Blog

Copenhagen & Economic Growth - You Can't Have Both

Thursday, December 24, 2009, 3:31 PM

Note:  This is most of a recent Martenson Report that I am making public after numerous requests to do so.  Normally I reserve such reports for at least several months before general release. I've only left off my conclusions about what this all implies about the future. One member from Germany (thank you Michael!) has translated this piece into German and that appears as a downloadable attachment at the bottom of the article.


Preamble: I normally avoid writing on Global Warming/Climate Change as a topic for discussion because it tends to be a heated topic for many people on both sides, which can work against collaborative solutions. This article is not about global warming and/or the science behind it, and it is not my intention to discuss those ideas here.




I want to point out that a massive discrepancy exists between the official pronouncements emerging from Copenhagen on carbon emissions and recent government actions to spur economic growth.

Before and during Copenhagen (and after, too, we can be sure), politicians and central bankers across the globe have worked tirelessly to return the global economy to a path of growth.  We need more jobs, we are told; we need economic growth, we need more people consuming more things.  Growth is the ever-constant word on politicians' lips.  Official actions amounting to tens of trillions of dollars speak to the fact that this is, in fact, our number-one global priority.

But the consensus coming out of Copenhagen is that carbon emissions have to be reduced by a vast amount over the next few decades. 

These two ideas are mutually exclusive.  You can't have both.

Economic growth requires energy, and most of our energy comes from hydrocarbons - coal, oil, and natural gas.  Burning those fuel sources releases carbon.  Therefore, increasing economic activity will release more carbon.  It is a very simple concept. 

Nobody has yet articulated how it is that we will reconcile both economic growth and reduced use of hydrocarbon energy.  And so the proposed actions coming out of Copenhagen are not grounded in reality, and they are set dead against trillions of dollars of spending.

There is only one thing that we know about which has curbed, and even reversed, the flow of carbon into the atmosphere, and that is the recent economic contraction.

This is hard proof of the connection between the economy and energy.  It should serve as proof that any desire to grow the economy is also an explicit call to increase the amount of carbon being expelled into the atmosphere. 

The idea of salvation via the electric plug-in car or other renewable energy is a fantasy. The reality is that any new technology takes decades to reach full market penetration, and we haven't even really begun to introduce any yet. Time, scale, and cost must be weighed when considering any new technology's potential to have a significant impact on our energy-use patterns.

For example, a recent study concluded that another 20 years would be required for electric vehicles to have a significant impact on US gasoline consumption.

Meaningful Numbers of Plug-In Hybrids Are Decades Away

The mass-introduction of the plug-in hybrid electric car is still a few decades away, according to new analysis by the National Research Council.

The study, released on Monday, also found that the next generation of plug-in hybrids could require hundreds of billions of dollars in government subsidies to take off.

Even then, plug-in hybrids would not have a significant impact on the nation’s oil consumption or carbon emissions before 2030. Savings in oil imports would also be modest, according to the report, which was financed with the help of the Energy Department. 

Twenty to thirty years is the normal length of time for any new technology to scale up and fully penetrate a large market.

But this study, as good as it was in calculating the time, scale, and cost parameters of technology innovation and penetration, still left out the issue of resource scarcity.  Is there enough lithium in the world to build all these cars?  Neodymium?  This is a fourth issue that deserves careful consideration, given the scale of the overall issue. 

But even if we did manage to build hundreds of millions of plug-in vehicles, where would the electricity come from?  Many people mistakenly think that we are well on our way to substantially providing our electricity needs using renewable sources such as wind and solar.  We are not.

Renewable timetable is a long shot

Al Gore's well-intentioned challenge that we produce "100 percent of our electricity from renewable energy and truly clean carbon-free sources within 10 years" represents a widely held delusion that we can't afford to harbor.

The delusion is shared by the Minnesota Legislature, which is requiring the state's largest utility, Xcel Energy, to get at least 24 percent of its energy from wind by 2020.

One of the most frequently ignored energy issues is the time required to bring forth a major new fuel to the world's energy supply. Until the mid-19th century, burning wood powered the world. Then coal gradually surpassed wood into the first part of the 20th century. Oil was discovered in the 1860s, but it was a century before it surpassed coal as our largest energy fuel.

Trillions of dollars are now invested in the world's infrastructure to mine, process and deliver coal, oil and natural gas. As distinguished professor Vaclav Smil of the University of Manitoba recently put it, "It is delusional to think that the United States can install in a decade wind and solar generating capacity equivalent to that of thermal power plants that took nearly 60 years to construct."

Texas has three times the name plate wind capacity of any other state — 8,000-plus megawatts. The Electric Reliability Council of Texas manages the Texas electric grids. ERCOT reports that its unpredictable wind farms actually supply just a little more than 700 MW during summer power demand, and provide just 1 percent of Texas' power needs of about 72,000 MW.

ERCOT's 2015 forecast still has wind at just more than 1 percent despite plans for many more turbines.

For the United States, the Energy Information Administration is forecasting wind and solar together will supply less than 3 percent of our electric energy in 2020.

Again it turns out that supplanting even a fraction of our current electricity production with renewables will also take us decades.  And even that presumes that we have a functioning economy in which to mine, construct, transport and erect these fancy new technologies.  Time, scale, and cost all factor in as challenges to significant penetration of new energy technologies as well.

So where will all the new energy for economic growth come from?  The answer, unsurprisingly, is from the already-installed carbon-chomping coal, oil, and natural gas infrastructure. That is the implicit assumption that lies behind the calls for renewed economic growth.

It's The Money, Stupid

As noted here routinely in my writings and in the Crash Course, we have an exponential monetary system.  One mandatory feature of our current exponential monetary system is the need for perpetual growth.  Not just any kind of growth; exponential growth.  That's the price for paying interest on money loaned into existence.  Without that growth, our monetary system shudders to a halt and shifts into reverse, operating especially poorly and threatening to melt down the entire economic edifice.

This is so well understood, explicitly or implicitly, throughout all the layers of society and in our various institutions, that you will only ever hear politicians and bankers talking about the "need" for growth. 

In fact, they are correct; our system does need growth.  All debt-based money systems require growth. That is the resulting feature of loaning one's money into existence. That's the long and the short of the entire story. The growth may seem modest, perhaps a few percent per year ('That's all, honest!'), but therein lies the rub.  Any continuous percentage growth is still exponential growth.  

Exponential growth means not just a little bit more each year, but a constantly growing amount each year.  It is a story of more.  Every year needs slightly more than the prior year - that's the requirement.

The Gap

Nobody has yet reconciled the vast intellectual and practical gap that exists between our addiction to exponential growth and the carbon reduction rhetoric coming out of Copenhagen.  I've yet to see any credible plan that illustrates how we can grow our economy without using more energy.

Is it somehow possible to grow an economy without using more energy?  Let's explore that concept for a bit.

What does it mean to "grow an economy?"  Essentially, it means more jobs for more people producing and consuming more things.  That's it.  An economy, as we measure it, consists of delivering the needs and wants of people in ever-larger quantities.  It's those last three words - ever-larger quantities - that defines the whole problem.

For example, suppose our economy consisted only of building houses.  If the same number of houses were produced each year, we'd say that the economy was not growing.  It wouldn't matter whether the number was four hundred thousand or four million; if the same number of new homes were produced each year, year after year, this would be considered a very bad thing, because it would mean our economy was not growing.

The same is true for cars, hair brushes, big-screen TVs, grape juice, and everything else you can think of that makes up our current economy.  Each year, more needs to be sold than the year before, or the magic economic-stimulus wands will come out to ward off the Evil Spirits of No Growth.

If our economy were to grow at the same rate as the population, it would grow by around 1% per year. This is still exponential growth, but it is far short of the 3%-4% that policymakers consider both desirable and necessary.  Why the gap?  Why do we work so hard to ensure that 1% more people consume 3% more stuff each year?

Out of Service

It's not that 3% is the right number for the land or the people who live upon it.  The target of 3% is driven by our monetary system, which needs a certain rate of exponential growth each year in order to cover the interest expense due each year on the already outstanding loans.  The needs of our monetary system are driving our economic decisions, not the needs of the people, let alone the needs of the planet.  We are in service to our money system, not the other way around. 

Today we have a burning need for an economic model that can operate tolerably well without growth.  But ours can't, and so we actually find ourselves in the uncomfortable position of pitting human needs against the money system and observing that the money system is winning the battle.   

