3 cheers for A2Bism: a review of ‘Copenhagenize’

Also published at Resilience.org.

How do we get beyond the dependency-inducing trap of car culture? After 100 years in which auto-oriented infrastructure has dominated public works spending and reshaped civic life, how can we make our streets safe and healthy spaces?

Copenhagenize:
The Definitive Guide to Global Bicycle Urbanism
(200 colour illustrations, 296 pages), March 2018, Island Press

These questions were suggested in discussion with a reader following my last post, Speeding Down a Dead End Road. There are many ways to approach this subject – and one of the best is to read Copenhagenize: The Definitive Guide to Global Bicycle Urbanism, a just-released book by Mikael Colville-Andersen which fortuitously landed in my inbox last week.

Colville-Andersen is a Canadian-Danish designer who started photographing people on bicycles in Copenhagen in 2006. This pastime quickly became the popular Cycle Chic blog, and then grew into Copenhagenize Design Co., which has now helped scores of cities improve their urban transportation mix. Copenhagenize, the book, is a great summary not only of the lessons learned by Copenhagen over the past forty years, but also the lessons learned by Colville-Andersen and his associates in many cities over the past 10 years.

First a brief word about what is both the book’s major limitation and its great strength: this is a guide to “bicycle urbanism” – it doesn’t pretend to cover cycling in rural or small-town areas.

In a move away from car culture, urban cycling is definitely the low-hanging fruit. Short trips under about 7 km make up a large proportion of trips within cities. Furthermore, the many costs of car culture – especially air pollution, and crashes that kill and maim – are readily evident in cities, while much-touted benefits such as speed and convenience are typically negated by gridlock. So it should be easy to persuade many average citizens to get out of cars and take to the streets on bicycle – if those streets can be made convenient and safe for human-powered transportation.

Let’s start with “convenient”.
 

A simple motivation

Extensive surveys have found that most Copenhagen cyclists are not motivated primarily by health concerns, or a concern for the environment, or a desire to save money – they ride bike because it’s the most convenient way to get around their city. This leads Colville-Andersen to stress a basic principle:

“I know exactly what you want. It’s the same thing that I want. Indeed, it’s what every homo sapien who has ever lived wants: a direct line from A to B when we’re transporting ourselves. … This is the most basic principle in transport planning. I call it A2Bism.” (Copenhagenize, pg 146)

Taking the most direct line is especially important when we’re getting around under our own steam. Yet for seventy-five years traffic planners concentrated on giving the best routes to cars, while introducing detours for foot-powered residents. Colville-Andersen sums up both this history of mistakes, and the simple solution, in these simple “traffic planning guide” graphics.

The two graphics on the left summarize the rupture of an ancient pattern of city life  by car culture – including, he emphasizes, in cities such as Copenhagen and Amsterdam.

On the right is the guide used by bicycle-friendly cities in recent decades. While cities in Denmark and the Netherlands have seen tremendous growth in cycling since they adopted this approach in the 1970s, a significant uptick in active transportation has also begun in many other cities, including a few in North America.

All too often in North America, however, new bike routes are added in out-of-the-way locations where they, predictably, serve few riders going about daily tasks like getting to and from work.1 If we were serious about encouraging rather than discouraging cyclists, we would allocate safe space for them on the most direct routes.

The Copenhagenize approach is illustrated at the right side of the graphic above: safe and healthy modes of active transportation are given direct routing, while polluting and dangerous cars and trucks get the frequent jogs and detours.
 

Safe space

Cycle-friendly planning isn’t quite as simple as drawing lines on a map or on the streets. While Colville-Andersen emphasizes that good urban cycling infrastructure is far cheaper than what we routinely spend on car infrastructure, we do need to budget for something besides a little paint:

“Hastily painted pictograms in the middle of car lanes are not infrastructure. They are the awkward watermark of lazy politicians and lazier transport professionals.” (Copenhagenize, pg 77)

Where streets must be shared by pedestrians, cyclists, and cars, trucks and buses, and motorized traffic will move more than 40 km/h, mere painted bike lanes will not provide an adequate measure of safety – some sort of physical separation is required. Having a row of parked cars between the cycle lane and the moving traffic is one good strategy. (In North America, however, the order is often reversed, with cycle lanes between the parked cars and moving traffic, precisely in the “door zone” where a driver opening the door of a parked car might knock a cyclist directly into the passing traffic.)

If Copenhagen now illustrates everything in Colville-Andersen’s chapter “Best Practice Design and Infrastructure”, it’s not because the Danes have always got it right. In fact, he says, all the cycle-planning mistakes frequently being made in other jurisdictions have also been made in Copenhagen. Other cities can save a lot of time and money if they don’t try to “reinvent the wheel”.

Waiting at a signalized intersection on a bike lane in Almetyevsk, Republic of Tatarstan

Colville-Andersen gives advice on many specifics: what is the minimum width for separated bike lanes, and when is it time to widen them further; what kind of intersection spacing works to keep cyclists safe from right-turning cars; under what circumstances is a bi-directional cycle lane a good option; how can cycle lanes be safely routed past bus stops. Yet the basic typology for bike lanes is based on just two data points: how many cars does a road carry, and what is the speed. Based on these two issues, he says, there are a grand total of four basic designs:

“Four. There are only four basic designs in Danish bicycle planning. One of these four fits every street in the Danish Kingdom and, indeed, every street in every city in the world.” (Copenhagenize, page 176)

In North America, in spite of a resurgence in urban cycling over the past ten years, no major city yet enjoys a bicycle “mode-share” of 10%. In Copenhagen and in Dutch cities such as Groningen, meanwhile that mode-share is now more than 40% – with the remainder split between buses, trains, cars, and walking.

Colville-Andersen emphasises, however, that “Copenhagen wasn’t always Copenhagen …. This city was as car-clogged as anywhere else on the planet through the 1950s and 1960s.” (Copenhagenize, page 64)

The growth of cycling culture there required massive public demonstrations in the 1970s, decades of work, and leadership by municipal officials with real vision. A key barrier is to get beyond the idea that we shouldn’t invest in cycling, because only a few people are willing to ride bike in our current urban environments:

“That misconception that a city has to build infrastructure for the people cycling now, as opposed to the 20-25 percent of the population that could be cycling, still reigns supreme.” (Copenhagenize, page 199)

 
 

Perfect synergy

Copenhagenize is a superb manual on all the important details of bike infrastructure design and operation. It’s a great ‘how-to’ guide for making cities safe and convenient for active transportation. Indeed, it’s a great book on the factors that, in the millennia before the destructive onset of car culture, made cities very attractive places to live:

“We have been living together in cities for more than 7,000 years. By and large, we used those seven millennia to hammer out some serious best-practices about cohabitation in the urban theater and the importance of social fabric. We threw most of that knowledge under the wheels of the automobile shortly after we invented it ….” (Copenhagenize, page 13)

In the struggle to redemocratize our streets, he says, the bicycle will play a key role: “This most human form of transport represents the perfect synergy between technology and the human desire to move. It is the most perfect vehicle for urban living ever invented.”


photos and illustrations by Mikael Colville-Andersen courtesy of Island Press


1A recent example in my area is the stalled plan to shrink car lanes and add bicycle lanes on a section of Toronto’s main through street, Yonge Street. The mayor and many councillors want instead to send local cyclists on a detour to the west, while preserving the direct route for motorists.

An enthusiastic embrace of a mysterious planet

Also published at Resilience.org.

Let’s face it, most of us don’t love the environment most of the time. More often than not, the environment is too cold, too hot, too buggy, too dry or too wet, and we try to keep it safely on the far side of a window or a TV screen.

