; 0.94% (1820-1870); 2.12% (1870-1913); 1.82% (1913-1950); 4.9% (1950-1973); 3.17% (1973-2003), and 2.25% (1820-2003). [3]

We tend to see global economic growth in terms of change. We can observe it through increasing energy and resource flows, population, material wealth, complexity and, as a general proxy, GWP. This can be viewed from another angle. We could say that the globalising growth economy has experienced a remarkably stable phase for the last 150 years. For example, it did not grow linearly by any percentage rate for any time, decline exponentially, oscillate periodically, or swing chaotically. What we see is a tendency to compound growth of a few percent per annum, with fluctuations around a very narrow band. At this growth rate, the system could evolve, unsurprisingly, at a rate to which we could adapt.

The sensitivity felt by governments and society in general to very small changes in GDP growth shows that our systems have adapted to a narrow range of variation. Moving outside that range can provoke major stresses. Of course small differences in aggregate exponential growth have major effects over time, but here we are concentrating upon the stability issue only.

The growth process itself has many push-pull drivers: in human behaviour; in population growth; in the need to maintain existing infrastructure and wealth against entropic decay; in the need to employ those displaced by technology; in the response to new problems; and in the need to service debt that forms the basis of our economic system.

The global economy grows in complexity

Complexity can be measured in several ways — as the number of connections between people and institutions, the intensity of hierarchical networks, the number of distinct products produced and the extent of the supply-chain networks required to produce them, the number of specialised occupations, the amount of effort required to manage systems, the amount of information available and the energy flows required to maintain them. By all these measures, economic growth has been associated with increasing complexity. [4]

As a species, we had to become problem solvers to meet our basic needs, deal with status anxiety and respond to the new challenges presented by a dynamic environment. The problem to be solved could be simple such as getting a bus or buying bread; or it could be complex, such as developing an economy’s energy infrastructure. We tend to exploit the easiest and least costly solutions first. We pick the lowest hanging fruit or the easiest extractable oil first. As problems are solved new ones tend to require more effort and complex solutions.

A solution is framed within a network of constraints. One of the system constraints is set by the operational fabric, comprising the given conditions at any time and place which support system wide functionality. For modern developed economies this includes functioning markets, financing, monetary stability, operational supply-chains, transport, digital infrastructure, command and control, health services, research and development infrastructure, institutions of trust and socio-political stability. It is what we casually assume does and will exist, and which provides the structural foundation for any project we wish to develop. Our solutions are also limited by knowledge and culture, and by the available energetic, material, and economic resources available to us. The formation of solutions is also shaped by the interactions with the myriad other interacting agents such as people, businesses and institutions. These add to the dynamic complexity of the environment in which the solution is formed, and thus the growing complexity is likely to be reinforced as elements co-evolve together.

As a result, the process of economic growth and complexity has been self-reinforcing. The growth in the size of the networks of exchange, the operational fabric and economic efficiencies all provided a basis for further growth. Growing complexity provided the foundation for developing even more complex integration. In aggregate, as the operational fabric evolves in complexity it provides the basis to build more complex solutions.

The net benefits of increasing complexity are subject to declining marginal returns — in other words, the benefit of rising complexity is eventually outweighed by its cost. A major cost is environmental destruction and resource depletion. There is also the cost of complexity itself. We can see this in the costs of managing more complex systems, and the increasing cost of the research and development process. [5] When increased complexity begins to have a net cost, then responding to new problems arising by further increasing complexity may be no longer viable. An economy becomes locked into established processes and infrastructures, but can no longer respond to shocks or adapt to change. For the historian Joseph Tainter, this is the context in which earlier civilisations have collapsed. [6]

The global economy is increasing co-dependence and integration

As the globalising economy grows, increased population, wealth and integration opens up the possibility of greater economies of scale and more diverse productive niches. When new technologies and business models (solutions or sets of solutions) emerge, they co-adapt and co-evolve with what is already present. Their adoption and spread through wider networks depends on the efficiencies they provide in terms of lower costs and new market opportunities. One of the principal ways of gaining overall efficiency is by letting individual parts of the system share the costs of transactions by sharing common infrastructure platforms (information and transport networks, electric grid, water/sewage systems, financial systems), and integrating more. Thus there is a reinforcing trend of benefits for those who build the platform and the users of the platform, which grows as the number of users grows. In time, the scale of the system becomes a barrier to a diversity of alternative systems as the upfront cost and the embedded economies of scale become a greater barrier to new entrants, especially where there is a complex hub infrastructure. The lack of system diversity is not necessarily due to corporate monopolies. There is vigorous competition between mobile phone service providers but they share common information platforms and depend on electricity networks and the monetary system, both of which have little or no system diversity.

Our operational systems are integrated into the wider economy. Expensive infrastructure and continual need for replacement components mean that economies of scale and a large number of economically connected people are necessary to make them viable. For example, the resources required to maintain the IT infrastructure on which we rely for critical services demand that we also buy games consoles, send superfluous text messages and watch YouTube. In other words, our non-discretionary needs and the critical systems that support them are affordable because they are being cross-subsidised by discretionary spending, which itself depends on further economies of scale being generated by the globalised economy that provides us with our discretionary income in the first place.

From this perspective, asking about the resource requirements for individual products of the economy (a computer or my morning coffee, say) is akin to asking about the resource requirements for your finger; it only makes sense if the rest of the body is properly resourced.

Each new level of infrastructural complexity implies a new fixed cost in terms of energy flows and resources required for maintenance and operation, and an economy of scale that can support such flows. It also locks into place co-dependence amongst components of our critical infrastructure that integrate the operational fabric. For example, if our IT platform failed, so too would our financial, knowledge and energy systems. Similarly, if our financial system collapsed, it would not take long for our IT and supply-chains to collapse too. The UK-based Institute of Civil Engineers acknowledges that the complex relationships between co-dependent critical infrastructures are not understood. [7]

Finally, as new infrastructural platforms become established, legacy systems are left to shrink or decay. Thus, if suddenly we all were to lose the communications infrastructure introduced over the past ten years, we would not return to the system we had before that infrastructure was introduced. Instead, most of us would be left without any fall-back communication system at all.

The global economy has bounded resilience

An isolated, poor and self-sufficient community is vulnerable to severe risk of a general failure of food production due to flooding or pestilence, say. Even comparatively rich France had 18 general famines in the eighteenth century and hundreds of local ones [8]. Without access to money, weak transport links, markets and communications, surplus production from elsewhere could not relieve local starvation. The growth in the interconnectedness, infrastructure and institutions of the globalising economy meant local risks could be shared over wide networks, and this enhanced local resilience.

One of the great virtues of the global economy is that while factories may fail and links in a supply-chain break, the economy can quickly adapt by fulfilling its needs elsewhere or finding substitutes. This is a measure of the resilience within the globalised economy and is a natural feature of a de-localised and networked complex adaptive system. But it is true only within a certain context. There are common platforms or ‘hub infrastructure’ that maintain the operation of the global economy and the operational fabric as a whole, and the collapse of such hubs is likely to induce systemic failure. Principal among these are the monetary and financial system, accessible energy flows, transport infrastructure, economies of scale and the integrated infrastructures of information technology and electricity.

Our freedom to change can be limited by lock-in

Lock-in can be defined broadly as an inability to deal with one problem by changing a sub-system in the economy without negatively modifying others upon which we depend. For example, our current just-in-time food system and agricultural practices are hugely risky. As the current economic crisis tightens, those involved in food production and distribution strive for further efficiencies and economies of scale as deflation drives their prices down. The lower prices help maintain welfare and social peace, and make it easier for consumers to service their debts, which in turn supports our battered banks, whose health must be preserved or the bond market might not show up at a government auction. As a result, it is very hard to do major surgery on our food systems if doing so required higher food prices, decreased productivity and gave a poor investment return.

However, the primary lock-in process is the growth economy itself. We are attempting to solve systemic ecological problems within systems that are themselves dependent upon increasing resource depletion and waste. We are embedded within economic and social systems whose operation we require for our immediate welfare. But those systems are too optimized, interconnected and complex to comprehend, control and manage in any systemic way that would allow a controlled contraction while still maintaining our welfare.

The problem of lock-in is part of the reason why there is no possibility of a managed degrowth.

The global economy’s adaption to ecological constraints displaces and magnifies stresses

Peak oil is expected to be the first ecological constraint to impact significantly on the advanced infrastructure of the globalised economy. However, it is only one part of an increasingly integrated web of constraints including fresh-water shortages, bio-diversity loss, soil erosion and reduced soil fertility, shortages of key minerals and climate change. As a result, it makes little sense to compartmentalise our focus as we do through the UN Framework Convention on Climate Change, for example. The interwoven nature of our predicament is clearly shown by the Green Revolution of the 1960s that supposedly ‘solved’ the increasing pressure on food production from a growing population. Technology was marshalled to put food production onto a fossil-fuel platform, which allowed further population overshoot and thus a more general growth in resource and sink demands. The result is that even more people are more vulnerable as their increased welfare demands are dependent upon a less diverse and more fragile resource base. As limits tighten, we are responding to stress on one key resource (by, say, reducing greenhouse gas emissions or getting around fuel constraints by using biofuels) by placing stresses on other key resources that are themselves already under strain (food, water). That we have to do so demonstrates how little adaptive capacity we have left.

Our local needs depend on the global economy

Our basic and discretionary needs are dependent on a globalised fabric of exchange. So too is our ability to exchange our labour for the means to pay those needs. The conditions that maintain our welfare are smeared over the globe.

We have adapted to the stability of globalising growth over the decades. Our skills and knowledge have become ever more refined so as to contribute to the diverse niches within the global economy. The tools we interact with — computers and software, mobile phones, machines and payment systems — maintain our productivity. So too do the supply-chains that feed us, provide inputs to our production process and maintain the operation of the systems we depend upon. Our productivity also depends upon the global economy of scale, not just those reaped by our direct customers, but also the conditions that support their economic activity in the wider economy. We are all of us intertwined. For this reason we can say that there is no longer any wholly indigenous production.

Money and credit integrate the global economy

If one side of the global economy is goods and services, the other side is money and credit. Money has no intrinsic value; it is a piece of paper or charged capacitors in an integrated circuit. It represents not wealth, but a claim on wealth (money is not the house or food we can buy with it). Across the globe we exchange something intrinsically valuable for something intrinsically useless. This only works if we all play the game, governments mandate legal tender and monetary stability and trust are maintained. The hyper-inflation in Weimar Germany and in Zimbabwe until it adopted the US dollar shows what happens when trust is lost.

The thermodynamics of the global economy

Like human beings and life on earth, economies require flows of energy through them to function and maintain their structure. If we do not maintain flows of energy (directly, or by maintenance and replacement) through systems we depend upon, they decay. Humans get their energy when they transform the concentrated energy stores in food into metabolising, thinking and physical labour, and into the dispersed energy of heat and excreta. Our globalising economy is no less energy constrained, but with one crucial difference.
When humans reach maturity they stop growing and their energy intake stabilises. Our economy has adapted to continual growth, and that means rising energy flows.

The self-organisation and biodiversity of life on earth is maintained by the flows of low-entropy solar energy that irradiate our planet as it is transformed into high-entropy heat radiating into space. Our complex civilisation was formed by the transformation of the living bio-sphere and the fossil reserves of ancient solar energy into useful work, and the entropy of waste heat energy, greenhouse gases and pollution that are the necessary consequences of the fact that no process is perfectly efficient.

The first law of thermodynamics tells us that energy cannot be created or destroyed. But energy can be transformed. The second law of thermodynamics tells us how it is transformed. All processes are winding down from a more concentrated and organised state to a more disorganised one, or from low to higher entropy. We see this when our cup of hot coffee cools to the room’s ambient temperature, and when humans and their artefacts decay to dust. The second law defines the direction in which processes happen. In transforming energy from a low-entropy to a higher-entropy state, work can be done, but this process is never 100% efficient. Some heat will always be wasted and be unavailable for work. This work is what has built and maintains life on earth and our civilisation.

So how is it that an island of locally concentrated and complex low-entropy civilisation can form out of the universal tendency to disorder? The answer is that more and more concentrated energy has to flow through it so as to keep the local system further and further away from the disorder to which it tends. The evolution and emergence of complex structures maximises the production of entropy in the universe (local system plus everywhere else) as a whole. Clearly, if growing and maintaining complexity costs energy, then energy supply is the master platform upon which all forms of complexity depends. [9]

The operational fabric evolves with new levels of complexity. As integration and co-dependency rise, and economies of scale become established, higher and higher fixed costs are required to maintain the operational fabric. That cost is in energy and resource flows. Furthermore, as the infrastructure, plant and machinery that are required to maintain economic production at each level expand, they are open to greater depreciation costs or, in thermodynamic terms, entropic decay.

The correlation between energy use and economic and social change should therefore come as no surprise. The major transitions in the evolution of human civilisation, from hunter-gatherers through the agricultural and industrial revolutions, have been predicated on revolutions in the quality and quantity of energy sources used.

We can see this through an example. According to the 1911 Census of England and Wales, the three largest occupational groups were domestic service, agriculture and coal mining. By 2008, the three largest groups were sales personnel, middle managers and teachers. [10] What we can first notice is 100 years ago much of the work done in the economy was direct human labour. And much of that labour was associated directly with harnessing energy in the form of food or fossil fuels. Today, the largest groups have little to do with production, but are more focused upon the management of complexity directly, or indirectly through providing the knowledge base required by people living in a world of more specialised and diverse occupational roles.

What evolved in the intervening century was that human effort in direct energy production was replaced by fossil fuels. The energy content of a barrel of oil is equivalent to 12 years of adult labour at 40 hours a week. Even at $100 a barrel, oil is remarkably cheap compared with human labour! As fossil-fuel use increased, human effort in agriculture and energy extraction fell, as did the real price of food and fuel. These price falls freed up discretionary income, making people richer. And the freed-up workers could provide the more sophisticated skills required to build the complex modern economy which itself rested upon fossil-fuel inputs, other resources and innovation.