The Federal Reserve exists solely to assure that the monetary system has what it needs to function.  That is their focus, their role, and their primary concern.  I assume that they assume that by taking care of the monetary system, everything else will take care of itself.  I think their assumption is archaic and wrong.  Regardless, our primary institutions and governing systems are in service to a monetary system that is dysfunctional.  It was my having this outlook, this lens, more than any other, that allowed me to foresee what so many economists missed.  Only by examining the system from a new, and very wide, angle can the enormous flaws in the system be seen. 

Economy & Energy

Now let's get back to our main problem of economic growth and energy use (a.k.a. carbon production). 

There is simply no way to build houses, produce televisions, grow and transport grape juice, and market hair brushes without consuming energy in the process. That's just a cold, hard reality.  We need liquid fuel to extract, transform, and transport products to market.  More people living in more houses means we need more electricity.

Sure, we can be more efficient in our use of energy, but unless our efficiency gains are exceeding the rate of economic growth, more energy will be used, not less.  In the long run, if we were being 3% more efficient in our use of fuel and growing our economy at 3%, this would mean burning the same amount of fuel each year.  Unfortunately, fuel-efficiency gains are well known to run slower than economic growth.  For example, the average fuel efficiency of the US car fleet (as measured by the CAFE standards) has increased by 18% over the past 25 years, while the economy has grown by 331%.  Naturally, our fuel consumption has grown, not fallen, over that time, despite the efficiency gains.

So the bottom line is this:  There is no possible way to both have economic growth (as we've known it in the past) and cut carbon emissions.  At least not without doing things very differently. 

Things like enforcing extremely high fuel efficiency standards on the automakers, investing heavily in electric rail transport, and moving things around as much as possible by water, and then rail, and finally trucks as a last resort.  Things like enforcing building standards that would create super-insulated structures to utilize the sun for heating as much as possible.  Where we live, work, and shop would all be reconfigured.

Since we're not doing any of these things in any sort of a credible manner, history suggests that if it comes down to either cutting carbon or growing the economy, the economy will win that battle every time. 

We can find examples everywhere - fishermen will deplete their ancestral fishing grounds to earn the money to pay back their boat loan and send their kids to college.  Corporations will sacrifice long-term health to make their quarterly numbers.  Politicians will promise exorbitant pension benefits to public employees with no plans for how those payments will be made.  And so on.

Historically, short-term economic decisions have always trumped long-term considerations.

Again, my purpose here is not to take on the issue of global warming, nor to challenge the IPCC's conclusions, but instead to point out that the political rhetoric on the economy is utterly at odds with the idea of cutting carbon emissions. 

So which will it be, cut carbon or spur economic growth?

To hold both at the same time as twin goals is the textbook definition of cognitive dissonance.  No wonder people are confused. 

And the good news?

The good news for people worried about ever-increasing carbon emissions from here to eternity is that we'll probably never get all the coal and oil out of the ground to burn.  Our exponentially-designed economic system will gasp a final breath through a dwindling energy straw long before we manage to extract the remaining dregs.  A slumping economy will prevent oil from being extracted from 35,000 feet under the ocean and coal from being pulled up from 4,000 feet under the ground.

Even without the economic dislocation effects, the dire IPCC carbon projections for carbon dioxide accumulation would require the world's extraction and use of coal to climb by more than 600% over the rest of the century, which is pure fantasy

If emissions from coal are to increase by 600 percent this cannot occur without the USA – that has the world’s largest coal finds – increasing its coal production by the same amount. In an article published in May 2009 in the International Journal of Coal Geology we have studied the historical trends and future possible production of coal in the USA.

The production of high-grade anthracite is decreasing while the production of brown coal in Wyoming is increasing. Future coal production is completely dependent on new coal mining in the state of Montana. According to the constitution of the USA, federal authorities cannot force Montana to produce coal. In Montana they do not want to produce coal since the mining will destroy the environment and large areas of agricultural land.

If the constitution is changed and mining of coal in Montana does occur it is possible for the USA to increase its coal production by 40% but not by 100%. An increase of 600% is pure fantasy.

Today, the world’s largest coal producer is China. Its reserves of coal are half the size of the USA’s and China has no possibility of increasing its coal production by 100%. A 600% increase there is also pure fantasy. Russia, with the world’s second largest coal reserves, can increase its production significantly but the untouched Russian coal reserves lie in central Siberia in an area without infrastructure.

Russia is not dependent on this coal for its own energy needs but if mining did begin there some time after 2050 it could only ever be equivalent to a small fraction of today’s global production. Therefore, it is impossible for global coal production to increase by 100% and 600% is, once again, pure fantasy.

40% growth in coal use?  Maybe.  600%?  No way.  So take heart; the worst projections will have to be scaled back considerably, based on lack of hydrocarbons to burn. 

The Political Conundrum

The truth of the matter is that a steady decline in energy use is going to result in a steady decline in the economy and a steady (hopefully) decline in living standards. There will simply be less surplus energy to go around.  Many service-related jobs will simply disappear, as they will become unaffordable and unnecessary in a world shaped by reduced energy (here are some examples).

But no politician will ever willingly come out and state this, because it will mean large, uncomfortable adjustments for many people.  So instead we get schizophrenic words and policies working at cross-purposes (i.e., cutting carbon and growing our economy) when we should be vigorously dealing with reality. 

Our monetary system is out of step with reality, and the sooner we admit that, the better.  We need an economic model that can operate without the requirement of exponential growth.  Can we live prosperous lives in a stable, non-growing economy?  Of course we can. 

But first we have to admit to ourselves that the source of the trouble is debt-based money.  And we need to begin the long, slow process of reorienting our culture, priorities, and values away from growth in service of an ill-fated money system and towards a workable, livable economy that serves humanity, preserves the world, and conforms to reality.  It will require refashioning our system of money. 

The problem here is that the political system is completely captured by the current practitioners of the existing monetary system.  How can we ever expect the people who owe their livelihoods to the continuation of a given system to recognize the need for its reformation?  Is this too much to expect?

I suspect it is, and this is why I have been working to educate people like you about the larger story that lurks within the connection of the economy, energy, and the environment.  With this recognition comes the opportunity to refashion your finances, thoughts, plans, and hopes - now, on your own terms, rather than later, on some other terms. 

If We Were Serious…

If we were really serious about global warming, we'd immediately put a halt to all economic expansion until we figured out how to grow our economy without growing our use of carbon-based energy.  We'd probably also get serious about controlling population growth, since that is the ultimate driver of consumption and planetary stress.

In addition, we'd have already begun a crash program in energy conservation and efficiency, beginning with transportation and heating/cooling. These are areas where we have plenty of solutions laying about; all we need is the proper motivation to begin using them. 

Since we're not doing any of these things, I can only conclude that we are not really serious about actually doing anything about global warming.  The trouble is that the new taxes that are being proposed are deadly serious.  If these taxes are anything like past government taxes, they will be announced using very impressive language, but will ultimately disappear into fungible government coffers, where unnecessary things dwell like wars without defined goals and bridges to nowhere. 

So besides the keen interest of governments across the world in raising new taxes, I have not yet detected credible signs that any of them are taking climate change to heart.

In the end, you cannot really be serious about climate change (as it has been presented) if you are simultaneously promoting economic growth. 

You can't have both.