Bicycle travel has a way of breaking us out of that narrow band of comfort. When we ride for more than a few days in one direction, it’s almost certain to rain or to snow, the wind will blow in the wrong direction, or perhaps it will get still and sultry and we’ll complain that there’s no wind at all. We either give up cycle touring, or we expand our appreciation beyond “nice” weather.

Lands of Lost Borders: Out of Bounds on the Silk Road, by Kate Harris, 2018, Knopf Canada, 300 pages

Yet few travelling cyclists will embrace the environment, in all its moods, with the eagerness shown by Kate Harris. That enthusiasm is just one of the qualities that makes Lands of Lost Borders so inspirational. Her book is one of the finest bike-trip travelogues ever written – but the wide-ranging reflections spurred by long hours on the road make her memoir a great read even for people with no interest in cycling.

Ironically, Harris’ deep dive in this earthly environment – via a months-long ride on the Silk Road and through Tibet – resulted from her growing disenchantment with an extra-terrestrial itinerary. A childhood dream of becoming a Mars-bound astronaut led to a stellar academic career, with a Rhodes scholarship to Oxford and admission to a PhD program at MIT.

It wasn’t the difficulty or the danger of a Mars mission that put her off. Rather, a summer-long Mars simulation exercise in the Utah desert brought an unbearable sense of separation:

As four crewmates and I trundled around Utah in canvas spacesuits, I found myself disconcerted by the fact that when I gazed at a mountain, I saw a veneer of Plexiglas. When I reached out to touch canyon walls the colour of embers, I felt the synthetic fabric of my glove instead of the smooth, sun-warmed sandstone. As all kinds of weather howled outside my spacesuit, I heard either radio static or my percussive panting amplified in the plastic helmet, like I was breathing down my own neck.”

Giving up the dream of going to Mars wasn’t easy. “The first sign of doubt is a renewed fanaticism,” she observes, and she threw herself into preparatory work doing a master’s degree at Oxford followed by graduate work in windowless labs at MIT. Eventually, though, she could not resist the urge to clear her head by going for a bike ride with her long-time friend Melissa – a 10,000 km ride, from Turkey to Tibet, through snowstorms, days of winter rains, against fierce winds on plateaus higher than any mountain peak in North America, across baking deserts and into teeming cities.

Her book would be superb if it merely catalogued the adventures of the road, or if it merely described her gradual coming to terms with the flaws and limitations of childhood heroes such as Marco Polo and Charles Darwin. But she also allows readers to share her sense of wonder at the lands she is visiting:

Deserts have long been landscapes of revelation, as though the clean-bitten clarity of so much space heightens receptivity to frequencies otherwise missed in the white noise of normal life. This was especially true just before dawn on the Ustyurt Plateau, when the horizon glowed and shimmered like something about to happen. As the sun rose it tugged gold out of the ground and tossed it everywhere, letting the land’s innate wealth loose from a disguise of dust. The air smelled of baked dirt spiced with dew and sage. Our bicycles cast long cool shadows that grew and shrank with the desert’s rise and fall, its contours so subtle we needed those shadows to see them. The severity of the land, the softness of the light – where opposites meet is magic.”

Blizzards, sandstorms, endless mud, these are challenges to be relished – but borders are insufferable. In spite of her success in sneaking across border checkpoints for unauthorized rides across Tibet – not once but twice – some of the borders are non-negotiable, causing long delays and major changes in route. With enough time for reflection, however, even these borders help her to deeper understandings:

Whether buttressed with dirt roads or red tape, barbed wire or bribes, the various walls of the world have one aspect in common: they all posture as righteous and necessary parts of the landscape. That we live on a planet drawn and quartered is a fact most Canadians have the luxury of ignoring, for our passports open doors everywhere – with the notable exception of Central Asia, where North Americans face the kind of suspicion and resistance would-be tourists from Uzbekistan get from Canada ….”

Is there a recipe for a successful bike trip across a remote continent? Kate Harris would likely say that’s the wrong question. It doesn’t matter how far away, how exotic, how difficult or how long your journey is, it only matters that you throw yourself into the experience:

Departure is simple: you step out the door, onto your bike, into the wind of your life. What’s hard is not looking back, not measuring gain or loss by lapsed time, or aching legs, or the leering kilometre markers of ambition. You are on your way when you decipher the pounding of rain as Morse code for making progress. You are getting closer when you recognize doubt as the heaviest burden on your bike and toss it aside, for when it comes to exploring, any direction will do. You have finally arrived when you realize that persistent creak you’ve been hearing all this time is not your wheels, not your mind, but the sound of the planet turning.”

 

Illustration at top adapted from “Lands of Lost Borders Highlights Reel” video, viewed via kateharris.ca.

A fascinating, flawed look at limits

A review of The Wizard and The Prophet

Also published at Resilience.org.

Charles C. Mann has written consecutive bestsellers of popular history writ large. His 1491 surveyed the civilizations of the pre-Columbian Americas, while 1493 looked at how post-Columbian America has affected the whole world.

The Wizard and the Prophet, by Charles C. Mann, 2018, 616 pages

The Wizard and the Prophet at first glance shows Mann at work on a smaller canvas, comparing the life’s work of two American scientists in the mid-20th century.

Though Norman Borlaug and William Vogt both studied agricultural resources their career trajectories could hardly have been more different. Mann uses the contrast as a framework for a sweeping discussion of the biggest environmental questions facing our generations.

In the process he transforms Borlaug into “The Wizard” and Vogt into “The Prophet’’, superheroes who have, in Mann’s telling, guided the two major currents in environmental thinking ever since. Thus “The Wizard” and “The Prophet” are tapped for analyses of subjects which, for all we know, neither Borlaug nor Vogt actually thought about.

Always lurking in the background are the questions with which Mann opens the book: is it possible to feed, clothe, and shelter 10 billion people on this planet, or are we moving towards inevitable environmental collapse?

The real Norman Borlaug was born to a poor Iowa farm family and he yearned to escape the backbreaking work in the fields. After earning a degree in plant pathology he found himself immersed in even more tedious manual labour in a dusty, eroded, wind-blown patch of dirt outside Mexico City. His goal was to find a variety of wheat that would resist the blight known as rust.

Borlaug planted eight thousand wheat varieties the first season and came up with exactly four rust-resistant varieties. But he eventually developed strains of “dwarf” wheat that not only resisted rust, but which did not blow over in the wind and which responded well to artificial fertilizers. This development became known as the “Green Revolution”, and earned Borlaug a Nobel Peace Prize. He continued to work nearly up to his death in 2009 at the age of ninety-five, with advocacy for genetic engineering a theme of his later writings.

William Vogt was publicly lionized long before Borlaug came to fame, yet he too did his key research in an unglamorous setting: the guano-caked islands off Peru’s coast. For half a century the nitrogen-rich excrement of Guanay cormorants had been a key resource for world agriculture. Peru’s government wanted to know: why did the population of cormorants sometimes crash, and could they safeguard the marvellous output of fertilizer?

While Borlaug’s work rewarded a rigorous focus on detail, Vogt approached his task with the wide-angle lens of ecology. He tied cormorant populations to the ups and downs of the anchovetas which fed the birds; the plankton which fed the anchovetas; and the alternately warm or cold ocean currents of El Niño or La Niña which fed or starved the plankton. The maximum numbers of cormorants as well as their periodic crashes, Vogt reported, were set by nature’s own limits, and it would be foolhardy to push against those limits.

Vogt extended this message of limits in his 1948 book Road to Survival. He believed too much consumption is ecologically disastrous, and this consumption is based on both population growth and the quest for continuing economic growth. Road to Survival was a runaway best-seller.

Trending to infinity

Mann’s story-telling skills shine when he’s narrating the life and times of Borlaug, Vogt and the colourful characters they worked with. When The Wizard and the Prophet embarks on a 200-page tour of today’s many global ecology challenges, Mann’s discursions are fascinating but the quality is uneven.