In energy terms a number of things happened. Firstly, we were accessing large, highly concentrated energy stores in growing quantities. Secondly, fossil fuels required little energy to extract and process; that is, the net energy remaining after the energy cost of obtaining the energy was very high. Thirdly, the fuels used were high quality, especially oil, which was concentrated and easy to transport at room temperature; or the fuels could be converted to provide very versatile electricity. Finally, our dependencies co-evolved with fossil-fuel growth, so our road networks, supply-chains, settlement patterns and consumer behaviour, for example, became adaptive to particular energy vectors and the assumption of their future availability.

The growth and complexity of our civilisation, of which the growing GWP is a primary economic indicator, is by necessity a thermodynamic system and thus subject to fundamental laws.

In neo-classical models of economic growth, energy is not considered a factor of production. It is assumed that energy is non-essential and will always substitute with capital. This assumption has been challenged by researchers who recognise that the laws of physics must apply to the economy and that substitution cannot continue indefinitely in a finite world. Such studies support a very close energy-growth relationship. They see rising energy flows as a necessary condition for economic growth, which they have demonstrated historically and in theory. [11] [12] [13] It has been noted that there has been some decoupling of GWP from total primary energy supply since 1979 but much of this perceived decoupling is removed when higher energy quality is allowed for. [14]

It is sometimes suggested that energy intensity (energy/unit GDP) is stabilising, or declining a little in advanced economies, a sign to some that local decoupling can occur. This confuses what are local effects with the functioning of an increasingly integrated global economy. Advanced knowledge and service economies do not do as much of the energy-intensive raw materials production and manufacturing as before, but their economies are dependent upon the use of energy-intensive products manufactured elsewhere, and the prosperity of the manufacturers to whom they sell their services.

Peak oil

The phenomenon of peaking — be it in oil, natural gas, minerals or even fishing — is an expression of the following dynamics. With a finite resource such as oil, we find in general that which is easiest to exploit is used first. As demand for oil increases, and knowledge and technology associated with exploration and exploitation progress, production can be ramped up. New and cheap oil encourages new oil-based products, markets and revenues, which in turn provide revenue for investments in production. For a while this is a self-reinforcing process but eventually the reinforcement is weakened because the energy, material and financial costs of finding and exploiting new production start to rise. These costs rise because, as time goes on, new fields become more costly to discover and exploit as they are found in smaller deposits, in deeper water and in more technically demanding geological conditions. In some cases, such as tar sands, the oil requires very advanced processing and high energy and water expenditures to be rendered useful. This process is another example of declining marginal returns.

The production from an individual well will peak and decline. Production from an entire oilfield, a country and the whole world will rise and fall. Two-thirds of oil-producing countries have already passed their individual peaks. For example, the United States peaked in 1970 and the United Kingdom in 1999. The decline has continued in both cases. It should be noted that both countries are home to the worlds’ best universities, most dynamic financial markets, most technologically able exploration and production companies, and stable, pro-business political environments. Nevertheless, in neither case has decline been halted.

As large old fields producing cheap oil decline, more and more effort must be made to maintain production with the discovery and production from smaller and more expensive fields. In financial terms, adding each new barrel of production (the marginal barrel) becomes more expensive. Sadad al-Huseini said in 2007 that the technical floor (the basic cost of producing oil) was about $70 per barrel on the margin, and that this would rise by $12 per annum (assuming demand was maintained by economic growth). [15] This rapid escalation in the marginal cost of producing oil is recent. In early 2002, the marginal cost of a barrel was $20.

It is sometimes argued that there is a huge amount of oil in deposits such as the Canadian tar sands. The questions this claim raises are “When will it be on-stream?”, “At what rate can oil be made available?”, “What is the net energy return?” and “Can society afford the cost of extraction?” If less available net energy from oil were to make us very much poorer, we could afford to pay even less. Eventually, production would no longer be viable as economies could no longer afford the marginal cost of a barrel. In a similar vein, our seas contain huge reserves of gold but it is so dispersed that the energetic and financial cost of refining it would far outweigh any benefits (Irish territorial waters contain about 30 tons).

Some misconceptions regarding peak oil

The decline curve assumption

The now familiar image of a modelled global oil production curve showing a decline in production of 2-3% per annum (EGross), has led commentators to assume that this is what will be available in future to the global economy. Intuitively this might seem an almost manageable constraint. The assumption on which this curve is based, the decline curve assumption, is incorrect for three reasons. Firstly, it does not account for the increasing energy cost of extracting oil; the net energy (ENet) available to society will decline at a faster rate than the modelled decline.

Secondly, oil exporters, for the moment at least, are growing consumers of oil, and will favour domestic consumption over exports. This will reduce the volume of internationally traded oil.

Energy supply too small to permit economic growth

Figure 1: In this projection of a possible future, the steadily-increasing amount of energy required for economic growth to continue is shown by the line EGrowth. While the gross amount of energy that might be available is indicated by the line EGross and the net amount of energy after the energy required to deliver that energy has been deducted is marked ENet. In theory, the gap between the energy available and the energy required for growth (EGap) grows smoothly and steadily as the graph shows but this ignores powerful feedbacks caused by the gap itself. As a result, the gap is likely to grow far more rapidly and erratically.

The third reason lies at the heart of why we must take a whole-systems approach to peak oil. The decline curve assumption assumes there is no strong feedback between declining production, the economy, and oil production. The modelled assumptions for the declining production, even accounting for declining net energy and producer consumption, assume a stable economy and infrastructure. In most of the modelling, the production curve (EGross) is derived from “proven reserves” or “proven plus probable” ones. “Proven” reserves imply we can afford to pay current real prices and deploy existing technology, while “proven plus probable” reserves are estimated on the basis of assumptions about the growth in technology and the idea that increasing wealth might allow us to pay higher prices more comfortably. In other words, at a minimum, the future production curve assumes that current technology and real prices would allow new oil to be brought on-stream to counter some of the effects of declining established production, without which the so-called natural decline rate could be greater than 7% per annum. [16]

A decline in oil production undermines economic production, thus reducing society’s ability to pay for oil. A decline also, as we shall see, undermines the operational fabric, which in turn constrains the ability of society to produce, trade, and use oil (and other energy carriers) in a reinforcing feedback loop. Energy flows through the economy are likely to be unpredictable, erratic and prone to sudden and severe collapse. The implication is that much of the oil (and other energy carriers) that are assumed to be available to the global economy will remain in the ground as the real purchasing power, productive demand, energy infrastructure and economic and financial systems will not be available to extract and use it.

Energy independence

Another misconception is that the output from other energy sources — natural gas, coal, nuclear, and renewable energy — are largely independent of oil even though oil is part of the systemic fabric of the global economy. At the most direct level, oil is used to transport coal and re-supply the infrastructure of natural gas and coal. More broadly, while oil is predominantly a transport fuel, the demand for it is tied to production in the wider economy, which is dependent upon natural gas and coal. A forced reduction in oil use would reduce economic production, which would induce a system-wide reduction in electricity and heating demand. At a wider level, all energy sources interact to maintain the global economy. If there was a major failure in that economy, the continued production, processing, trade and distribution of all energy sources may be imperiled. There would only be energy source independence if there was perfect real-time substitutability and a real-time net energy surplus in one or more of the alternative sources.

We can fill the gap

If the peak in global oil production is imminent, or occurs within the next decade, we have neither the time nor the resources to substitute for oil, or to invest in conservation and efficiency. This point has been made recently by the UK Energy Research Council [17] and many others [18], [19].

We can outline the general reasons as follows. It is not merely that we are replacing high-quality energy sources with lower-quality ones, such as tar sands and renewables. It is not that the costs of such alternatives are generally greater than established historical sources. Nor is it that the productive base for deploying alternative energy infrastructure is small, with limited ramp-up rates, or that it competes with food. Nor even that as the global credit crisis continues with further risks ahead, ramping-up financing will remain difficult while many countries struggle with ballooning deficits and pressing immediate concerns. The main point is that once the effects of peak oil become apparent, we will lose much of what we have called the operational fabric of our civilisation. For example, any degradation and collapse of the operational fabric in the near future may mean that we already have in place a significant fraction of the renewable energy infrastructure that will ever be in place globally.

The economics of peak oil

The thermodynamic foundations of the global economy are expressed through energy prices. Although the price of oil depends upon many things, supply and demand are the most basic. Speculation can be a major factor in setting prices too, but it may only have short-term effects and, if the world was awash with oil, there would be little incentive to speculate. On the supply side, the price paid for oil must be greater than the marginal cost of a barrel of oil, otherwise it’s not worth producing. On the demand side, the price that users can afford to pay depends on the health of their economy, which can be undermined by high oil prices.

The oscillating decline model is an attempt to describe the effect of peak oil on an economy. In this model, constrained or declining oil production leads to an escalation in oil and food prices relative to available income, which feeds through to the whole economy. But economies cannot pay this price for a number of reasons. Firstly the price rises leave people with less money to spend on discretionary items, causing job losses and business closures amongst suppliers. Secondly, for a country that is a net importer of energy, the money sent abroad to pay for energy is lost to the economy unless it stimulates the export of goods of equivalent value (highly unlikely in this analysis).

The constricted growth leads to rising defaults on loans and to less international trade that would support the servicing of external debt. It would raise interest rates as the future economic outlook became more precarious. There would be a tendency to save against the increased risks of unemployment. The general effect would be deflationary as money supply dropped in relation to available goods and services. This would add to what are already huge deflationary pressures arising from the deleveraging of the hyper-credit expansion of the last two decades. The rising cost of debt servicing, on top of food and energy price rises, would further squeeze consumption. The oscillating decline model assumes such stresses are not great enough to cause a terminal systemic global banking failure or a major monetary collapse.

The decline in economic activity leads to a fall in purchasing power and a decline in all forms of energy demand and a fall in its price. Falling or volatile energy prices mean new production is less likely to be brought on stream. New energy investments in oil, renewable energy, natural gas or nuclear power, for example, become less competitive not just because energy prices are lower but also because existing energy infrastructure and supply has an overhang of spare capacity. Energy companies’ reduced revenue and the bad credit conditions further constrain their ability to invest in new production. [20] The reduced revenue also means that the fixed costs of maintaining existing energy infrastructure (gas pipelines, the electric grid, refineries etc.) is a greater burden as a percentage of declining revenue.

If production falls significantly, companies lose the economies of scale they have been getting from their infrastructure. For example, once the revenue from natural gas sales becomes less than the fixed operating costs of production platforms and pipelines, then continuing to deliver gas becomes no longer viable. That means that loss of economies of scale can lead to an abrupt supply collapse and the withdrawal of supply, leading to a further reduction in production capability, and thus in economic production. This is yet another positive feedback loop.

These same conditions also constrain energy adaptation. For example, customers would find it more difficult to buy electric cars or invest in insulation, and governments to subsidise them. It would also be more difficult for the car manufacturers to ramp-up production and gain economies of scale (in addition to dealing with tight lithium supplies). In general, the tighter the economic and social constraints on an economy, the more likely it is that resources will be deployed to deal with current concerns rather than being invested in something that brings a future benefit. This expresses the generally observed increase in the social discount rate in times of growing stress.

In such an energy-constrained environment, one would also expect a rise in geo-political risks. Bilateral arrangements between countries to secure oil and food would reduce the amount on the open market. It would also increase the inherent vulnerability to highly asymmetric price/supply shocks from state/non-state military action, extreme weather, or other “black swan” events.

When oil prices rise above the marginal cost of production and delivery, but can still be afforded despite the economy’s decreased purchasing power, the energy for growth becomes available again. Of course local and national differences (in, for example, the degree of dependence on energy imports or the export of key production such as food) affect how regions fared in the recession and their general ability to pick up again. Even so, growth begins again, focusing maybe on more ‘sustainable’ production and consumption.

However, the return of growth will not raise the purchasing power of the economy to its previous level because oil production will be limited by resource depletion; the lack of investment in production; the entropic decay of infrastructure and productive capacity; and the lower purchasing power which will reduce the price that the economy can afford to pay for its oil. The recovery will be cut short as rising oil, food and energy prices produce another recession.

The sequence of events in the oscillating decline model is therefore as follows: economic activity increases — energy prices rise — a recession occurs — energy prices fall — economic activity picks up again but to a lower bound set by declining oil production. As a result, the economy oscillates to a lower and lower level of activity.

There are good grounds for believing that this process has already begun. At least one authority links the record oil prices in 2007 to the pricking of the credit bubble. [21]

Collapse dynamics

The oscillating decline model does not account properly for some of the embedded structures of the global economy which, while relatively obvious, have been obscured by the fact that they were adaptive in a growing economy. If oil production declines, and we cannot fill the gap between the energy required for growth and what can be produced, as we saw in the oscillating decline model, this limits the availability of other types of energy, then the global economy must continue to contract. In short, humanity is at, or has exceeded, the limits to growth.

Embedded structures that fail to contract in an orderly manner will break down. The structures that will break down include monetary and financial system, critical infrastructure, global economies of scale, and food production. As argued earlier, these structures are deeply inter-dependent. As a result, they will reinforce each other’s collapse. Their collapse undermines the whole operational fabric and the functioning of the global economy and all it supports.

It has been argued so far that our civilisation is a single, complex adaptive system. Complex adaptive systems, and the sub-systems of which they are comprised, are a feature of open thermodynamic systems. And while they show great diversity, from markets to ecosystems to crowd behaviour, their dynamic properties have common features. For most of the time complex adaptive systems are stable, but many of them have critical thresholds called tipping points, when the system shifts abruptly from one state to another. Tipping points have been studied in many systems including market crashes, abrupt climate change, fisheries collapse and asthma attacks. Despite the complexity and number of parameters within such systems, the meta-state of the system may often be dependent on just one or two key state variables. [22]

Recent research has indicated that as systems approach a tipping point they begin to share common behavioural features, irrespective of the particular type of system. [23] This unity between the dynamics of disparate systems gives us a formalism through which to describe the dynamic state of globalised civilisation, via its proxy measure of Gross World Product (GWP) and its major state variable, energy flow.

