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To feed the world’s burgeoning population while saving it from exhausting natural land resources, the United Nations today issued a report for policymakers, “Assessing Global Land Use: Balancing Consumption With Sustainable Supply,” published Jan. 24 by the International Resource Panel of the United Nations Environment Programme.
“Over the past 30 years, we’ve been increasing production on agricultural land, but scientists are now seeing evidence of reaching limits,” says Robert W. Howarth, Cornell’s David R. Atkinson Professor of Ecology and Environmental Biology and a lead author of the United Nations report.
“We need to stop over-consuming land-based products. For example, one of our key challenges is overusing agricultural land for growing meat. There is just not enough land on Earth for everyone in the world to eat like Americans and Europeans,” says Howarth. “We don’t need to become complete vegetarians, but to put this into context and to help sustain feeding a burgeoning global population, we need to reduce our meat consumption by 60 percent – which is about 1940s era levels.”
The U.N. predicts the world’s population will be around 9.2 billion people in 2050, with the world’s less-developed regions contributing the most people. More cropland will be required to feed them. The report explains wide-ranging scientific options for sustainable, global land management. Expanding global cropland forever depletes environmentally needed savannahs, grasslands and forests.
If current conditions continue, by 2050 the world could have between 320 million and 849 million hectares more natural land converted to cropland. “To put things into perspective, the higher range of this estimate would cover an extension of land nearly the size of Brazil,” says the report.
Further, the U.N. report – compiled by noted international scientists – says that decoupling fuel and food markets would be a major component of sustainable resource management. Howarth says that countries must halve their current biofuel expectations to ease potential crises. “With widespread use of biofuels, rising petroleum prices will inevitably also drive food prices because biofuels are derived from cropland,” says the report. “Intolerable price increases for food may lead to spreading hunger, cause riots and sociopolitical disturbances.”
This difficult challenge reaches beyond agriculture and forestry. The report delves into energy, transportation, manufacturing, global health and family planning, climate protection and conservation.
Large areas with degraded soils must be restored, and improved land-use planning must be implemented to avoid building on fertile land, according to the report. An estimated one-fourth of all global crop soils is degraded, but nearly 40 percent of this degenerated land has strong potential for easy restoration.
To ease land pressures, the U.N. suggests more programs for economywide sustainable resource management; promoting a healthy diet in countries high in meat consumption; programs in family planning that slow population growth; and reducing food loss at the production and harvest stage in developing countries by increasing infrastructure, storage facilities and bolstering cooperatives.
Autarky is more than a ten-dollar word for self-sufficiency, as it implies a number of questions that “self-sufficiency” alone might not.
Autarky vs. Self-Sufficiency
The ability to survive without trade or aid from other nations, for example, is not the same as the ability to reap enormous profits or grow one’s economy without trade with other nations. In other words, ‘self-sufficiency’ in terms of survival does not necessarily imply prosperity, but it does imply freedom of action without dependency on foreign approval, capital, resources, and expertise.
Freedom of action provided by independence/autarky also implies a pivotal reduction in vulnerability to foreign control of the cost and/or availability of essentials such as food and energy, and the resulting power of providers to blackmail or influence national priorities and policies.
Where self-sufficiency might suggest a binary state – you’re either self-sufficient or you’re not – autarky invites an exploration of which parts of one’s economy and political order are self-sufficient and which ones are critically dependent on foreign approval, capital, resources, and expertise.
In terms of military freedom of action, some nations are able to commit military forces and project power without the aid or approval of other nations. These nations have military autarky, though they might be entirely dependent on foreign countries for critical resources, capital, expertise, etc.
In this case, though their military may be self-sufficient in terms of capabilities (power projection, control of airspace, etc.), any dependency in other critical areas introduces an element of political, financial, or resource vulnerability should the key suppliers disapprove of a military action. These vulnerabilities impose often-ambiguous but nonetheless very real limits on freedom of action.
The key take-away from this brief overview is that autarky has two distinct states. One is absolute: i.e., Can a nation grow, process, and distribute enough food to feed its population if trade with other nations ceased?, and the other is relative: Is the we-can-feed-ourselves self-sufficiency of the subsistence-survival variety that requires great sacrifice and a drastic re-ordering of national priorities and capital? Or is it relatively painless in terms of national sacrifices and priorities?
Clearly, relative autarky invokes a series of trade-offs: Is the freedom of action and reduction in vulnerability gained by increasing autarky worth a national re-ordering of values, priorities, and capital, and quite possibly broad-based, long-term sacrifices?
There is an additional issue raised by autarky: Is the self-sufficiency a matter of being blessed with abundant resources, or is it the result of conscious national policy and resolve?