An overview of world agriculture contrasts the Green Revolution with small-scale “organic” approaches. Yet Mann winds up that chapter without posing an obvious question. The artificial fertilizers required by Green Revolution crops are based on an energy-intensive process with natural gas as a feedstock, but can we be confident we have affordable resources to maintain, let alone double, current fertilizer production?

Through most of the book Mann recognizes the value in Vogt’s arguments for limits as well as Borlaug’s success in at least temporarily pushing those limits. That even-handedness is gone in his chapter on energy supply. Responding to the fear that fossil fuel resources might soon run short, Mann espouses Cornucopianism with an enthusiasm that would make a tar-sands tycoon blush.

In Mann’s reading of history the mere thought of “peak oil” has produced such infelicities as 75 years of war and tyranny in the Middle East. Though in some mere physical sense fossil fuel reserves must be limited, Mann argues, they are economically infinite – and economics trumps physics. That may be “counterintuitive”, he admits, “but more than a century of experience has shown it to be true.” If a trend lasts 100 years, apparently, we should feel confident it will be sustained for all time.

His chapter on climate change has more grounding in science and reason, but is badly dated. He relies on the 2014 report of the Intergovernmental Panel on Climate Change, a necessarily conservative consensus review of thousands of reports published in prior years, which gave a likely range of global temperature increases from 1.5° to 4.5° Celsius.

Mann uses the IPCC’s temperature range and probability estimates to conclude “Very roughly speaking, this translates into a one-out-of-six chance that nothing much will happen – and a one-out-of-six chance of complete disaster.” When Stewart Brand used a similar one-in-six analogy in his 2009 book Whole Earth Discipline it was somewhat plausible. But since that time, measured global warming has been consistently outrunning the IPCCs cautious projections, many climatologists warn that we’ve already passed any chance of keeping global warming to less than 2°C, and the possible outcomes now run along a spectrum of biospheric  and civilizational catastrophes.

Vogt’s 1948 Road to Survival was a bestseller, but by the mid-1960s he found it hard to get a hearing in major media. Borlaug’s 1970 Nobel Prize was the first of a series of accolades that continued for the next 40 years. (Photo of statue in US Capitol building by Architect of the Capitol)

While Borlaug was influential to the end of his long life Vogt’s career flamed out early. In the 1950s he turned to population control as the single overriding issue, leading to a stormy tenure  at the helm of Planned Parenthood. Publishers and book buyers lost interest in his writings and he slid into despair. In 1968 – two years before Borlaug won his Nobel Prize – Vogt was gone, dead by his own hand.

Had he lived another fifty years to see 7 billion people trying to secure a subsistence on a planet already suffering from climate change, it’s hard to imagine that he would have regained hope.

 

Photos at top: Norman Borlaug in Mexico, 1964, photo from Centro Internacional de Mejoramiento de Maíz y Trigo. William Vogt, 1940, promotional photo from Compañia Administradora del Guano

The climate revolution: a manual for head, hands and heart

Also published at Resilience.org.

How many people in North America and Europe have known for at least 15 years that climate change is dangerous, that it is caused mostly by our burning of fossil fuels, and that we must drastically reduce our fossil fuel consumption?

That would be most of us.

And how many of us have drastically reduced our fossil fuel consumption?

Not so many of us.

Mostly, our actions proclaim “We’ll cut back our fossil fuel use when everybody else does … or when the government forces us … or when hell freezes over – whichever comes last!”

Physicist and climatologist Peter Kalmus found the gulf between his beliefs and his lifestyle to be deeply unsatisfying, and he set out to heal that rift.

The result, he says, has been a dramatically richer life for him and his family.

His book Being The Change (New Society Publishers, 2017) outlines the ‘why’ and ‘how’ of his family’s reduction of their fossil fuel consumption by 90% in just a few years. His discussion ranges from climate science to economics, from bicycling to beekeeping, from community networks to meditation, in a deeply inspiring narrative.

Waves of gravity

Kalmus didn’t begin his scientific career in climatology. With a PhD in astrophysics, his speciality was gravitational waves and his day job was working through the data that would, in 2016, confirm Einstein’s prediction of gravitational waves.

But he was also learning about the onrushing catastrophe of climate change, and as a young parent he was deeply worried for the world his children would inherit. Motivated by a desire to work on problems closer to home, he switched his professional focus, taking a new job at NASA studying the role of clouds in global warming.

Kalmus describes Being the Change as a book for the head, the hands and the heart. Wearing his scientist hat, he lucidly lays out the science of climate change. These chapters don’t require more than a high-school science background to understand, but even those who have read many books and articles on the subject are likely to learn something. For those who have read little or nothing on this subject, a good beginning would be to read Kalmus’ chapters on climate science three or four times over – he packs a lot of information into 50 pages.

His sobering conclusion is that we have already stalled too long to have any reasonable chance of keeping global warming below 2°C. Within two or three decades, the mean global temperature will be higher than in any record-warmth year in human experience so far. That new climate era will last centuries, challenging the resiliency of not only human civilization but global biodiversity.

The key uncertainty, he says, is the temperature at which global warming will peak. None of us alive today will be here to experience that peak, but our actions this generation will have a major influence on that peak. A higher peak will cause a spike in the rate of species extinctions, and if and when global warming slows or stops, it will take far longer for biodiversity to recover.

“A good overarching goal for today’s civilization would be to minimize global warming and its concomitant biodiversity loss for the sake of the next few hundred thousand human generations.” (Being the Change, page 69)

Fear of not flying

Climate science gives us clear warning of the disaster we are bequeathing our descendants if we don’t change our way of life, fast. Kalmus concludes, “it’s critical we begin saying that burning fossil fuels is causing real harm and needs to stop. It’s even more important to begin living this message.” (Being the Change, page 120 – italics mine)

A second major focus of the book is “hands-on” – the many ways people can change their own lives to join the movement away from fossil fuels. Kalmus relates his personal experiences here, but he also provides valuable suggestions to help others estimate their consumption of fossil fuels and reduce that consumption in meaningful ways.

Kalmus found that one category of fossil fuel consumption outweighed all others in his life: long-distance travel by air. Much of this consumption happened in traveling to distant conferences where delegates would warn of the dangers of climate change. Kalmus’ decision to stop taking these flights led to a more satisfying life, he says – though this was a rejection of one of the signature privileges of a global elite.

“The act of flying is an exercise of privilege. Globally, only about 5% of humans have ever flown.” (Being the Change, page 151)

Even the average American spends relatively little time in the air. Kalmus writes that “The average American emits about 1,000 kg CO2 per year from flying, which is roughly equivalent to one 4,000-mile round-trip between Los Angeles and Chicago.” But in 2010, Kalmus’ carbon emissions due to flying were 16 times that average – and so it was obvious where he had to make the first change to align his lifestyle with his knowledge.

Kalmus’ graph of his greenhouse gas emissions for 2010 – 2014. Source: Being the Change, page 144. (click graph for larger view)

For the average American, Kalmus says, the “largest climate impact is from driving.” He largely eliminated those CO2 emissions from his life too, through routine bicycling, driving a car that he converted to run on used vegetable oil, and taking a bus or trains for occasional long-distance trips.

Each person’s CO2 emission profile, and therefore their opportunities for emission reductions, will be different.

But Kalmus hopes others will share his experience in one key respect – a greater peace with their own lives and their own surroundings.

“I think most people are afraid of a low-energy lifestyle because we equate quality of life with quantity of energy use,” he says. “My experience has been the opposite: low-energy living is more fun and satisfying.”

Reading about his new-found love of gardening and beekeeping, and the strength of the local community bonds he and his family have developed, it’s easy to understand the richness of this low-energy lifestyle.