Catastrophic bifurcation is the name given to a type of transition where once the tipping point has been passed, a series of positive feedbacks drives the system to a contrasting state. For example, as the climate warms, it increases methane emissions from the Arctic tundra, which drives further climate change, which leads to a further growth in emissions. This could trigger other tipping points such as a forest die-off in the Amazon Basin, itself driving further emissions. These positive feedbacks could mean that whatever humanity does would no longer matter as its impact would be swamped by the acceleration of much larger-scale processes.

Small changes can produce a big response

Figure 2: The state of a system responds to a change in conditions. The continuous line represents a stable equilibrium. In A a change in conditions drives an approximately linear response in the systems state, unlike B where a threshold is crossed and the relationship becomes very sensitive. The fold bifurcation (C, D) has three equilibria for the same condition, but the one represented by the dotted line is unstable. That means that there is a range of system states that are dynamically unstable to any condition. Source [24].

Figure 2 shows how the system state responds to a change in conditions. The state of a system could represent the size of a fish population, or the level of biodiversity in a forest, while the conditions could represent nutrient loading or temperature (both effectively energy vectors). The continuous line represents a stable equilibrium; the dotted line an unstable one. In a stable equilibrium, the state of the system can be maintained once the condition is maintained. In figure a) and b) we see two different responses of a stable system under changing conditions. In the first, a given change in conditions has a proportional effect on the system state; in the latter, the state is highly sensitive to a change in conditions. In c) and d) the system is said to be close to a catastrophic bifurcation. In both of these cases there is an unstable region, where there is a range of system states that cannot be maintained. If a system state is in an unstable regime, it is dynamically driven to another available stable state. If one is close to a tipping point at a catastrophic bifurcation the slightest change in the condition can cause a collapse to a new state as in c), or a small perturbation can drive the system over the boundary as in d).

The state of our civilisation necessarily depends on the state of the global economy. I mentioned earlier that the global economy has been in a dynamic but stable state for 150 years or so, because it has had compound economic growth of about 3% per annum within a narrow band of fluctuation during that time. The state of the global economy is indicated by annual GWP growth of approximately 3%, and GWP is absolutely dependent upon rising energy flows.

To argue that civilisation is on the cusp of a collapse, it is necessary to show that positive feedbacks exist which, once a tipping point has been passed, will drive the system rapidly towards another contrasting state. It is also necessary to demonstrate that the state of the global economy is driven through an unstable regime, where the strength of the feedback processes is greater than any stabilizing process. It acknowledges that there may be an early period of oscillating decline, but that once major structural components (international finance, techno-sphere) drop or ‘freeze’ out, irreversible collapse must occur.

In the new post-collapse equilibrium state we would expect a collapse in material wealth and productivity, enforced localisation/de-globalisation, and collapse in the complexity as compared with before — an expression of the reduced energy flows.

Collapse mechanisms

The monetary and financial system

As I write, fears are being expressed that a Greek sovereign default may be inevitable and that, as a result, the markets might refuse to lend to Ireland, Portugal and Spain, causing them to default as well. In Ireland, as in other countries, deflation is continuing as the money supply contracts, and people retrench their spending because of fears of future unemployment. As our debt burden becomes greater in relation to our national income, it adds to the instability in the eurozone. A contagious default would be a major blow to German and French banks, which have lent to all four countries. The economic historian Niall Ferguson argued that US fiscal deficits could lead at some point in time to a rapid collapse in the United States economy, noting “most imperial falls are associated with fiscal crisis”. [25] Such a crisis would drag down every other economy, including those of China and Saudi Arabia.

These examples point to three things. One is that while money may not have any intrinsic value, it can nevertheless decide the fate of nations and empires. The second is that in an integrated globalised economy, a crisis in one region can become everybody’s crisis. Finally, it emphasises that the risks arising from huge indebtedness (and implied trade imbalances) are still with us, irrespective of resource constraints. The latter signifies the necessary irony that never before have we been so indebted, which is essentially an expression of our faith in future economic growth, just as that growth becomes impossible due to resource constraints.

Earlier I explained that the monetary and financial system was a hub infrastructure of the global economy, with no operational alternative. It is based upon credit, interest and fiat currencies. Credit underpins our monetary system, investment financing, government deficit financing, trade deficits, letters of credit, the bond market and corporate and personal debt. Credit, and the promise of future economic growth, supports our stock market, production, employment and much else besides. It is a primary institutional infrastructure of the global economy.

Over the whole of an economy, in order for debt to be repaid with interest, the money supply must increase year on year to replace the money lost to the economy when interest payments are made[1]. Money is injected into the economy when additional loans are taken out. Accordingly, the payment of interest requires an increasing level of debt, and eventually, the level of debt will become unsupportable unless incomes grow as well, either because the economy has grown or because there has been an inflation. If loan repayments including interest exceed the value of the new loans being taken out, the money supply contracts. If it does so, less business can be done, so firms fail and there is less purchasing power in the economy and increasing difficulties with servicing debts. This causes people to spend less, and investment borrowing to fall. In other words, a deflationary spiral develops. On the other hand, if debt, and thus the money supply, increases without a corresponding increase in GDP, money’s purchasing power is reduced by inflation.

Increasing GDP requires increasing energy and material flows. With an energy contraction, the economy must contract. In a growing economy, debts can be paid off as they fall due, because borrowers are prepared to take out enough additional loans to cover the payment of the principal plus interest on old loans as they mature. In a permanently contracting economy, the shrinking income makes the payment of even the interest increasingly difficult as, with inadequate borrowing, the money supply declines. Another way of putting this is that reducing energy flows cannot maintain the economic production required to service debt. The value of the debt needs to be written down to a level appropriate to the new level of production. This write-down can be achieved by either mass defaults or by inflation. Consequently, if the economy is expected to shrink year after year, the number of people prepared to borrow or lend money in the conventional way will dry up, as no-one will be confident that the borrowers will have enough income to make the interest payments.

A bank’s main assets are the loans on its books. If even a tenth of those loans cannot be repaid, that bank is wiped out because making good the losses would take more than its shareholders’ capital and retained profits. Its depositors could not be repaid in full and its government or central bank would have to step in to make good the loss and allow the bank to continue to trade. If the bank’s losses continued as incomes and asset values fell further, the government is likely to reach the end of its borrowing capacity. It would be open to the central bank to create money out of nothing to fill the hole in the bank’s books, but it is likely to be reluctant to do so for fear that the new money would cause inflation.

Unlike previous monetary crisis, one caused by declining incomes and asset values would be systemic and global. There would be no ‘outside’ lender to provide rescue, or external hard currency to provide reserves for important imports. Nor could the system be ‘re-set’ in the expectation of future growth, because those expectations would have little foundation.

As the deflationary pressures would continue as the crisis developed, the prices of oil, food, and debt servicing would rise in relation to people’s falling incomes. There would be an increasing frequency of sovereign defaults, banking collapses and runs, declining production, panic buying and shattered public finances. In such a context, printing money (not necessarily by conventional quantitative easing) and currency re-issues are likely to become necessary. Unless the money issue was tightly controlled, this could open the door to hyper-inflation. However, forecasting and control of money supply may be very difficult due to the intrinsic uncertainty of the monetary and economic environment. An additional inflation risk is that, if people began to have doubts over their bank deposits and future monetary stability, they may start spending on necessities and resilient assets, driving up the velocity of money and further increasing inflation.

Trust is the central principle underpinning the global monetary system and thus the trade networks upon which we rely. Governments can in theory print endless money, at almost no cost, to their hearts’ content. That we trade it for our limited assets, or our finite labours, is a measure of the remarkable trust bequeathed to us through our experience of globalising growth. The economist Paul Seabright argues that trust between unrelated humans outside our own tribal networks cannot be taken for granted. [26] Because trade is, in general, to all our benefit, we have developed institutions of trust and deterrence (‘good standing’, legal systems, the IMF, banking regulations, insurance against fraud, and the World Trade Organization, etc.) to reinforce co-operation and deter freeloaders. Trust builds compliance, which confers benefits, which in turn builds trust. But the reverse is also true. A breakdown in trust can cause defections from compliance, further reducing trust.

Because our governance and monetary policy is national (the Euro is likely to fail), but our basic needs are supplied globally, countries will be tempted to engage in predatory devaluations followed by inflations. This could occur even if governments were directly issuing debt-free money to citizens. Governments act firstly for their own citizens. In an evolving crisis, they are also likely to favour clear immediate benefits over uncertain future ones. Facing pressing immediate and projected national needs, the prospect of a continuing decline in the global productive base, and the risks of collapse in the operational fabric, governments are likely to face the following choice: maintain the value of your currency by limited issuance in the hope that it will in future be more acceptable to foreign traders, or ‘stealth’ print money to make a grab for international assets and inputs before there is a major system failure. Furthermore, if currency crises are seen as inevitable, and hard asset barter or currency backing are likely to supersede it, then the break-up of countries’ dedication to monetary stability becomes a matter of when, not if. In such a manner, the globalising trust dynamics that evolved in the confidence in future growth begin to break down.

Remember, we only exchange something of intrinsic value for currency if we can assume that the money we get can be exchanged later on for something else of intrinsic value. In other words, we need to be able to assume that exchange rates will be stable and that inflation will be low in the period before we spend the money again. The instability of debt money, fiat currencies and competitive devaluations all remove the basis for this assumption. Money becomes very difficult to value in space (for foreign exchange and trade) and in time (for savings and investment). We can say that it becomes opaque.

Bank intermediation, credit and confidence in money holding its value are the foundations of the complex trade networks upon which we rely. The mismatch between our dependencies upon integrated global supply-chains, local and regional monetary systems, and nationalised economic policy, which has not been a problem up to now, will become so as the monetary crisis develops. A complete collapse in world trade is an extreme but not unlikely consequence.

Even if debts are written off or inflated away, a much higher proportion of everyone’s reduced incomes will be absorbed by food and energy purchases. However, a country will only be able to import energy, food and inputs for its production processes by exporting something of equal value, because it will not be granted credit to run a trade deficit. The uncertainty about the value of money, and fears of future degradation of the operational fabric, is likely to mean that commodities such as gold, oil, grain and wood may be used as currency to settle accounts. However, this form of payment is ill suited to the complexity of global inputs.

Exports will collapse along with the level of production within a country, making it even more difficult to import energy or materials to increase production. As I explained earlier, modern economies produce almost nothing indigenously, as supply-chain breakdowns causing key production inputs to become unavailable become increasing likely. This will cause further production problems and make it likely that countries will remain trapped at a very low level of economic activity.

Moreover, because our supply-chains are so complex and globalised, local failures in monetary stability, lack of inputs, or a failing operational fabric would propagate through supply-chain links and other national operational fabrics. In this way, localised failures quickly become globalised.


Global food producers are already straining to meet rising demand against the stresses of soil degradation, water shortages, over-fishing and the burgeoning effects of climate change. [28] It is estimated that between seven and ten calories of fossil-fuel energy go into every one calorie of food energy we consume. It has been estimated that without nitrogen fertiliser, produced from natural gas, no more than 48% of today’s population could be fed at the inadequate 1900 level. [29] No country is self-sufficient in food production today.

The fragility of the global food production system will be exposed by a decline in oil and other energy production. It is not just the more direct energy inputs, such as diesel, that would be affected, but fertilisers, pesticides, seeds, and spares for machinery and transport. The failing operational fabric may mean there is no electricity for refrigeration, for example.

It should be clear even from the above overview that a major financial collapse would not just cut actual food production, but could result in food left rotting in the fields, an inability to link surplus production with those in need, a lack of purchasing power and an inability to enact monetised food transactions.

Our critical reliance upon complex just-in-time supply-chain networks means there is little buffering to protect us from supply shocks. In the event of a shock, unless precautions are taken, it is likely that hunger could spread rapidly. Even in a country that could be food independent or a net exporter, it may take years to put new systems in place. In the interim, the risks are severe.

The primacy of the necessary and reverse economies of scale

We mentioned that more and more of people’s declining income will go on the most non-discretionary purchases, in particular food and energy. What does this mean for developed economies where most energy and a fair amount of food is imported, and which together employ only a few percent of a population? It means not only mass unemployment, but also a tiny amount of purchasing power chasing the declining availability of the necessities we depend upon. A similar position would exist in other countries. Imports and exports would drop rapidly. The unemployed, schooled and adapted to specialised and largely service roles in the globalised economy, would be quite at a loss for a considerable period.

In addition we would face reverse economies of scale. As the size, integration and complexity of the global economy has grown, our local well-being has become more and more dependent upon global economies of scale. Economies of scale work at every level-not just in the good you buy, but in all the components that went into making it, and so on. Similarly, all the hub infrastructures depend on globalised economies of scale. The lower unit prices have led to greater sales volumes and have also a freed up discretionary income to be spent on other goods and services. Thus our purchasing power too is dependent upon economies of scale. The evolution of our economies and economic infrastructure has been predicated upon increasing economies of scale.

If the scaling-up process goes into reverse, reduced purchasing power, and the constriction in non-discretionary consumption, causes purchases to fall and unemployment to rise. Fewer goods and services are sold, which reduces economies of scale, which causes prices to rise, causing further falls in sales. The problem is particularly acute for very complex products and services with limited substitutability, and ones that have high operational costs.

For example, as fewer users can afford to replace mobile phones or computers, or use them less, the cost of the personal hardware and maintaining the network rises per user. Rising costs mean less discretionary use and so on. This is a serious matter for the operators because common IT platforms require a large number of users to keep costs per user low. In effect, the most discretionary use (say, Facebook, texting and Playstation) keeps down the cost for more important uses such as business operations, banking, the electricity grid and the emergency services. Remove the discretionary uses and the cost for businesses and critical services begins to escalate. Furthermore, large hub infrastructure has a fixed cost of operation and maintenance. Once income falls below the operating cost, the system will be switched off unless supported from outside. As government income is likely to fall greatly, this may not be possible.

Critical infrastructure

We are deeply dependent on the grid, IT and communications, transport, water and sewage, and banking infrastructure. In general, these are amongst the most technologically complex and expensive products in our civilisation. Their scale and capacity is determined by current and the projected growth in economies, meaning they have high fixed costs. They are viable because there is purchasing power, economies of scale, open supply-chains and general monetary stability over the world. They both comprise and are dependent upon the operational fabric.