Related content

44 Comments

billbrad's picture
billbrad
Status: Member (Offline)
Joined: Dec 20 2009
Posts: 3
Re: Copenhagen & Economic Growth - You Can't Have Both

This is actually a wonderful article with the seeds of some interesting possible solutions in it.  When we talk about the addiction to growth we are reallly talking about the addiction to free market ideology.  This more than any other factor has been the downfall of the U.S. economy in the last 30 years.  If we don't give this up.  We will not survive and the consequences will be disastrous.  I would also like to say that Chris, it is unrealistic not to talk about climate change since that is central to the problem and perhaps, to the solution.  I would like to quote from James K. Galbraith in his book "Predator State".   He says, "The avatars of the Predator State have understood very well what is at stake.  That is why climate change denial and free-market ideology now go together.  The right wing realizes that dealing with climate change must empower the scientific and educational estate and the government, that it must involve a mobilization of the community at large, and that it will impose standards of conduct and behavior and performance on large corporate enterprises that the leaders of such enterprises would greatly prefer to avoid.  In this view, they are entirely correct.  For those who take climate change seriously,  it does no good to pretend that these issues can somehow be avoided. "  We can sit around not talking about the elephant in the living room and waste another 30 years, like we have the last 30,  or we can get busy here.  Yes, it's a big, daunting job.  But if energy is so central to the problem then this is what we must tackle, and not solely because of climate change, but also from the standpoint  of our balance of trade in petroleum (a huge factor in the national debt),  and from the standpoint of declining oil as a viable energy resource as well.  Dr. Galbraith proposes planning (yes, that would be government planning) of the highest order to make this happen.  If we sit around lamenting these figures about how it's going to take 2000 times the renewable energy to make up our trade deficit in petroleum then we will be sitting around whining, denying, arguing and not dealing with the obvious.  That is truly the recipe for disaster.  What Dr. Galbraith proposes is a mobilization similar to what we had during World War II.  About the only thing the United States has left (other than an ability to sell Treasury Bonds), is technological expertise.  If we can mobilize public and political opinion around this issue with the same zeal we turned against the Nazis, and we turn our sights more toward Scandinavian economic models of capitalism, not reliant on growth, then we may have a chance.  If we apply our technological expertise to the problem of climate change/declining oil, we can once again reclaim a form of world leadership in the process.  BUT...and this is a big one, the Predator State free marketeers, climate change denialists are going to have to get out of the way.  If these folks continue to be hoodwinked by big oil interests we will lack the political focus and we will be quite definitely doomed. 

vital's picture
vital
Status: Member (Offline)
Joined: Jan 11 2009
Posts: 7
Re: Copenhagen & Economic Growth - You Can't Have Both

Very lucid report. Thanks.

Even  without the Copenhagen you still can't have growth forever. As Albert Bartlett said:

When applied to material things, the term "sustainable growth" is an oxymoron.

It all seems to be about the new venues for the selected few too-big-to-fails (leaving out the NWO conspiracies). They (giant worm-like entities or whoever else they might be) seem to be getting desperate and running out of bullets in their attempts to find/establish new markets, badly needed to keep their Ponzi-like financial centrifuges going. The health care reform, cap-and-trade and more obvious WTO demands on "emerging economies" to open up for exotic financial trash all point to the same end.

What's next?

guardia's picture
guardia
Status: Platinum Member (Offline)
Joined: Jul 26 2009
Posts: 592
Re: Copenhagen & Economic Growth - You Can't Have Both

Welcome aboard billrad!

billbrad wrote:

This is actually a wonderful article with the seeds of some interesting possible solutions in it.  When we talk about the addiction to growth we are reallly talking about the addiction to free market ideology. 

I wouldn't lump everything together... free market != growth. One could also easily argue that in an unregulated free market, fiat currency would not exist and no one would care for growth

IMO, the root of the problem comes from our inadequate human nature and our failure to compensate via education, not from whatever system you put on top of them.. We can either educate ourselves (thank Chris for that :) or failing to do so, well, natural selection will take care of it, and it won't be pretty, oh no...

Samuel

bill.flinn's picture
bill.flinn
Status: Member (Offline)
Joined: Feb 10 2009
Posts: 10
Re: Copenhagen & Economic Growth - You Can't Have Both

I draw readers' attention to recent writings of and interviews with Matt Simmons, on Financial Sense and elsewhere (link www.oceanenergy.org) . As Chris points out, a crucial problem facing us is the repowering of the transport fleet. Offshore of Maine, trial giant wind turbines (think Empire State Building size) have been built, and have been used to desalinate salt water, and combine the hydrogen with nitrogen to make liquid ammonia.  The end results of the process are therefore pure salt, pure water, and liquid ammonia, and moreover, the whole process is carbon neutral. The great thing about liquid ammonia is that it can be used directly to power internal combustion engines.

The problem I foresee, however, is the availability of raw materials for scaling up the process to power the entire transport fleet.....

rht1786's picture
rht1786
Status: Bronze Member (Offline)
Joined: Aug 13 2008
Posts: 36
Re: Copenhagen & Economic Growth - You Can't Have Both

Great article, Chris. This very clearly explains the dilemma at hand.

Your point about an unwillingness to change the political system is very prescient. The status quo has been preserved for far too long. It seemas if Americans were obsessed with the boisterous, uninhibited growth of the series of bubbles the Federal Reserve has allowed to inflate. American society, and global society along with it, has enjoyed the inflation of these bubbles, but the deflation has not been allowed to play out. The bubbles stay inflated with minor patchwork. If it goes down it will be Hindenberg-like in scope.

What continuously puzzles me, however, is that we don't know better. We have seen these instances play out time and time again in history. In the Weimar Republic in Germany, in present-day Japan, in Zimbabwe, and in countless other instances, the fundamentals of economics have demonstrated their resiliency to government attempts to control economies and markets.

I am no NWO conspiracy spook, although I have my thoughts on the pros and cons of one-world government, but I have trouble accepting the simple fact that Bernanke, Geithner, Obama and the rest of the US administration -- those names we don't hear but who also hold the reigns of power -- are making a mistake when driving us towards this precipice. There must be an ulterior motive, but what is it, and why?

Merry Christmas, Happy Holiday,
This was a much-appreciated gift, indeed.

guardia's picture
guardia
Status: Platinum Member (Offline)
Joined: Jul 26 2009
Posts: 592
Re: Copenhagen & Economic Growth - You Can't Have Both

rht1786 wrote:

I am no NWO conspiracy spook, although I have my thoughts on the pros and cons of one-world government, but I have trouble accepting the simple fact that Bernanke, Geithner, Obama and the rest of the US administration -- those names we don't hear but who also hold the reigns of power -- are making a mistake when driving us towards this precipice. There must be an ulterior motive, but what is it, and why?

I believe it's just their ignorance... For example, Bernanke knows a lot about the Great Depression, probably too much for his own good, but if you mention "peak oil" to him, he'll probably duck and start talking about some mountain somewhere named "Oil", if that even exists. Same thing for Obama. He talks well and all, but all the things he ever learned, he most likely learned them from the Wall Street guys and the army dudes... he seems to believe in climate change, but probably has no clue about peak oil either and how it might (will) impact our deployment of renewable energies.

And Bush, well he was aware of peak oil, at least, and look where that got us. He wasn't perfect by any means either.

They don't mean it, they're just dumb! We should feel sorry for them... Give them a break ;)

Merry Christmas!

Samuel

rht1786's picture
rht1786
Status: Bronze Member (Offline)
Joined: Aug 13 2008
Posts: 36
Re: Copenhagen & Economic Growth - You Can't Have Both

Samuel  / guardia, 

You have a point. Their ignorance is evident. 

Accepting that as the truth is difficult. Given the fact that these men have worked so hard for so long, they must have the understanding of their field of work that would enable them to see reality as it is. 

However, your comments do give weight to the perspective that those men who devote their lives to a system of government suffer from the myopic bias of being a part of the action. As a single actor of a play is unable to see how is own performance contributes to the whole of the action, it is reasonable to consider that American leaders fail to accurately recognize the results of their actions.

Yet, this is the dilemma we all face in determining whether we are "conspiracy theorists" or not. Is there a controlling power, or is this planet's society the outcome of individuals' acting decisions, with no cohesive plan propelling us into the future. 

Happy holidays, indeed. 2010 has much in store for us.

V's picture
V
Status: Platinum Member (Offline)
Joined: Dec 14 2009
Posts: 849
Re: Copenhagen & Economic Growth - You Can't Have Both

THEY?

They are ignorant?

They have jobs which supply them with

six figure salaries

lifetime full retirement benefits after only one term (full pay and the best health coverage on the planet)

trips around the world paid for by U.S taxpayers

huge amounts of money from lobbyists.

etc.etc. etc.

Now who exactly is it that is ignorant?

rhare's picture
rhare
Status: Diamond Member (Online)
Joined: Mar 30 2009
Posts: 1271
Re: Copenhagen & Economic Growth - You Can't Have Both

When we talk about the addiction to growth we are reallly talking about the addiction to free market ideology.  This more than any other factor has been the downfall of the U.S. economy in the last 30 years.  If we don't give this up.

Quite the opposite. Free markets are not favorable to the fiat money system and it's exponential growth.  That takes goverment forcing people to use a currency by threat of force.  Also, the free market would never have allowed all the growth we have seen.  That took government interference in the markets to force loans to be made that never would have happen without government interference. 