He also makes clear that he doesn’t believe that purely individual actions are sufficient to halt the fossil-fuel juggernaut. In the realm of public policy, he pens an excellent advocacy for his preferred fiscal approach to reducing national and international CO2 emissions – Carbon Fee And Dividend (CFAD). He also discusses his work with one group working on the CFAD option, the Citizens’ Climate Lobby.

Finding a lifestyle that matches his principles brings joy and a significant measure of peace of mind. At the same time, finding peace of mind is key in giving him the energy to embark on all those personal changes. That brings us to a third major focus of Being the Change: meditation.

“As part of my daily work, I look directly at the truth of global warming, and what it’s doing to the inhabitants of the Earth. Meditation gives me the strength and the courage to keep interacting with this truth, as it is – not only to cope, but to be happy and as effective as possible in enacting positive change.” (Being the Change, page 203)

As one who has never been attracted to the practice of meditation, Kalmus’ story here left me with mixed feelings. On the one hand, his discussions of dissolving the ego and escaping all wants were, for this reader, just about the only parts of the book that weren’t wholly convincing. On the other hand his life story so far is truly moving, and if he says meditation has been central to that journey then I can only celebrate the strength and peace that meditation gives him. More than that, his book has made me ask whether I want to introduce meditation into my own life in a concerted way; better late, perhaps, than never.

Science and love

Peter Kalmus has written a profound book about the science of global warming, and a profound book about love:

“These two seemingly disparate things – reducing my own fossil fuel use and increasing my ability to love – are actually intimately interconnected.”

In the process he grapples with three of the most troublesome questions facing the environmental movement. Can we convince people it’s essential to eliminate fossil fuel use, when our own lifestyles say that fossil fuel use is no problem? Can we convince people that a high-energy lifestyle is unnecessary and destructive, when we act as if our lives depend on that lifestyle? Can we be happily productive agents of change, while we are caught up in the high-energy whirl of consumptive capitalism? It’s hard to answer those questions except with “No, no and no.” And yet Kalmus’ personal message is deeply positive and deeply hopeful:

“On my own path, as I continue to reduce, I’m actually experiencing increasing abundance. It’s a good path.”

 

Photo at top: Peter Kalmus, photo by Alice Goldsmith, courtesy of New Society Publishers

The unbearable cheapness of capitalism

Also published at Resilience.org.

René Descartes, Christopher Columbus and Jeff Bezos walk into a bar and the bartender asks, “What can I get for you thirsty gentlemen?”

“We’ll take everything you’ve got,” they answer, “just make it cheap!”

That’s a somewhat shorter version of the story served up by Raj Patel and Jason W. Moore. Their new book, A History of the World in Seven Cheap Things, illuminates many aspects of our present moment. While Jeff Bezos doesn’t make it into the index, René Descartes and Christopher Columbus both play prominent roles.

In just over 200 pages plus notes, the book promises “A Guide to Capitalism, Nature and the Future of the Planet.”

Patel and Moore present a provocative and highly readable guide to the early centuries of capitalism, showing how its then radically new way of relating to Nature remains at the root of world political economy today. As for a guide to the future, however, the authors do little beyond posing a few big questions.

The long shadow of the Enlightenment

Philosopher René Descartes, known in Western intellectual history as one of the fathers of the Enlightenment, helped codify a key idea for capitalism: separation between Society and Nature. In 1641,

“Descartes distinguished between mind and body, using the Latin res cogitans and res extensa to refer to them. Reality, in this view, is composed of discrete “thinking things” and “extended things.” Humans (but not all humans) were thinking things, Nature was full of extended things. The era’s ruling classes saw most human beings – women, peoples of color, Indigenous Peoples – as extended, not thinking, beings. This means that Descartes’s philosophical abstractions were practical instruments of domination ….”

From the time that Portuguese proto-capitalists were converting the inhabitants of Madeira into slaves on sugar plantations, and Spanish colonialists first turned New World natives into cogs in their brutal silver mines, there had been pushback against the idea of some humans owning and using others. But one current in Western thought was particularly attractive to the profit-takers.

In this view, Nature was there for the use and profit of thinking beings, which meant white male property owners. Patel and Moore quote English philosopher and statesman Francis Bacon, who expressed the new ethos with ugly simplicity: “science should as it were torture nature’s secrets out of her,” and the “empire of man” should penetrate and dominate the “womb of nature.”

The patriarchal character of capitalism, then, is centuries old:

“The invention of Nature and Society was gendered at every turn. The binaries of Man and Woman, Nature and Society, drank from the same cup. … Through this radically new mode of organizing life and thought, Nature became not a thing but a strategy that allowed for the ethical and economic cheapening of life.”

Armored with this convenient set of blinders, a colonialist could gaze at a new (to him) landscape filled with wondrous plants, animals, and complex societies, and without being hindered by awe, respect or humility he could see mere Resources. Commodities. Labour Power. A Work Force. In short, he could see Cheap Things which could be taken, used, and sold for a profit.

Patel and Moore’s framework is most convincing in their chapters on Cheap Nature, Cheap Work, and Cheap Care. Their narrative begins with the enclosure movement, in which land previously respected as Commons for the use of – and care by – all, was turned into private property which could be exploited for short-term gain.

Enclosure in turn led to proletarianization, resulting in landless populations whose only method of fending off starvation was to sell their labour for a pittance. The gendered nature of capitalism, meanwhile, meant that the essential role of bringing new generations of workers into life, and caring for them until they could be marched into the fields or factories, was typically not entered into the economic ledger at all. The worldwide legacy remains to this day, with care work most often done by women either egregiously under-paid or not paid at all.

Yet as the book goes on, the notion of “cheap” grows ever fuzzier. First of all, what’s cheap to one party in a transaction might be very dear to the other. While a capitalist gains cheap labour, others lose their cultures, their dignity, often their very lives.

Other essential components in the system often don’t come cheap even for capitalists. In their chapter on Cheap Money, Patel and Moore note that the European powers sunk tremendous resources into the military budgets needed to extend colonial domination around the world. The chapter “Cheap Lives” notes that “Keeping things cheap is expensive. The forces of law and order, domestic and international, are a costly part of the management of capitalism’s ecology.” The vaunted Free Market, in other words, has never come free.

A strategic definition

How can the single word “cheap” be made a meaningful characterization of Nature, Money, Work, Care, Food, Energy and Lives? The authors promise at the outset to tell us “precisely” what they mean by “cheap.” When the definition arrives, it is this:

“We come, then, to what we mean by cheapness: it’s a set of strategies to manage relations between capitalism and the web of life by  temporarily fixing capitalism’s crises. Cheap is not the same as low cost – though that’s part of it. Cheap is a strategy, a practice, a violence that mobilizes all kinds of work – human and animal, botanical and geological – with as little compensation as possible. … Cheapening marks the transition from uncounted relations of life making to the lowest possible dollar value. It’s always a short-term strategy.”

Circular reasoning, perhaps. Capitalism means the Strategies of getting things Cheap. And Cheap means those Strategies used by Capitalism. Yet Moore and Patel use this rhetorical flexibility, for the most part, to great effect.

Their historical narrative sticks mostly to the early centuries of capitalism, but their portrayals of sugar plantations, peasant evictions and the pre-petroleum frenzies of charcoal-making in England and peat extraction in the Netherlands are vivid and closely linked.

Particularly helpful is their concept of frontiers, which extends beyond the merely geographic to include any new sphere of exploitation – and capitalism is an incessant search for such new frontiers. As a result, it’s easy to see the strategies of “cheapening” in the latest business stories.