Because of their complexity and scale (implying high levels of entropic decay), this infrastructure requires continuous inputs for maintenance and repair. These inputs are often very complex, have limited lifetimes and require specialised components that depend upon very diverse and extensive supply-chains. For the various reasons discussed, substitutes and sub-components for missing inputs may not exist, causing critical infrastructure to break down. Or, the infrastructure provider or component suppliers may not be able to afford inputs due to loss of purchasing power in economies, loss of economies of scale or monetary collapse.

The tight coupling between different infrastructures magnifies the risk of a cascading failure in our critical infrastructure and thus a complete systemic failure in the operational fabric upon which our welfare depends. At the very least, a failing infrastructure feeds back into reduced economic activity and energy use, further undermining the ability to keep the infrastructure maintained.

Financial system dynamics

Our knowledge and response to expectations of the future shape that future. One area that is most sensitive to this is financial markets.

Money only has value because it can be exchanged for a real asset such as food, clothing or a train journey. As long as we share the confidence in monetary stability, we can save, trade and invest. It is a virtual asset, as it represents only a claim on something physically useful. [27] For most of us, bonds and equities are effectively virtual, as very few shareholders have any meaningful access to underlying physical assets; they are mediated by money. However, the current valuation of virtual assets towers over real productive assets on which their value is supposed to be based. A bond is valuable because we expect to be paid back with interest some years hence; paying 20 times earnings for shares in a company is a measure of confidence in the future growth of that company. Conversely, if a productive asset cannot be made to produce because of energy and resource constraints and the failing operational fabric, it loses its value. This implies that virtual wealth, including pension funds, insurance collateral and debt, will become worth much less than at present, or effectively evaporate[2].

The widespread acknowledgement by market participants (and governments) that peak oil is upon us, coupled with an understanding of its consequences, is likely to crash the global financial system. Initially, just a few market participants will begin to question their faith in the overall stability and continued growth of the system and thus the likely value of their virtual assets. However, the transition can be very rapid from a few market participants accepting the idea that the system could break down permanently, to large-scale acceptance. A fear-driven, positive feedback conversion of a mountain of paper virtual assets into a mole-hill of resilient real assets could develop. This would help precipitate an irretrievable collapse of the financial and economic system.

The re-booting problem

The opportunity to re-boot the globalised economy from a trough in the oscillating decline model, or from a collapsed state, so as to return it to the operation and functionality of its current state, is likely to be deeply problematic. We can consider this from four standpoints.

Entropic decay

As Germany was hit by the global economic crisis, there was a big drop in the need for commercial transport. As a result trains and locomotives were taken out of use. A year later as the economy picked up, the trains were again required. But in the interim, cylinders and engines had rusted. The trains were of no use until repairs could be carried out, which required finance, time and open supply-chains. There was a costly shortage for a while but a fully functioning operational fabric and wider economy ensured there was no disaster [30].

If we have a major economic collapse, the longer it continues the greater the entropic decay of our productive and critical infrastructure, and the more difficult it will be to re-boot.

Loss of co-ordination

The global economy we have now is the result of a self-organising process that emerged over generations. If it collapsed, we would lose the infrastructure that allowed that complex self-organisation to emerge. Post-collapse, we would have to begin with top-down conscious re-building; this would suffice for simple projects but not the hyper-complex products with globalised sourcing we rely upon today.

Loss of resilience & adaptive capacity

In this paper, I have focused on some well-defined collapse mechanisms that are to varying degrees necessary, though they are by no means exclusive. Social stresses, health crises, and the effects of climate change may all add to our difficulties.

By way of illustration we can consider climate change. We are likely to see a major (forced) drop in emissions of anthropogenic greenhouse gases. However, temperature may continue to rises for many decades. Furthermore, we are left with uncertainty as to whether we have crossed tipping points in the climate system that could accelerate terrestrial emissions.

Few studies of the economic impact assume we will be very much poorer in future. The physical effects of climate change, in the form of flooding or reduced food productivity, will amplify the effects of the collapse processes. Being much poorer, and without our current operational fabric, will mean that the relative cost of adaption and recovery from climate induced shocks will escalate beyond our ability to pay much sooner than if our economies continued on their present courses. Furthermore, we will lose the buttressing provided by insurance, and the open supply-chains and strong globalised economies that could re-distribute surplus food from elsewhere.

Focus of the moment

In the increasing stress of the moment, available resources are more likely to be invested in dealing with immediate needs over long-term investment. The stability of the globalising economy has provided the context in which planning and investment could occur. The inherent uncertainty in the collapse process will also tend to favour shorter-term actions. This will reduce the resources for re-booting the system to its former state.


An amalgam of the oscillating decline and the collapse model has been offered as a guide rather than a prediction. The irony is that people may rarely notice they are living under energy constraints. Energy retraction from the global economy can be achieved by production declines or collapses in demand, though as we have seen, they are deeply inter-related. We may experience energy use collapse not as an energy constraint, but as a systemic banking collapse and vanished purchasing power. While energy is generally regarded as non-discretionary, energy use can drop considerably and welfare can, to some degree, be maintained. Food will represent a far more persistent challenge with the strongest real price support. For collapses in food supply and/or demand may well be associated with famine.

Tainter, drawing on historical precedent, defined some of the features of the collapsed state:

  • a lower degree of stratification and social differentiation;
  • less economic and occupational specialisation;
  • less behavioural control;
  • less flow of information between individuals, between political and economic groups, between the centre and its periphery;
  • less sharing, trading, and redistribution of resources;
  • less overall co-ordination and organisation of individuals and groups;
  • smaller territories integrated within a single political unit.

The integration and speed of processes (financial information, capital movement, supply-chains, component lifetimes, etc.) within the globalised economy suggest that a collapse will be much faster than those that have gone before. Furthermore, the level of delocalisation and complexity upon which we depend, and our lack of localised fall-back systems and knowledge, suggests that the impacts may be very severe for the most advanced economies. No country or aspect of human welfare will escape significant impact.

Our understanding and expectations of the world have been shaped by our experience of economic growth. The dynamic stability of that growth has habituated us to what is ‘normal’. That normal must soon shatter. Our species’ belle époque is passing and its future seems more uncertain than ever before.


  1. Here we are referring to the 95% drop in the Baltic Dry Shipping Index. See
  2. Korowicz, D. (2010) Tipping Point: Near-term Systemic Implications of a Peak in Global Oil Production.
  3. Maddison, A. (2007) Contours of the World Economy 1-2030AD. Page 81 Oxford Univ. Press.
  4. See Beinhocker, E. (2005) The Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics. Rh Business Books.
  5. Jones, B. (2009) The Burden of knowledge and the Death of the Renaissance Man: Is Innovation Getting Harder? Review of Economic Studies 76(1).
  6. Tainter, J. (1988) The Collapse of Complex Societies. Cambridge University Press.
  7. State of the Nation: Defending Critical Infrastructure. Institute of Civil Engineers (2009).
  8. Braudel, F. (1981). The Structure of Everyday Life (Vol. 1): The limits of the possible. Collins. Page 74.
  9. Chaisson, E. (2001) Cosmic Evolution: The Rise of Complexity in Nature. Harvard Univ. Press.
  10. Kinsella, T. Politics must liberate itself for revolution to succeed. The Irish Times. 16th March 2009.
  11. Cleveland, C. et al. Energy and the US Economy: A biophysical Perspective. Science 255 (1984).
  12. Ayres, R., Ayres, L., Warr, B. Energy, Power, and Work in the US Economy, 1990-1998. Energy 28 (2003).
  13. Ayres, R., Warr, B. (2009) The Economic Growth Engine: How Energy and Work Drive Material Prosperity. Cambridge, Edward Elgar Publishing.
  14. Cleveland, C., Kaufmann, R., Stern D., eds, Aggregation and the Role of Energy in the Economy. Ecological Economics 32. Elsevier (2000).
  15. Al-Huseini, S. In conversation at
  16. World Energy Outlook (2008). The International Energy Agency estimates a ‘natural’ decline rate of 6.7%, which would be expected to rise as production became more dependent upon smaller fields.
  17. Sorrell, S. and Speirs, J. (2009) Global Oil Depletion: An Assessment of the Evidence for the Near-Term Physical Constraints on Global Oil Supply. UKERC Report.
  18. Heinberg, R. (2009) Searching For a Miracle: Net Energy Limits and the Fate of Industrial Society. Forum on Globalisation and The Post Carbon Institute.
  19. Trainer, T. (2007) Renewable Energy Cannot Sustain a Consumer Society. Springer.
  20. The evolving credit crisis has led to a drop of 19% in energy investments in 2008 according to the International Energy Agency and the cancellation of many projects that depended upon high oil prices such as the tar sands.
  21. Hamilton, J. (2009) Causes and Consequences of the Oil Shock 2007-2008. Brookings Papers on Economic Activity. March.
  22. Scheffer, M. (2009) Critical Transitions in Nature and Society. Princeton Univ. Press.
  23. Scheffer, M et al. (2009) Early-warning signals for critical transitions. Nature Vol. 461 3 Sept.
  25. Ferguson, N. (2010) Complexity and Collapse: Empires on the Edge of Chaos. Foreign Affairs March/ April.
  26. Seabright, P. (2005) The Company of Strangers: A Natural History of Economic Life. Princeton Univ. Press.
  27. Soddy, F. (1926) Wealth, Virtual Wealth and Debt: the Solution of the Economic Paradox. George Allen and Unwin.
  28. Godfray, H et al. (2010) Food Security: The Challenge of Feeding 9 Billion People. Science Vol. 327.
  29. Smil, V. (1999) Long-Range Perspectives on Inorganic Fertilisers in Global Agriculture. International Fertiliser Development Centre.
  30. Germany Faces Freight Train Shortage as Growth Picks Up. Der Spiegel Online. 4th May 2010.,1518,687291,00.html

Definancialisation, deglobalisation and relocalisation

Dmitry Orlov

Countries’ current attempts to recover from their difficulties are driving up oil prices. The world economy will be unable to cope and will collapse, just as it did in 2008. Future attempts at recovery will also fail. Anyone who recognises this should spend whatever money they have engaging with their neighbours and the land in new ways so that they stand a chance of saving something for themselves and their children.

What I want to say can be summed up simply: we all have to prepare for life without much money, where imported goods are scarce, and where people have to provide for their own needs, and those of their immediate neighbours. My point of departure is the unfolding collapse of the global economy. This started in the financial markets in 2008, and is now affecting the political stability of various countries around the world. A few governments have already collapsed, others may be on their way, and before too long we may find our maps redrawn in dramatic ways.

What does achieving sustainability mean, exactly? Is becoming sustainable sustainable itself? Chris Clugston summarised [1] his analysis of what he calls “societal over-extension” on The Oil Drum web site. Here is a summary of his summary, in round numbers. I won’t trifle with his arithmetic, because it’s the cultural assumptions behind it that I find interesting. His idea is that if we shrink our ecological footprint by an order of magnitude or so, that should make humanity’s impact on the planet sustainable once again. He expresses the shrinkage in financial terms: the GDP of the US would drop from, say, $100,000 per capita per annum to, perhaps, $10,000. Clugston draws a distinction between making this reduction voluntarily or involuntarily: we should make it easy on ourselves and come along quietly, so that nobody gets hurt. I find the idea that Americans will voluntarily lower their GDP by a factor of 10 rather outlandish. We keep the same system, just shut down 9/10 of it? Wouldn’t that make it a completely different system? This sort of sustainability seems rather unsustainable to me.

I would like to offer a more realistic alternative. Everybody should have one US dollar for purely didactic purposes. This way, all Americans will be able to show their one dollar to their grandchildren, and say: “Can you imagine, this ugly piece of paper was once called The Almighty Dollar!” And their grandchildren will no doubt think that they are a little bit crazy, but they would probably think that anyway. But it certainly would not be helpful for them to have multiple shoe-boxes full of dollars, because then their grandchildren would think that they are in fact senile, because no sane person would be hoarding such rubbish.

Clugston himself offers an alternative to the big GDP decrease: a proportionate decrease in population. In this scenario, nine out of 10 people die so that the remaining 10% can go on living comfortably on $100,000 a year. I was happy to note that Chris did not carry the voluntary/involuntary distinction over to this part of the analysis, because I feel that this would have been in rather questionable taste. I can think of just three things to say about this particular scenario.

First, humans are not a special case when it comes to experiencing population explosions and die-offs. The idea that human populations should increase monotonically ad infinitum is just as preposterous as the idea of infinite economic growth on a finite planet. The exponential growth of the human population has tracked the increased use of fossil fuels, and I have yet to see a compelling argument for why the population would not crash along with them.

Second, shocking though this seems, it can be observed that most societies are able to absorb sudden increases in mortality without much fuss at all. There was a huge spike in mortality in Russia following the Soviet collapse, but it was not directly observable by anyone outside of the morgues and the crematoria. After a few years, people would look at an old school photograph and realise that half the class were gone! When it comes to death, most people make it easy on themselves and come along quietly. The most painful part of it is realising that something like that is happening all around you.

Third, this whole budgeting exercise for how many people we can afford to keep alive is a good way of demonstrating what monsters we have become, with our addiction to statistics and numerical abstractions. The disconnect between words and actions on the population issue is by now almost complete. Population is very far beyond anyone’s control, and this way of thinking about it takes us in the wrong direction. If we could not control it on the way up, what makes us think that we might be able to control it on the way down? If our projections look sufficiently shocking, then we might hypnotise ourselves into thinking that maintaining our artificial human life-support systems at any cost is more important than considering its effect on the natural world. The question “How many will survive?” is simply not ours to answer.

What’s actually happening

There seems to be a wide range of opinion on how to characterise what is happening in the world economy now, from recession to depression to collapse. The press has recently been filled with stories about “green shoots” and the economists are discussing the exact timing of economic recovery. Mainstream opinion ranges from “later this year” to “sometime next year.” None of them dares to say that global economic growth might be finished for good, or that it will be over in “the not-too-distant future” — a vague term they seem to like a whole lot.

