what a difference a day makes

We think of ice as solid, stable, slow to change, especially during a record-breaking cold snap. But on the shoreline of Lake Ontario the ice is always dynamic, changing from day to day and from hour to hour.

Waves pushed by a stiff wind can shatter and dissipate a thick sheet of shore ice overnight – or the spray from breaking waves can add many layers to that ice.

Just Before Dawn – December 28, 7:45 am (click images for larger view)

The steam that rises from the relatively warm lake water billows up to the clouds – or freezes against any solid cold surface.

Steamship – Dec 27, 9 am. This freighter was approaching the St. Marys Cement pier.

Through the cold weather, year-round resident water birds – Canada geese, mute swans, and several species of ducks – continue to feed in the shallows.

Ducks in a row – Dec 28, 8:40 am

Not so common is a bird that sometimes travels from the north along with the Arctic air. This Snowy owl (likely a first-year female) was bathed in the warm light of sunset on the breakwater.

Snowy Owl – Dec 28, 4:25 pm.

On the pebbles and the icicles right at the shoreline, water cycles through all its states continuously. Water vapor rises from the lake, condenses into mist, freezes into hoar-frost or solidifies into clear ice, before a wave or two washes across, either melting the ice it touches or freezing into thicker ice.

Frost Forest – Dec 28, 9 am

Even on the surface of the Bowmanville Marsh where no liquid water is to be seen, the ice changes hour by hour.

Morning Feather – Dec 27, 9:30 am

Though the temperature only rises to about –10°C, the weak winter sun dries the ice crystals off this tiny feather. And the feather, in turn, shapes the solid ice beneath it, catching and reflecting just enough warmth to carve out a tiny crater in the ice before the cold night returns.

Evening Feather – Dec 27, 5:05 pm

What a difference a day makes.

Top photo: Morning Flight, Dec 28, 8:05 am (click here for larger view)

Pebble Beach

One of the richest lodes of gemstones in the known universe can be found along the north shore of Lake Ontario – but only when the conditions are just right.

With the sun shining low on a cold winter’s day, and soft waves lapping over the icy stones, brilliant gems are scattered profusely.

Sandfish – Dec 13, 9:40 am (click images for full-size view)

Of course there are many other beautiful sights at the beach on such lovely days. The frozen sand can be hard and smooth, or scalloped into terraces. Steam rises off the warm lake water, swirling up to the clouds or disappearing in thin wisps that catch the sunlight.

Blue Shift – Dec 13, 9:15 am

But the stones hold a special fascination – especially since each wave might lift off the icy covering of one pebble, or roll more colourful gems from the shallow waters onto the beach.

Still Life – Dec 17, 10:40 am


Egg One – Dec 17, 10:40 am


Egg Two – Dec 17, 10:40 am

Still, on a winter walk to pebble beach you don’t want to look down at the ground all the time – if the air is crisp enough you may be treated to an icy rainbow – a sundog formed when the sunlight is refracted by tiny plate-shaped crystals floating above the horizon.


Sundog – Dec 14, 8:30 am

Top photo: Redstone – Dec 17, 10:10 am (click here for full-size view)

Super-size that commodity

Also published at Resilience.org.

A review of ‘A Foodie’s Guide to Capitalism’

Don’t expect a whole lot of taste when you sit down to a plateful of commodities.

That might be a fitting but unintended lesson for foodies who work through the new book by Eric Holt-Giménez. A Foodie’s Guide to Capitalism will reward a careful reader with lots of insights – but it won’t do much for the taste buds.

While A Foodie’s Guide is lacking in recipes or menu ideas, it shines in helping us to understand the struggles of the men and women who work in the farms and packing plants. Likewise, it explains why major capitalists have typically shown little interest in direct involvement in agriculture – preferring to make their money selling farm inputs, trading farm commodities, or turning farm products into the thousands of refined products that fill supermarket shelves.

Fictitious commodities

Karl Polanyi famously described land, labour and money as “fictitious commodities”. Land and labour in particular come in for lengthy discussion in A Foodie’s Guide to Capitalism. In the process, Holt-Giménez also effectively unmasks the myth of the free market.

“Markets have been around a long time,” he writes, “but before the nineteenth century did not organize society as they do today.” He shows how capitalism in England arose concurrently with vigorous state intervention which drove people off their small farms and into the industrial labour pool. Meanwhile overseas both the slave trade and settler colonialism were opening critical parts of global markets, which were anything but “free”.

Nevertheless the takeover of food production by capitalism has been far from complete.