Jeff Bezos, for example, has become the world’s richest man through a new model of industrial organization – thousands of minimum-wage workers frantically running through massive windowless warehouses to package orders, with the latest electronic monitoring equipment used to speed up the treadmill at regular intervals. Life-destroying stress for employees, but Cheap Work for Bezos. Or take the frontier of the “sharing economy”, in which clever capitalists find a way to profit from legions of drivers and hotel-keepers, without the expense of investment in taxis or real estate.

Patel and Moore note that periods of financialization have occurred before, when there was a temporary surplus of capital looking for returns and a temporary shortage of frontiers. But

“there’s something very different about the era of financialization that began in the 1980s. Previous financial expansions could all count on imperialism to extend profit-making opportunities into significant new frontiers of cheap nature. … Today, those frontiers are smaller than ever before, and the volume of capital looking for new investment is greater than ever before.”

Thus the latest episode of financialization is just one of many indicators of a turbulent future. And that leads us to perhaps the most glaring weakness of Seven Cheap Things.

The subtitle makes a promise of a guide to “the future of the planet”. (In fairness, it’s possible that the subtitle was chosen not by the authors but the publishers.) The Conclusion offers suggestions of “a way to think beyond a world of cheap things ….” But in spite of the potentially intriguing headings Recognition, Reparation, Redistribution, Reimagination, and Recreation, their suggestions are so sketchy that they end a solid story on a very thin note.


Top photo: “The boiling house”, from Ten Views in the Island of Antigua, 1823, by William Clark, illustrates a step in the production of sugar. Image from the British Library via Wikimedia Commons.

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)

S-curves and other paths

Also published at Resilience.org.

Oxford University economist Kate Raworth is getting a lot of good press for her recently released book Doughnut Economics: 7 Ways to Think Like a 21st Century Economist.

The book’s strengths are many, starting with the accessibility of Raworth’s prose. Whether she is discussing the changing faces of economic orthodoxy, the caricature that is homo economicus, or the importance of according non-monetized activities their proper recognition, Raworth keeps things admirably clear.

Doughnut Economics makes a great crash course in promising new approaches to economics. In Raworth’s own words, her work “draws on diverse schools of thought, such as complexity, ecological, feminist, institutional and behavioural economics.” Yet the integration of ecological economics into her framework is incomplete, leading to a frustratingly unimaginative concluding chapter on economic growth.

Laying the groundwork for that discussion of economic growth has resulted in an article about three times as long as most of my posts, so here is the ‘tl;dr’ version:

Continued exponential economic growth is impossible, but the S-curve of slowing growth followed by a steady state is not the only other alternative. If the goal is maintaining GDP at the highest possible level, then the S-curve is the best case scenario, but in today’s world that isn’t necessarily desirable or even possible.

The central metaphor

Full disclosure: for as long as I can remember, the doughnut has been my least favourite among refined-sugar-white-flour-and-grease confections. So try as I might to be unbiased, I was no doubt predisposed to react critically to Raworth’s title metaphor.

What is the Doughnut? As Raworth explains, the Doughnut is the picture that emerged when she sketched a “safe space” between the Social Foundation necessary for prosperity, and the Ecological Ceiling beyond which we should not go.

Source: Doughnut Economics, page 38

There are many good things to be said about this picture. It affords a prominent place to both the social factors and the ecological factors which are essential to prosperity, but which are omitted from many orthodox economic models. The picture also restores ethics, and the choosing of goals, to central roles in economics.

Particularly given Raworth’s extensive background in development economics, it is easy to understand the appeal of this diagram.

But I agree with Ugo Bardi (here and here) that there is no particular reason the diagram should be circular – Shortfall, Social Foundation, Safe and Just Space, Ecological Ceiling and Overshoot would have the same meaning if arranged in horizontal layers rather than in concentric circles.

From the standpoint of economic analysis, I find it unhelpful to include a range of quite dissimilar factors all at the same level in the centre of the diagram. A society could have adequate energy, water and food without having good housing and health care – but you couldn’t have good housing and health care without energy, water and food. So some of these factors are clearly preconditions for others.

Likewise, some of the factors in the centre of the diagram are clearly and directly related to “overshoot” in the outer ring, while others are not. Excessive consumption of energy, water, or food often leads to ecological overshoot, but you can’t say the same about “excessive” gender equality, political voice, or peace and justice.

Beyond these quibbles with the Doughnut diagram, I further agree with Bardi that a failure to incorporate biophysical economics is the major weakness of Doughnut Economics. In spite of her acknowledgment of the pioneering work of Herman Daly, and a brief but lucid discussion of the work of Robert Ayres and Benjamin Warr showing that fossil fuels have been critical for the past century’s GDP growth, Raworth does not include energy supply as a basic determining factor in economic development.

Economists as spin doctors

Raworth makes clear that key doctrines of economic orthodoxy often obscure rather than illuminate economic reality. Thus economists in rich countries extoll the virtues of free trade, though their own countries relied on protectionism to nurture their industrial base.

Likewise standard economic modeling starts with a reductionist “homo economicus” whose decisions are always based on rational pursuit of self-interest – even though behavioral science shows that real people are not consistently rational, and are motivated by co-operation as much as by self-interest. Various studies indicate, however, that economics students and professors show a greater-than-average degree of self-interest. And for those who are already wealthy but striving to become wealthier still, it is comforting to believe that everyone is similarly self-interested, and that their self-interest works to the good of all.

When considering a principle of mainstream economics, then, it makes sense to ask: what truths does this principle hide, and for whose benefit?

Unfortunately, when it comes to GDP growth as the accepted measure of a healthy economy, Raworth leaves out an important part of the story.

The concept of Gross Domestic Product has its roots in the 1930s, when statisticians were looking for ways to quantify economic activity, making temporal trends easier to discern. Simon Kuznets developed a way to calculate Gross National Product – the total of all income generated worldwide by US residents.

As Raworth stresses, Kuznets himself was clear that his national income tally was a very limited way of measuring an economy.

Emphasising that national income captured only the market value of goods and services produced in an economy, he pointed out that it therefore excluded the enormous value of goods and services produced by and for households, and by society in the course of daily life. … And since national income is a flow measure (recording only the amount of income generated each year), Kuznets saw that it needed to be complemented by a stock measure, accounting for the wealth from which it was generated ….” (Doughnut Economics, page 34; emphasis mine)

The distinction between flows and stocks is crucial. Imagine a simple agrarian nation which uses destructive farming methods to work its rich land. For a number of years it may earn increasingly high income – the flow – though its wealth-giving topsoil – the stock – is rapidly eroding. Is this country getting richer or poorer? Measured by GDP alone, this economy is healthy as long as current income grows; no matter that the topsoil, and future prospects, are blowing away in the wind.

In the years immediately preceding and following World War II, GDP became the primary measure of economic health, and it became political and economic orthodoxy that GDP should grow every year. (To date no western leader has ever campaigned by promising “In my first year I will increase GDP by 3%, in my second year by 2%, in my third year it will grow by 1%, and by my fourth year I will have tamed GDP growth to 0!”)

What truth does this reliance on GDP hide, and for whose benefit? The answers are fairly obvious, in my humble opinion: a myopic focus on GDP obscured the inevitability of resource depletion, for the benefit of the fossil fuel and automative interests who dominated the US economy in the mid-twentieth century.

For context, in 1955 the top ten US corporations by number of employees included: General Motors, Chrysler, Standard Oil of New Jersey, Amoco, Goodyear and Firestone. (Source: 24/7 Wall St)

In 1960, the top ten largest US companies by revenue included General Motors, Exxon, Ford, Mobil, Gulf Oil, Texaco, and Chrysler. (Fortune 500)

These companies, plus the steel companies that made sheet metal for cars and the construction interests building the rapidly-growing network of roads, were clear beneficiaries of a new way of life that consumed ever-greater quantities of fossil fuels.