A consensus seems to be forming that the 2008 financial crash was precipitated by the spike in oil prices when oil briefly touched $147/bbl. that year. Why this should have happened seems rather obvious. Since most things in a fully developed, industrialised economy run on oil, the fuel is not an optional purchase: for a given level of economic activity, a certain level of oil consumption is required, and so one simply pays the price for as long as access to credit is maintained and, after that, suddenly it’s game over.

US crude oil consumption as a percent of GDP 1970-2009

In the past forty years, three US recessions have been preceded by rapid increases in the amount of national income going to purchase oil. The bigger oil bills left less money for spending in the rest of the economy. 4% of GDP seems to be the maximum the country can afford. Source: What oil price can America afford? by Steven Kopits

The actual limiting price, beyond which the economy breaks down, was experimentally established to be less than the $147/bbl. reached in 2008. We may never run out of oil, but we have already at least once run out of money with which to buy it, and will most likely do so again and again, until we learn the lesson. We will run out of resources to pump it out of the ground as well. There might be a little bit of oil left over for us to fashion into exotic plastic jewellery for rich people but it won’t be enough to sustain an industrial base, and so the industrial age will effectively be over, except for some residual solar panels and wind generators and hydroelectric installations.

I think that the lesson from all this is that we have to prepare for a non-industrial future while we still have some resources with which to do it. If we marshal the resources, stockpile the materials that will be of most use, and harness the heirloom technologies that can be sustained without an industrial base, then we can stretch out the transition far into the future, giving us time to adapt.

I hold these truths to be self-evident, roughly speaking

  1. It is sometimes helpful to ignore various complexities to move the discussion forward. I believe that these points are all true, roughly speaking.
  2. Global GDP is a function of oil consumption; as oil production goes down, so will global GDP. At some point, the inability to invest in oil production will drive it down far below what might be possible if depletion were the sole limiting factor. Efficiency, conservation, renewable sources of energy all might have some effect, but will not materially alter this relationship. Less oil means a smaller global economy. No oil means a vanishingly small global economy not worthy of the name.
  3. We have had a chance to observe that economies crash whenever oil expenditure approaches 4% of their GDP. [2] Attempts at economic recovery will cause oil price spikes that break through this ceiling. These spikes will be followed by further financial crashes and further drops in economic activity. After each crash, the maximum level of economic activity required to trigger the next crash will be lower.
  4. Financial assets are only valuable if they can be used to secure a sufficient quantity of oil to keep the economy running. They represent the ability to get work done, and since in an industrialised society the work is done by industrial machinery that runs on oil, less oil means less work. Financial assets that that are backed with industrial capacity require that industrial capacity to be maintained in working order. Once the maintenance requirements of the industrial infrastructure can no longer be met, it quickly decays and becomes worthless. To a large extent, the end of oil means the end of money.

Now that the reality of Peak Oil has started to sink in, one commonly hears that “The age of cheap oil is over.” But does that mean that the age of expensive oil is upon us? Not necessarily. We now know (or should have learnt by now) that once oil rises to over 4% of GDP, the world’s industrial economy stalls out, and as soon as that happens, oil ceases to be particularly valuable, so much so that investment in maintaining oil production is curtailed. The next time industry tries to stage a comeback (if it ever does) it hits the wall much sooner and stalls again. I doubt that it would take more than just a couple of cycles of this market whiplash for all the participants to have two realisations: that they cannot get enough oil no matter how much they pay for it, and that nobody wants to take their money even for the oil they do have. Those who still have it will see it as too valuable to part with for mere money. On the other hand, if the energy resources needed to run an industrial economy are no longer available, then oil becomes just so much toxic waste. In any case, it is no longer about money, but direct access to resources.

No need to be gloomy

Now, I expect that a lot of people will find this view too gloomy and feel discouraged. But I feel that it is entirely compatible with a positive attitude to the future, so let me try to articulate what that attitude is.

First of all, we do have some control. Although we shouldn’t hold out too much hope for industrial civilisation as a whole, there are certainly some bits of it that are worth salvaging. Our financial assets may not be long for this world, but in the meantime we can redeploy them to good long-term advantage.

Secondly, we can take steps to give ourselves time to make the adjustment. By knowing what to expect, we can prepare to ride it out. We can imagine which options will be foreclosed first, and we can create alternatives, so that we do not run out of options.

Lastly, we can concentrate on what is important: preserving a vibrant ecosphere that supports a diversity of life, our own progeny included. I can imagine few short-term prerogatives that should override this — our highest priority.

It will take some time for these realisations to sink in. In the meantime, we will no doubt keep hearing that we have a financial crisis on our hands. We must do something to shore up the banks, to deal with the toxic assets, to shore up our credit ratings and so forth. There are people who will tell you that this was all caused by a mistake in financial modelling, and that if we re-regulate the financial sector, this won’t happen again. So, for the sake of the argument, let’s take a look at all that.

Financial management is certainly not my speciality, but as far as I understand it, it is mostly about assessing risk. And to do that, financial managers make certain assumptions about the phenomena they are trying to model. One standard assumption is that the future will resemble the past. Another is that various negative events are randomly distributed. For instance, if you are selling life insurance, you can be certain that people will die based on the fact that they have been born, and you can be reasonably certain that they will not all die at once. When someone dies is unpredictable; when people in general die is random, most of the time. And so here is the problem: the world is unpredictable, but classes of small events can be treated as random, until a bigger event comes along. It may seem like an obscure point, so let me explain the difference in a graphical way.

The square on the left is a random collection of multicoloured dots. Actually, it is pseudo-random, because it was generated by a computer, and computers are deterministic beasts incapable of true randomness.
A source of true randomness is hard to come by. The square on the right is not random, even to a layman. It is like oil expenditure going to 6% of GDP. That certainly wasn’t random. But was it unpredictable? We had a few years of monotonically increasing oil prices, and the high prices failed to produce much of a supply response in spite of record-high drilling rates, investment in ethanol, tar sands, and so on. We also had some good geology-based models that accurately predicted oil depletion profile for separate provinces, and had a high probability of succeeding in the aggregate as well. So the high oil expenditure was definitely not random, and not even unpredictable.

At a higher level, what sort of mathematics do we need to accurately model the inability of our financial and political and other leaders and commentators to see it, or to understand it, even now? And do we really need to do that, or should we just let this nice brick wall do the work for us. Because, you know, brick walls have a lot to teach people who refuse to acknowledge their existence, and they are very patient with students who need to repeat the lesson. I am sure that the lesson will sink in eventually, but I wonder how many more full-gallop runs at the wall it will take before everyone is convinced.

One person I would like to have a close encounter with the brick wall is Myron Scholes, the Nobel Prize–winning co-author of the Black-Scholes method of pricing derivatives, the man behind the crash of Long Term Capital Management. He is the inspiration behind much of the current financial debacle. Recently, he has been quoted as saying the following: “Most of the time, your risk management works. With a systemic event such as the recent shocks following the collapse of Lehman Brothers, obviously the risk-management system of any one bank appears, after the fact, to be incomplete.” Now, imagine a structural engineer saying something along those lines: “Most of the time our structural analysis works, but if there is a strong gust of wind, then, for any given structure, it is incomplete.” Or a nuclear engineer: “Our calculations of the strength of nuclear reactor containment vessels work quite well much of the time. Of course, if there is an earthquake, then any given containment vessel might fail.” In these other disciplines, if you just don’t know the answer, then you just don’t bother showing up for work, because what would be the point?

The point certainly wouldn’t be to reassure people, to promote public confidence in bridges, buildings, and nuclear reactors. But economics and finance are different. Economics is not directly lethal, and economists never get sent to jail for criminal negligence or gross incompetence even when their theories do fail. Finance is about the promises we make to each other, and to ourselves. And if the promises turn out to be unrealistic, then economics and finance turn out to be about the lies we tell each other. We want to continue believing these lies, because there is a certain loss of face if we don’t, and the economists are there to help us. We continue to listen to economists because we love their lies. Yes, of course, the economy will recover later this year, maybe the next. Yes, as soon as the economy recovers, all these toxic assets will be valuable again. Yes, this is just a financial problem; we just need to shore up the financial system by injecting taxpayer funds. These are all lies, but they make us feel all right. They are lying, and we are buying every word of it.

The five fastest ways to lose all your money and have nothing to show for it

These are difficult times for those of us who have a lot of money. What can we do?

  1. We can entrust it to a financial institution. That tends to turn out badly. Many people in the United States have entrusted their retirement savings to financial institutions. And now they are being told that they cannot withdraw their money. All they can do is open a letter once a month, to watch their savings dwindle.
  2. We can also invest it in some part of the global economy. I know some automotive factories you could buy. They are quite affordable right now. A lot of retired auto workers have put all of their retirement savings into General Motors stock. Maybe they know something that we don’t? (Actually, that’s part of a fraudulent scheme perpetrated by the Obama administration, to pay off their banker friends ahead of GM’s other creditors.)
  3. How about a nice gold brick or two? A bag of diamonds? Some classic cars? Then you could start your own personal museum of transportation. How about a beautifully restored classic luxury yacht? Then you could use the gold bricks to weigh you down if you ever decide to end it all by jumping overboard.
  4. Here’s another brilliant idea: buy green products. Whatever green thing the marketers and advertisers throw at you, buy it, toss it, and buy another one straight away. Repeat until they are out of product, you are out of money, and the landfills are full of green rubbish. That should stimulate the economy. Market research shows that there is a great reservoir of pent-up eco-guilt out there for marketers and advertisers to exploit. Industrial products that help the environment are a bit of an oxymoron. It’s a bit like trying to bail out the Titanic using plastic teaspoons.
  5. Another great marketing opportunity for our time is in survival goods. There are some web sites that push all sorts of supplies to put in your private bunker. It’s a clever bit of manipulation, actually. Users log in, see that the stock market is down, oil is up, shotgun shells are on sale, so are hunting knives, and if you add a paperback on “surviving financial armageddon” to your shopping cart you qualify for free shipping. Oh, and don’t forget to add a large tin of dehydrated beans. Fear is a great motivator, and getting people to buy survival goods is almost a matter of operant conditioning: a marketer’s dream.

If you want to help save the environment and prepare yourself for a life without access to consumer goods, then doing so by buying consumer goods doesn’t seem like such a great plan. A much better thing to do is to BUY NOTHING. But that is not something you can do with money. But there are useful things to do with money, for the time being, if we hurry.

How to spend all your money but have something to
show for it

Most of the wealth is in very few private hands right now. Governments and the vast majority of the people only have debt. It is important to convince people who control all this wealth that they really have two choices. They can trust their investment advisers, maintain their current portfolios, and eventually lose everything. Or they can use their wealth to re-engage with people and the land in new ways, in which case they stand a chance of saving something for themselves and their children. They can build and launch lifeboats, recruit crew, and set them sailing.

Those who own a lot of industrial assets can divest before these assets lose value and instead invest in land resources, with the goal of preserving them, improving them over time, and using them in a sustainable manner. Since it will become difficult to get what you want by simply paying for it, it is a good idea to establish alternatives ahead of time, by making resources, such as farmland, available to those who can put them to good use, for their own benefit as well as for yours. It also makes sense to establish stockpiles of non-perishable materials that will preserve their usefulness far into the future. My favourite example is bronze nails. They last over a hundred years in salt water, and so they are perfect for building boats. The manufacturing of bronze nails is actually a good use of the remaining fossil fuels — better than most. They are compact and easy to store.

Lastly, it makes sense to work towards orchestrating a controlled demolition of the global economy. This calls for a new financial skill set: that of a disinvestment adviser. The first step is a sort of triage; certain parts of the economy can be marked “do not resuscitate” and resources reallocated to a better task. A good example of an industry not worth resuscitating is the auto industry; we simply will not need any more cars. The ones that we already have will do nicely for as long as we’ll need them. A good example of a sector definitely worth resuscitating is public health, especially prevention and infectious disease control. In all these measures, it is important to pull money out of geographically distant locations and invest it locally. This may be inefficient from a financial standpoint, but it is quite efficient from the point of view of personal and social self-preservation.

Beyond finance: controlling other kinds of risk

It seems rather disingenuous for us to treat economics and finance as a special case. Do we have any examples of risks we understood properly and acted on in time? Have there been any really serious systemic problems that we have been able to solve? The best we seem to be able to do is buy time. In fact, that seems to be what we are good at — postponing the inevitable through diligence and hard work. None of us wants to act precipitously based on what we understand will happen eventually, because it may not happen for a while yet. And why would we want to rock the boat in the meantime? The one risk that we do seem to know how to mitigate against is the risk of not fitting in to our economic, social and cultural milieu. And what happens to us if our entire milieu finally goes over the edge? Well, the way we plan for that is by not thinking about that.

The biggest risk of all, as I see it, is that the industrial economy will blunder on for a few more years, perhaps even a decade or more, leaving environmental and social devastation in its wake. Once it finally gives up the ghost, hardly anything will be left with which to start over. To mitigate against this risk, we have to create alternatives, on a small scale, that do not perpetuate this system and that can function without it.

The idea of perpetuating the status quo through alternative means is all-pervasive, because so many people in positions of power and authority wish to preserve their positions. And so just about every proposal we see involves avoiding collapse instead of focusing on what comes after it. A prime example is the push to develop alternative energy. Many of these alternatives turn out to be fossil-fuel amplifiers rather than self-sufficient resources: they require fossil-fuel energy as an essential input. Also, many of them require an intact industrial base, which runs on fossil fuels. There is a pervasive idea that these alternatives haven’t been developed before for nefarious reasons: malfeasance on the part of the greedy oil companies and so on. The truth of the matter is that these alternatives are not as potent, physically or economically, as fossil fuels. And here is the real point worth pondering: If we can no longer afford the oil or the natural gas, what makes us think that we can afford the less potent and more expensive alternatives? And here is a follow-up question: If we can’t afford to make the necessary investments to get at the remaining oil and natural gas, what makes us think that we will find the money to develop the less cost-effective alternatives?

How long do we have?