“Today, despite centuries of capitalism, large-scale capitalist agriculture produces less than a third of the world’s food supply, made possible in large part by multibillion-dollar subsidies and insurance programs. Peasants and smallholders still feed most people in the world, though they cultivate less than a quarter of the arable land.” (Holt-Giménez, A Foodie’s Guide To Capitalism, Monthly Review Press and FoodFirst Books, citing a report in GRAIN, May 2014)

There are a lot of reasons for this incomplete transition, but many are related to two of the “fictitious commodities”. Let’s start with land.

While land is the most important “means of production” in agriculture, land is of course much more than that. For people throughout history, land has been home, land has been the base of culture, land has been sacred. Even today, people go to great lengths to avoid having their lands swallowed up by capitalist agriculture – especially since this transition typically results in widespread consolidation of farms, leaving most former farmers to try to earn a living as landless labourers.

Autumn colours in the Northumberland Hills north of Lake Ontario, Canada

Likewise labour is much more than a commodity. An hour of labour is a handy abstraction that can be fed into an economist’s formula, but the labourer is a flesh-and-blood human being with complex motivations and aspirations. Holt-Giménez offers a good primer in Marxist theory here, showing why it has always been difficult for capitalists to extract surplus value directly from the labour of farmers. He also builds on the concept of the “cost of reproduction” in explaining why, in those sectors of farming that do depend on wage labour, most of the wage labourers are immigrants.

Before people can be hired at wages, they need to be born, cared for as infants, fed through childhood, provided with some level of education. These “costs of reproduction” are substantial and unavoidable. A capitalist cannot draw surplus value from labour unless some segment of society pays those “costs of reproduction”, but it is in the narrow economic self-interest of capitalists to ensure that someone else pays. Consider, for example, the many Walmart employees who rely on food stamps to feed their families. Since Walmart doesn’t want to pay a high enough wage to cover the “cost of reproduction” for the next generation of workers, a big chunk of that bill goes to taxpayers.

In industrialized countries, the farm workers who pick fruit and vegetables or work in packing plants tend to be immigrants on temporary work permits. This allows the capitalist food system to pass off the costs of reproduction, not to domestic taxpayers, but to the immigrants’ countries of origin:

“the cost of what it takes to feed, raise, care for and educate a worker from birth to working age (the costs of reproduction) are assumed by the immigrants’ countries of origin and is free to their employers in the rich nations, such as the United States and the nations of Western Europe. The low cost of immigrant labor works like a tremendous subsidy, imparting value to crops and agricultural land. This value is captured by capitalists across the food chain, but not by the worker.” (Holt-Giménez, A Foodie’s Guide to Capitalism)

Farmstead in the Black Hills, South Dakota, USA

The persistence of the family farm

In the US a large majority of farms, including massive farms which raise monoculture crops using huge machinery, are run by individual families rather than corporations. Although they own much of their land, these farmers typically work long hours at what amounts to less than minimum wage, and many depend on at least some non-farm salary or wage income to pay the bills. Again, there are clear limitations in a capitalist food system’s ability to extract surplus value directly from these hours of labour.

But in addition to selling “upstream” inputs like hybrid and GMO seeds, fertilizers, pesticides and machinery, the capitalist food system dominates the “downstream” process of trading commodities, processing foods, and distributing them via supermarket shelves. An important recent development in this regard is contract farming, which Holt-Giménez refers to as “a modern version of sharecropping and tenant farming”.

A large corporation contracts to buy, for example, a chicken farmer’s entire output of chickens, at a fixed price:

“Through a market-specification contract, the firm guarantees the producer a buyer, based on agreements regarding price and quality, and with a resource-providing contract the firm also provides production inputs (like fertilizer, hatchlings, or technical assistance). If the firm provides all the inputs and buys all of the product, it essentially controls the production process while the farmer basically provides land and labor ….”

The corporation buying the chickens gets the chance to dominate the chicken market, without the heavy investment of buying land and buildings and hiring the workforce. Meanwhile farmers with purchase contracts in hand can go to the bank for operating loans, but they lose control over most decisions about production on their own land. And they bear the risk of losing their entire investment – which often means losing their home as well – if the corporation decides the next year to cancel the contract, drop the price paid for chicken, or raise the price of chicken feed.

Contract farming dominates the poultry industry in the US and the pork market is now rapidly undergoing “chickenization”. Holt–Giménez adds that “The World Bank considers contract farming to be the primary means for linking peasant farmers to the global market and promotes it widely in Asia, Latin America, and Africa.”

