By the time you read these words they will have been sitting on my computer for most of a week; the chance to attend the annual ASPO peak oil conference in Sacramento was too good to pass up, and I’ll be on the road during the window of time I normally use to compose these essays. It’s an interesting time to be second guessing the future, too, for as I type these words, the world’s financial markets are in chaos. The collapse of Lehman Brothers, one of the longest established brokerage houses in the New York market, followed by the forced sale of Merrill Lynch and the near-collapse of insurance giant AIG, seem finally to have made it clear to the world’s investors that the mountain of unpayable debt weighing on the global economy is a problem that can no longer be ignored.
Just how bad that problem will become is anybody’s guess. Stock markets worldwide are down steeply but, at least as of this writing, not yet in freefall, and massive government intervention in the credit markets has staved off a liquidity crunch. Over the longer term, though, investments supposedly worth trillions of dollars are going to have to be written off, and companies that padded their balance sheets with those investments are now facing a scramble for survival that many will fail. An entire economy built around the exchange of exotic IOUs is coming apart at the seams, and the economic structures that will replace it are not yet in sight.
A growing number of voices are proclaiming that the current crisis marks the beginning of a major economic downturn; the word “depression,” until recently taboo in polite financial company, is even being heard. Now it’s worth pointing out that we have as yet no way of knowing whether or not things will get that bad. The 1987 “Black Friday” crash, which saw the Dow Jones Industrials lose 22% of their value in a single day of trading, was followed by the same sort of proclamations; so was the unraveling of the tech boom in 2000. Both slumps, severe as they were, led to relatively modest recessions. It’s possible – though admittedly not very likely – that the same thing could happen this time.
Yet it also has to be remembered that not too long ago, economic depressions were simply a fact of life. In the 19th century, before government regulation restrained the excesses of the business cycle, major economic depressions happened every twenty or thirty years on average; most people could expect to live through two or three of them. The New Deal reforms of the 1930s, which restricted the vagaries of the business cycle, made depressions a thing of the past; still, those reforms were tossed aside in the deregulatory frenzy of the 1980s and 1990s, and unless they get put back in place, we will all likely have to get used to depressions again.
Counterintuitive though it may seem, furthermore, a serious depression right now may just be the best thing that could happen to the United States. I don’t say this by way of passing judgment, or in the spirit of schadenfreude that seems to surround so many predictions of social catastrophe. Rather, a good many of the dysfunctions that are dragging America to ruin will be immediately unsustainable in a time of depression, and a certain amount of economic suffering now could spare the American people a far worse experience later on. Here are some examples.
1. The End of American Empire
Right now America is as addicted to empire as any inner-city crackhead to cocaine. We support the world’s most bloated military, with troops and bases in more than a hundred countries, in order to enforce a global economic order that allows the 5% of the world’s people who live in the United States to use roughly a third of the world’s resources. At the same time, empires are costly pets, and ours – like every other empire in history – is becoming an economic burden our nation can no longer support; at the same time, the drastic decrease in US living standards that would follow the end of American empire is a political time bomb nobody wants to touch. Caught in that dilemma, the United States seems determined to follow the usual course of past empires, allowing its imperial commitments to drag it down.
A depression, however, would force the issue. In the midst of economic collapse, the United States would be no more able to maintain a global military presence than Russia was after its own collapse. The troops would have to come home – not just from Iraq and Afghanistan, but from the whole far-flung web of US military bases – and resources now being drained by the incubus of empire would be available for more constructive tasks, such as preparing for the onset of peak oil.
2. Energy Availability
A serious depression would also have predictable effects on energy use. The economic troubles of the 1970s and early 1980s, mild as they were by depression standards, played a noticeable role in causing energy use to drop sharply during those same years; when people don’t have money, they don’t spend it on unnecessary energy, and they are also likely to take conservation measures that cut into energy use even further.
By many estimates, we are only a few years from serious decreases in world petroleum production. Any significant response to this crisis will, ironically enough, require more fossil fuel energy – it takes energy, after all, to manufacture insulation, rebuild railways, and make wind turbines, and most of that energy will have to come from existing sources. If energy prices spiral out of sight, many such projects will be out of reach. A depression, on the other hand, will force down demand, keeping prices from rising and making it possible to build for the post-fossil fuel era. Public works projects such as the Depression-era Civilian Conservation Corps could also be directed toward energy conservation and renewable resources.
3. From Offshoring to Onshoring
Another likely result of a serious depression would be the rebirth of a domestic manufacturing economy in America. Right now the US economy produces very little but debt; that’s the way the tribute economy of America’s global empire works. The results have been profitable not only for the political classes but also for the middle class, which gets to buy all the consumer goods it wants without having to pay what it would cost to hire Americans to make them; the poorer two-thirds of the population, by contrast, has been hammered by predatory economic policies that replace well-paid factory jobs with minimum wage positions flipping hamburgers.
The global economy that made offshoring possible, though, will be an early casualty of a serious depression, and when the US either defaults on its national debt or hyperinflates its currency – and it will have to do one or the other of these, sooner or later, to get out from under the burden of unpayable debt – the unraveling of the global marketplace will be complete. Once that happens, goods and services for the American market will have to be produced here, and the rebuilding of domestic manufacturing capacity will follow. This will make it much easier for America to survive the transition to the age of scarcity industrialism now dawning around us.
4. Decreasing Income Disparities
Meanwhile, the huge disparities in income that separate the upper third of Americans from the rest of the population will unravel. Economic boomtimes are always periods of increasing social inequality, because investment income is concentrated in the upper income levels; depressions are income levelers for the same reason. In the 1920s, income disparity soared to levels that were not reached again until the Reagan years; in the 1930s, as investments of all kinds plunged in value, the gap between the rich and the rest dropped to historic lows. The same thing is true today; essentially all the exotic investments that drove the recent boom were available only to the rich, who thus have earned the privilege of losing their shirts as those investments unwind.
The narrowing of income disparities isn’t simply an issue of class jealousy; it powerfully affects the functioning of the economy. When the working classes have money, they spend it on goods and services, helping to maintain economic well-being. When the rich have money, they are more likely to invest it in speculative instruments that contribute much less. Speculation is a parasite on the economy, and it is quite capable of killing its host; that’s essentially what’s going on right now. An economy with lower income disparities is more stable and productive than one with the drastic disparities we have now, and we need a more stable and productive economy in order to deal with the instabilities that will follow the end of the age of cheap fossil fuels.
5. We’re Headed There Anyway
The most important impact depression could have is also the one that most people will enjoy the least: most of us will have to learn to make do with fewer of the comforts, conveniences, and opportunities that we have all learned to expect. For the last sixty years most Americans have enjoyed lives of relative opulence, even as the resource base and manufacturing economy that made that opulence possible has trickled away. The last few decades have seen desperate attempts to replace these losses with exotic financial instruments and an increasingly strident imperial policy overseas. These measures worked for a while, but now the bill is coming due.
At the same time, the end of America’s age of opulence comes as the world’s ability to supply itself with cheap abundant fossil fuels is becoming steadily more problematic. In a world of scarce energy, the opulence of the recent past will no longer be in reach for anybody. The sooner we begin retooling our lives to deal with that reality, the better off we will all be in the future. A depression would thus bring about changes that are going to happen anyway, and would do it at a time when the world could still devote significant amounts of energy to the transition.