We have not had a free market for years....

Tserendash's picture
Tserendash
Status: Silver Member (Offline)
Joined: Mar 5 2009
Posts: 178
Re: Copenhagen & Economic Growth - You Can't Have Both

If we ever got down to rational decisions it would include a big shrink in government.  THEY have no interest in that idea so rational is not going to ocour at the government level until forced by events out of their control.

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Copenhagen & Economic Growth - You Can't Have Both

billbrad wrote:

This is actually a wonderful article with the seeds of some interesting possible solutions in it.  When we talk about the addiction to growth we are reallly talking about the addiction to free market ideology.  This more than any other factor has been the downfall of the U.S. economy in the last 30 years.  If we don't give this up.  We will not survive and the consequences will be disastrous.

What do you mean "if"....?  Do you really think we have any choice in the matter...?

billbrad wrote:
I would also like to say that Chris, it is unrealistic not to talk about climate change since that is central to the problem and perhaps, to the solution.

Did you actually READ the entire article...?

billbrad wrote:
I would like to quote from James K. Galbraith in his book "Predator State".   He says, "The avatars of the Predator State have understood very well what is at stake.  That is why climate change denial and free-market ideology now go together.  The right wing realizes that dealing with climate change must empower the scientific and educational estate and the government, that it must involve a mobilization of the community at large, and that it will impose standards of conduct and behavior and performance on large corporate enterprises that the leaders of such enterprises would greatly prefer to avoid.  In this view, they are entirely correct.  For those who take climate change seriously,  it does no good to pretend that these issues can somehow be avoided. "  We can sit around not talking about the elephant in the living room and waste another 30 years, like we have the last 30,  or we can get busy here.

I've known about Alekllet's work for quite some time (> 2 years..?) but it really takes Chris' touch to explain it properly, and of course tie in the REAL elephant in the room, exponential growth.....

billbrad wrote:
Yes, it's a big, daunting job.  But if energy is so central to the problem then this is what we must tackle, and not solely because of climate change, but also from the standpoint  of our balance of trade in petroleum (a huge factor in the national debt),  and from the standpoint of declining oil as a viable energy resource as well.  Dr. Galbraith proposes planning (yes, that would be government planning) of the highest order to make this happen.  If we sit around lamenting these figures about how it's going to take 2000 times the renewable energy to make up our trade deficit in petroleum then we will be sitting around whining, denying, arguing and not dealing with the obvious.

Again, DID YOU actually READ the entire article...? We ain't gonna do ANYTHING.....  it will NOT happen....  No way will we have renewables powered plug in hybrids, or solar powered plasma screens.....  IF you still don't get it, go back and read the entire article, AGAIN.

I know it's hard to grasp truly mindset changing concepts (been there, done that), but this one you MUST grasp.....

billbrad wrote:
That is truly the recipe for disaster.  What Dr. Galbraith proposes is a mobilization similar to what we had during World War II.  About the only thing the United States has left (other than an ability to sell Treasury Bonds), is technological expertise.  If we can mobilize public and political opinion around this issue with the same zeal we turned against the Nazis, and we turn our sights more toward Scandinavian economic models of capitalism, not reliant on growth, then we may have a chance.  If we apply our technological expertise to the problem of climate change/declining oil, we can once again reclaim a form of world leadership in the process.  BUT...and this is a big one, the Predator State free marketeers, climate change denialists are going to have to get out of the way.  If these folks continue to be hoodwinked by big oil interests we will lack the political focus and we will be quite definitely doomed.

For goodness sake......  there are NO technological solutions, only social ones.... and what makes you think Scandinavian countries are not growing:

For those who would have their cake and eat it, too, look to Sweden, where the raw data is to be envied: between 1990 and 2006, the country enjoyed economic growth of 44 per cent in fixed prices, even as it cut carbon emissions by 9 per cent.

Denmark's numbers show a similar decoupling of GDP from the use of fossil fuels, with 43-per-cent growth contrasting with a 14-per-cent carbon reduction in the same time frame.

BTW, the "cuts" mentioned above are almost certainly deceptive, because I'm prrpared to bet the emissions caused by the manufacture of the renewables installed there were released "elsewhere"....  I'll bet all the raw materials were imported!

A Spanish friend of mine, a Renewables Engineer (Pedro Prieto - google him) made a presentation last year at Madrid's ASPO conference where he said that to produce 30% of the world's electricity within ten year with wind would require DOUBLING global steel production, a thirty fold increase in glass fibre production, half the world's coal and copper, and its entire concrete production!  Lots of oil would be needed too, can't remember how much.... (half..?)

So, whilst we merrily go about building the 1.5 million 2MW wind turbines as per above, ALL the car factories will have to be shut down, no hospitals/schools/houses will be built......  and emissions would skyrocket!  In the meantime of course electricity demand would have (conceivably) grown too...?

I now look forward to 2010!

Thanks a lot for that report Chris.....  brilliant as usual, but this time you have excelled yourself!

Have a preposterous New Year....

Mike

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Copenhagen & Economic Growth - You Can't Have Both

bill.flinn wrote:
The problem I foresee, however, is the availability of raw materials for scaling up the process to power the entire transport fleet.....

Attempting to "power the entire transport fleet....." would be gross mismanagement!

We take trucking of goods,  and private transport in particular, for granted.  It is neither essential, nor a right.

The problem I foresee is food, both production and accessibility.  Food production could be more or less solved using Permaculture principles, but only if we stop treating food production as a business, and turn it into an essential service.

Basically we need to turn the economy back into a society.  Chris states the system needs reformation, I think it needs revolution!  Living for profit must disappear....  it will in fact do so when Capitalism collapses, soon....

Accessibility of food means it will have to be all grown locally (forget about the 3000 mile Caesar Salad!) and marketed (and I mean literally, in a market, like this)

We only have the current transport system......  because we CAN!

The next twenty years will be nothing like the last.....

Mike

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Copenhagen & Economic Growth - You Can't Have Both

Lionel Hastings wrote:

If we ever got down to rational decisions it would include a big shrink in government.  THEY have no interest in that idea so rational is not going to ocour at the government level until forced by events out of their control.

Big government has no future.  Even government will have to be relocalised.  In France (where I was born) every small town has its own elected Mayor, they are largely self determinatory, running their own marriages and certification of births and deaths etc...  Country living as done in France (and much of Europe actually) is what I'd like futre living transitioning to...

It's the transitioning that worries me.....  If climate change can be avoided with a massive energy crash, then GREAT!

Humanity has lived without cheap and abundant fossil fuels for 99% of its history, but it cannot survive with a clapped out climate......

Mike

Doug's picture
Doug
Status: Diamond Member (Online)
Joined: Oct 1 2008
Posts: 2764
Re: Copenhagen & Economic Growth - You Can't Have Both

The ugly truth is that we won't technology our way out of the coming energy crisis.  Although few people want to talk about it, serious conservation is the only way we're going to get to the other side of the crisis where we will again live like our grandparents, like DTM suggests.  I really don't think anything resembling our current transportation system will survive the transition.  We will have to make the transition, willingly and with foreplanning, or unwillingly and painfully.  Our choice.

Doug

Amanda V's picture
Amanda V
Status: Gold Member (Offline)
Joined: Dec 31 2008
Posts: 262
Re: Copenhagen & Economic Growth - You Can't Have Both

Has any body ever suggested an alternative money model - as opposed to debt based money system ?

Or would it be so simple it would not be a "model"  ?   How did the system work before the fractional reserve banking debt based money system ? 

And, how would the banks even operate if they were not able to lend out the money deposited to them ?

Does anybody have any ideas about any of this as I have not actually seen a discussion about a "solution"anywhere.

Thanks

guardia's picture
guardia
Status: Platinum Member (Offline)
Joined: Jul 26 2009
Posts: 592
Re: Copenhagen & Economic Growth - You Can't Have Both

V wrote:

Now who exactly is it that is ignorant?

If they had any clue about what they were doing, they would try to save their wealth before it gets all destroyed... well, maybe they are thinking about it :) Conspiracies... :)

Samuel

guardia's picture
guardia
Status: Platinum Member (Offline)
Joined: Jul 26 2009
Posts: 592
Re: Copenhagen & Economic Growth - You Can't Have Both

Amanda V wrote:

Has any body ever suggested an alternative money model - as opposed to debt based money system ?