Farm field in springtime, western North Dakota, USA

Feeding a hungry world

In North America the conventional wisdom holds that only industrial capitalist agriculture has the ability to provide food for the billions of people in today’s world. Yet on a per hectare basis, monoculture agribusiness has been far less productive than many traditional intensive agricultures.

“Because peasant-style farming usually takes place on smaller farms, the total output is less than capitalist or entrepreneurial farms. However, their total output per unit of land (tons/hectare; bushels/acre) tends to be higher. This is why, as capitalist agriculture converts peasant-style farms to entrepreneurial and capitalist farms, there is often a drop in productivity ….”

Marxist political-economic theory provides a useful basis for Holt-Giménez’ explorations of many aspects of global food systems. Among the topics he covers are the great benefits of the Green Revolution to companies marketing seeds and fertilizers, along with the great costs to peasants who were driven off their lands, and potentially catastrophic damages to the ecological web.

But an over-reliance on this theory, in my opinion, leads to an oversimplification of some of our current challenges. This is most significant in Holt-Giménez’s discussions of the overlapping issues of food waste and the failure to distribute farm outputs fairly.

In recent decades there has been a constant surplus of food available on world markets, while hundreds of millions of people have suffered serious malnutrition. At the same time we are often told that approximately 40% of the world’s food goes to waste. Surely there should be an easy way to distribute food more justly, avoid waste, and solve chronic hunger, no?

Yet it is not clear what proportion of food waste is unavoidable, given the vagaries of weather that may cause a bumper crop one year in one area, or rapid increases in harvest-destroying pests in response to ecological changes. It is easy to think that 40% waste is far too high – but could we reasonably expect to cut food waste to 5%, 10% or 20%? That’s a question that Holt-Giménez doesn’t delve into.

On the other hand he does pin food waste very directly on capitalist modes of production. “The defining characteristic of capitalism is its tendency to overproduce. The food system is no exception.” He adds, “The key to ending food waste is to end overproduction.”

Yet if food waste is cut back through a lowering of production, that in itself is of no help to those who are going hungry.

Holt-Giménez writes “Farmers are nutrient-deficient because they don’t have enough land to grow a balanced diet. These are political, not technical problems.” Yes, access to land is a critical political issue – but can we be sure that the answers are only political, and not in part technical as well? After all, famines predated capitalism, and have occurred in widely varying economic contexts even in the past century.

Particularly for the coming generations, climatic shifts may create enormous food insecurities even for those with access to (formerly sufficient) land. As George Monbiot notes in The Guardian this week, rapid loss of topsoil on a world scale, combined with water scarcity and rising temperatures, is likely to have serious impacts on agricultural production. Facing these challenges, farming knowledge and techniques that used to work very well may require serious adaptation. So the answers are not likely to be political or technical, but political and technical.

These critiques aside, Holt-Giménez has produced an excellent guidebook for the loose collection of interests often called “the food movement”. With a good grasp of the way capitalism distorts food production, plus an understanding of the class struggles that permeate the global food business, foodies stand a chance of turning the food movement into an effective force for change.

When boom is bust: the shale oil bonanza as a symptom of economic crisis

Also published at Resilience.org.

The gradual climb in oil prices in recent weeks has revived hopes that US shale oil producers will return to profitability, while also renewing fevered dreams of the US becoming a fossil fuel superpower once again.

Thus a few days ago my daily newspaper ran a Bloomberg article by Grant Smith which lead with this sweeping claim:

“The U.S. shale revolution is on course to be the greatest oil and gas boom in history, turning a nation once at the mercy of foreign imports into a global player. That seismic shift shattered the dominance of Saudi Arabia and the OPEC cartel, forcing them into an alliance with long-time rival Russia to keep a grip on world markets.”

I might have simply chuckled and turned the page, had I not just finished reading Oil and the Western Economic Crisis, by Cambridge University economist Helen Thompson. (Palgrave Macmillan, 2017)

Thompson looks at the same  shale oil revolution and draws strikingly different conclusions, both about the future of the oil economy and about the effects on US relations with OPEC, Saudi Arabia, and Russia.

Before diving into Thompson’s analysis, let’s first look at the idea that the shale revolution may be “the greatest oil and gas boom in history”. As backing for this claim, Grant Smith cites a report earlier in November by the International Energy Agency, predicting that US shale oil output will soar to about 8 million barrels/day by 2025.