In the decades after World War II, the US industrial complex threw its efforts into rapid exploitation of energy reserves, along with mass production of machines that would burn that energy as fast as it could be pulled out of the ground. This transformation was not a simple result of “the invisible hand of the free market”; it relied on the enthusiastic collaboration of every level of government, from local zoning boards, to metropolitan transit authorities, to state and federal transportation planners.

But way back then, was it politically necessary to distract people from the inevitability of resource depletion?

The Peak Oil movement in the 1930s

From the very beginnings of the petroleum age, there were prominent voices who saw clearly that exponential growth in use of a finite commodity could not go on indefinitely.

One such voice was William Jevons, now known particularly for the “Jevons Paradox”. In 1865 he argued that since coal provided vastly more usable energy than industry had previously been able to harness, and since this new-found power was the very foundation of modern industrial civilization, it was particularly important to a nation to prudently manage supplies:

Describing the novel social experience that coal and steam power had created, the experience that today we would call ‘exponential growth’, in which practically infinite values are reached in finite time, Jevons showed how quickly even very large stores of coal might be depleted.” (Timothy Mitchell, Carbon Democracy, pg 129)

In the 1920s petroleum was the new miracle energy source, but thoughtful geologists and economists alike realized that as a finite commodity, petroleum could not fuel infinite growth.

Marion King Hubbert was a student in 1926, but more than sixty years later he still recalled the eye-opening lesson he received when a professor asked pupils to consider the implications of ongoing rapid increases in the consumption of coal and oil resources.

As Mason Inman relates in his excellent biography of Hubbert,

When a quantity grows by a constant percentage each year, its history forms a straight line on a semilogarithmic graph. Hubbert plotted the points for coal, year after year, and found a fairly straight line that persisted for several decades: a continual growth rate of around 6 percent a year. At that rate, the production doubled about every dozen years. When he looked at this graph, it was obvious to him that such rapid growth could persist for decades – his graph showed that had already happened – but couldn’t continue forever.” (The Oracle of Oil, 2016, pg 19)

Hubbert soon learned that there were many others who shared his concerns. This thinking coalesced in the 1930s in a very popular movement known as Technocracy. They argued that wealth depended primarily not on the circulation of money, but on the flow of energy.

The leaders of Technocracy, including Hubbert, were soon speaking to packed houses and were featured in cover stories in leading magazines. Hubbert was also tasked with producing a study guide that interested people could work through at home.

In the years prior to the Great Depression, people had become accustomed to economic growth of about 5% per year. Hubbert wanted people to realize it made no sense to take that kind of growth for granted.

“It has come to be naively expected by our business men and their apologists, the economists, that such a rate of growth was somehow inherent in the industrial processes,” Hubbert wrote. But since Earth and its physical resources are finite, he said, infinite growth is an impossibility.

In short, Technocracy pointed out that the fossil fuel age was likely to be a flash in the pan, historically speaking – unless the nation’s fuel reserves were managed carefully by engineers who understood energy efficiency and depletion.

Without sensible accounting and allocation of the true sources of a nation’s wealth – its energy reserves – private corporations would rake in massive profits for a few decades and two or three generations of Americans might prosper, but in the longer term the nation would be “burning its capital”.

Full speed ahead

After the convulsions of the Depression and World War II, the US emerged with the same leading corporations in an even more dominant position. Now the US had control, or at least major influence, not only over rich domestic fossil fuel reserves, but also the much greater reserves in the Middle East. And as the world’s greatest military and financial power, they were in a position to set the terms of trade.

For fossil fuel corporations the major problem was that oil was temporarily too cheap. It came flowing out of wells so easily and in such quantity that it was often difficult to keep the price up. It was in their interests that economies consume oil at a faster rate than ever before, and that the rate of consumption would speed up each year.

Fortunately for these interests, a new theory of economics had emerged just in time.

In this new theory, economists should not worry about measuring the exhaustion of resources. In Timothy Mitchell’s words, “Economics became instead a science of money.”

The great thing about money supply was that, unlike water or land or oil, the quantity of money could grow exponentially forever. And as long as one didn’t look too far backwards or forwards, it was easy to imagine that energy resources would prove no barrier. After all, for several decades, the price of oil had been dropping.

So although increasing quantities of energy were consumed, the cost of energy did not appear to represent a limit to economic growth. … Oil could be treated as something inexhaustible. Its cost included no calculation for the exhaustion of reserves. The growth of the economy, measured in terms of GNP, had no need to account for the depletion of energy resources.” (Carbon Democracy, pg 140)

GDP was thus installed as the supreme measure of an economy, with continuous GDP growth the unquestionable political goal.

A few voices dissented, of course. Hubbert warned in the mid-1950s that the US would hit the peak of its conventional fossil fuel production by the early 1970s, a prediction that proved correct. But large quantities of cheap oil remained in the Middle East. Additional new finds in Alaska and the North Sea helped to buy another couple of decades for the oil economy (though these fields are also now in decline).

Thanks to the persistent work of a small number of researchers who called themselves “ecological economists”, a movement grew to account for stocks of resources, in addition to tallying income flows in the GDP. By the early 1990s, the US Bureau of Economic Analysis gave its blessing to this effort.

In April 1994 the Bureau published a first set of tables called Integrated Environmental-Economic System of Accounts (IEESA).

The official effort was short-lived indeed. As described in Beyond GDP,

progress toward integrated environmental-economic accounting in the US came to a screeching halt immediately after the first IEESA tables were published. The US Congress responded swiftly and negatively. The House report that accompanied the next appropriations bill explicitly forbade the BEA from spending any additional resources to develop or extend the integrated environmental and economic accounting methodology ….” (Beyond GDP, by Heun, Carbajales-Dale, Haney and Roselius, 2016)

All the way through Fiscal Year 2002, appropriations bills made sure this outbreak of ecological economics was nipped in the bud. The bills stated,

The Committee continues the prohibition on use of funds under this appropriation, or under the Census Bureau appropriation accounts, to carry out the Integrated Environmental-Economic Accounting or ‘Green GDP’ initiative.” (quoted in Beyond GDP)

One can only guess that, when it came to contributing to Congressional campaign funds, the struggling fossil fuel interests had somehow managed to outspend the deep-pocketed biophysical economists lobby.

S-curves and other paths

With that lengthy detour complete, we are ready to rejoin Raworth and Doughnut Economics.

The final chapter is entitled “Be Agnostic About Growth: from growth addicted to growth agnostic”.

This sounds like a significant improvement over current economic orthodoxy – but I found this section weak in several ways.

First, it is unclear just what it is that we are to be agnostic about. While Raworth has made clear earlier in the book why GDP is an incomplete and misleading measure of an economy, in the final chapter GDP growth is nevertheless used as the only significant measure of economic growth. Are we to be agnostic about “GDP growth”, which might well be meaningless anyway? Or should we be agnostic about “economic growth”, which might be something quite different and quite a bit more essential – especially to the hundreds of millions of people still living without basic necessities?

Second, Raworth may be agnostic about growth, but she is not agnostic about degrowth. (She has discussed elsewhere why she can’t bring herself to use the word “degrowth”.) True, she remarks at one point that “I mean agnostic in the sense of designing an economy that promotes human prosperity whether GDP is going up, down, or holding steady.” Yet in the pictures she draws and in the ensuing discussion, there is no clear recognition either that degrowth might be desirable, or that degrowth might be forced on us by biophysical realities.

She includes two graphs for possible paths of economic growth –  with growth measured here simply by GDP.

Source: Doughnut Economics, page 210 and page 214

As she notes, the first graph shows GDP increasing at steady annual percentage. While the politicians would like us to believe this is possible and desirable, the graph showing what quickly becomes a near-vertical climb is seldom presented in economics textbooks, as it is clearly unrealistic.

The second graph shows GDP growing slowly at first, then picking up speed, and then leveling off into a high but steady state with no further growth. This path for growth is commonly seen and recognized in ecology. The S-curve was also recognized by pre-20th-century economists, including Adam Smith and John Stuart Mill, as the ideal for a healthy economy.

I would concur that an S-curve which lands smoothly on a high plateau is an ideal outcome. But can we take for granted that this outcome is still possible? And do these two paths – continued exponential growth or an S-curve – really exhaust the conceptual possibilities that we should consider?

On the contrary, we can look back 80 years to the Technocracy Study Course for an illustration of varied and contrasting paths of economic growth and degrowth.

Source: The Oracle of Oil, page 58

M. King Hubbert produced this set of graphs to illustrate what can be expected with various key commodities on which a modern industrial economy depends – and by extension, what might happen with the economy as a whole.

While pure exponential growth is impossible, the S-curve may work for a dependably renewable resource, or a renewable-resource based economy. However, the next possibility – with a rise, peak, decline, and then a leveling off – is also a common scenario. For example, a society may harvest increasing amounts of wood until the regenerating power of the forests are exceeded; the harvest must then drop before any production plateau can be established.

The bell curve which starts at zero, climbs to a high peak, and drops back to zero, could characterize an economy which is purely based on a non-renewable resource such as fossils fuels. Hopefully this “decline to zero” will remain a theoretical conception, since no society to date has run 100% on a non-renewable resource. Nevertheless our fossil-fuel-based industrial society will face a severe decline unless we can build a new energy system on a global scale, in very short order.

This range of economic decline scenarios is not really represented in Doughnut Economics. That may have something to do with the design of the title metaphor.

While ecological overshoot, on the outside of the doughnut, represents things we should not do, the diagram doesn’t have a way of representing the things we can not do.

We should not continue to burn large quantities of fossil fuel because that will destabilize the climate that our children and grandchildren inherit. But once our cheaply accessible fossil fuels are used up, then we can not consume energy at the same frenetic pace that today’s wealthy populations take for granted.

The same principle applies to many essential economic resources. As long as there is significant fertility left in farmland, we can choose to farm the land with methods that produce a high annual return even though they gradually strip away the topsoil. But once the topsoil is badly depleted, then we no longer have a choice to continue production at the same level – we simply need to take the time to let the land recover.

In other words, these biophysical realities are more fundamental than any choices we can make – they set hard limits on which choices remain open to us.

The S-curve economy may be the best-case scenario, an outcome which could in principle provide global prosperity with a minimum of system disruption. But with each passing year during which our economy is based overwhelmingly on rapidly depleting non-renewable resources, the smooth S-curve becomes a less likely outcome.

If some degree of economic decline is unavoidable, then clear-sighted planning for that decline can help us make the transition a just and peaceful one.

If we really want to think like 21st century economists, don’t we need to openly face the possibility of economic decline?

 

Top photo: North Dakota State Highway 22, June 2014. (click here for larger view)

Guns, energy, and the coin of the realm

Also published at Resilience.org.

While US debt climbs to incomprehensible heights, US banking authorities continue to pump new money into the economy. How can they do it? David Graeber sees a  simple explanation:

There’s a reason why the wizard has such a strange capacity to create money out of nothing. Behind him, there’s a man with a gun.” (Debt: The First 5,000 Years, Melville House, 2013, pg 364)

In part one of this series, we looked at the extent of violence in the “American Century” – the period since World War II in which the US has been the number one superpower, and in which US garrisons have ringed the world. In part two we looked at the role of energy supplies in propelling the US to power, the rapid drawdown of energy supplies in the US post-WWII, and the more recent explosion of US debt.

In this concluding installment we’ll look at the links between military power and financial power.

A new set of financial institutions arose at the end of World War II, and for obvious reasons the US was ‘first among equals’ in setting the rules. Not only was the US in military occupation of Germany and Japan, but the US also had the financial capital to help shattered countries –whether on the war’s winning or losing sides – in reconstructing their infrastructures and restarting their economies.

The US was also able to offer military protection to many countries including previous mortal enemies. This meant that these countries could avoid large military outlays – but also that their elites were in no position to challenge US supremacy.

That being said, there were challenges both large and small in dozens of nations, particularly from the grass roots. The US exercised political power, both soft and hard, in attempts to influence the directions of scores of countries around the world. Planting of media reports, surreptitious aid to favoured electoral candidates, dirty tricks to discredit candidates seen as threatening, military aid and training to dictatorships and police forces who could put down movements for social justice, planning and helping to implement coups, and full-fledged military invasion – this range of intervention techniques resulted in hundreds of thousands, if not millions, of deaths. Cataloguing the bloody side of US “leadership of the free world” is the task taken on so ably by John Dower in The Violent American Century.

Dollars for oil

One of the rules of the game grew in importance with each passing decade. In Timothy Mitchell’s words,

Under the arrangements that governed the international oil trade, the commodity was sold in the currency not of the country where it was produced, nor of the place where it was consumed, but of the international companies that controlled production. ‘Sterling oil’, as it was known (principally oil from Iran), was traded in British pounds, but the bulk of global sales were in ‘dollar oil’.” (Carbon Democracy, Verso, 2013, pg 111)

As David Graeber’s Debt explains in detail, the ability to force people to acquire and use the ruler’s currency has, throughout history, been a key mechanism for extracting tribute from subject populations.

In today’s global economy, that is why the pricing of oil in dollars has been so important for the US. Again in Timothy Mitchell’s words:

Europe and other regions had to accumulate dollars, hold them and then return them to the United States in payment for oil. Inflation in the United States slowly eroded the value of the dollar, so that when these countries purchased oil, the dollars they used were worth less than their value when they acquired them. These seigniorage privileges, as they are called, enabled Washington to extract a tax from every other country in the world …. (Carbon Democracy, pg 120)

As Greg Grandin explains, the oil-US dollar relationship grew in importance even as OPEC countries were able to force big price increases:

With every rise in the price of oil, oil-importing countries had to borrow more to meet their energy needs. With every petrodollar placed in New York banks, the value of the US currency increased, and with it the value of the dollar-denominated debt that poor countries owed to those banks.” (“Down From The Mountain”, London Review of Books, June 19, 2017)

But the process did take on another important twist after US domestic oil production peaked and imports from Saudi Arabia soared in the 1970s. Although the oil trade continued to support the value of the US dollar, the US was now sending a lot more of those dollars to oil exporting countries. The Saudis, in particular, accumulated US dollars so fast there wasn’t a productive way for them to circulate these dollars back into the US by purchasing US-made goods. The burgeoning US exports of munitions provided a solution. Mitchell explains:

As the producer states gradually forced the major oil companies to share with them more of the profits from oil, increasing quantities of sterling and dollars flowed to the Middle East. To maintain the balance of payments and the viability of the international financial system, Britain and the United States needed a mechanism for these currency flows to be returned. … Arms were particularly suited to this task of financial recycling, for their acquisition was not limited by their usefulness. The dovetailing of the production of petroleum and the manufacture of arms made oil and militarism increasingly interdependent.” (Carbon Democracy, pg 155-156)

He adds, “The real value of US arms exports more than doubled between 1967 and 1975, with most of the new market in the Middle East.”