Or would it be so simple it would not be a "model"  ?   How did the system work before the fractional reserve banking debt based money system ? 

And, how would the banks even operate if they were not able to lend out the money deposited to them ?

Does anybody have any ideas about any of this as I have not actually seen a discussion about a "solution"anywhere.

I'll answer to that in order: gold, gold, gold, gold, and Chris did say he would start talking about solutions... Looking forward to that first article! :)

Samuel

JAG's picture
JAG
Status: Diamond Member (Offline)
Joined: Oct 26 2008
Posts: 2490
Re: Copenhagen & Economic Growth - You Can't Have Both

guardia wrote:

I'll answer to that in order: gold, gold, gold, gold,....

Gold? Have we learned nothing from our history?

The solution to every problem is gold? The day that gold becomes the solution, you'll be wishing you could trade it for bullets. 

guardia's picture
guardia
Status: Platinum Member (Offline)
Joined: Jul 26 2009
Posts: 592
Re: Copenhagen & Economic Growth - You Can't Have Both

JAG wrote:

Gold? Have we learned nothing from our history?

Have we? Please elaborate...

From a factual historical point of view, no fiat currency has ever worked out in the long term, but gold and silver have been kicking along for a few thousand years already... IMO, I don't think as humans we can change our own nature. Nature will do it for us in the end, and well, who knows, maybe in a few millions years we will develop a few more decent qualities (such as instinctive respect for nature), once all the bad genes have been wiped out :)

rht1786's picture
rht1786
Status: Bronze Member (Offline)
Joined: Aug 13 2008
Posts: 36
Re: Copenhagen & Economic Growth - You Can't Have Both

To JAG, Mike, and others:

One can point a finger at any individual cause and claim that it is "the problem", but the situation at hand has many facets and is highly complex.

First, technology is the solution. And it is possible. A mobilization of resources would enable a sutainable model of civilization to emerge in time. Additionally, oil just isn't going to disappear. There will still be accessible oil, but it will not be as easy as it always has been to mine and refine.

Second, capitalism will not fail. Capitalism cannot fail. The idea of capitalism is not something that simply dies, despite what any practictioner of economcis or finance would have you think. Capitalism is an ideal of free market economics. Free market economics also cannot fail. Capitalism / free market economics is a theory like socialism. Socialism cannot just die. If you disagree with this statement, I challenge you to read the literature and redefine your terminology. See von Mises, Hayek, Rothbard et al. What can fail is a fractional reserve banking and our debt-based fiat money system. In the past decade, what we have seen happen in the international financial system has not been a failure of capitalism. It has been a failure of government and of interventionism.

When considering a technology-based solution to the climate issue, what prevents a solution is population and, accordingly, scale. Although there is not a definitive field for planetology, the Earth as a planet can only support a certain level of human life given current levels of technolgoy. The fact that poverty exists today is evidence to the fact that we have surpassed the population capacity of Earth. This claim is debatable, as one could argue that government interventionalism has prevented the equal distribution of capital and chained the economic forces of free markets, or that technology could feed everyone on the planet. As Dr. Martenson and numerous other scientists have pointed out, scaling up technology to account for the entire human civilization of the planet will take decades and vast resources that lack the infrastructure, capital and energy to utilize.

Considering Washington's love of interventionism, I wouldn't be surprised if military technologies exist that allow the utilization of resources more sustainable than oil. Keep in mind that Western oil companies, or Western-supporting governments, control most of the world's oil reserves, and a continued societal dependence on oil as a national resource is currently profitable. As long as those companies make money, the tax proceeds from them are funnelled into US treasuries. If the US transitioned to alternative energy with all possible speed, then it surely would have lost its superpower status years ago, along with the financial funding to maintain its empire.  

Regardless, the solution is not to continue down this path. What is needed is a paradigm shift from consumer based growth economies to sustainability. And yes, the sustainable growth is an oxymoron, but sustainable development is achievable. Granted, you may use some fossil-fuel based equipment or technology, but the outcome will be a sustainable community.

rht1786's picture
rht1786
Status: Bronze Member (Offline)
Joined: Aug 13 2008
Posts: 36
Re: Copenhagen & Economic Growth - You Can't Have Both

To JAG, Mike, and others:

One can point a finger at any individual cause and claim that it is "the problem", but the situation at hand has many facets and is highly complex.

First, technology is the solution. And it is possible. A mobilization of resources would enable a sutainable model of civilization to emerge in time. Additionally, oil just isn't going to disappear. There will still be accessible oil, but it will not be as easy as it always has been to mine and refine.

Second, capitalism will not fail. Capitalism cannot fail. The idea of capitalism is not something that simply dies, despite what any practictioner of economcis or finance would have you think. Capitalism is an ideal of free market economics. Free market economics also cannot fail. Capitalism / free market economics is a theory like socialism. Socialism cannot just die. If you disagree with this statement, I challenge you to read the literature and redefine your terminology. See von Mises, Hayek, Rothbard et al. What can fail is a fractional reserve banking and our debt-based fiat money system. In the past decade, what we have seen happen in the international financial system has not been a failure of capitalism. It has been a failure of government and of interventionism.

When considering a technology-based solution to the climate issue, what prevents a solution is population and, accordingly, scale. Although there is not a definitive field for planetology, the Earth as a planet can only support a certain level of human life given current levels of technolgoy. The fact that poverty exists today is evidence to the fact that we have surpassed the population capacity of Earth. This claim is debatable, as one could argue that government interventionalism has prevented the equal distribution of capital and chained the economic forces of free markets, or that technology could feed everyone on the planet. As Dr. Martenson and numerous other scientists have pointed out, scaling up technology to account for the entire human civilization of the planet will take decades and vast resources that lack the infrastructure, capital and energy to utilize.

Considering Washington's love of interventionism, I wouldn't be surprised if military technologies exist that allow the utilization of resources more sustainable than oil. Keep in mind that Western oil companies, or Western-supporting governments, control most of the world's oil reserves, and a continued societal dependence on oil as a national resource is currently profitable. As long as those companies make money, the tax proceeds from them are funnelled into US treasuries. If the US transitioned to alternative energy with all possible speed, then it surely would have lost its superpower status years ago, along with the financial funding to maintain its empire.  

Regardless, the solution is not to continue down this path. What is needed is a paradigm shift from consumer based growth economies to sustainability. And yes, the sustainable growth is an oxymoron, but sustainable development is achievable. Granted, you may use some fossil-fuel based equipment or technology, but the outcome will be a sustainable community.

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Copenhagen & Economic Growth - You Can't Have Both

I'm constantly amazed at the number of people on this site who worry about their wealth..... especially after (presumably) doing the Crash Course! Discussing free markets and globalisation is completely irrelevant now, the only topic that should be in your head is how to survive.

If you still have wealth, at this time in history, then SPEND IT!!!

I would buy fencing and water tanks before I'd buy gold.... inedible!  And don't think I'm just mouthing off here, we have spent every last penny we ever owned getting ready for the collapse.

People with gold and no skills will just be part of the dieoff......

Mike

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Copenhagen & Economic Growth - You Can't Have Both

"First, technology is the solution."

No it isn't.  I used to believe this too, but now I'm a lot wiser....  I used to believe it so much, I built a solar powered house and all..... technology is merely clever use of RESOURCES and ENERGY. So only technologies that use little energy and few resources will now survive!

"Additionally, oil just isn't going to disappear."

No one here has said that.....  but with barely more than half used up, it skyrocketed to $147 a barrel and triggered the (admittedly inevitable) crisis last year.....  Once oil was that dear, EVERYTHING ELSE went up, not least food, but every other commodity known to man which depends on oil for its extraction and/or manufacture.  That this is hard for you to understand doesn't surprise me, it took me a couple of years before the penny dropped, but I didn't have all the help available to you HERE!!

"I wouldn't be surprised if military technologies exist that allow the utilization of resources more sustainable than oil."

Would you care to elaborate.......  because I'd like to know what those are!  If you search through Peak Oil threads on this site, you will discover several links to papers showing the military is VERY concerned about Peak Oil.

I can't be bothered debating the end of Capitalism, because it will happen whether you want to believe it won't or not!  Capitalism is about CAPITAL..... and without CAPITAL, where is Capitalism?

And of course Socialism will always be with us.......  that's more or less how we always lived; as a society, NOT an economy.........