No matter what we do, the way there won’t be easy. Hard times are hard times, and it’s a waste of time trying to sugarcoat that fact. Still, an economic contraction beginning now – before peak oil has a chance to force the issue – could give us a crucial margin of lead time.
Wednesday, September 24, 2008
Wednesday, September 17, 2008
The Effluent Society
The latest round of convulsions in the world’s financial markets has caused a great deal of panic among pundits and ordinary citizens alike. I have to admit, though, that I don’t share their consternation. One benefit of living on a writer’s limited means is that I don’t have the funds to spare for investment – like most of my generation, I’ll never be able to afford the luxury of retirement; unlike most of my generation, I’m well aware of this fact – and the lack of any personal stake in the fate of Wall Street makes it possible to sit back and watch the carnage with a certain degree of detachment.
Of course it doesn’t hurt that most of the money lost in the recent troubles never existed in the first place. The wealth allegedly created by rising house prices, for example, consists of nothing more than the belief that a great many houses could be sold by their owners for more than their previous purchase price. Only a small fraction of said owners can actually sell their homes at any one time without crashing the price – this is, after all, how housing bubbles inevitably end – but while the bubble lasts, even the most theoretical increase in value is treated as cash on the barrel. The popping of the bubble, in turn, simply dispels the delusion that these evanescent gains are actually worth anything.
Still, my habit of reaching for the popcorn instead of the panic button when the stock market swoons has another source. It’s sitting on a bookshelf a few steps from the desk where I’m writing this: a much-read copy of The Great Crash 1929 by the late John Kenneth Galbraith. The Great Crash is considered the definitive history of the speculative bubble and bust that ushered in the Great Depression; it is also the funniest work of serious economic history ever written. Galbraith’s wry humor and his superb grasp of economic process make it arguably the best introduction to the way that markets run amok and bring about their own worst nightmares.
As this suggests, bubbles rise and burst with tolerable regularity. The crucial lesson of Galbraith’s book is that what’s happening now has happened before. Dozens of times in the past, people convinced themselves that the world had entered a new economic era in which getting something for nothing was the way things worked. Dozens of times in the past, markets driven by this giddy conviction soared to absurd heights, then plunged back to earth with a resounding thud. Even the rhetoric repeats itself so precisely that you can time the market by it; when leading political figures respond to a market slump, for example, by insisting that the economic fundamentals are in good shape – an utterance that has already passed the lips of several American politicians, including John McCain – it’s always time to head for the exits.
What this implies, of course, is that the end of a bubble is not the end of the world. This is not to say it will have no impact. A great many people who thought they had huge amounts of money, and who made dismally bad decisions on that basis, will have to deal with the consequences. A great many companies made the same mistakes on an even larger scale, and face bankruptcy in many cases and massive layoffs in others; the impact on employment levels, tax revenues, and many other aspects of our collective life will not be small. If the consequences are handled clumsily enough by government and the upper levels of business, the end result could be – well, since the word “depression” has been gently shepherded out of the realm of public discourse, let’s call it the Great Recession, a period of economic contraction and retrenchment that could easily run on for a decade and leave America’s economic and political life in shreds.
All this has happened before. Only the comfortable delusion of American exceptionalism – a belief that manages to ignore all of American history before 1950, and assumes that the second half of the 20th century will repeat itself in a tape loop until the end of time – makes many Americans think that it can’t happen now, or that it won’t happen again. Yet that same delusion makes it hard to remember that our society survived this same process many times before, and will doubtless survive it once again. Nations have perished for many reasons, but curiously enough, financial collapse is not one of them – a reminder, if one is needed, that money is not wealth, but simply a tool for facilitating the exchange of that real wealth that consists of goods and services provided by people for people.
Over the last two decades or so, I’ve had quite a few occasions to reflect along these lines. Beginning with 1987’s Black Friday, which ushered in the current era of financial instability, economic crashes and convulsions of one sort or another have come at fairly regular intervals, and each time Galbraith’s book has offered a useful counterpoint to the pronouncements of the moment. This time, though, has been spiced with an additional dose of irony, for a few weeks ago one of the used book stores here in Ashland provided me with a dog-eared old copy of what was once Galbraith’s most famous book, The Affluent Society.
Some economists spend their lives writing in obscurity, and some become famous without seeing their ideas put into practice. Galbraith was not so lucky. Published in 1958, The Affluent Society argued that the United States had achieved a self-sustaining level of opulence to which the old laws of economic scarcity no longer applied, and that this abundance could support sweeping public programs to eliminate poverty and provide amenities for all. These claims became holy writ in mid-20th-century liberal circles, and drove most of a generation of American public investment, from Johnson’s Great Society on down. In the process, it committed America to unsustainable public expenditures that set the stage for the economic troubles of the Seventies, and helped drive the backlash of the Eighties that replaced tax-and-spend Democrats with borrow-and-spend Republicans. By the time Galbraith died in 2006, he was treated by most economists with that dismissive fondness reserved for proponents of failed ideologies.
The Affluent Society has been much critiqued by those economic thinkers whose faith in the omniscience of the free market rivals a medieval peasant’s trust in the miracle-working powers of the bones of the local saint, but it seems to me that the book’s major flaw has been missed by these writers. Ironically, Galbraith in The Affluent Society fell into the same trap he critiqued in The Great Crash: the belief that economic reality had changed and the old rules no longer applied. He was quite correct to note that America in the 1950s had become stunningly wealthy, but he was quite wrong to think that this wealth was more than a temporary phenomenon.
Two factors gave postwar America the longest period of sustained economic expansion in its history. First, the accident of geography that put nearly all the battles and air raids of the Second World War on other nations’ territory left the United States in a unique position at the war’s end. Every other industrial power on the planet had had its factories and cities pulverized by enemy action; America, and only America, was left with its industrial plant intact. For more than a decade after 1945, as a result, America dominated the world’s markets for most industrial goods, and profited mightily as a result. By the time The Affluent Society saw print, though, this dominance was already fading, and within another decade it would be a thing of the past.
Just as important as America’s industrial predominance was its role as the world’s largest producer of crude oil. In 1950, for example, the United States produced as much petroleum as the rest of the world put together. Its huge market share allowed it to prosper in the same way that oil sheikdoms are prospering today. By the end of the 1950s, however, the vast American thirst for cheap energy had turned the United States into a net importer of oil; by 1970, US petroleum production peaked and began its irreversible decline as America’s oil reserves began skidding down the far side of Hubbert’s peak. All this made the opulence of the Fifties a passing phase, and turned Galbraith’s prescription for a better society into an expensive flop.
Behind both these failures, it seems to me, is the besetting sin of modern economics, the failure to ground economic factors in their historical and ecological contexts. The index of The Affluent Society contains no entries for “energy,” “coal,” or “petroleum;” while Galbraith briefly raises the issue of resource depletion at the end of his book, he presents it purely as a challenge that could be solved with an adequate supply of scientific talent. The role of contingent historical events in launching American society on its trajectory through affluence and out the other side gets equally short shrift in Galbraith’s book. Neither of these faults is unique to Galbraith; they pervade the entire discipline of economics, which has consistently tried to impose timeless laws on the grubby historical realities of economic life, and has just as consistently ignored the role of natural systems as a primary source of economic value.