Autarky as Policy
Consider petroleum/fossil fuels as an example. Nations blessed with large reserves of fossil fuels are self-sufficient in terms of their own consumption, but the value of their resources on the international market generally leads to dependence on exports of oil/gas to fund the government, political elites, and general welfare. This dependence on the revenues derived from exporting oil/gas leads to what is known as the resource curse: The rest of the oil-exporting nation’s economy withers as capital and political favoritism concentrate on the revenues of exporting oil, and this distortion of the political order leads to cronyism, corruption, and misallocation of national wealth on a scale so vast that nations suffering from an abundance of marketable resources often decline into poverty and instability.
The other path to autarky is selecting and funding policies designed to directly increase self-sufficiency. One example might be Germany’s pursuit of alternative energy via state policies such as subsidies.
That policy-driven autarky requires trade-offs is apparent in Germany’s relative success in growing alternative energy production; the subsidies that have incentivized alternative energy production are now seen as costing more than the presumed gain in self-sufficiency, as fossil-fueled power generation is still needed as backup for fluctuating alt-energy production.
Though dependence on foreign energy has been lowered, Germany remains entirely dependent on its foreign energy suppliers, and as costs of that energy rise, Germany’s position as a competitive industrial powerhouse is being threatened: Industrial production is moving out of Germany to locales with lower energy costs, including the U.S. (Source)
The increase in domestic energy production was intended to reduce the vulnerability implicit in dependence on foreign energy providers, yet the increase in domestic energy production has not yet reached the critical threshold where vulnerability to price shocks has been significantly reduced.
Assessing the Trade-Offs
This highlights the critical nature of the autarchic thresholds of systemic costs and freedom of action. Above a difficult-to-define threshold, the trade-off required to increase self-sufficiency to the point of being meaningful is too high in sacrifice or cost to the economy or society; the trade-offs required aren’t worth the gain in freedom of action and self-sufficiency.
Put another way: Below a difficult-to-define threshold, an increase in self-sufficiency does not yield either lower or more reliable economic costs, nor does it decrease the nation’s vulnerability to blackmail, price shocks, etc.
In other words, though dependence always has potentially negative consequences, it can also be cheaper, more convenient, and more profitable than autarky.
The diffused benefits of autarky are often overshadowed by the presumed burdens of increasing self-sufficiency. But this trade-off can be illusory. Though the status-quo players benefiting from dependence on foreign markets, trade, and capital will shrilly claim that the nation is doomed should their foreign-derived profits be sacrificed in favor of increasing autarky, a desire for more autarky often pushes the economy and society into a highly positive and productive search for greater efficiencies and more productive uses of capital.
Is the sacrifice needed to reach self-sufficiency as steep as presumed, or is a new order of efficiency enough to meaningfully reduce dependence on foreign resources and capital?
A Thought Experiment in American Autarky
If we look at America’s consumption of fossil fuels and its dependence on oil imports to feed its consumption, autarky forces us to ask: Exactly how difficult would it be to lower consumption enough to eliminate the need for imported oil? Would the economy suffer a death-blow if vehicle, heating, and appliance-efficiency standards were raised, and business travel declined in favor of telecommuting and teleconferencing, etc.?
The answer of those profiting from the status quo is, of course, “Yes, the U.S. will be fatally harmed if energy consumption declines,” but the reality is that such creative destruction of wasteful inefficiencies and consumption is the heart of free enterprise and the rising productivity that creates widespread prosperity.
If the U.S. had listened to the 1970s-era defenders-of-the-status-quo doomsdayers, who claimed that environmental codes and higher energy-efficiency standards would doom the nation, the U.S. economy would in fact be doomed by the absurdly inefficient energy consumption of that era. The U.S. economy has remained vibrant and productive precisely because the defenders-of-the-status-quo doomsdayers lost the political conflict between the forces of improved efficiency and productivity and the defenders of the inefficient, wasteful, and diminishing-returns status quo.
There is one other element in the calculus of dependence, vulnerability, and freedom of action implicit in any discussion of autarky. Despite the rapid increase in production of oil and gas in the U.S., America remains dependent on imports of oil. But not all foreign sources of oil, capital, expertise, etc. are equal; some suppliers may be stable, close allies, and share borders and standards of trade (for example: Canada, Mexico, and the U.S.), while others may be distant, unstable, and unreliable.
In other words, autarky may not be worth the cost if a nation is dependent on stable, close neighbors, but the value of autarky rises very quickly when a nation’s survival is dependent on distant, unstable nations with few ties other than the profitable export of resources.
Though a survey of America’s relative dependence and self-sufficiency would require a book, let’s look at a few charts to get a taste of America’s declining dependence on foreign-supplied oil.