GregSchleich's picture
GregSchleich
Status: Silver Member (Offline)
Joined: Jan 16 2009
Posts: 187
Re: Copenhagen & Economic Growth - You Can't Have Both

Damnthematrix wrote:

I'm constantly amazed at the number of people on this site who worry about their wealth..... especially after (presumably) doing the Crash Course! Discussing free markets and globalisation is completely irrelevant now, the only topic that should be in your head is how to survive.

If you still have wealth, at this time in history, then SPEND IT!!!

I would buy fencing and water tanks before I'd buy gold.... inedible!  And don't think I'm just mouthing off here, we have spent every last penny we ever owned getting ready for the collapse.

People with gold and no skills will just be part of the dieoff......

Mike

Mike

I always enjoy your posts. You're a very smart guy and definitely very well informed, but I find your confidence in your ability to divine the future to be nothing short of breathtaking.

The amazement is mutual!Wink

Best

Greg

nyfarmer's picture
nyfarmer
Status: Member (Offline)
Joined: Oct 20 2009
Posts: 8
Re: Copenhagen & Economic Growth - You Can't Have Both

Shopping at a certain big box store I picked up a bag of Empire apples and noticed that another bin had Empire's for a few cents less.  Upon closer inspection I was surprised to see that the less expensive apples were a product of Romania!  NYS is one of the largest apple production states in the USA (Washington State is #1).  The higher priced apples were from NYS -- from a large grove not 20 miles from the said store. 

The problem is not capitalism.  In the above real example producers and buyers operated by the rules of commerce given the varibles to work with. I believe that one problem are the folks who muck around with our money systems.  The artificial dollar value impedes or skews the best use of resources that is at the heart of a free market system. Money value is controlled by what amounts to a monopoly by central governments.  Money value is a commodity as much as the goods and services in play.

rht1786's picture
rht1786
Status: Bronze Member (Offline)
Joined: Aug 13 2008
Posts: 36
Re: Copenhagen & Economic Growth - You Can't Have Both

Mike,

Go to Google and search for Aurora aircraft. Also search for TR3B. The results you find are interesting, to say the least. While I don't profess to believe in them, I don't discount them outright as fiction.

I do not disagree with your assessment of technology and energy use. My thoughts are the same, although my language differs from yours.

Additionally, I understand the fundamentals of the commodity markets and the effect of inceases in the price of oil on the system. My point is that at any point in the system, most technologies are replacable by technologies not dependent on oil. You can replace an oil-consuming truck or train for an electric one, that may be powered by solar or wind power. You can replace plastic containers or boxes with recyclable materials. That recycling can be processed by renewable energy sources. Some aspects of this chain require oil, yes, but those increases can be offset by a realization of how many facets of our lives can shift to renewable energy dependency, rather than oil dependency.

There will always be capital. I don't know what your definition of capital is, but capital is simply a factor of production used to create a good. No matter what our economy depends on, there will always be capital, whether its a piece of clothing, a husk of wheat, or a barrel of oil. Given a sustainable economic system, capital may expand to include wind, water and sunlight, in which case it will indeed be relatively infinite. Until we strip this planet of every single resource and by those means destroy our civilization.

And socialism need not exist, although if often does due to human nature and the inherent tendency of governments to tend towards interventionism. Once again, I challenge you to read the literature: Hayek's Road to Serfdom or, if you have more time, von Mises' Human Action.

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Copenhagen & Economic Growth - You Can't Have Both

Amanda V wrote:

Has any body ever suggested an alternative money model - as opposed to debt based money system ?

Or would it be so simple it would not be a "model"  ?   How did the system work before the fractional reserve banking debt based money system ? 

And, how would the banks even operate if they were not able to lend out the money deposited to them ?

Does anybody have any ideas about any of this as I have not actually seen a discussion about a "solution"anywhere.

Thanks

You might want to take a peak over at Nate's site, he has a freedom plan that is well thought out, I'm still reading it.

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Copenhagen & Economic Growth - You Can't Have Both

"My point is that at any point in the system, most technologies are replacable by technologies not dependent on oil. You can replace an oil-consuming truck or train for an electric one, that may be powered by solar or wind power."

You just don't get it rht.....  There is virtually NOTHING that is not dependant on oil......  and THAT is exactly my point.  Just try building an electric train without oil (or coal for that matter)  Then just think of the millions of miles of copper wires you'd have to string out along abandoned roads now turned into railways to power electric locos...?  Because you see, it also takes a lot of other ever getting scarcer (and expensive) resources.

I've mentioned many times how the building of 1.5 million 2GW wind turbines required to generate just 30% of the global electric load by 2020 would necessitate the DOUBLING of global steel production, consuming the ENTIRE concrete production of the worls, a thirty fold increase in glass fiber production, half the coal, and nearly half the copper.......

Now if you can't see a problem just there.....  well I give up!

Ken C's picture
Ken C
Status: Platinum Member (Offline)
Joined: Feb 13 2009
Posts: 753
Re: Copenhagen & Economic Growth - You Can't Have Both

Damnthematrix wrote:

And don't think I'm just mouthing off here, we have spent every last penny we ever owned getting ready for the collapse.

Mike,

If you have no money then how do you pay the taxes on your property?

I don't know about OZ but here in the US if you don't  pay the property tax the county will take your property.

Ken

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Copenhagen & Economic Growth - You Can't Have Both

Sorry Ken, what I meant to say is we have no money stashed away in the bank or invested in anything.....  except what we own outright, our house, land, and livestock........

We live on $200 a week which is more than enough to pay what we call rates, ~$1000 a year.  We also still run a car on that, and I look forward to the collapse so that we no longer will be expected to have a car, releasing even more funds for "fun stuff" like buying chocolates!  Tongue out

Mike

RichardCassie's picture
RichardCassie
Status: Member (Offline)
Joined: Sep 21 2009
Posts: 14
Re: Copenhagen & Economic Growth - You Can't Have Both

I would urge those who are not familiar with David C. Korten, author of "When Corporations Rule the World," "The Great Turning: From Empire to Earth Community" and "Agenda for a New Economy." He argues that corporate consolidation is merely one manifestation of what he calls "Empire": the organization of society through hierachy and violence  that has largely held sway for the past 5,000 years. These works wove all the threads together for me.

guardia's picture
guardia
Status: Platinum Member (Offline)
Joined: Jul 26 2009
Posts: 592
Re: Copenhagen & Economic Growth - You Can't Have Both

Davos wrote:

You might want to take a peak over at Nate's site, he has a freedom plan that is well thought out, I'm still reading it.

This page? http://economicedge.blogspot.com/2009/12/freedoms-vision-outline.html

Too many CAPITAL LETTERS and text in italic for my liking. Still, sounds nice, but he assumes people are smarter than they really are... "Only two things are infinite, the universe and human stupidity, and I'm not sure about the former." - Albert Einstein  (Not sure where that one comes from, there's too many hits on Google, but I agree...)

Samuel

Tserendash's picture
Tserendash
Status: Silver Member (Offline)
Joined: Mar 5 2009
Posts: 178
Re: Copenhagen & Economic Growth - You Can't Have Both

What will we use for money after fiat is gone - at least for a few years?

Gold is rare and can not be easily duplicated.  It is also way to valuable to buy a loaf of bread.  Gold is good for the big stuff then you need lesser value metals or things that reflect real sweat to create.  Silver is good below gold, but even it becomes to valuable for small purchases.  And old silver dime approaches $2 in today money.  In 1950 the actual silver in a dime was only worth about 4 cents.  Silver would zoom if it again become monetary.  If you use $25 as the value of silver on a monetary basis and you reduce the coin value to 40% of silver then an ounce of silver would have monetary value of $62.50 and a dime would be $6.25 in today's money.  If you make the value of the silver to close to the coins monetary value you risk coins going out of circulation and into the melting pot on any up swing in the metal price.  It costs money to create coins and they do wear out.  So the mint does need to earn a profit.

England was on the gold standard for 300 years and the inflation/deflation chart looks like a normal read out of a heart.  Prices advanced about 25% followed by a recession and a drop back to the starting point with this repeated every few decades.  The point is silver and gold will still wobble in value.