Accordingly, “ ‘The United States will be the undisputed leader of global oil and gas markets for decades to come,’ IEA Executive Director Fatih Birol said … in an interview with Bloomberg television.”

Let’s leave this prediction unchallenged for the moment. (Though skeptics could start with David Hughes detailed look at the IEA’s 2016 forecasts here, or with a recent MIT report that confirms a key aspect of Hughes’ analysis.) Suppose the IEA turns out to be right. How will the shale bonanza rank among the great oil booms in history?

Grant Smith uses the following chart to bolster his claim that the fracking boom will equal Saudi Arabia’s expansion in the 1960s and 1970s.


Chart by Bloomberg


OK, so if US shale oil rises to 8 million barrels by 2025, that production will be about the same as Saudi oil production in 1981. Would that make these two booms roughly equivalent?

First, world oil consumption in the early 1980s was only about two-thirds what it is now. So 8 billion barrels/day represented a bigger proportion of the world’s oil needs in 1980 that it does today.

Second, Saudi Arabia used very little of its oil domestically in 1980, leaving most of it for sale abroad, and that gave it a huge impact on the world market. The US, by contrast, still burns more oil domestically than it produces – and in the best case scenario, its potential oil exports in 2025 would be a small percentage of global supply.

Third, Saudi Arabia has been able to keep roughly 8 million barrels/day flowing for the past 40 years, while even the IEA’s optimistic forecast shows US shale oil output starting to drop within ten years of a 2025 peak.

And last but not least, Saudi Arabia’s 8 million barrels/day have come with some of the world’s lowest production costs, while US shale oil comes from some of the world’s costliest wells.

All these factors come into play in Helen Thompson’s thorough analysis.

No more Mr. NICE Guy

In an October 2005 speech, Bank of England governor Mervyn King “argued that the rising price of oil was ending what he termed ‘NICE’ – a period of ‘non-inflationary consistently expansionary economic growth’ that began in 1992.” (Thompson, Oil and the Western Economic Crisis, page 28-29)

In spite of their best efforts in the first decade of this millennium, Western governments were not able to maintain steady economic growth, nor keep the price of oil in check, nor significantly increase the supply of oil, nor prevent the onslaught of a serious recession. Thompson traces the interplay of several major economic factors, both before and after this recession.

By the beginning of the George W. Bush administration, there was widespread concern that world oil production would not keep up with growing demand. The booming economies of China and India added to this fear.

“Of the increase of 17.9 million bpd in oil consumption that materialised between 1994 and 2008,” Thompson writes, “only 960,000 of the total came from the G7 economies.” Nearly all of the growth in demand came from China and India – and that growth in demand was forecast to continue.

The GW Bush administration appointed oilman and defense hawk Dick Cheney to lead a task force on the impending supply crunch. But “ultimately, for all the aspiration of the Cheney report, the Bush Jr administration’s energy strategy did little to increase the supply of oil over the first eight years of the twenty-first century.” (Thompson, page 20)

In fact, the only significant supply growth in the decade up to 2008 came from Russia. This boosted Putin’s power while fracturing Western economic interests, as “the western states divided between those who were significant importers of Russian oil and gas and those that were not.” (Thompson, page 23)

Meanwhile oil prices shot up dramatically until Western economies dropped into recession in 2007 as a precursor to the 2008 financial crash. Shouldn’t those high oil prices have spurred high investment in new wells, with consequent rises in production? It didn’t work out that way.

Between 2003 and the first half of 2008 the costs of the construction of production facilities, oil equipment and services, and energy soared in good part in response to the overall commodity boom produced by China’s economic rise. Consequently, whilst future oil supply was becoming ever more dependent on large-scale capital investment both to extract more from declining fields and to open up high-cost non-conventional production, the capital available was also required by 2008 simply to cover rising existing costs.” (Thompson, page 23)

Thus oil prices rose to the point where western economies could no longer maintain consumption levels, but these high prices still couldn’t finance the kind of new drilling needed to boost production.

Oddly enough, the right conditions for a boom in US oil production wouldn’t occur until well after the crash of 2008, when monetary policy-makers were struggling with little success to revive economic growth.

Zero Interest Rate Policy

In western Europe and the US, recovery from the financial crisis of 2008 has been sluggish and incomplete. But the growth in demand for oil by India and China continued, with the result that after a brief price drop in 2009 oil quickly rebounded to $100/barrel and stayed there for the next few years.

As in the years leading up to the crash, $100 oil proved too expensive for western economies, accustomed as they had been to running on cheap energy for decades. Consumer confidence, and consumer spending, remained low.