It would be excellent if more people were thinking along these lines and had started making their lives a bit more sustainable, but social inertia is considerable, and the process of adaptation takes time. So the question is, is there enough time for significant numbers of people to realise the situation and to adapt, or will they have to endure quite a lot of discomfort? I believe that people who start the process now stand a fairly good chance of making the transition in time but that it would be unwise to wait and try to grab a few more years of comfortable living. Not only would that be a waste of time on a personal level, but we’d be squandering the resources we need to make the transition.

Collapse without preparation is a defeat.

Collapse with preparation is an eccentricity.

I concede that the choice is a difficult one: either we wait for circumstances to force our hand, at which point it is too late for us to do anything to prepare, or we bring it upon ourselves ahead of time. If we ask the question, “How many people are likely to do that?” —then we are asking the wrong question. A more relevant question is, “Would we be doing this all alone?” And I think the answer is, probably not, because there are quite a few other people who are thinking along these same lines.

Even so, it is very important to understand social inertia for the awesome force that it is. I have found that many people are almost genetically predisposed to not want to understand what I have been saying, and many others understand it on some level but refuse to act on it. When they are touched by collapse, they take it personally or see it as a matter of luck. They see those who prepare for collapse as eccentrics; some may even consider them to be dangerous subversives. This is especially likely to be the case for people in positions of power and authority, because they are not exactly cheered by the prospect of a future that has no place for them.

There is a certain range of personalities that are most likely to survive collapse unscathed, physically or psychologically, and adapt to the new circumstances. I have been able to spot certain common traits while researching reports of survivors of shipwrecks and other similar calamities. A certain amount of indifference or detachment is definitely helpful, including indifference to suffering. Possibly the most important characteristic of a survivor, more important than skills or preparation or even luck, is the will to survive. Next is self-reliance: the ability to persevere in spite of loneliness and lack of support from anyone else. Last on the list is unreasonableness: the sheer stubborn inability to surrender in the face of seemingly insurmountable odds, opposing opinions from one’s comrades, or even force.

Those wishing to be inclusive and accommodating, who want to compromise and to seek consensus, need to understand that social inertia is a crushing weight. Translated, “We must take into account the interests of society as a whole” means “We must allow ourselves to remain thwarted by people’s unwillingness or inability to make drastic but necessary changes; to change who they are.” Must we, really?

There are two components to human nature, the social and the solitary. The solitary is definitely the more highly evolved, and humanity has surged forward through the efforts of brilliant loners and eccentrics. Their names live on forever precisely because society was unable to extinguish their brilliance or to thwart their initiative. Our social instincts are atavistic and result far too reliably in mediocrity and conformism. We are evolved to live in small groups of a few families, and our recent experiments that have gone beyond that seem to have relied on herd instincts that may not even be specifically human. When confronted with the unfamiliar, we have a tendency to panic and stampede, and on such occasions people regularly get trampled and crushed underfoot: a pinnacle of evolution indeed! And so, in fashioning a survivable future, where do we put our emphasis: on individuals and small groups, or on larger entities — regions, nations, humanity as a whole? I believe the answer to that is obvious.

“Collapse” or “Transition”?

It’s rather difficult for most people to take any significant steps, even individually. It is even more difficult to do so as a couple. I know a lot of cases whether one person understands the picture and is prepared to make major changes in the living arrangement, but the partner or spouse is non-receptive. If they have children, then the constraints multiply, because things that may be necessary adaptations post-collapse look like substandard living conditions to a pre-collapse mindset. For instance, in many places in the United States, bringing up a child in a place that lacks electricity, central heating, or indoor plumbing may be equated with child abuse, and authorities rush in and confiscate the children. If there are grandparents involved, then misunderstandings multiply. There may be some promise to intentional communities: groups that decide to make a go of it in rural setting.

When it comes to larger groups — towns, for instance — any meaningful discussion of collapse is off the table. The topics under discussion centre around finding ways to perpetuate the current system through alternative means: renewable energy, organic agriculture, starting or supporting local businesses, bicycling instead of driving, and so on. These certainly aren’t bad things to talk about, or to do, but what of the radical social simplification that will be required? And is there a reason to think that it is possible to achieve this radical simplification in a series of controlled steps? Isn’t that a bit like asking a demolition crew to demolish a building brick by brick instead of what it normally does? Which is, mine it, blow it up, and bulldoze and haul away the debris?

Better living through bureaucracy – A 10-Step programme

  1. Formulate a brilliant plan
  2. Generate community enthusiasm
  3. Get support from industry, government, the UN, the Vatican
    and the Dalai Lama.
  4. Use mass media to generate public awareness.
  5. Form action committees.
  6. Propose new legislation. Lobby parliaments.
  7. Secure corporate sponsorship.
  8. Execute pilot programmes.
  9. Publish papers, present results at conferences

There are still many believers in the goodness of the system and the magic powers of policy. They believe that a really good plan can be made acceptable to all — the entire unsustainably complex international organisational pyramid, that is. They believe that they can take all these international bureaucrats by the hand, lead them to the edge of the abyss that marks the end of their bureaucratic careers, and politely ask them to jump. Now, don’t get me wrong, I am not trying to stop them. Let them proceed with their brilliant schemes, by all means.

There are far simpler approaches that are likely to be more effective. Since most wealth is in private hands, it is actually up to individuals to make very important decisions. Unlike various bureaucratic and civic bodies, which are both short of funds and mired in social inertia, they can act decisively and unilaterally. The problem is, what to do with financial assets before they lose value. The answer is to invest in things that will retain value even after all financial assets are worthless: land, ecosystems, and personal relationships. The land need not be in pristine or natural condition. After a couple of decades, any patch of land reverts to a wilderness, and unlike an urban or an industrial desert, a wilderness can sustain life, human and otherwise. It can support a population of plants and animals, wild and domesticated, and even a few humans.

The human relationships that are the most conducive to preserving ecosystems are ones that are in turn tied to a direct, permanent relationship with the land. They can be enshrined in permanent, heritable leases payable in sustainably harvested natural products. They can also be enshrined as deeded easements that provide the community with traditional hunting, gathering and fishing rights, provided human rights are not allowed to supersede those of other species. I think the lifeboat metaphor is apt here, because the moral guidance it offers is so clear. What has to happen in an overloaded lifeboat at sea when a storm blows up and it becomes necessary to lighten the load? Everyone draws lots. Such practises have been upheld by the courts, provided no-one is exempt — not the captain, not the crew, not the owner of the shipping company. If anyone is exempt, the charge becomes murder. Sustainability, which is necessary for group survival, may have to have its price in human life, but humanity has survived many such incidents before without descending into barbarism.

Gift-giving as an organising principle

Many people have been so brainwashed by commercial propaganda that they have trouble imagining that anything can be made to work without recourse to money, markets, the profit motive, and other capitalist props. And so it may be helpful to present some examples of very important victories that have been achieved without any of these.

In particular, Open Source software, which used to be somewhat derisively referred to as “free software” or “shareware,” is a huge victory of the gift economy over the commercial economy.” Free software” is not an accurate label; nor is “free prime numbers” or “free vocabulary words.” Nobody pays for these things, but some people are silly enough to pay for software. It’s their loss; the “free” stuff is generally better, and if you don’t like it, you can fix it. For free.

General science works on similar principles. Nobody directly profits from formulating a theory or testing a hypothesis or publishing the results. It all works in terms mutuality and prestige — same as with software.

On the other hand, wherever the pecuniary motivation rises to the top, the result is mediocre at best. And so we have expensive software that fails constantly (I understand that the Royal Navy is planning to use a Microsoft operating system on its nuclear submarines; that is a frightening piece of news). We also have oceans full of plastic trash — developing all those “products” floating in the ocean would surely have been impossible without the profit motive. And so on.

In all, the profit motive fails to motive altruistic behaviour, because it is not reciprocal. And it is altruistic behaviour that increases the social capital of society. Within a gift-giving system, we can all be in everyone’s debt, but going into debt makes us all richer, not poorer.

Barter as an organising principle

Gifts are wonderful, of course, but sometimes we would like something rather specific, and are willing to work with others to get it, without recourse to money, of course. This is where arrangements can be made on the basis of barter. In general, you barter something over which you have less choice (one of the many things you can offer) for something over which you have more choice (something you actually want).

Economists will tell you that barter is inefficient, because it requires “coincidence of wants”: if A wants to barter X for Y, then he or she must find B who wants to barter Y for X. Actually, most everyone I’ve ever run across doesn’t want to barter either X for Y, or Y for X. Rather, they want to barter whatever they can offer for any of a number of the things they want.

In the current economic scheme, we are forced to barter our freedom, in the form of the compulsory work-week, for something we don’t particularly want, which is money. We have limited options for what to do with that money: pay taxes, bills, buy shoddy consumer goods, and, perhaps, a few weeks of “freedom” as tourists. But other options do exist.

One option is to organise as communities to produce certain goods that the entire community wants: food, clothing, shelter, security and entertainment. Everyone makes their contribution, in exchange for the end product, which everyone gets to share. It is also possible to organise to produce goods that can be used in trade with other communities: trade goods. Trade goods are a much better way to store wealth than money, which is, let’s face it, an essentially useless substance.

Misleading idea 1: Local/alternative currencies can help

There is a lot of discussion of ways to change the way money works, so that it can serve local needs instead of being one of the main tools for extracting wealth from local economies. But there is no discussion of why it is that money is generally necessary. That is simply assumed. There are communities that have little or no money, where there may be a pot of coin buried in the yard somewhere, for special occasions, but no money in daily use.

Lack of money makes certain things very difficult. Examples include gambling, loan sharking, extortion, bribery and fraud. It also makes it more difficult to hoard wealth, or to extract it out of a community and ship it somewhere else in a conveniently compact form. When we use money, we cede power to those who create money (by creating debt) and who destroy money (by cancelling debt). We also empower the ranks of people whose area of expertise is in the manipulation of arbitrary rules and arithmetic abstractions rather than in engaging directly with the physical world. This veil of metaphor allows them to mask appalling levels of violence, representing it symbolically as a mere paper-shuffling exercise. People, animals, entire ecosystems become mere numbers on a piece of paper. On the other hand, this ability to represent dissimilar objects using identical symbols causes a great deal of confusion. For instance, I have heard rather intelligent people declare that government funds, which have been allocated to making failed financial institutions look solvent, could be so much better spent feeding widows and orphans. There is no understanding that astronomical quantities of digits willed into existence and transferred between two computers (one at a central bank, another at a private bank) cannot be used to directly nourish anyone, because food cannot be willed into existence by a central banker or anyone else.

Misleading idea 2: Science and technology can help

One accusation I often hear is that I fail to grasp the power of technological innovation and the free-market system. If I did, apparently I would have more faith in a technologically advanced future where all of our current dilemmas are swept away by a new wave of eco-friendly sustainability. My problem is that I am not an economist or a businessman: I am an engineer with a background in science. The fact that I’ve worked in several technology start-up companies doesn’t help either.

I know roughly how long it takes to innovate: come up with the idea, convince people that it is worth trying, try it, fail a few times, eventually succeed, and then phase it in to real use. It takes decades. We do not have decades. We have already failed to innovate our way out of this.

Not only that, but in many ways technological innovation has done us a tremendous disservice. A good example is innovation in agriculture. The so-called “green revolution” has boosted crop yields using fossil-fuel inputs, creating generations of agro-addicts dependent on just one or two crops. In North America, human hair samples [3] have been used to determine that fully 69% of all the carbon came from just one plant: maize. So, what piece of technological innovation do we imagine will enable this maize-dependent population to diversify their food sources and learn to feed themselves without the use of fossil-fuel inputs?

We think that technology will save us because we are addled by it. Efforts at creating intelligent machines have failed, because computers are far too difficult to programme, but humans turn out to be easy for computers to programme. Everywhere I go I see people poking away at their little mental-support units. Many of them can no longer function without them: they wouldn’t know where to go, who to talk to, or even where to get lunch without a little electronic box telling them what to do.

These are all big successes for maize plants and for iPhones, but are they successes for humanity? Somehow I doubt it. Do we really want to eat nothing but maize and look at nothing but pixels, or should there be more to life? There are people who believe in the emergent intelligence of the networked realm — a sort of artificial intelligence utopia, where networked machines become hyperintelligent and solve all of our problems. And so our best hope is that in our hour of need machines will be nice to us and show us kindness? If that’s the case, what reason would they find to respect us? Why wouldn’t they just kill us instead? Or enslave us. Oh, wait, maybe they already have!

We’ll need to re-skill and toughen up

Supposing all goes well, and we have a swift and decisive collapse, what should follow is an equally swift rebirth of viable localised communities and ecosystems. One concern is that the effort will be short of qualified staff.

It is an unfortunate fact that the recent centuries of settled life, and especially the last century or so of easy living based on the industrial model, have made many people too soft to endure the hardships and privations that self-sufficient living often involves. It seems quite likely that those groups that are currently marginalised would do better, especially the ones that are found in economically underdeveloped areas and have never lost contact with nature.

And so I would not be surprised to see these marginalised groups stage a come-back. Almost every rural place has its population of people who know how to use the local resources. They are the human component of the local ecosystems and, as such, they deserve much more respect than they have received. A lot of them can’t be bothered about fine manners or speaking English. Those who are used to thinking of them as primitive, ignorant and uneducated will be shocked to discover how much they must learn from them.

Rules for your new life

  1. Conserve energy. Get plenty of rest and sleep a lot. Sleeping burns 10 times less energy than hard physical labour.
  2. Save time. Avoid living to a schedule. Work with the weather and the seasons, not against them.
  3. Pick and choose. Always have more to do than you ever plan to get done.
  4. Have plenty of options. You don’t know what the future holds so (don’t) plan accordingly.
  5. Think for yourself. The popularity of the stupid idea doesn’t make it any less stupid.
  6. Laugh at the world. Make sure to maintain a healthy sense of humour.

