By Steven Tanner
Ask anyone what they think about President Obama’s efforts to stimulate the economy and you’re likely to get one of two responses: (1) It doesn’t go far enough to actually create jobs, or (2) We’re leveraging our children’s future with debt when we should be cutting taxes instead.
If you ask me, both responses are based on false assumptions about the trajectory of Western capitalism.
Everyone would like to see a full recovery back to what we mistakenly perceive as the “normal” state of things. But we’re trying to save an economy built on infinite growth and cheap energy at a time when such frontiers no longer exist – instead of laying the necessary foundations for an austere economic future that will depend on locally driven solutions.
Our futile effort to prop up a system that’s in decline might play well politically; saying things like, “We will restore America’s economic vitality and create jobs for all” certainly sounds good to constituents, while it allows corporations to whistle through the graveyard as if better times were ahead. But priming a pump that’s broken and throwing our remaining national wealth down the rabbit hole is a denial of epic proportions that can’t end well.
Perhaps that’s all a capitalist system allows us to do. Indeed a call for slower growth and an end to globalization would mean a rejection of capitalism, even though our assumption that infinite growth can continue is beyond arrogant.
The tightly interwoven web of relationships, infrastructures and massive outlays of natural resources central to our modern existence is so ubiquitous that it’s all but ignored. We in the developed world enjoy a collective miracle of human achievement, to be sure, but its days are numbered.
I enjoy the luxuries of indoor plumbing, abundant food and personal transportation as much as the next person. But the future for all three doesn’t look good; hoping and praying won’t change the trajectory we find ourselves on.
The indisputable fact is that the marvels of our modern world all can be traced back to carbon-based energy, a finite resource that most energy experts who are not compromised warn is in decline. If oil and natural gas were still abundant, why would we be spending billions of dollars to drill for the stuff more than a mile under the Gulf of Mexico? And if it were possible to entirely replace fossil fuels with alternatives, why aren’t we?
Let’s consider the brief history of oil. It was first “discovered” in Pennsylvania in the mid-1800s (although people started using it 3,000 years ago to waterproof ships, for medicines and to light lamps). Just as coal (also a fossil fuel) powered the Industrial Revolution, oil and natural gas fueled a massive technology and population boom that continues to this day. In the course of human evolution, this 150-year oil orgy barely registers as a blip. Oil’s uses are seemingly endless; unfortunately, its supply is not.
Population exploded in the late 19th Century and all of the 20th Century (and continues today) because petrochemicals allowed more widespread food production (although this is unsustainable and exhausts arable land), along with a lot of other advancements made possible by a world fueled not by muscle but by oil (cheap energy has made us forget about the real energy and resource cost behind most consumer goods). It’s probably no coincidence that oil production began in earnest around the time US slavery was abolished.
But a growing chorus of geologists and other experts says we are approaching peak oil production, and may already be standing on the plateau, which means we probably have extracted about half of the oil that exists in the earth. The other half won’t be nearly as easy to get (as we saw from the BP oil disaster in the Gulf) and won’t be extracted fast enough or cheap enough to keep up with demand. Once supply dips below demand, the inflated cost of that energy will erase the already thin margins of businesses that rely on its artificially low price.
Oil doesn’t just fuel our cars but is central to our way of life, from food to plastics to just about everything we use on a daily basis, particularly manufacturing and transport of goods. Peak oil just may present the greatest challenge of human existence.
So what does this have to do with economic stimulus or the hope of a recovery?
Capitalism is relatively new and only flourished with the upswing of cheap energy. Debt and investment both rely on the promise of future growth and increased production, made possible by the wonders of cheap fossil fuels. Once oil becomes too expensive to pull out of the ground – basically, when people decide they can’t afford to fill their tanks or pay for goods shipped by truck – our economic system most likely will collapse (since governments are either sticking their heads in the sand or afraid to speak the truth for fear of causing riots).
Our currency may become worthless, as it’s only worth the paper it’s printed on without confidence in the underlying economic system. This goes beyond politics, since even those crying foul over deficit spending believe that tax cuts will somehow prime the economic pump (it won’t). Our tedious reliance on all of those support networks we take for granted – indoor plumbing, flushable toilets, electricity, pharmaceuticals, the interstate highway system, abundant food from all over the world, the Internet, just about everything – will once again become visible in the blinding light of their absence.
While many will say peak oil is a hoax (we can only hope), it is a disaster we can actually see unfolding before our eyes if we only choose to look at the evidence and see how oil already has peaked in certain geographic locations. The oil embargo in the early 1970s correlated with the peak in U.S. oil production, meaning exporting nations suddenly had the upper hand because we could no longer satisfy our own demand for oil and became a net importer. When the USSR disintegrated, Cuba no longer had a source of oil and embarked on a successful transformation whereby its citizens were required to grow food organically on every available square inch of arable land.
No one knows exactly how to rebuild a sustainable system from the ruins of our (likely) failed one, but it most likely will be based on local commerce, local production and substantially lowered expectations. Getting to know one’s neighbors will once again become critical to survival and I’m confident we will gain almost as much as we lose by reacquainting ourselves with things that really matter. Sitting in an air-conditioned house while eating Cheetos and playing XBox will be recognized as the conspicuous, mindless lifestyle it really is (or was).
As far as economic policy is concerned, I would have liked to have seen a quick and ambitious move toward a renewable energy infrastructure and a call on Americans to make sacrifices and become more self-reliant. But instead we got more of the same because to do otherwise would trigger a quicker fall. It’s not Obama’s fault; he’s just a product of the system, which is proving to be a house cards built in a hall of mirrors.
What I’d like to see more than anything is an end to all of the bickering and name-calling and a collective effort to create a new way of living that’s not based on destruction or isolation. As Americans, we know how to innovate and get through difficult times.
Clinging to the last vestiges of a crumbling empire, though, will soon be revealed for the folly it really is.