We had a nickel that was actually made out of nickel and a penny made out of copper that shrank in size over the years.  While in Russia I bought a Russian penny that is over 200 years old.  It weighs as much as 2 or 3 silver dollars and reflected a close to true value in copper.  I was told that a 100 Ruble note would buy 8 cows so go figure what 1/10,000 of that was worth.  I guess 1,250 of these big copper penneys would weigh 200 pounds.  That is over $600 at todays copper price so not that far off of todays value of a cow.  Not bad at retaining its value from Cathereen the Greats time till now.  Of course people did not have the standard of living we have now and most Russians probable did not earn 100 Rubles in a year.  In a pinch a big copper penny could be hammered into something useful.

I favor a monetary board totally seperate from the Federal, State, and Local governments and the banks.  This independent elected board would issue the money and be free of all political constrants from the operating governments.  In fact operating government officials and employees would be forbidden to even talk to them.

We could use any assortment of tangible assets to back the money such as grain, cotton, farm land, forests, apartment blocks, shopping malls ect. in addition to gold and silver which are probable not abundant enough to fill the total monetary needs of the nation.  To some degree this monetary board could also work as a commodity price equalization board buying corn when it is cheep and selling it when it is high replacing the value nest with copper, cotton or what ever is in surplus.  A fall out of that would be famine prevention.

All kinds of crazy stuff has been used as money over the years including big round stones with holes in them in the Yap Islands.  After a few years of moving these heavy stones around  when they were spent the Yap citizens reached a point where they just left them where they lay and everybody in the community knew who owned each stone.  When someone spent a stone for a couple pigs everybody knew the stone had a new owner.  Several men left in a double dug out canoe and went to the stone money island and hewed out a new stone to increase the money supply.  On the way back they got in a storm and feared for their lives.  They dumped the stone into the ocean to increase their odds of survival.  Luckly, they did survive, and lived to testify that a valuable chunk of money was in fact in existance at the bottom of the ocean.  Everybody agreed that it existed and was there so the money supply was increased.  Some lucky Yap Island citizen owns that stone and can freely trade it for anothers pigs or what ever.  This story is from Milton Freedman's book MONEY.

Keep it simple and out of the governments hands and it will work!

jpitre's picture
jpitre
Status: Gold Member (Offline)
Joined: Mar 3 2009
Posts: 366
Re: Copenhagen & Economic Growth - You Can't Have Both

I second Richard's recommendation about reading Korten's work. He does an excellent job of analyzing what has gotten us to where we are. If you are only going to read one, I suggest his latest work "Agenda for a New Economy". His analysis of where we are and how we got here in "The Great Turning" is excellent although I think his recommended solutions fall short. I think he does a better job of where we need to go now in the "Agenda for a New Economy"  

I don't agree with all he says, but I do think his work is the most thought provoking I've read recently

Jim

rhare's picture
rhare
Status: Diamond Member (Online)
Joined: Mar 30 2009
Posts: 1271
Re: Copenhagen & Economic Growth - You Can't Have Both

I favor a monetary board totally seperate from the Federal, State, and Local governments and the banks.  This independent elected board would issue the money and be free of all political constrants from the operating governments.  In fact operating government officials and employees would be forbidden to even talk to them.

Why have a "monetary board" at all.  There is no need to limit money creation to any one entity.  If it's all based on metal content anyone could create the money. Perhaps you have some type of auditing board to insure competing currencies aren't being debased, kind of like auditing of public companies now.  If it's an elected board then it's not the following:

Keep it simple and out of the governments hands and it will work!

Besides, the amount of silver/gold/other if used as a anchor for money makes no difference.  In todays society few would select using coins for money anyway, just as many do not use cash today.  Electronic tracking of money would work just as it does today.  The only important thing is that if you wanted to change your electronic currency into physical metal, you could.

A fall out of that would be famine prevention.

Money should never have any side effects.  That is not it's purpose, when you start trying to do things like "prevent famine" with your money supply you end up with the same situation we are in today.  After all the FED and our current fiat money was put into place to help stop business cycles, prevent unemployment, etc.

SingleSpeak's picture
SingleSpeak
Status: Gold Member (Offline)
Joined: Dec 1 2008
Posts: 430
Re: Copenhagen & Economic Growth - You Can't Have Both

rhare,

You've hit on the real problem (or at least one of them). If we had true supply and demand working without government manipulating, stimulating, regulating, and bailing out failed entities things would work much more smoothly. When you take away someone's ability to fail, you'll get well........exactly what we've got right now, a big mess.

Chris, your insight in this schitzo situation is invaluable.

rht1786's picture
rht1786
Status: Bronze Member (Offline)
Joined: Aug 13 2008
Posts: 36
Re: Copenhagen & Economic Growth - You Can't Have Both

I've written in the forum of this website several times before concerning Ludwig von Mises' Human Action, and I will not stop recommending it as a must-read for anybody who wants to intelligently discuss anything economic. Human Action is the definitive work concerning what economics is. And don't disregard these words, economics is widely misunderstood by the public, including those who frequent this website. Very often people mislabel economic terms, or use the wrong terminology, or argue over a subject (i.e. capitalism) without a full understanding of the meaning of this field.

That is because in this day and age, academic institutions, the media and governments have specifically frustrated an attempt to fully comprehend economics by making the subject appear extremely dull, uninteresting and unpopular. Additionally, economists tend to be very boring, uninteresting people, constantly full of negativity on world events. Economists also tend to lack the marketing expertise that current governments command, so they are unable and unwilling to attempt to capture complex economic concepts into catch phrases like "quantitative easing" or "jobless recovery". However, economists are simply rational and logical to the extreme, and most modern cultures lack this fervent rationalism. 

There is an explicit difference between capitalism and totalitarianism - they are opposites. Similar to contemporary definitions of the political right and left, which von Mises, himself, despises, but I will use in this context to illustrate a point, capitalism and totalitarianism form the poles in the scale of economic freedom. There is a method behind how economies function and how systems of government interact with and interfere with local, national and global economies. These fields are called praxeology and catallactics, and form the underpinning of free market, classical liberal economic theory. In this day and age, this economic theory is referred to as Austrian, and it is contrasted by Keynesian, but the differences are marked and simple. 

Austrian economics is the study of economics as a science and field of knowledge. It is contrasted by Keynesian economics, which is the economic policy of government interventionalism and its effects on free markets. 

At some 900 pages of verbose, often thick economic theory, Human Action is a difficult read. If you pick up this book with the intention to finish it, it will take some effort to push through all 900 pages. Regardless, if you want a full and complete understanding and one hell of a sound perspective on how the world works, then read this book. It will be worth your time.

rht1786's picture
rht1786
Status: Bronze Member (Offline)
Joined: Aug 13 2008
Posts: 36
Re: Copenhagen & Economic Growth - You Can't Have Both

Mike,

Your tone is so inflammatory it's hard to discuss this with you, because you don't seem willing to discuss facts and opinions, just to tell me that I'm wrong. 

Even more, I find it strange that you live in Australia, a resource-rich country that sits on a lot of mineral wealth, much of it still untapped, yet you still have an almost conspiracy theorist, American-like paranoia and fear of complete global collapse and worldwide destruction. 

When Peak Oil begins to affect the world economy, the necessary steps will be taken by leading firms to switch their energy bases to alternative energy. Communities already powered by alternative energy will become centers of further alternative energy development. There exist carbon neutral communities or sustainable communities that are off grid. There also exist houses that are off-grid and completely sustainable. More of these projects are quickly coming online.

While you are correct that they will not come online quickly enough to prevent global fallout and pockets of chaos and instability, the entire world will not suffer from massive destruction, short of extraterrestrial or galactic cataclysms. Areas most set for complete societal collapse are the United Kingdom, Japan and the United States. As I wrote above, population and the underinvestment in agriculture will play a major role. Although governments have massively skewed the free market, free market forces are more powerful than governments, and will force a realignment of investment capital into agriculture and shift society's attention towards the necessity of sustainability, most critically in terms of population. 

Personally, my attitude is positive and optimistic, as well as entrepreneurial and opportunistic. As long as man exists on this planet, there will be society, for man in civilization must depend on fellow man in order to create growth or sustain prosperity. Perhaps in some regions, society will crumble, and I have no doubt there will be localized war, perhaps numerous localized wars, but on our march towards a global civilization and a realization of planetary consciousness, an attitude of apocalypse will only set us back and does nothing to positively contribute to society.

These views are my own and I am not attempting to force them upon anybody. 

Cheers, and Happy New Year. 

Welcome 2010, it has much in store.