Simply pumping the markets with cash – Quantitative Easing – had little effect on the real economy (though it afforded bank execs huge bonuses and boosted the prices of stocks and other financial assets). But as interest rates dropped to historic lows, the flood of nearly-free money finally revived the US energy-production sector.

QE and ZIRP hugely increased the availability of credit to the energy sector. ZIRP allowed oil companies to borrow from banks at extremely low interest rates, with the worth of syndicated loans to the oil and gas sectors rising from $600 billion in 2006 to $1.6 trillion in 2014. Meanwhile, in raising the price and depressing the yield of the relatively safe assets central banks purchased, QE created incentives for investors to buy assets with a higher yield, including significantly riskier corporate bonds and equities. …” (Thompson, page 50)

Without this extraordinary monetary expansion “the rise of non-conventional oil production would not have been possible”, Thompson concludes.

And while a huge boost in shale oil production might be counted as a “win” for the economic growth team, the downsides have been equally serious. The Zero Interest Rate Policy has almost eliminated interest earnings for cautious middle-income savers, which depresses consumer spending in the short term and threatens the security of millions in the long term. The inflation in asset prices has boosted the profits of large corporations, while weak consumer confidence has removed corporate incentive to invest in greater production of most consumer goods.

The situation would be more stable if non-conventional oil producers had the ability to weather prolonged periods of low oil prices. But as the price drop of 2015 showed, that would be wishful thinking. “By the second quarter of 2015 more than half of all distressed bonds across investment and high-yield bond markets were issued by energy companies. Under these financial strains a wave of shale bankruptcies began in the first quarter of 2015” – a bankruptcy wave that grew three times as high in 2016.

Finally, financial markets with their high exposure to risky non-conventional oil production have been easily spooked by mere rumours of the end of quantitative easing or any significant rise in interest rates. So central bankers have good reason to fear they may go into the next recession with no tools left in their monetary policy toolbox.

Far from representing a way out of economic crisis, then, the shale oil and related tar sands booms are a symptom of an ongoing economic crisis, the end of which is nowhere in sight.

Energy and power

Thompson also discusses the geo-political effects of the changing global oil market. She notes that the shale oil boom created serious tensions in the US-Saudi relationship. The Saudis wanted oil prices to be moderately high, perhaps in the $50-60/barrel range, because that would afford the Saudis substantial profits without driving down demand for oil. The Americans, with their billions sunk into high-cost shale oil wells, now had a need for oil prices in the $70/barrel and up range, simply to make the fracked oil minimally profitable.

There was no way for both the Saudis and the Americans to win in this struggle, though they could both lose.

At the peak (to date) of the shale oil boom, there was only one significant geo-political development in which the Americans were able to flex some muscle specifically because of the big increase in US oil production, Thompson says. She attributes the nuclear treaty with Iran in part to the surge of new oil production in Texas and North Dakota. In her reading, world oil markets at the time needn’t fear the sudden loss of Iran’s oil output, and that gave European governments a comfort level in agreeing to impose sanctions on Iran. These sanctions, in turn, helped convince Iran to make a deal (a diplomatic success which the Trump administration is determined to undo).

But in 2014 OPEC still produced about three times as much oil as the US produced – with important implications:

“even at the height of the shale boom the obvious limits to any claim of geo-political transformation were also evident. The US remained a significant net importer of oil and, consequently, lacked the capacity to act as a swing producer capable of immediately and directly influencing the price.” (Thompson, page 56)

“Most consequentially, when the Obama administration turned towards sanctions against Russia after the onset of the Ukrainian crisis in the spring of 2014, it was not willing to contemplate significant action against Russian oil production.” (Thompson, page 57)

Thompson wraps up with a look at the oil shock of the 1970s, concluding that “There are striking similarities between aspects of the West’s current predicaments around oil and the problems western governments faced in the 1970s. … However, in a number of ways the present version of these problems is worse than those that were manifest in the 1970s.” (Thompson, page 57)

A much higher world oil demand today, the fact that new oil reserves in western countries are very high-cost, plus the explosion of oil-related financial derivatives, make the international monetary order highly unstable.

Has the US returned to the ranks of “fossil fuel superpowers”? Not as Thompson sees it:

Now the US has nothing like the power it had in the post-war period in providing other states access to oil. Shale oil … cannot change the fact that the largest reserves of cheaply accessible oil lie in the Middle East and Russia, or that China and others’ rise has fundamentally changed the volume of demand for oil in the world.” (Thompson, page 111)