It’s for these reasons, I’ve come to think, that a society guided by economic ideas treats pollution as an amenity problem, rather than a factor that can reduce the Earth’s ability to support human societies, and treats resource scarcity as something that can be solved by investing more money, rather than a hard limit to growth. On a larger scale, it’s for these reasons that the three-hundred-year boomtime of industrialism looks normal to so many people today. Looked at with an eye tempered by the cycles of history and the principles of ecology, it takes on a very different shape; its similarity to a speculative bubble is hard to miss; its dependence on reckless, unsustainable exploitation of half a billion years of stored photosynthetic energy, in the form of the Earth’s fossil fuel reserves, becomes just as visible as the dependence of the late housing bubble on wild overestimates of how much future buyers would pay for homes.
Thus the last three centuries of industrialism have given us, not an affluent society, but an effluent one: effluent in the literal sense – one that pours out its waste on the living Earth that supports it – and also in the deeper sense of its Latin roots, ex-fluere, to flow out or away. By ignoring its own dependence on functioning natural systems and the nonrenewability of the resource base that allows it to function, it is causing the historic and ecological conditions that allowed it to emerge and flourish to trickle away out of reach. The history of industrial humanity may therefore turn out to be a repetition, on a much larger scale, of the same sequence of bubble and bust that is heading to its normal conclusion in the world’s financial markets right now; it’s pleasant to think that a future equivalent of John Kenneth Galbraith might someday write the history of that larger boom and bust for the edification of our descendants.
Of course it doesn’t hurt that most of the money lost in the recent troubles never existed in the first place. The wealth allegedly created by rising house prices, for example, consists of nothing more than the belief that a great many houses could be sold by their owners for more than their previous purchase price. Only a small fraction of said owners can actually sell their homes at any one time without crashing the price – this is, after all, how housing bubbles inevitably end – but while the bubble lasts, even the most theoretical increase in value is treated as cash on the barrel. The popping of the bubble, in turn, simply dispels the delusion that these evanescent gains are actually worth anything.
Still, my habit of reaching for the popcorn instead of the panic button when the stock market swoons has another source. It’s sitting on a bookshelf a few steps from the desk where I’m writing this: a much-read copy of The Great Crash 1929 by the late John Kenneth Galbraith. The Great Crash is considered the definitive history of the speculative bubble and bust that ushered in the Great Depression; it is also the funniest work of serious economic history ever written. Galbraith’s wry humor and his superb grasp of economic process make it arguably the best introduction to the way that markets run amok and bring about their own worst nightmares.
As this suggests, bubbles rise and burst with tolerable regularity. The crucial lesson of Galbraith’s book is that what’s happening now has happened before. Dozens of times in the past, people convinced themselves that the world had entered a new economic era in which getting something for nothing was the way things worked. Dozens of times in the past, markets driven by this giddy conviction soared to absurd heights, then plunged back to earth with a resounding thud. Even the rhetoric repeats itself so precisely that you can time the market by it; when leading political figures respond to a market slump, for example, by insisting that the economic fundamentals are in good shape – an utterance that has already passed the lips of several American politicians, including John McCain – it’s always time to head for the exits.
What this implies, of course, is that the end of a bubble is not the end of the world. This is not to say it will have no impact. A great many people who thought they had huge amounts of money, and who made dismally bad decisions on that basis, will have to deal with the consequences. A great many companies made the same mistakes on an even larger scale, and face bankruptcy in many cases and massive layoffs in others; the impact on employment levels, tax revenues, and many other aspects of our collective life will not be small. If the consequences are handled clumsily enough by government and the upper levels of business, the end result could be – well, since the word “depression” has been gently shepherded out of the realm of public discourse, let’s call it the Great Recession, a period of economic contraction and retrenchment that could easily run on for a decade and leave America’s economic and political life in shreds.
All this has happened before. Only the comfortable delusion of American exceptionalism – a belief that manages to ignore all of American history before 1950, and assumes that the second half of the 20th century will repeat itself in a tape loop until the end of time – makes many Americans think that it can’t happen now, or that it won’t happen again. Yet that same delusion makes it hard to remember that our society survived this same process many times before, and will doubtless survive it once again. Nations have perished for many reasons, but curiously enough, financial collapse is not one of them – a reminder, if one is needed, that money is not wealth, but simply a tool for facilitating the exchange of that real wealth that consists of goods and services provided by people for people.
Over the last two decades or so, I’ve had quite a few occasions to reflect along these lines. Beginning with 1987’s Black Friday, which ushered in the current era of financial instability, economic crashes and convulsions of one sort or another have come at fairly regular intervals, and each time Galbraith’s book has offered a useful counterpoint to the pronouncements of the moment. This time, though, has been spiced with an additional dose of irony, for a few weeks ago one of the used book stores here in Ashland provided me with a dog-eared old copy of what was once Galbraith’s most famous book, The Affluent Society.
Some economists spend their lives writing in obscurity, and some become famous without seeing their ideas put into practice. Galbraith was not so lucky. Published in 1958, The Affluent Society argued that the United States had achieved a self-sustaining level of opulence to which the old laws of economic scarcity no longer applied, and that this abundance could support sweeping public programs to eliminate poverty and provide amenities for all. These claims became holy writ in mid-20th-century liberal circles, and drove most of a generation of American public investment, from Johnson’s Great Society on down. In the process, it committed America to unsustainable public expenditures that set the stage for the economic troubles of the Seventies, and helped drive the backlash of the Eighties that replaced tax-and-spend Democrats with borrow-and-spend Republicans. By the time Galbraith died in 2006, he was treated by most economists with that dismissive fondness reserved for proponents of failed ideologies.
The Affluent Society has been much critiqued by those economic thinkers whose faith in the omniscience of the free market rivals a medieval peasant’s trust in the miracle-working powers of the bones of the local saint, but it seems to me that the book’s major flaw has been missed by these writers. Ironically, Galbraith in The Affluent Society fell into the same trap he critiqued in The Great Crash: the belief that economic reality had changed and the old rules no longer applied. He was quite correct to note that America in the 1950s had become stunningly wealthy, but he was quite wrong to think that this wealth was more than a temporary phenomenon.
Two factors gave postwar America the longest period of sustained economic expansion in its history. First, the accident of geography that put nearly all the battles and air raids of the Second World War on other nations’ territory left the United States in a unique position at the war’s end. Every other industrial power on the planet had had its factories and cities pulverized by enemy action; America, and only America, was left with its industrial plant intact. For more than a decade after 1945, as a result, America dominated the world’s markets for most industrial goods, and profited mightily as a result. By the time The Affluent Society saw print, though, this dominance was already fading, and within another decade it would be a thing of the past.
Just as important as America’s industrial predominance was its role as the world’s largest producer of crude oil. In 1950, for example, the United States produced as much petroleum as the rest of the world put together. Its huge market share allowed it to prosper in the same way that oil sheikdoms are prospering today. By the end of the 1950s, however, the vast American thirst for cheap energy had turned the United States into a net importer of oil; by 1970, US petroleum production peaked and began its irreversible decline as America’s oil reserves began skidding down the far side of Hubbert’s peak. All this made the opulence of the Fifties a passing phase, and turned Galbraith’s prescription for a better society into an expensive flop.
Behind both these failures, it seems to me, is the besetting sin of modern economics, the failure to ground economic factors in their historical and ecological contexts. The index of The Affluent Society contains no entries for “energy,” “coal,” or “petroleum;” while Galbraith briefly raises the issue of resource depletion at the end of his book, he presents it purely as a challenge that could be solved with an adequate supply of scientific talent. The role of contingent historical events in launching American society on its trajectory through affluence and out the other side gets equally short shrift in Galbraith’s book. Neither of these faults is unique to Galbraith; they pervade the entire discipline of economics, which has consistently tried to impose timeless laws on the grubby historical realities of economic life, and has just as consistently ignored the role of natural systems as a primary source of economic value.
It’s for these reasons, I’ve come to think, that a society guided by economic ideas treats pollution as an amenity problem, rather than a factor that can reduce the Earth’s ability to support human societies, and treats resource scarcity as something that can be solved by investing more money, rather than a hard limit to growth. On a larger scale, it’s for these reasons that the three-hundred-year boomtime of industrialism looks normal to so many people today. Looked at with an eye tempered by the cycles of history and the principles of ecology, it takes on a very different shape; its similarity to a speculative bubble is hard to miss; its dependence on reckless, unsustainable exploitation of half a billion years of stored photosynthetic energy, in the form of the Earth’s fossil fuel reserves, becomes just as visible as the dependence of the late housing bubble on wild overestimates of how much future buyers would pay for homes.
Thus the last three centuries of industrialism have given us, not an affluent society, but an effluent one: effluent in the literal sense – one that pours out its waste on the living Earth that supports it – and also in the deeper sense of its Latin roots, ex-fluere, to flow out or away. By ignoring its own dependence on functioning natural systems and the nonrenewability of the resource base that allows it to function, it is causing the historic and ecological conditions that allowed it to emerge and flourish to trickle away out of reach. The history of industrial humanity may therefore turn out to be a repetition, on a much larger scale, of the same sequence of bubble and bust that is heading to its normal conclusion in the world’s financial markets right now; it’s pleasant to think that a future equivalent of John Kenneth Galbraith might someday write the history of that larger boom and bust for the edification of our descendants.
Wednesday, September 10, 2008
The Retrofit Economy
I’ve suggested several times in these essays that the broad shape of the most likely future facing industrial society, at the end of the age of cheap abundant energy, can be sorted out very roughly into three phases: the age of scarcity industrialism, the age of salvage societies, and – if we are lucky – the ecotechnic age, when new societies based on sustainable high technology will rise on the ruins of our own unsustainable time. For a variety of reasons, any typology of this sort is easy to misunderstand, and it seems worthwhile just now to clarify what I intend to say, and what I don’t, in proposing this model of the future.
The most important point that needs making, it seems to me, is that these three phases are to some extent ideal types, and the forms they take on the ground of actual history will be far more complex, messy, and idiosyncratic than the simple outline suggests. This isn’t simply a result of the fact that none of these phases have arrived yet. The same thing can be said, after all, of the use of economic phases to talk about history that’s already happened.
When a historian suggests that England embraced a mercantilist economic system in the sixteenth century, for instance, she does not mean that the English economy shifted gears all at once on January 1, 1501. Nor does she mean that the English economy in that century lacked important features of the older feudal-agrarian economy or foreshadowings of the capitalist economy that replaced mercantilism later on, nor that the English mercantilist economy was identical to all others. Rather, she means that the traits implied by the term “mercantilism” – an export-based economy geared toward generating a favorable balance of trade with competing nations, foreign policy initiatives pursuing overseas colonies and the expansion of naval power and a merchant marine, and the like – provide a workable sketch of the shape toward which the English economy moved over the course of the century in question.
The same rule applies to the phases I’ve outlined here. The transition from today’s industrialism of abundance to the scarcity industrialism of the near future, for example, will likely be just as slow and ragged a process as the rise of mercantilism. Some nations – Russia, for example – have already implemented the political control of resource markets that I’ve suggested as a core feature of the phase; other nations have barely begun to move in that direction, and other features of the phase are just as unevenly distributed. For that matter, the 1950s-era American autos cruising down the streets of Havana today, repeatedly rebuilt with scavenged and jerry-built parts, show certain core features of the salvage economy already in existence in some parts of the world right now.
Thus the world of a hundred years from now, say, will include nations at many different points along the scale. It will very likely be dominated by nations that have embraced scarcity industrialism, while the powers of today’s age of abundance will be the fallen empires and failed states of that day. Meanwhile, those nations that draw the short straws in the geopolitical lottery may already be well into the salvage society phase, mining the refuse of the industrial age to meet local needs and to pay for whatever foreign trade can still be had. Nations that lack both fossil fuels and valuable salvage, in turn, will either have fallen back to agrarian or nomadic economies or, given plenty of luck and the necessary knowledge base, may be pioneering the first rough sketch of an ecotechnic society. All of this will take place amid the turmoil of ordinary history: that unending and uneven rhythm of crises, struggles, and the rise and fall of governments and peoples whose embarrassingly premature obituary Francis Fukuyama wrote a few years back, and which tends to hide the slower and broader shifts in economy and subsistence from contemporary eyes.
Fast forward another century, when Hubbert’s curve will have finished its trajectory and fossil fuels will be rare geological specimens, and the powers of the age of scarcity industrialism will most likely have collapsed in their turn. Those areas with a wealth of salvageable scrap and the political and military savvy to hold onto them will be the regional powers of a world in which global reach no longer exists, while other areas – the modern conception of the nation-state will probably have fallen into history’s recycling bin by then, to be replaced by some other form of geopolitical arrangement – will have only sustainable resources to rely on; some of those will likely have settled into some nonindustrial mode for the long term, while others may be building on the first tentative foundations of an ecotechnic system. All these changes, once again, will take their shape amid the rough and tumble of historical events, and may be difficult to track against that wildly variable background.
One implication of this vision is that appropriate steps for the present and the near future are not limited to those that have some obvious relationship to the scarcity industrialism of the near future. If, unlikely as it seems, any of my readers belong to the political, economic, or military leadership of one of the world’s leading or rising powers, their attention will be, and indeed should be, riveted to the coming of scarcity industrialism; the nations they lead, not to mention their own positions of influence and privilege, depend utterly on how well they are able to manage that difficult transition. For the rest of us, though, a broader focus and a less limited toolkit has many advantages. The end of the age of abundance industrialism means the end of the trickle-down economy that provided so many economic benefits to the middle classes and raised the industrial world’s working classes out of abject poverty. To some extent, while the political classes will be entering a new industrial order, those outside that circle may just find themselves passing directly into the world of Dark Age salvage societies. What this implies, in turn, is that the skills and habits of the age of salvage may be well worth cultivating right now.
One obvious example unfolds from the implications of the sprawling speculative subdivisions that surround so many American cities just now, in the aftermath of the late housing bubble. For decades now, people interested in sustainable housing have focused their attention on innovative methods of new house construction: cobb and adobe, straw bale, and many more. These are useful and in some cases brilliantly successful technologies, but their application to our present predicament is limited by one overarching factor: here in America, at least, we already have many more houses than we need or can afford, and the economic system we use to pay for new houses is so badly broken just now that it may take a generation or more to get a new one up and running.
That being the case, the dream of sustainable Levittowns of cob-built, earth-sheltered, solar-heated houses will remain out of reach for a good long time. The possibilities before us are more limited. We can either struggle on with the hopelessly inefficient housing stock we have now in its current state, or we can learn how to rework our existing homes to improve their energy efficiency: that is, we can learn to retrofit.
The word “retrofit” was coined in the 1950s, but its common use is one of the legacies of the energy crises of the 1970s. During those years, a great many homeowners discovered that houses built to take advantage of cheap energy lost most of their advantages when energy stopped being cheap. At the same time, the soaring interest rates and stagflation of that decade made buying a new home a good deal less economically viable than it had been during the preceding years. Many people responded by figuring out cheap, effective ways to improve the energy efficiency of their existing homes. Insulating blankets found their way around hot water heaters, caulk guns traced lines around leaky foundation plates, insulated Roman blinds replaced fashionable curtains, and a surprising number of people discovered that it really is just as comfortable to put on a cardigan as it is to turn up the thermostat on a cold evening.
One of the less noticed phenomena of these same years, in turn, was the emergence of home energy retrofitting as a viable economic sector. In every American city and a great many smaller towns, contractors no longer able to find work building houses found a new niche installing insulation, storm windows, and solar water heaters, while hardware stores found room for a new section of home energy efficiency supplies. It was never a large sector, and its growth came to a sudden stop in the early 1980s in the flurry of political machinations that crashed the price of oil and threw away our best chance for a transition to sustainability, but it was one of the few success stories at a time when most American industries were contracting and most families’ standard of living was slipping year after year.
Many of those same conditions are repeating themselves on a much larger scale as the world stumbles across the uneven plateau on top of Hubbert’s peak. Despite the recent volatility in the futures markets, oil remains far more expensive than it was a year ago; one step down for every two steps upward still amounts to steady upward movement. The approaching Great Recession promises to make the stagflation of the Seventies look mild, but to American families it still poses the same challenge of having to get by with less. Thus it’s tolerably likely that the same sort of retrofit economy will emerge in the next few years, as those homeowners who stayed clear of the blandishments of fast-talking mortgage salesmen, and keep their homes, find that they have no choice but to make the best of the homes they have.
The same considerations apply to other sectors of the economy. The auto industry is facing a similar transition, for example, as mechanics and hobbyists across the country turn used cooking oil into biodiesel, convert hybrid cars into plug-in vehicles, and equip bicycles and scooters with electric motors and batteries. Detroit’s much-ballyhooed electric cars, when they finally get around to appearing on the market, are likely to find themselves eating the dust of thousands of ingenious retrofitters who, unburdened with the institutional inertia of Fortune 500 corporations, are getting products to local markets right now. These retrofits won’t allow what James Howard Kunstler has usefully labeled “the paradise of happy motoring” to continue; on the other hand, they may well enable a great many Americans to deal with the downside of a social geography designed for cars rather than people, during the inevitable lag time while that social geography becomes a bad memory.
A great many more dimensions of American life are likely to need retrofitting in the years to come; nearly every aspect of our economy, culture, and politics depends on cheap abundant energy and will have to be rebuilt to deal with the new reality of energy scarcity. That will apply to little things – for example, plenty of home appliances now controlled by computer chips can be made to work with thermostats, spring-driven timers, and the like, given a little ingenuity and a willingness to tinker – and to much bigger ones as well. In a very real sense, given the sharp limits we face in the near future, our entire lives will need to be retrofitted to deal with the realities so manh of us have been trying to avoid for so long. The first job of this foreshadowing of the salvage economy, in other words, will be to haul a viable future out of the scrap heap of the present, and get it back into some semblance of working order while there’s still time to do so.
The most important point that needs making, it seems to me, is that these three phases are to some extent ideal types, and the forms they take on the ground of actual history will be far more complex, messy, and idiosyncratic than the simple outline suggests. This isn’t simply a result of the fact that none of these phases have arrived yet. The same thing can be said, after all, of the use of economic phases to talk about history that’s already happened.
When a historian suggests that England embraced a mercantilist economic system in the sixteenth century, for instance, she does not mean that the English economy shifted gears all at once on January 1, 1501. Nor does she mean that the English economy in that century lacked important features of the older feudal-agrarian economy or foreshadowings of the capitalist economy that replaced mercantilism later on, nor that the English mercantilist economy was identical to all others. Rather, she means that the traits implied by the term “mercantilism” – an export-based economy geared toward generating a favorable balance of trade with competing nations, foreign policy initiatives pursuing overseas colonies and the expansion of naval power and a merchant marine, and the like – provide a workable sketch of the shape toward which the English economy moved over the course of the century in question.
The same rule applies to the phases I’ve outlined here. The transition from today’s industrialism of abundance to the scarcity industrialism of the near future, for example, will likely be just as slow and ragged a process as the rise of mercantilism. Some nations – Russia, for example – have already implemented the political control of resource markets that I’ve suggested as a core feature of the phase; other nations have barely begun to move in that direction, and other features of the phase are just as unevenly distributed. For that matter, the 1950s-era American autos cruising down the streets of Havana today, repeatedly rebuilt with scavenged and jerry-built parts, show certain core features of the salvage economy already in existence in some parts of the world right now.
Thus the world of a hundred years from now, say, will include nations at many different points along the scale. It will very likely be dominated by nations that have embraced scarcity industrialism, while the powers of today’s age of abundance will be the fallen empires and failed states of that day. Meanwhile, those nations that draw the short straws in the geopolitical lottery may already be well into the salvage society phase, mining the refuse of the industrial age to meet local needs and to pay for whatever foreign trade can still be had. Nations that lack both fossil fuels and valuable salvage, in turn, will either have fallen back to agrarian or nomadic economies or, given plenty of luck and the necessary knowledge base, may be pioneering the first rough sketch of an ecotechnic society. All of this will take place amid the turmoil of ordinary history: that unending and uneven rhythm of crises, struggles, and the rise and fall of governments and peoples whose embarrassingly premature obituary Francis Fukuyama wrote a few years back, and which tends to hide the slower and broader shifts in economy and subsistence from contemporary eyes.
Fast forward another century, when Hubbert’s curve will have finished its trajectory and fossil fuels will be rare geological specimens, and the powers of the age of scarcity industrialism will most likely have collapsed in their turn. Those areas with a wealth of salvageable scrap and the political and military savvy to hold onto them will be the regional powers of a world in which global reach no longer exists, while other areas – the modern conception of the nation-state will probably have fallen into history’s recycling bin by then, to be replaced by some other form of geopolitical arrangement – will have only sustainable resources to rely on; some of those will likely have settled into some nonindustrial mode for the long term, while others may be building on the first tentative foundations of an ecotechnic system. All these changes, once again, will take their shape amid the rough and tumble of historical events, and may be difficult to track against that wildly variable background.
One implication of this vision is that appropriate steps for the present and the near future are not limited to those that have some obvious relationship to the scarcity industrialism of the near future. If, unlikely as it seems, any of my readers belong to the political, economic, or military leadership of one of the world’s leading or rising powers, their attention will be, and indeed should be, riveted to the coming of scarcity industrialism; the nations they lead, not to mention their own positions of influence and privilege, depend utterly on how well they are able to manage that difficult transition. For the rest of us, though, a broader focus and a less limited toolkit has many advantages. The end of the age of abundance industrialism means the end of the trickle-down economy that provided so many economic benefits to the middle classes and raised the industrial world’s working classes out of abject poverty. To some extent, while the political classes will be entering a new industrial order, those outside that circle may just find themselves passing directly into the world of Dark Age salvage societies. What this implies, in turn, is that the skills and habits of the age of salvage may be well worth cultivating right now.
One obvious example unfolds from the implications of the sprawling speculative subdivisions that surround so many American cities just now, in the aftermath of the late housing bubble. For decades now, people interested in sustainable housing have focused their attention on innovative methods of new house construction: cobb and adobe, straw bale, and many more. These are useful and in some cases brilliantly successful technologies, but their application to our present predicament is limited by one overarching factor: here in America, at least, we already have many more houses than we need or can afford, and the economic system we use to pay for new houses is so badly broken just now that it may take a generation or more to get a new one up and running.
That being the case, the dream of sustainable Levittowns of cob-built, earth-sheltered, solar-heated houses will remain out of reach for a good long time. The possibilities before us are more limited. We can either struggle on with the hopelessly inefficient housing stock we have now in its current state, or we can learn how to rework our existing homes to improve their energy efficiency: that is, we can learn to retrofit.
The word “retrofit” was coined in the 1950s, but its common use is one of the legacies of the energy crises of the 1970s. During those years, a great many homeowners discovered that houses built to take advantage of cheap energy lost most of their advantages when energy stopped being cheap. At the same time, the soaring interest rates and stagflation of that decade made buying a new home a good deal less economically viable than it had been during the preceding years. Many people responded by figuring out cheap, effective ways to improve the energy efficiency of their existing homes. Insulating blankets found their way around hot water heaters, caulk guns traced lines around leaky foundation plates, insulated Roman blinds replaced fashionable curtains, and a surprising number of people discovered that it really is just as comfortable to put on a cardigan as it is to turn up the thermostat on a cold evening.
One of the less noticed phenomena of these same years, in turn, was the emergence of home energy retrofitting as a viable economic sector. In every American city and a great many smaller towns, contractors no longer able to find work building houses found a new niche installing insulation, storm windows, and solar water heaters, while hardware stores found room for a new section of home energy efficiency supplies. It was never a large sector, and its growth came to a sudden stop in the early 1980s in the flurry of political machinations that crashed the price of oil and threw away our best chance for a transition to sustainability, but it was one of the few success stories at a time when most American industries were contracting and most families’ standard of living was slipping year after year.
Many of those same conditions are repeating themselves on a much larger scale as the world stumbles across the uneven plateau on top of Hubbert’s peak. Despite the recent volatility in the futures markets, oil remains far more expensive than it was a year ago; one step down for every two steps upward still amounts to steady upward movement. The approaching Great Recession promises to make the stagflation of the Seventies look mild, but to American families it still poses the same challenge of having to get by with less. Thus it’s tolerably likely that the same sort of retrofit economy will emerge in the next few years, as those homeowners who stayed clear of the blandishments of fast-talking mortgage salesmen, and keep their homes, find that they have no choice but to make the best of the homes they have.
The same considerations apply to other sectors of the economy. The auto industry is facing a similar transition, for example, as mechanics and hobbyists across the country turn used cooking oil into biodiesel, convert hybrid cars into plug-in vehicles, and equip bicycles and scooters with electric motors and batteries. Detroit’s much-ballyhooed electric cars, when they finally get around to appearing on the market, are likely to find themselves eating the dust of thousands of ingenious retrofitters who, unburdened with the institutional inertia of Fortune 500 corporations, are getting products to local markets right now. These retrofits won’t allow what James Howard Kunstler has usefully labeled “the paradise of happy motoring” to continue; on the other hand, they may well enable a great many Americans to deal with the downside of a social geography designed for cars rather than people, during the inevitable lag time while that social geography becomes a bad memory.
A great many more dimensions of American life are likely to need retrofitting in the years to come; nearly every aspect of our economy, culture, and politics depends on cheap abundant energy and will have to be rebuilt to deal with the new reality of energy scarcity. That will apply to little things – for example, plenty of home appliances now controlled by computer chips can be made to work with thermostats, spring-driven timers, and the like, given a little ingenuity and a willingness to tinker – and to much bigger ones as well. In a very real sense, given the sharp limits we face in the near future, our entire lives will need to be retrofitted to deal with the realities so manh of us have been trying to avoid for so long. The first job of this foreshadowing of the salvage economy, in other words, will be to haul a viable future out of the scrap heap of the present, and get it back into some semblance of working order while there’s still time to do so.
Wednesday, September 03, 2008
The Post-Petroleum Job Ads
The mismatch between the narratives of sudden apocalypse that shape so much of today’s debate about the future, on the one hand, and the sluggish pace at which the predicament of industrial society unfolds in the real world, on the other, found a poster child of sorts last weekend. During the days of uncertainty before Hurricane Gustav’s arrival on the Louisiana coast, some enthusiastic soul posted claims to the peak oil newsblog The Oil Drum that the hurricane would bring industrial civilization itself crashing down in ruins.
I was pleased to note that this announcement seems to have fallen on unsympathetic ears. The Oil Drum’s forte is shrewd technical analysis, and its staff – if I may so describe the loose association of regular posters and commenters who give that excellent site its tone and direction – set aside such speculations and did their usual exemplary job, mapping out the oil platforms and refineries likely to be affected by Gustav and posting damage estimates that turned out to be fairly close to the picture now emerging on the ground. Gustav was a moderately strong storm; it forced the evacuation of nearly every offshore and coastal petroleum facility in the Gulf of Mexico, causing substantial short-term production losses; the long-term effects of the storm will not be clear for weeks, but all by itself, $30 billion or so in estimated damage piled atop an already faltering economy will certainly have an impact.
The difference between the fantasy of sudden collapse and the reality of one more localized jolt piling additional burdens on a stumbling society is well worth keeping in mind. Like the proverbial frog in the saucepan, those who think of apocalyptic collapse as the only way industrial civilization can break down are far less likely to notice the gradual changes in their environment that are leading in the same direction, just more slowly. It’s as though, to shift stories, the boy who cried wolf was convinced that immense armies of wolves would suddenly swoop down and eat up all the sheep in the world at once, and mistook every whistle of wind in the trees for the distant howling of the wolf pack to end all wolf packs; meanwhile, practically under his nose, real wolves – scruffy, undersized, and quite depressingly few in number compared to the massed uber-wolves of the fantasy – were picking off a sheep or two each day from the fringes of the flock.
As both these metaphors suggest, the fixation on sudden collapse has practical disadvantages. If you’re a frog in a saucepan, and the only idea of heat you’re willing to consider involves all the water in the saucepan suddenly flashing into steam, you probably won’t jump while your legs are still uncooked enough to do so; if you’re guarding sheep from wolves, and groups of wolves numbering fewer than fifty are beneath your notice, your sheep are going to be eaten. In the same way, there are plenty of practical steps that can be taken here and now by individuals, that will likely make the slow unraveling of industrial society much less horrific than it might otherwise be. Most of those steps would be, or at least appear to be, irrelevant in the face of sudden global catastrophe, and in fact it’s not uncommon to find believers in some such catastrophe dismissing these practical steps in exactly those terms.
Mind you, there are other reasons why those steps are easy to dismiss. Every one of them has a price tag of some sort, denominated in money, labor, comfort, convenience, or unimpeded access to the smorgasbord of distractions today’s industrial civilization offers its inmates. By contrast, our culture’s two dominant narratives about the future – the narrative of apocalypse and its twin and shadow, the narrative of inevitable progress – are popular at least in part because they push the necessity and the costs of change onto somebody else: the “they” who are expected to think of something just in time to keep progress on track, for example, or the supposedly faceless billions who are expected to hurry up and die en masse so that the flag of some future utopia can be pitched atop their graves.
I’ve talked about some of the steps in question already on this blog, but today I’d like to turn to something a bit different from those previous discussions: the question of how people will make a living during the long unraveling of the industrial age.
That’s a question that has received surprisingly little attention in recent years, and a good deal of that neglect, I think, can be laid at the door of the apocalyptic narrative. According to that narrative, after all, nothing much changes until everything does; you keep on punching the timeclock at your present job until the day that civilization falls apart, and then, if you happen to be among the survivors, you step into whatever new role the apocalypse has ordained for you – subsistence farmer, tribal hunter-gatherer, protein source for the local cannibal population, or what have you. At the same time, the absence of a 9-to-5 routine on the far side of apocalypse is likely to be an important source of the narrative’s popularity; I’m far from the only person who noticed, during the runup to the Y2K noncrisis, how many people predicting imminent doom seemed exhilarated by the notion that they would not have to go to work on January 2, 2000.
If I’m right and the descent into the deindustrial future unfolds over generations, though, that enticing prospect is not in the cards. Rather, the vast majority of us will need to earn our livings in a world that, while it will be changing around us, is extremely unlikely to change in ways that will make that process any easier than it is now. During the period I’ve described in other posts as the age of scarcity industrialism, something like today’s money economy will likely remain firmly in place, though the household economy and other forms of production and exchange outside the money economy will likely play a steadily growing role. During the age of salvage economies that I expect to follow the twilight of the industrial system, money of some sort will likely remain in use on a small scale, as it does in most dark ages, but most day-to-day transactions will take place via barter or other systems of exchange outside the money economy; again, that’s standard practice in dark ages. In both periods, though, people will work for their livings – and will likely work a good deal harder than many Americans do today.
Nor will their jobs be the same as the ones that employ most Americans nowadays. The flood of cheap abundant energy that surged through the industrial world during the twentieth century reshaped every dimension of the economy in its image, and nearly all the things we have grown up considering normal and natural are artifacts of that highly abnormal and unnatural state of affairs. Very few people in the industrial world today spend their workdays producing goods or providing necessary services; instead, pushing paper has become the standard employment, and preparation for a paper-pushing career the standard form of education. The once-mighty archipelago of trade schools that undergirded the rise of America as an industrial power sank with barely a trace in the second half of the twentieth century. I once lived three blocks away from the shell of one such school; it had been engulfed by a community college, and classrooms that once hummed with the busy noises of machine-shop equipment and the hiss of hot solder were being used to train a new generation of receptionists, brokers, and medical billing clerks
The postindustrial economy proclaimed by Daniel Bell many years ago, and accepted as an accurate description of economic reality since then, was never much more than a shell game. The societies of the industrial world were every bit as dependent on industry as they had ever been; they simply exported the industries to Third World countries where labor was cheap and environmental regulation nonexistent, and continued to reap the benefits back home. Those arrangements only worked, however, because cheap abundant energy made transport costs negligible, and systematic distortions in patterns of exchange pumped wealth from the Third World to a handful of industrial nations, providing the latter with the wherewithal to pay a very large fraction of their populations to do jobs that don’t actually need to be done. As energy becomes scarce and expensive again, and the imperial systems that concentrated the world’s wealth in a minority of nations are shredded by the rise of new centers of power, those arrangements will break down. As that happens, a great many goods and necessary services now done offshore will need to be done at home once again, and a great many professions that produce no goods and provide no necessary services will likely drop off the economic map.
Prophecy is a risky business at the best of times, but it’s worth hazarding some guesses about the jobs that will fill the post-petroleum job ads here in America over the next generation or so, through the years of the Great Recession and the disintegration of America’s overseas empire. Farmers are among the most likely candidates for the top of the list. By this I don’t mean subsistence farmers in rural ecovillages – their time is much further in the future, if it ever comes at all. Rather, market farmers tilling what is now suburban acreage to feed the dwindling cities, and rural farmers producing grains and other bulk crops for foreign exchange, will likely be in high demand, along with support professions such as agronomists.
Engineers form another set of trades likely to do well in the generation to come, especially those who know their way around energy production and distribution and the design, building, and maintenance of low-tech transportation networks. In the not too distant future, rail and canal transport will have to take over much of the work now done by trucks, and energy networks will have to cope with a fractious mix of alternative resources, dwindling fossil fuels, and massive conservation programs. The people who actually put the plans of engineers into effect, from skilled machinists all the way down to the gandy dancers who lay the rails, will also be able to count on steady paychecks.
Another suite of professions likely to do well barely exists today, though demolitions experts, junkyard workers, and people who run recycling and composting operations represent tentative forays into the territory. A huge fraction of America’s potential wealth in the postpeak years consists of manufactured objects that can either be refurbished and put back into circulation, or stripped of raw materials for reuse. When the electricity needed to power elevators and run heating and cooling systems is dizzyingly expensive when it can be had at all, for example, skyscrapers will be worth more as sources of refined metal than as buildings, and most of them will come down. On the other end of the spectrum, a great many consumer products that are now consigned to landfills when they break will be worth salvaging, repairing, and reselling once the cost of the necessary labor is cheaper than the cost of the energy and raw materials for a new model – a state of affairs that existed in America until the 1960s and will likely exist again within a decade or two. The salvage industries, as we may as well call them, may well turn out to be one of the major growth industries of the twenty-first century.
Other professions have their own possibilities. It’s a useful exercise to locate a city directory from the first half of the twentieth century and flip through the pages, noting the businesses that existed then but are nowhere to be found today. Those that meet actual needs, however unpopular they are as career tracks today, are likely to be more viable and more lucrative in a deindustrializing future than many professions fashionable today. The pundits and publicists of our economic system never seem to tire of explaining that tomorrow’s jobs will not be the same as today’s, and I suspect they may just be right; what they don’t expect, and I do, is that many of tomorrow’s hottest jobs will have more than a little resemblance to the careers of yesterday.
Those people who make preparations now to move into such jobs as they come open will be doing themselves and their communities alike a favor of no small worth. These preparations need to begin soon – while the time, resources, and knowledge base for many necessary skills are still readily accessible – and this requires, once again, some sense of the way civilizations actually fall, and a willingness to apply that slow, stumbling, unromantic but realistic model to the events going on around us right now.
I was pleased to note that this announcement seems to have fallen on unsympathetic ears. The Oil Drum’s forte is shrewd technical analysis, and its staff – if I may so describe the loose association of regular posters and commenters who give that excellent site its tone and direction – set aside such speculations and did their usual exemplary job, mapping out the oil platforms and refineries likely to be affected by Gustav and posting damage estimates that turned out to be fairly close to the picture now emerging on the ground. Gustav was a moderately strong storm; it forced the evacuation of nearly every offshore and coastal petroleum facility in the Gulf of Mexico, causing substantial short-term production losses; the long-term effects of the storm will not be clear for weeks, but all by itself, $30 billion or so in estimated damage piled atop an already faltering economy will certainly have an impact.
The difference between the fantasy of sudden collapse and the reality of one more localized jolt piling additional burdens on a stumbling society is well worth keeping in mind. Like the proverbial frog in the saucepan, those who think of apocalyptic collapse as the only way industrial civilization can break down are far less likely to notice the gradual changes in their environment that are leading in the same direction, just more slowly. It’s as though, to shift stories, the boy who cried wolf was convinced that immense armies of wolves would suddenly swoop down and eat up all the sheep in the world at once, and mistook every whistle of wind in the trees for the distant howling of the wolf pack to end all wolf packs; meanwhile, practically under his nose, real wolves – scruffy, undersized, and quite depressingly few in number compared to the massed uber-wolves of the fantasy – were picking off a sheep or two each day from the fringes of the flock.
As both these metaphors suggest, the fixation on sudden collapse has practical disadvantages. If you’re a frog in a saucepan, and the only idea of heat you’re willing to consider involves all the water in the saucepan suddenly flashing into steam, you probably won’t jump while your legs are still uncooked enough to do so; if you’re guarding sheep from wolves, and groups of wolves numbering fewer than fifty are beneath your notice, your sheep are going to be eaten. In the same way, there are plenty of practical steps that can be taken here and now by individuals, that will likely make the slow unraveling of industrial society much less horrific than it might otherwise be. Most of those steps would be, or at least appear to be, irrelevant in the face of sudden global catastrophe, and in fact it’s not uncommon to find believers in some such catastrophe dismissing these practical steps in exactly those terms.
Mind you, there are other reasons why those steps are easy to dismiss. Every one of them has a price tag of some sort, denominated in money, labor, comfort, convenience, or unimpeded access to the smorgasbord of distractions today’s industrial civilization offers its inmates. By contrast, our culture’s two dominant narratives about the future – the narrative of apocalypse and its twin and shadow, the narrative of inevitable progress – are popular at least in part because they push the necessity and the costs of change onto somebody else: the “they” who are expected to think of something just in time to keep progress on track, for example, or the supposedly faceless billions who are expected to hurry up and die en masse so that the flag of some future utopia can be pitched atop their graves.
I’ve talked about some of the steps in question already on this blog, but today I’d like to turn to something a bit different from those previous discussions: the question of how people will make a living during the long unraveling of the industrial age.
That’s a question that has received surprisingly little attention in recent years, and a good deal of that neglect, I think, can be laid at the door of the apocalyptic narrative. According to that narrative, after all, nothing much changes until everything does; you keep on punching the timeclock at your present job until the day that civilization falls apart, and then, if you happen to be among the survivors, you step into whatever new role the apocalypse has ordained for you – subsistence farmer, tribal hunter-gatherer, protein source for the local cannibal population, or what have you. At the same time, the absence of a 9-to-5 routine on the far side of apocalypse is likely to be an important source of the narrative’s popularity; I’m far from the only person who noticed, during the runup to the Y2K noncrisis, how many people predicting imminent doom seemed exhilarated by the notion that they would not have to go to work on January 2, 2000.
If I’m right and the descent into the deindustrial future unfolds over generations, though, that enticing prospect is not in the cards. Rather, the vast majority of us will need to earn our livings in a world that, while it will be changing around us, is extremely unlikely to change in ways that will make that process any easier than it is now. During the period I’ve described in other posts as the age of scarcity industrialism, something like today’s money economy will likely remain firmly in place, though the household economy and other forms of production and exchange outside the money economy will likely play a steadily growing role. During the age of salvage economies that I expect to follow the twilight of the industrial system, money of some sort will likely remain in use on a small scale, as it does in most dark ages, but most day-to-day transactions will take place via barter or other systems of exchange outside the money economy; again, that’s standard practice in dark ages. In both periods, though, people will work for their livings – and will likely work a good deal harder than many Americans do today.
Nor will their jobs be the same as the ones that employ most Americans nowadays. The flood of cheap abundant energy that surged through the industrial world during the twentieth century reshaped every dimension of the economy in its image, and nearly all the things we have grown up considering normal and natural are artifacts of that highly abnormal and unnatural state of affairs. Very few people in the industrial world today spend their workdays producing goods or providing necessary services; instead, pushing paper has become the standard employment, and preparation for a paper-pushing career the standard form of education. The once-mighty archipelago of trade schools that undergirded the rise of America as an industrial power sank with barely a trace in the second half of the twentieth century. I once lived three blocks away from the shell of one such school; it had been engulfed by a community college, and classrooms that once hummed with the busy noises of machine-shop equipment and the hiss of hot solder were being used to train a new generation of receptionists, brokers, and medical billing clerks
The postindustrial economy proclaimed by Daniel Bell many years ago, and accepted as an accurate description of economic reality since then, was never much more than a shell game. The societies of the industrial world were every bit as dependent on industry as they had ever been; they simply exported the industries to Third World countries where labor was cheap and environmental regulation nonexistent, and continued to reap the benefits back home. Those arrangements only worked, however, because cheap abundant energy made transport costs negligible, and systematic distortions in patterns of exchange pumped wealth from the Third World to a handful of industrial nations, providing the latter with the wherewithal to pay a very large fraction of their populations to do jobs that don’t actually need to be done. As energy becomes scarce and expensive again, and the imperial systems that concentrated the world’s wealth in a minority of nations are shredded by the rise of new centers of power, those arrangements will break down. As that happens, a great many goods and necessary services now done offshore will need to be done at home once again, and a great many professions that produce no goods and provide no necessary services will likely drop off the economic map.
Prophecy is a risky business at the best of times, but it’s worth hazarding some guesses about the jobs that will fill the post-petroleum job ads here in America over the next generation or so, through the years of the Great Recession and the disintegration of America’s overseas empire. Farmers are among the most likely candidates for the top of the list. By this I don’t mean subsistence farmers in rural ecovillages – their time is much further in the future, if it ever comes at all. Rather, market farmers tilling what is now suburban acreage to feed the dwindling cities, and rural farmers producing grains and other bulk crops for foreign exchange, will likely be in high demand, along with support professions such as agronomists.
Engineers form another set of trades likely to do well in the generation to come, especially those who know their way around energy production and distribution and the design, building, and maintenance of low-tech transportation networks. In the not too distant future, rail and canal transport will have to take over much of the work now done by trucks, and energy networks will have to cope with a fractious mix of alternative resources, dwindling fossil fuels, and massive conservation programs. The people who actually put the plans of engineers into effect, from skilled machinists all the way down to the gandy dancers who lay the rails, will also be able to count on steady paychecks.
Another suite of professions likely to do well barely exists today, though demolitions experts, junkyard workers, and people who run recycling and composting operations represent tentative forays into the territory. A huge fraction of America’s potential wealth in the postpeak years consists of manufactured objects that can either be refurbished and put back into circulation, or stripped of raw materials for reuse. When the electricity needed to power elevators and run heating and cooling systems is dizzyingly expensive when it can be had at all, for example, skyscrapers will be worth more as sources of refined metal than as buildings, and most of them will come down. On the other end of the spectrum, a great many consumer products that are now consigned to landfills when they break will be worth salvaging, repairing, and reselling once the cost of the necessary labor is cheaper than the cost of the energy and raw materials for a new model – a state of affairs that existed in America until the 1960s and will likely exist again within a decade or two. The salvage industries, as we may as well call them, may well turn out to be one of the major growth industries of the twenty-first century.
Other professions have their own possibilities. It’s a useful exercise to locate a city directory from the first half of the twentieth century and flip through the pages, noting the businesses that existed then but are nowhere to be found today. Those that meet actual needs, however unpopular they are as career tracks today, are likely to be more viable and more lucrative in a deindustrializing future than many professions fashionable today. The pundits and publicists of our economic system never seem to tire of explaining that tomorrow’s jobs will not be the same as today’s, and I suspect they may just be right; what they don’t expect, and I do, is that many of tomorrow’s hottest jobs will have more than a little resemblance to the careers of yesterday.
Those people who make preparations now to move into such jobs as they come open will be doing themselves and their communities alike a favor of no small worth. These preparations need to begin soon – while the time, resources, and knowledge base for many necessary skills are still readily accessible – and this requires, once again, some sense of the way civilizations actually fall, and a willingness to apply that slow, stumbling, unromantic but realistic model to the events going on around us right now.