Haerdt

jpitre's picture
jpitre
Status: Gold Member (Offline)
Joined: Mar 3 2009
Posts: 366
Re: Copenhagen & Economic Growth - You Can't Have Both

I think that the whole idea that our problems stem form government manipulation of markets is an illusion -- it only seems that way on the surface. Behind the government regulation is the vast manipulative system (a very natural progression in hindsight) concocted by our so called free enterprise/capitalist system that has seized control of of our entire economic system for the benefit of the few who both overtly and covertly control our economy including the monetary system and the government. Some call this a system of  "corporatocracy". The Capitalist system left to free wheel without strict regulation spins out of control making it our master rather than serving our needs.

According to David Korten in his book Agenda for a New Economy summarizes Adam Smith's plan for free market systems as follows:

1) Buyers and sellers must be too small to influence the market place

2) Complete information must be available to all participants, and there can be no trade secrets

3) Sellers must bear the full cost of the products they sell and incorporate them into the sales price

4) Investment capital must remain within national borders and trade between countries must be balanced

5) Saving must be invested in the creation of productive capital rather than in speculative trading

Korten goes on to say that Smith was in favor of local market economies run by small entrepreneurs and that he would take offense at being associated with anything resembling our current definition of Capitalism.

My point being that it looks to me that whether we like it or not, (I hope) we are headed towards Smith's vision of an economic system that will benefit us all rather than the few -- and allow us all to step off the corporate treadmill

Jim

ejdodson's picture
ejdodson
Status: Member (Offline)
Joined: Dec 28 2009
Posts: 2
Re: Copenhagen & Economic Growth - You Can't Have Both

There are many very thoughtful people trying to bring about constructive changes in the public policies and laws of their governments. This is a daunting task in a world where law has been utilized to secure and protect entrenched privilege for centuries. Forcing governments to act in the common interest, and even to enforce existing laws, is proving nearly impossible.

Take, for example, one of the most potentially important pieces of international economic law ever written -- the Law of the Sea treaty. The fundamental principle of treating the seas as a global commons is that the earth is the birthright of all persons, equally. And yet, what every national government has tried to do is claim sovereignty and exclusive rights of exploitation over larger and larger portions of the earth's surface, its seas and its subsurface minerals. Adam Smith, David Ricardo, John Stuart Mill and a long list of political economists understood what was at stake. Following on their analysis and extending it, Henry George called for the societal collection of the annual rental value of all locations. Do this and two things would follow: government would have a sustainable income stream to cover the cost of public goods and serices as well as pay down national debt; and, by removing the profit from speculation in building locations, in natural resource-laden lands (and other forms of natural monopolies) the selling price of land would fall and remain low. That is, land would become far more affordable whether for residential or commerical construction, for agriculture, for environmentally-sustainable resource extraction -- for whatever productive use people have for nature.

If only we somehow could muster the political will to do what is rational and moral.

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Copenhagen & Economic Growth - You Can't Have Both

rht1786 wrote:
Personally, my attitude is positive and optimistic

I'd call it denial myself, or at the very least a lack of understanding of physics and chemistry.....

rht1786 wrote:
As long as man exists on this planet, there will be society, for man in civilization must depend on fellow man in order to create growth or sustain prosperity.

I find it amazing that after presumably doing the crash course, you can still go on about creating growth.....  which part of exponential do you not understand...? ALL past civilisations have collapsed BECAUSE of growth.....

Mike

rht1786's picture
rht1786
Status: Bronze Member (Offline)
Joined: Aug 13 2008
Posts: 36
Re: Copenhagen & Economic Growth - You Can't Have Both

Mike,

I wrote: "As long as man exists on this planet, there will be society, for man in civilization must depend on fellow man in order to create growth or sustain prosperity."

Not only did I not write a single word about exponential growth, or sustaining growth, I also wrote that some areas of the world will experience societal or economic collapse and chaos.

If you watched the Crash Course, then you would remember that the options are growth and prosperity. You can't have both. With surplus, you can either have one or the other. If you want to quote the Crash Course, then given enough surplus, you can choose either, but that has only been an available option given the vast amount of surplus recently enjoyed by global societies.

While human civilizations past and present have always experienced varying growth, both positive and negative, I respectfully disagree with you about growth always leading to collapse. Civilizations have also collapsed because of war or anarchy, famine and plague, and global cataclysm or Earth changes. Granted, except in the case of global catastrophe, you could pose the argument that growth plays a part in leading to war and famine. I do not disagree that the mindset that persistent never-ending growth is a false hope. 

You may have missed my point completely. I recognize my ability to convey ideas may not be as prescient as Dr. Martenson's, but I am neither a Doctor nor an experienced academic.

Cheers,
Rand 

DBurnham's picture
DBurnham
Status: Member (Offline)
Joined: Nov 28 2008
Posts: 5
Re: Copenhagen & Economic Growth - You Can't Have Both

I have been a subscriber to the Chris Martenson site for over a year.  I am also a Canadian.  I follow and see what is going on around the financial world through Chris's site and a few others that I subscribe to as well.  I see the reckless financial attitudes portrayed by the American government and many other governing bodies around the world. My question is why is this going on??? Can so many of these governing individuals be so stupid as to destroy countries through such poor economic decisions or is there another agenda out there.  What is really going on??

There is an extremely informative podcast that can be heard on KingWorldNews.com by a gentleman by the name of Lord Christopher Monckton, former adviser to Margaret Thathcher.  In this interview he states that he read the Copenhagen treaty, which is by the way a couple of hundred pages long,  and the real agenda from this meeting is to form a one world government communist style.  

Chris, have you heard this interview?  And if you have, can you provide any comments.  If this is the big old world plan, sounds like there is not much that the "ordinary folk" out there can do, but prepare, especially in the area of food, and to be as self sufficient as possible.  Thanks.  DB.   

Doug's picture
Doug
Status: Diamond Member (Online)
Joined: Oct 1 2008
Posts: 2764
Re: Copenhagen & Economic Growth - You Can't Have Both

James Hansen, climate scientist with NASA Goddard Institute, is generally vilified by the denialist crowd for his findings wrt climate change.  But now he is emerging as a strong anti-cap-and-trade activist.  Here's an essay he delivered to the Chairman of the Carbon Trading Summit in New York on Jan. 12:

http://www.columbia.edu/~jeh1/mailings/2010/20100112_PeopleVersusCap.pdf

Quote:
Cap-and-trade is a hidden tax.  An accurate name would be cap-and-tax, because cap-and-trade increases the cost of energy for the public, as utilities and other industries purchase the right to pollute with one hand, adding it to fuel prices, while with the other hand they take back most of the permit revenues from the government.  Costs and profits of the trading infrastructure are also added to the public's energy bill.

Fee-and-divident, in contrtast, is a non-tax.  The fee collected at the first sale of oil, gas and coal in the country does increase the price of fossil fuel energy.  But 100 percent of the fee is distributed monthly to the public as electronic deposits to the bank account or debit card of all legal residents, with half shares for children, up to two children per family.

Quote:
 As long as fossil fuels are the cheapest form of energy their use will continue and even increase.

Quote:
We can cure our fossil fuel addiction and in the process reduce emissions that cause climate change.  It requires that we take actions for the public interest, not for special interests.

What we need is an approach that addresses the fundamental fact that keeps us addicted to fossil fuels; they are the cheapest form of energy, provided their prices do not have to include the damage they do to humnan health, the environment, and the future of our children.

Fot the sake of the people, especially young people, there should be a rising price on carbon emissions.  The price should rise at a known economically sensible rate, so that businesses have time to plan their investments accordingly.  The money collected should be put in the hands of the public, so they are able to make the purchases necessary to reduce their carbon footprint.

The money collected should not be used by Congress to invest in energy R&D.  It has been shown time and again that Congress does not invest efficiently, and certainly not compared to the private sector.  Private sector investments will be made if a rising price of carbon emissions is legislated through a carbon fee that makes the rising price explicit.  The government already has resources to support research - it should not steal fee-and-dividend money from the public.

I don't think that the politicians and fossil fuel industry are going to give up another revenue source easily, but Hansen has suggested a framework that addresses AGW and looming shortages of fossil fuels while being relatively revenue neutral for the average consumer and providing an incentive for conservation of energy.  It is a beginning of a dialogue that could lead to real solutions.  Unfortunately, I am jaded enough to believe that real solutions to real problems will not be made until Congress, the fossil fuel industry and Wall St. are hit between the eyes by the proverbial 2X4.

Doug

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments