My apologies for the lack of a proper thread this morning but I must get me old gnashers seen to.
In lieu of one, I highly recommend these two new overviews by Gail Tverberg and Tim Morgan, respectively. Gail has long been an influence of mine and to a large extent it was her story I was telling when I started putting together economic threads many years ago on Facebook.
“2023: Expect a financial crash followed by major energy-related changes.
“Why is the economy headed for a financial crash? It appears to me that the world economy hit Limits to Growth about 2018 because of a combination of diminishing returns in resource extraction together with rising population. The Covid-19 pandemic and the accompanying financial manipulations hid these problems for a few years, but now, as the world economy tries to reopen, the problems are back with a vengeance.”
https://ourfiniteworld.com/2023/01/09/__trashed/
“#245: 2023 – Navigating the narratives…
“The facts of the matter are simply stated. The harnessing of abundant, low-cost energy from coal, oil and natural gas triggered two centuries of remarkable economic growth. Now, though, fossil fuel energy has ceased to be low-cost and can be expected, in consequence, to become a lot less abundant as well. With no complete replacement available for the energy value hitherto sourced from fossil fuels, the economy can only contract.“
https://surplusenergyeconomics.wordpress.com/2023/01/09/245-2023-navigating-the-narratives/
I’ll be back tomorrow with a new thread (probably a climate one).
I too followed Gail for quite some time. But her projections of collapse throughout which never came about caused me to pause. Also I am cautious whenever I come across the “system” that seemingly has a life of its own. There would seem to be no human or Natural ‘agency’ in the creation, maintenance, or indeed, change of the “system” [she is not the only one who supports this view!]. Natural agency is what you give us every second day in spades, but which is being faught tooth and nail by the “system” of business and government around the world.
Hi Bruce. Yes, she has been boldly predicting economic Armageddon since 2015 – but even if her timing is out, I do agree with the broad sweep of her analyses.
As for the question of human agency, that is a philosophical rabbit hole without end. 😆 Certainly the totality of the global economy seems to have its own emergent properties and can be said to be self-organising… It is tempting to view it as mechanistic and entirely beholden to thermodynamic imperatives but then within that totality, to give a rather negative example, you have a nation like Cambodia under Pol Pot that inflicts aggressive de-growth upon itself for ideological reasons.
So human agency can certainly shake things up and be a wild card.
I agree on Gail’s, and Tim’s, underlying theoretical analyses of the energy basis of the world economy, but *global* projections are based on *global* averages which are dominated by the biggest economies. So smaller economies get “washed out” in the numbers, and secondly, some large economies like China, BRICS, OPEC etc are very opaque with information, numbers etc so there is a lot of uncertainty in their models.
But overall, they are correct in the trends going down and contraction over time, aligned with the decline in available energy source. Financial systems have masked it for a long time, with “imaginary money” cash-splash injections etc.
Degrowth/deglobalisation is happening but with so much uncertainty, and potential ‘wild cards’ like wars, food production declines and the costs of repairing climate change disasters, the how fast and how soon of that decline is anybody’s guess.
My own guess, is it will be slower than a sudden big-bang, like a downward staircase, series of recessions over several years with only partial recoveries between. Perhaps economic decline will have a long tail to the graphs.
I’m more concerned with climate extreme disasters, so many coming back-to-back in time now, very quick pace.. even more unpredictable and uncertain than economic theory. but it can’t help anyone’s economy to keep repairing or replacing lost infrastructure, farming lands etc.
Gail makes a good case that we began our downward staircase in 2018. Certainly that jibes well with the economic stagnation I observed in 2019, prior to the pandemic obscuring, and of course in many ways exacerbating, the situation.
My feeling FWIW is that at some point something critical gives – whether it is a paralysis of international credit markets after a huge financial shock or something more leftfield – and the global economy effectively seizes up. Of course getting to that point could be a long and bumpy journey.
Hey there panopticon, faithful follower although lurker of your site for a few years now, and felt like pitching in for once , only once :p
Cambodja, yes , but also some surprising effects through all kinds of political systems and types of legislation . For example the policy of Brasils former military dictatorship in the 80s to give away land (former nature ) to anyone that spend five years on it , no matter what you did there , especially along the trans amazon highway and the crazy city of Manaus .
End game effect of these laws in Brasil was not exactly economic growth , not necessarily de growth , but a guaranteed destruction and inroads into old primary rainforest
A perfect example of many “economic” policies that dont even have had a specific goal but accumulated gigantic environmental loss
Harmon, good to hear from you. Not quite as bonkers, but here in the Hebrides, for reasons I still don’t fully understand, Thatcher’s government encouraged the plantation of large forests of fir trees with financial incentives. These monocultures are ecological deserts, as the trees are too densely packed to allow eco-systems to form around them. Ugly, too.
Re Brazil, I spotted this article today: “The manufactured mayhem that tore through the centres of power in Brasília on Sunday should be seen, at least in part, as another front in the war on nature.”
https://www.theguardian.com/world/2023/jan/10/brasilia-violence-amazon-bolsonaro-war-on-nature-in-brazil
Basically, Gail’s basic thinking is interesting and certainly makes sense. Her narrative evidence structure and her predictions have been the same for at least a decade. Her ‘geopolitical’ reflections are best skipped. These are characterised by a great lack of historical and specific knowledge so all that comes out are generalities that are of no use to anyone.
She is typically the product of a conservative middle-class citizen somewhere in the US. She really has no knowledge of Europe.
Her problem is that her theory is so general that ‘something’ about it is always right. Her ‘ forays’ into Covid are lousy.
Zip, I agree she has her shortcomings as an analyst. I recall she was very clear that the global financial system would fall apart in 2015/16. She was looking to explain the collapse in oil prices back then primarily in terms of the demand destruction she anticipated when, with the benefit of hindsight, it looks more like an issue of excess supply, as Saudi/OPEC battled the shale industry.
And, as you say, some of her geopolitical reflections are often not very well founded. But she puts herself out there and is bold in stating her views, even though they run so contrary to mainstream narratives. She really is something of a pioneer in her particular “limits to growth” analysis. I’ve learnt so much from her over the years and have something of a sentimental attachment to her, so I am perhaps not the best person to be objective about her.
You are right that she gives a consistent and interesting interpretation of the ‘limits to growth’ models where the availability of affordable energy is concerned.
‘Too expensive for consumers, too cheap for producers’ . Furthermore, I find her theories on the historically grown and irreversible ‘complexity’ of societies interesting. I regularly use her insights in the articles I write here in France on (nuclear) energy, hydro and renewables.
Having said that, I do think she is very tight-lipped about the ‘future home’. There is no escape! Apparently, her modelling evokes that.
This is also directly reflected in the endless literally thousands of comments, all of which cannot wait for doomsday to arrive whether it comes through an energy crisis or Covid in various guises. I stopped reading them a long time ago.
In my daily ‘ experience’ and future reflexions, that doesn’t really kick in. It will…. because apparently it doesn’t matter anyway, it’s an irreversible mechanism. So far, systems and people appear to be resistant anyway.
What I really like is this site, maybe you know it Kris de Decker…. there’s a bit more ‘ air’ in there. Thanks for your daily updates….
https://solar.lowtechmagazine.com/nl
“‘Too expensive for consumers, too cheap for producers’.” Her “no price that works” insight is a terrific one and very helpful in shedding light on the splintering and fracturing of geopolitical relations around the world.
I’m not really in a position to malign Gail’s comments section as of course I spent so many years lurking there myself. But I realised I had stopped learning anything new and the general energy was no longer edifying or enjoyable, so I felt it best to move on.
The name Kris de Decker is oddly familiar but I don’t recognise that site. It looks sensible and pragmatic; not qualities I can lay much claim to myself. 😂