So what are we to do while we wait for collapse, followed by good things? It’s no use wasting your energy, running yourself ragged and ageing prematurely; so get plenty of rest, and try to live a slow and measured life. One of the ways industrial society dominates us is through the use of the factory whistle: few of us work in factories, but we are still expected to work a shift. If you can avoid doing that, you will be ahead. Maintain your freedom to decide what to do at each moment, so that you can do each thing at the most opportune time. Specifically try to give yourself as many options as you can, so that if any one thing doesn’t seem to be working out, you can switch to another. The future is unpredictable, so try to plan so as to be able to change your plans at any time. Learn to ignore all the people who earn their money by telling you lies. Thanks to them, the world is full of very bad ideas that are accepted as conventional wisdom, so watch out for them and come to your own conclusions. Lastly, people who lack a sense of humour are going to be in for a very hard time, and can drag down those around them. Plus, they are just not that funny. So avoid people who aren’t funny, and look for those who can laugh at the world no matter what happens.


  1. ttp:// Dated 3 May 2009
  2. The average price of a barrel of oil in 2007 was $65.61 and production was 73.78 million barrels per day. The Gross World Product was $65,610 billion. This means that 2.7% of world output spent on buying oil. In 2008, the average price rose to $91.50, thus pushing the share of world output figure to around 4%.
  3. R,H. Tycot et al., “The Importance of Maize in Initial Period and Early Horizon Peru”, chapter 14 in Histories of Maize: Multidisciplinary Approaches to the Prehistory, Biogeography, Domestication, and Evolution of Maize, J.E. Staller, R.H. Tykot & B.F. Benz eds., Elsevier, 2006, downloadable from

Danger ahead: prioritising risk avoidance in political and economic decision-making

Brian Davey

Now that the financial and political components of the present system have discredited themselves, a fluid situation exists that might allow more viable options to emerge. Local green initiatives, in particular the Transition Towns movement, are gaining in strength and number(s), but do they have the potential to develop the capacity needed at a national level to transform societies’ energy and transport infrastructures?

In a commentary on the Great Depression of the 1930s, the German economic historian Werner Abelshauser noted that the scale of the crisis in its early stages was often underestimated. While still in office, President Hoover saw the worst as being over, and when he came to power in 1933, Roosevelt thought the same. According to Abelshauser, the main actors in the drama lacked what he called “Catastrophe Consciousness.” They simply could not comprehend the scale of what was happening.

In this paper, I argue that the same now holds true for elite thinking and preparedness across a range of issues that were predicted in the 1970s by the group that wrote the Club of Rome Report, the “Limits to Growth”. At the time, this report received a lot of attention but it was widely rubbished by mainstream economists, who helped create a conventional wisdom that the “Limits to Growth” theorists “had been proved wrong”.

Unsustainable growth, “overshoot” and collapse

The subsequent period was marked by the rise of Thatcher, Reagan and market fundamentalism and by the collapse of the communist bloc. A long period of expansion occurred from which most people in the world either did not gain or emerged worse off. The cheap energy powering modern transport and communications enabled globalised capital to move easily to where it wanted — to take advantage of the cheapest pay, most favourable tax opportunities and lowest environmental standards. It is therefore not surprising that while the index of market-based transactions (GDP) soared, the other, less-publicised well-being measures — like the Genuine Progress Indicator or the Index of Sustainable Economic Welfare — stagnated or declined. While the media was full of adverts for the latest energy-guzzling toys and stories showing the luxurious lifestyles of the celebrities, most people could only have a taste of this lifestyle if they ran down their savings or got deeper into debt on a gamble that the equity on their home would continue to rise. The consumer toys they then purchased were bought “on the cheap” because the environmental filth generated in production is offloaded onto people living in or near the new industrial zones in India, China and elsewhere.

In short, this kind of development was highly unbalanced, characterised by the running down of financial savings and natural capital, followed by the piling up of financial debts — and ecological debts too. As the system became grotesquely unequal it became correspondingly unbalanced. The money, and hence the purchasing power, accumulated to the benefit of a few. They then lent it back into circulation, which maintained aggregate demand. After a point however, those who borrowed the money were too poor to service their debts. And when energy prices rose, this finished them off. The financial debt crisis has been very painful for millions of people but they will mostly survive it; what is not clear is whether humanity will survive the crisis of ecological debt.

The “Limits to Growth” theorists had a phrase to describe all of this: “overshoot”. They didn’t deny that growth could occur for a time at high rates, but they argued that it couldn’t last because humanity cannot permanently run down natural capital and degrade sinks — the air, seas and lands that absorb the wastes of economic activity.

Oil and gas depletion is a run-down in natural capital because natural gas and oil are non-renewable. Using them can only be described as sustainable if a proportion is set aside to build up a renewables-based infrastructure that will deliver not only an equal or greater amount of replacement energy over its lifetime, but also the energy needed to replace the renewables infrastructure itself. To date, nothing of the kind has happened.

Wherever one looks in the world, fossil water supplies have not been used sustainably. Soils are being eroded and not restored at anything near the rate required. Perhaps most seriously of all, the use of the atmosphere as a greenhouse gas dump far exceeds safe levels. In a now well-known article, scientist James Hansen and colleagues calculate that a safe level of CO2 in the atmosphere is probably far below 350, possibly as low as 300-325ppm. Yet the atmospheric concentration is already 387 ppm and rising.

Humanity is thus taking from future generations to feed its consumption now or, rather, a very tiny minority is doing so. And this tiny minority — the political and economic elite — is steering planet Earth towards a catastrophe far greater than the credit crunch. They are steering us directly towards an eco-system crunch.

Seeing the trends together: Nature does not do
ceteris paribus

The true magnitude of this crisis can only be ascertained by viewing all the different problems together. Typically, the various threats and problems are examined by specialist media correspondents and editors, specialists in academia and specialist departments in government and local government. These experts are all working within certain conceptual and administrative conventions that parse reality into bite-size chunks that journalists, researchers, officials and policy makers can cope with. The specialisation seems to help them get a better grasp of the issues.

In a generalised system crisis, the opposite is the case: the compartment-alisation that specialisation brings with it precludes a clear overview, one that would tell us that things are far more dangerous and the dangers likely more imminent than we thought. Thus specialists can tell us that a 1 degree Celsius rise in global temperatures will probably lead to a fall in global crop yields of 10%. But to calculate figures like these, specialists have to make assumptions about the context in which 1 degree C rise will happen. The normal assumption is ceteris paribus: all other things being equal or staying the same. However, in a general system crisis, most relevant “other things” are NOT staying the same. They are changing, and very often in an unfavourable way, because one problem exacerbates the others in a chain reaction that becomes a cascade of knock-on effects. Thus, for example, plants grown in warmer temperatures than they are acclimatised to will need adequate water to suit those altered conditions, and if there is a depleted level of fossil water to draw upon, then crop yields may fall a lot more.

The food crisis

If runaway climate change or the Energy Winters predicted by peak-oil theorists are not gloomy enough for you — if you really want to be frightened — then just consider together some of the well-established trends in global food production:

  1. Climate change, leading to a rise in surface temperatures and a decline in crop yields.
  2. Declining regional water availabilities. Falling water tables in countries populated by half the world’s peoples. According to figures quoted by Lester R. Brown, 175 million Indians consume grain produced with water from irrigation wells that will soon be exhausted.
  3. Soil degradation and erosion, bringing increasing desertification.
    Top soil is eroding faster than new soil formation on perhaps one-third of the world’s cropland.
  4. Increased urbanisation and non-farming activities out-compete food production for land and water use.
  5. Fossil-fuel depletion impacting on fertiliser/pesticide availability and costs, reducing access to the inputs that have increased yields over the last few decades.
  6. Decline of biodiversity of food crops, bringing vulnerability to disease just as pesticide costs rise.
  7. Crops used to feed animals rather than humans as affluent meat-based diets become more common.
  8. Biofuels; grains and crops used to feed cars rather than humans.
  9. Depletion of global phosphorous inputs. There’s no research on peak phosphorous but according to the European Fertiliser Association, phosphorous may begin to run out in the second half of the century. And without phosphorous, crop yields will fall by 20-50%.
  10. Global diseases of bee pollinators. British bee populations slumped 30% in the winter of 2007/8, the result either of pesticides, disease, mites and/or milder winters that encourage them to forage too soon. (The Independent)
  11. Rising world population, increasing at 1.14% per annum or an extra 75 million per year (Wikipedia). The cultivated area per person fell from 0.6 hectares per person in 1950 to 0.25 hectares in 2000. (Limits to Growth 30 Year Update, p. 62)
  12. Overfishing, marine pollution and decline of world fish stocks. A 2003 study by a Canadian-German research team published in Nature concluded that 90 percent of the large fish in the oceans had disappeared over the last 50 years.
  13. The bulk of global grain market in the hands of just three companies. Development of “terminator” seeds to concentrate all seed sales in the hands of a corporate elite.

Failed states

In a May 2009 article “Could food shortages bring down civilization?” in Scientific American, Lester R. Brown argues that some of these trends are creating the context for conflict, the breakdown of political administrations and the emergence of “failed states”. Of course, the disintegration caused by resource wars is one other reason for failed states. As oil, natural gas, water, agricultural land and mineral resources become scarcer, so land grabs or destabilising manoeuvres are made to secure privileged access to them; this often underpins conflicts that, at least on the surface, are about ideology or religion.

The growing number of conflicts then has its own self-feeding dynamic. Increasingly “the market” reacts by growing a security, prisons and armaments sector with a vested interest in further sales, while mass psychology becomes more paranoid and sociopathic. Frightened, hostile groups find it more difficult to co-operate to find positive responses to the situations they find themselves in. Meanwhile, quite apart from the misery of living in them, failed states become sources of refugees, disease, piracy and drugs and, arguably as a consequence, breeding grounds for psychopaths.

Disease, ill health and a global public health crisis

The risks of disease and ill health are crucial. Once again, if we put the trends together the picture is far more alarming than if we look at each issue in isolation:

  1. Climate change, bringing extreme temperature and natural catastrophes, and shifting boundaries for insects and pests like mosquitoes.
  2. Weakened immune systems due to malnutrition, stress, and water, air and soil pollution.
  3. Water shortages, creating problems of basic hygiene and health
  4. A combination of resource wars, corruption and collapse of political administrations, leading to weak or non-existent public-health infrastructures and large populations forced into migration.
  5. Extreme concentration of animal factory farming, creating ideal conditions for mutations of pathogens
  6. Urbanisation and globalisation. Rapid travel between densely populated centres creates optimal conditions for rapid transmission of diseases.

Naturally, there are trends working in the other direction. Most systems have feedback effects, including negative feedbacks that act as stabilisers. Thus, when animal diseases like swine flu sweep around the world, some people stop eating meat either temporarily or for good. That the world is in an economic recession has led to a dramatic decline in air travel, which has probably slowed the spread of swine flu.

Scaremongering versus the reasons to be cheerful

The threats, then, seem both real and in some cases imminent. But to present the picture wholly from the negative side is to be accused of “scare mongering” by those techno-optimists and politicians who are confident that while problems exist, they are still manageable. Such people argue that it is alarmist to emphasise negative trends and worst-case scenarios without also highlighting options for responding to those threats. With regard to food, water and soils there are indeed many options for organic production and ecological agriculture. Possibilities exist to improve soils, manage water resources better, enhance and extend biodiversity, integrate alternative forms of aquaculture and fish production, and disperse the concentrations of animals that have become “disease factories” and, because much of their food is made from it, act as a pressure on the price of grain. There are also ways to improve energy efficiency and to promote renewables and policies like Cap and Share that could lock in the carbon gains made.

The real problem is not a lack of potential responses to the truly colossal threats we face. What is genuinely alarming is that the political-economic establishment has a built-in inertia that stops it responding quickly, effectively and adequately to these threats as they present themselves. And while it is true that it has responded relatively quickly, and certainly on a huge scale, to the banking crisis, this is only because making money is the primary purpose of the economic system. Crucially, even though the threats it poses are far graver, as outlined above, the response to the ecological crisis has been totally different. The vast vested interests and financial clout of the corporate elite are based on a fossil fuel – and carbon-powered status quo that wants to see “business as usual” continue in perpetuity. All of which means that the money men drag their feet when it comes to addressing the ecological crisis.

Take this May 2009 quote [1] from The Guardian, for example

America’s oil, gas and coal industry has increased its lobbying budget by 50%, with key players spending $44.5m in the first three months of this year in an intense effort to cut off support for Barack Obama’s plan to build a clean energy economy.

The spoiler campaign runs to hundreds of millions of dollars and involves industry front groups, lobbying firms, television, print and radio advertising, and donations to pivotal members of Congress. Its intention is to water down or kill off plans by the Democratic leadership to pass “cap and trade” legislation this year, which would place limits on greenhouse gas emissions.

The essence of the problem can be expressed in economic terms: those with access to fossil fuel–based technologies are currently far more productive and therefore have a competitive advantage that allows them to undercut their competitors and make the most money. The wealth thus gained also allows them to undermine their political rivals where it really counts — well-connectedness. It enables direct access to those in positions of political authority so they can influence political agendas. Resources are also made available for campaigns to set agendas within the mass media, and in this way to mould public perceptions and public opinion.

Power arrogance and hubris

There is nothing new in the phenomena of power arrogance and hubris. Since the earliest civilisations, rulers have made decisions and overreached their power in the confident belief that they had God on their side. In more modern times our rulers have believed that nature rewards the fittest, in other words, them.

Irrespective of what point in history they emerge, the starting point of most elites is the comfortable assumption that, as things have typically gone right for them in the past, they will continue to go right in the future. This belief is compounded by the fact that for a long time it has been the “little people” who bear the costs while those higher up the food chain reap the benefits. Power means that they are effectively cocooned from the negative kick-back from their actions. Long before the rulers themselves are successfully challenged and fall — and this typically happens only in the final stages — millions of others have already lost out badly and immense damage has been done.

What we term hubris is the cruel arrogance that arises from a failure of bottom-up feedback in systems where vast social and geographical distances exist between the powerful and the powerless. The punishment of Nemesis, the Greek goddess who was supposed to re-impose limits on those who overstepped their power, typically befalls entire societies before it befalls the rulers. Today the vast distance that separates the global elite from ordinary people is magnified further by the high-power technologies of communications, transport, production and weaponry. Nemesis, when she comes, will be global.

Power relationships in the transition

What to do? Marxist acquaintances of mine would probably suggest armed revolution but that would be futile. It would only enhance and exacerbate the current trends towards greater surveillance, paranoia, police powers and militarisation, a war that the powers-that-be would win before we’re all dragged into the vortex of the ecological crisis.

The situation demands that we re-think what political and economic power involves. Because there are a host of things that can and must be done to re-organise society at the level of the household and local community, there’s no need for people of goodwill to wait for politicians to set an example. The Transition Towns movement has shown that immense potential exists for people to organise to do what they can now to get their homes, gardens, local transport arrangements and communities in order for the coming crisis. Increasingly, local politicians are taking their point of departure from the Transition Initiatives. This shows that power comes not solely, or even mainly, from positions of formal political authority; it comes with having the kind of initiative to which others respond and which acts through the power of personal influence and example.

The exercise of power in human society occurs by means of various initiatives. And these initiatives don’t always need to be big. Many of the biggest and most powerful institutions originally started very small.

As individuals and groups we have both needs and problems. To meet the needs and solve the problems, we structure our activities in purposeful ways. And a purpose pursued over time, through an arranged sequence of activities, is an initiative. When we pursue this purpose with other people, we set up organisations and institutions to help us. We agree (or in an authoritarian system impose!) to shared purposes, develop the skills for attaining them, and then assemble and apply the energy, material and financial resources required.

It is a challenging job to get new organisations off the ground around new purposes, bringing together people who may not know each other, developing and applying new skills, and accumulating the other resources for the job — and all from scratch, too. This process is commonly called “capacity building” and it requires all-round leadership.

Capacity building is a process of empowerment in the sense that the group has a growing capacity to achieve its aims. As groups grow they develop a capacity for planning and designing their activities over time, implementing their decisions and then monitoring and reviewing their results. The more a group can achieve, the more resources it will tend to attract and the more it will get noticed in the political process, irrespective of whether any group member occupies a formal position of political power.

Now that we have exceeded the limits to growth, the new conditions of resource scarcity require many initiatives to meet individual and community needs in different ways, closer to home, with less energy and materials. Transition Initiatives highlight a major area for change, one in which most ordinary people can and must participate: the acquisition of new skills, networking, organising initiatives and developing projects. As this process evolves, it’s inevitable that participants will recognise that the state and politics must also change to complement, rather than undermine, what they’re trying to achieve.

It’s obvious to many that to deal effectively with climate change or environmental chaos, energy is best spent seeking to influence or replace those in power, i.e. people in senior positions in politics and business. Politicians typically pass the buck, however, claiming that citizens should change, that they can’t do much until we are ready. This, however, is nothing but an excuse for not getting down to the issues at hand. The truth is that some things we can do on our own, some with state support and some mainly (or only) at state level. If the state is unwilling to act, we can still get on with things locally and join with others nationally and internationally. And when we do, we build the organisational power and the moral authority to eventually transform the state.

Proximal and distal power

Personal circumstances determine the purposes that people pursue. Most ordinary people have, at best, proximal power — the ability to influence that which is immediate in their lives, e.g. what they buy, who they spend time with and so on. But this kind of proximal influence can be considerably extended by networking together in Transition Initiatives and skilling up on a different model. In the end, more ambitious goals for transformation means influencing and changing the structures of distal power.

Distal power transcends proximal power [2]. It is the world in which high politics, high finance and business operates, often behind the scenes, informally in clubs, in social networks of the well connected, in official offices of state. Distal power is the ability to determine the contexts in which others operate. In terms of political power, this means the ability to influence things like interest rates, public expenditure priorities, programme priorities for grant-aid funding, legal frameworks, minimum standards regulations for health and safety, buildings etc.

The danger of co-option: sticking to transitional purposes

I do not wish to deny the usefulness of intervening in the political arena, nor of trying to influence policy. On the contrary, movements like the Transition Initiatives will hopefully become more able to work the system, i.e. find their way around and use the structures of distal power to develop more resilient communities. At the same time, it is to be hoped that engagement with the system does not lead to compromise. Where movements or individuals engage prematurely with more powerful networks, they tend to get co-opted, lose their own agenda and adopt the agenda of the more powerful players. The danger in our case is that that “involvement” would be manipulated to legitimise “greenwashing” and resource-wasting growth. It is important that we stick to our own purposes.

With the vital caveat about the dangers of co-option in mind, we can nevertheless envisage a process where groups like the Transition Initiatives secure changes in the structures of distal power so that they are more amenable to their different purposes. Specifically, it would involve state structures prioritising resilience as the number one item on the public agenda. Resilience would be seen by all as being not only different from a growth agenda, but incompatible with it. Priorities like public health, social cohesion (a priority for vulnerable people who will otherwise become a source of public-health risk), the conservation and maintenance of sustainable energy supplies, would shift to a position where they have the power to trump the provision of more inessential consumer goods.

We will know we have made it in the U.K. when we rewrite the mission statement of the U.K. Treasury, which currently says that its

aim is to raise the rate of sustainable growth, and achieve rising prosperity and a better quality of life with economic and employment opportunities for all.” Its aim ought to be “to secure economic resilience to protect and ensure that the basic needs of all can be met fairly through assisting transformation of the economy in the face of natural capital depletion and environmental limits.

With this kind of state it would be possible to develop a collaborative working relationship between communities, officials and a community economy sector. This last sector would establish ethical living as its goal. It would help communities provide for their basic needs while adjusting to, and coping with, difficult times. The community economic agenda would prioritise fairness and equity to help maintain social cohesion. And as resources become scarcer, social and community enterprise would stand a better chance of surviving conflicts arising from distribution.

Unless and until we can change the state to support these kinds of processes, it will be necessary to grow our abilities to develop purposes in ways that are largely independent of the structures of distal power. This means the development of confidence, skills and resources that do not rely on anything bestowed by the structures of social authority; we will need to development the ability to use our own unutilised energies for the organisation and management of “powerdown” processes.

Contradictions between different parts of the state
and public sector

Firstly, confronted by the limits to growth, current political-economic establishments are having great difficulty acknowledging that citizens will have to change their lifestyles. On the one hand, there is no desire to sponsor a movement in which people might — horror of horrors — lose interest in shopping. After all, what is growth without consumption?

On the other hand, some politicians recognise that many people are having great difficulty holding onto their “lifestyle packages” and these politicians don’t want to give the impression that they’re going to make life even more difficult for these people. Each of us holds in balance a habitat and consumption throughput that must match an income and credit capacity related to our work and sources of income, and which sustains our dependencies and emotional relationships in ways appropriate to our age, health and aspirations. In a time of generalised crisis, people are subjected to agonising decisions because the choices are no longer about which brands to pick on supermarket shelves, but about how to hold the entire lifestyle together without losing one’s home, seeing one’s relationships break up or being unable to cope in a job whose security is in any case precarious. It is therefore no surprise that establishment-based “green” think-tanks and consultants base policy frameworks on the assumption that the public would not be obliged to substantially change their lifestyles. It is simply too unpalatable a message.

As a result, mainstream politics largely cedes the very space where much of the real work of change is needed: the creation of a movement focused on post-consumerist, low-energy lifestyles. I write “largely” because health-promotion agencies and sustainability officials will typically lend their support to projects that promote allotments, community gardens, local food, warmer homes and the like. But such schemes are far from the mainstream and have tiny budgets. And in terms of political traction, they can be a bit toothless.

The politics of the future is therefore one in which these fringe groups, aided and abetted by officials and practitioners working to an increasingly important public-health agenda, are likely to move increasingly into the mainstream, while “economic development”— the industrial and financial activities of the state and the networks in which they operate —come to be seen as largely irrelevant, are discredited or are (rightly) perceived as operating in a way that is eco-socially toxic.

Government decisions that affect the ways the
public changes

While the state will increasingly recognise that it must urge the public to take action to reduce carbon emissions and unnecessary waste, the reverse of this also holds true: that the public will be more sensitive to whether, and in what ways, major government decisions either enhance or undermine what they are being urged to do. People are increasingly aware that unless society as a whole, and unless nations as a whole, take action on climate change, what they do as individuals and communities is futile.

This is a crucial part of the argument for policies like Cap and Share because it cuts through the backsliding and evasion that currently passes for climate policy. If fossil fuels create climate change they should be banned from sale unless with a permit. Period. The limited permission to sell fossil fuels now is temporary. It arises only because we cannot wean ourselves off our addiction to fossil fuels overnight. The number of permits, denominated in greenhouse gas quantities, has to be reduced as quickly as possible down to zero. A policy like this must also be administered in an equitable manner. In contrast to the European Emissions Trading System, which gives away permits, the fossil-fuel suppliers should have to buy in a Cap and Share system. The bulk of the revenue from these sales should go back to the people, shared out on a per-capita basis. The people need these revenues to invest in establishing their houses and communities as the top priority.

If people are to be encouraged to take action at the proximal level and this action is not to be undermined by actions at the distal level, the frameworks themselves must be changed in a complementary way. Cap and Share is one part of ensuring this happens. But it’s not enough on its own. Consistent industrial, transport and agricultural policies are also needed.

Shaping strategic infrastructure decisions

Over and above the reorganisation of local space (homes, gardens and neighbourhoods), some very large-scale bits of engineering are needed to create the broad-scale renewable-energy and transport systems of the future. The techno systems are so large that national-level strategic political decisions have to be made, with major implications for resource allocation. At this point in time the carbon lobby is far too dominant and well entrenched for government to get behind even the most modest non-carbon energy and transport. It will take time to grow a citizens’ movement with the economic clout, momentum and networked resources needed to change this situation, though the pressure for this change will certainly build.

People who take the climate crisis seriously and start to act in their private lives and community are obviously going to be outraged when government takes the sorts of decisions that they have recently in the U.K. by agreeing to a third runway at Heathrow. In the age of the Internet, people can see now only too clearly what is going on when big government and carbon interests cut deals to develop coal power based on the slender hope that Carbon Capture and Storage will work sufficiently and on time. We are therefore likely to see a growing polarisation against big government and big carbon business alliances that currently have a stranglehold on national energy and transport policy.

The scope for change for millions of people is not simply a matter of individual wishes and willpower. The term “lock in” is often used to describe how our economies and societies operate with a technical infrastructure that is replaced only very slowly and at considerable investment cost. While individual and communities can start to change their lifestyles at the local level to a considerable extent, further change will hinge on decisions taken about engineered infrastructures by the organisations that decide on them.  At some point a full follow-through in ecological transformation will be dependent on huge collective planning and investment decisions about the technical infrastructure of society — the fabric of buildings, the transport systems and the power station architecture.    

I use the word “systems” here deliberately because there is a danger of thinking in terms of individual technologies and not seeing that we are actually talking about larger techno-social systems with cross-economy complementarities. Central to the energy system, for example, is the problem of how to deal with intermittency if renewables are to be used to their maximum capacity. There are clearly ways to deal with this — through matching electricity demand to the supply when it’s available (when the wind blows, batteries for electric cars are charged up) as well as through the development of electrical storage capacity. However, the decisions that need to be taken here are big strategic decisions involving industrial, energy and transport policy.

Furthermore, large-scale engineering and building programmes can develop only at a certain pace, and, while it can perhaps be speeded up if we all accept that an emergency exists or is imminent, limits are still set by the time needed to plan, clarify technological, legal and administrative issues, raise finance, train people and get them together in functioning and effective teams. These time issues cannot be wished away.

Capacity building for ‘Powering Up’

The Transition movement has a good chance, over several years, of making an impact on the “Power Down” agenda, but for a “Power Up” agenda to be realised, well-thought-out, strategic decisions must be made in the fields of energy, industry, agriculture and transport. Ideally, taken together these decisions would comprise a consistent plan. But getting such a plan worked up and implemented is not merely a matter of political will; we also need organisation, resources, logistics and skills. The politics cannot move faster than the build-up of the eco-economic capacity.

Free-market fundamentalists might well say that the state is likely to do a thoroughly bad job if it has too much influence over big infrastructure decisions. They might thoroughly dislike my implied dirigiste argumentation. They might be right. However, rather than states backing the wrong systems, I fear we’re more likely to see a failure of states to back any coherent large-scale system plans at all.

Given the short-term nature of the parliamentary system and the huge scale on which we now have to re-cast the entire energy, transport, agricultural and industrial systems, given the competing vested interests with their rival approaches, given the credit crunch, given peak oil and its capacity to bring the economy to its knees, given the enormous complexity of all these things, I believe that politicians and the state are simply incapable of making strategic decisions on the scale necessary. What we will get instead is a lot of floundering and procrastination disguised with rhetoric. Indeed, although there has been a lot of rhetoric about Green New Deals, there has been almost no spending on climate or environmental agendas.

This situation echoes the ideas of Joseph Tainter: that societies collapse not because of stress surges per se, but because, when stress surges occur, circumstances have become so complex that the authorities are overwhelmed by all the complications to the point of being unable to provide a response and see it through. This dynamic defines the larger and longer term challenge. We are threatened with a future of breakdowns, extreme weather events and epidemics, all observed by an increasingly paralysed state and an elite that masks the collective self-deception using the machines of the PR industry and the mass media. The race will be on to develop a coherent ecological package to forestall the growth of extremist parties. These parties will focus on people’s mass anger and despair and on simplistic messages of hatred — blaming and persecuting scapegoats like ethnic minorities, immigrants, the rich or the growing numbers of environmental refugees.

Can a new movement of ecological activists unfold to the extent that one is needed? Can it move from proximal to distal agendas without co-option? As it evolves, can it find within itself the necessary financial acumen, skills and organisational resources to create realistic and realisable plans? Will it be able to create the minimal necessary renewable-generating capacity and the minimal necessary alternative transport network and cultivational system? Given the collapse in the credibility and legitimacy of the carbon mainstream, can this nascent movement find sufficient popular political support to take over and transform the state in a peaceful process to oversee the development of an alternative ecological resilience package? I believe that yes, of course it can.


  2. This terminology of ‘proximal power’ and ‘distal power’ is taken from David Smail’s The origins of Unhappiness HarperCollins, 1993)