An F-15 Eagle aircraft of the Royal Saudi Air Force takes off during Operation Desert Shield, 1991. (Source: Wikimedia Commons)

Fast forward to today. Imported oil is a critical factor in the US economy, in spite of a supply blip from fracking. US industry leads the world in the export of weapons; the top three buyers, and five of the top ten buyers, are in the Middle East. (Source: CNN, May 25, 2016) Yet US arms sales are dwarfed by US military expenditures, which are roughly double in real terms what they were in the 1960s. (Source: Time, July 16, 2013)

Finally, US national debt, in 1983 dollars, is about 10 times as high as it was from 1950 to 1980. In other words the US government, along with its banking and military complexes, has been living far beyond its means (making bankruptcy king Donald Trump a fitting figurehead). (Source: Stephen Bloch, Adelphi University)

Yet the game goes on. As David Graeber sees it,

American imperial power is based on a debt that will never – can never – be repaid. Its national debt has become a promise, not just to its own people, but to the nations of the entire world, that everyone knows will not be kept.

At the same time, U.S. policy was to insist that those countries relying on U.S. treasury bonds as their reserve currency behaved in exactly the opposite way: observing tight money policies and scrupulously repaying their debts ….” (Debt, pg 367)

We’ll close with two speculations on how the “American century” may come to an end.

US supremacy rests on interrelated dominance in military power, financial power, and influence over fossil fuel energy markets. At present the US financial system can create ever larger sums of money, and the rest of the world may have no immediately preferable options than to continue buying US debt. But just as you can’t eat money, you can’t burn it in an electricity generator, a diesel truck, or a bomber flying sorties to a distant land. So no amount of financial wizardry will sustain the current outsized industrial economy or its military subsection, once prime fossil fuel sources have been tapped out.

On the other hand, suppose low-carbon renewable energy technologies improve so rapidly that they can replace fossil fuels within a few decades. This would be a momentous energy transition, and might also lead to a momentous transition in geopolitics.

In recent years, and especially under the Trump administration, the US is ceding renewable energy technology leadership to other countries, especially China. If many countries free themselves from fossil-fuel dependence, and they no longer need US dollars to purchase their energy needs, a pillar of US supremacy will fall.

Top photo: Commemorative silver dollar sold by the US Mint, 2012.

Fossil fuel empire: a world of vulnerability

Also published at Resilience.org.

“It’s all about the oil,” many commentators said about the US assault on Iraq in 2003.

Attributing a war to a single cause is almost always an oversimplification, but protecting access to the 20th century’s most important energy source has been a priority of US foreign policy since World War II.

In part one of this series we considered the effects of the US military complex which has ringed the world for the past 75 years. This complex has depended on vast amounts of fossil fuel energy to move troops and munitions, and the US became a world power in significant part because of its endowment of oil.

As Daniel Yergin recounts in The Prize: The Epic Quest for Oil, Money & Power

Petroleum was central to the course and outcome of World War II in both the Far East and Europe. The Japanese attacked Pearl Harbor to protect their flank as they grabbed for the petroleum resources of the East Indies. Among Hitler’s most important strategic objectives in the invasion of the Soviet Union was the capture of the oil fields in the Caucasus. But America’s predominance in oil proved decisive, and by the end of the war German and Japanese fuel tanks were empty.” (The Prize, Simon & Schuster, 1990, pg 13)

At the end of World War II the US was not only the world’s preeminent military force, but its industrial capacity was undamaged by war and it was running on seemingly abundant supplies of cheap domestic oil.

Spurred on by oil and car companies who had the most to gain from a high-energy way of life, the US embarked on a building spree of far-flung suburbs, interstate highways, and airports that allowed long-distance flight to become a routine activity.

This hyper-consumption was bolstered by a new economic orthodoxy which saw no need to factor in energy depletion when accounting for national wealth, and which portrayed exponential economic growth as a phenomenon that could and should continue decade after decade.

It took barely a generation, of course, for the US economy to suck up the bulk of its cheap domestic oil – conventional oil production peaked in the US in 1971. Did Americans then conclude they should change the basis of their economy, and make peace with reduced energy consumption? Far from it. Dependence on imported oil has now been a central feature of the US economy for fifty years.

Gap between US oil consumption and production. Chart by An Outside Chance for the post Alternative Geologies: Trump’s “America First Energy Plan”, from stats on ycharts.com

 

A world of vulnerability

The huge military complex which protects essential oil supply routes is sometimes seen as a sign of US strength, but it can just as accurately be seen as a sign of US weakness.

In a 2009 report entitled “Powering America’s Defense: Energy and the Risks to National Security”, a panel of twelve retired generals and admirals notes that “The U.S. consumes 25 percent of the world’s oil production, yet controls less than 3 percent of an increasingly tight supply.” This voracious appetite for oil, they say, is a dangerous vulnerability:

As we consider America’s current energy posture, we do so from a singular perspective: We gauge our energy choices solely by their impact on America’s national security. Our dependence on foreign oil reduces our international leverage, places our troops in dangerous global regions, funds nations and individuals who wish us harm, and weakens our economy; our dependency and inefficient use of oil also puts our troops at risk.” (Introduction to Powering America’s Defense)

One source of imported oil has outranked all others for the US and its western European allies. The US was already consolidating its “special relationship” with Saudi Arabia in the 1930s, in the first years of that country’s existence. As Timothy Mitchell describes this relationship,

Aramco [Arabian-American Oil Company] paid the oil royalty not to a national government but to a single household, that of Ibn Saud, who now called himself king and renamed the country … the ‘Kingdom of Saudi Arabia’. … This ‘privatisation’ of oil money was locally unpopular, and required outside help to keep it in place. In 1945 the US government established its military base at Dhahran, and later began to train and arm Ibn Saud’s security forces …. The religious establishment, on the other hand, created the moral and legal order of the new state, imposing the strict social regime that maintained discipline in the subject population and suppressed political dissent.” (Timothy Mitchell, Carbon Democracy, Verso, 2013, pg 210-211)

The alliance between a self-styled liberal democracy and an theocratic autocracy has not been a marriage made in heaven. But in spite of many points of tension the relationship has benefited powerful forces in both countries and has endured for most of the age of oil.

The need to protect US access to the world’s largest sources of conventional oil was formally recognized in the Carter Doctrine:

An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force.” (US President Jimmy Carter in his State of the Union Address, January 1980)

Ironically, this doctrine led the US to begin supporting the mujahideen, Islamic fundamentalists who were fighting the Soviet Union in Afghanistan. And ironically, after the Soviet-Afghan war ended one of the major irritants for the formerly lauded “freedom fighters” was the heavy military presence of the infidel United States in Saudi Arabia. The result has been almost 20 years of continuous warfare between the US and various offshoots of the mujahideen, with no prospect of victory for the US.

The costs of these wars, merely in dollar terms, have been staggering. While US military expenditures have remained high ever since World War II, these costs have recently gone through the roof. An analysis of military spending by Time in 2013 found that inflation-adjusted military spending in the 2000s was approximately twice as high as military spending in the 1960s, during the nuclear face-off with Russia and the massive deployment in Indochina.

In sum, the US has been importing increasing quantities of increasingly expensive oil for decades. During the same years US military spending has soared. Does this sound like a recipe for solvency? You might well wonder if it’s just coincidence that US national debt has soared during these years.

US national debt converted to 1983 dollars and plotted on logarithmic scale – each step up the ladder is 10 times as high as the previous step – by Stephen Bloch of Adelphi University.

 

Recall the curious formulation by John Dower cited in the first installment of this series:

Creating a capacity for violence greater than the world has ever seen is costly – and remunerative.” (The Violent American Century, pg 12, emphasis mine)

How is this world-wide military occupation remunerative? In our next installment we’ll look at the tie-in between the power that grows out of the barrel of a gun, and the power that comes with control of currency.

Part Three of this series

 

Top photo: well head at the Big Hill, Texas site of the US Strategic Petroleum Reserve. The Big Hill facility stores up to 160 million barrels of oil. The four sites of the Strategic Petroleum Reserve were developed in the 1970s, amid fears that a disruption in global supply lines could leave the US dangerously vulnerable. Photo from US Office of Fossil Energy.