Declines in consumption have the same effect in terms of reducing dependency as do increases in domestic production. Has the U.S. economy imploded as miles driven have declined? Or has the increased efficiency this implies boosted productivity?
U.S. imports of petroleum have declined:
U.S. domestic crude oil production has increased:
U.S. natural gas production has risen:
The U.S. oil/gas rig count is still far lower than the peak in the 1980s:
There are many issues raised by these charts, including the sustainability of increased production, the possibility of further declines in consumption, policies that affect production and consumption, and so on, but similar charts of grain, capital, expertise, goods, etc. would help to fill out the complex set of issues raised by declining consumption and increasing domestic production and productivity.
In finance, dependence can mean dependence on other nations for capital and/or profits. What is the consequence of rising autarky for an economy such as America’s that is heavily dependent on foreign markets and trade for the stupendous profitability of its corporations?
In Part II: The Consequences of American Autarky, we discuss this and other ramifications of America’s rising autarky.
America’s ability to project power and maintain its freedom of action both presume a network of diplomatic, military, and economic alliances and trading relationships which have (not coincidentally) fueled American corporation’s unprecedented profits.
The recent past has created an assumption that the U.S. can only prosper if it imports oil, goods, and services on a vast scale. Could the U.S. shift production from overseas to domestic suppliers, and reduce its consumption of oil and other resources imported from other nations?
This Graceless Age…
The consumption-oriented lifestyle could in no way scale across 7 billion people, so this was always a zero sum game between haves and have nots.
Global policy-makers saved the globalized ponzi scheme from itself in 2008. Now having squandered all resources, the odds that they can save it again are somewhere between zero and impossible. The first melt-down to weaken the model. This next one to kill it, for good…
The New Rome
Worthless political thought dealers. Vacuous media buffoons. Country club CEOs hell bent on liquidating their own country. Wall Street greed idolators. Self-important billionaires sprinkling their Central Bank-inflated wealth on the indolent masses. Hollywood’s fake gods and goddesses saving the world one comic book remake at a time. Steroid-bloated millionaire athletes pimping factory slave made sneakers to poverty-stricken inner city youth at $150 a pair. Testosterone-depleted boy-men running around like refugees, incapable of anything beyond their own immediate self-gratification. Idiocratic masses, stewing in a lethal cauldron of junk food and junk culture – too stoned to realize how stoned they are.
Life Without SUVs: Inconceivable
Third grade math indicates that the consumption-oriented lifestyle is in no way scalable across 7 billion people. In the U.S. alone, 5% of the world’s population consume 20% of global resources. It’s a tale of moral and intellectual bankruptcy that today’s thought dealers would allow so much legacy industrial assets to be liquidated just to propagate the fundamentally unsustainable for a few years longer. Despite doubling 229 years worth of national debt in just the past 7 years, today’s dumbfucked leaders, clueless academics, and the Idiocracy at large just can’t face the idea that their overriding mission to consume this planet, is now ending.
Anyone who reads this after-the-collapse, must come to terms with the fact that they were financially bludgeoned merely because they took all of the above decadence for granted – “business as usual”. And the fact that they were incapable of third grade math or otherwise had their heads buried straight up their own ass. Even at this late stage, the vast majority are totally bought in to the status quo and its inherent exploitation-based mentality. It’s totally unquestioned.
What to tell the grandchildren?
“Yeah, we thought it was odd – trying to borrow our way out of a debt crisis. And we really felt bad about bankrupting your generation, but those shopping sprees were fantastic. Personally, I was skeptical trusting the same morons with the global financial system after they crashed it in 2008, but then Bernanke gave them a free bailout and a lot more gambling money, so they seemed happy. I was really taken aback when the Chinese stopped lending us their money – after all, we’d been paying them $.10 on the dollar in wages. Totally ungrateful. Overall though, I’ll be honest, I was too busy watching the Dow, the NFL and Faux News, so I really had no clue what the hell was going on in the real world…”.
And now, we just learned, 400 Priests defrocked by the Pope over a two year period, for child molestation. A thousand plus years of shameful secrets disgorged in one exhale. Do we really believe that this is all a modern problem? That this legacy of sexual abuse has not been secretly propagated for centuries? Of course not. Suffice to say, This is a bad time to be left faithless, going into what will very likely be the most deadly period in human history.
I highly doubt that the U.S. would ever turn full blown communist – let’s face it, today’s phony Obama-socialism is nothing more than foodstamp-based riot control while billionaires complete the estate sale. Those Americans who honestly think that the U.S. is on the verge of socialism, need to take their first-ever trip outside of the U.S. and get some fucking perspective. That said, there are several well known countries where opinions are turning decidedly against capitalism, not the least of which is Japan. Suffice to say, the age of Sociopathic Corporations run by sociopathic frat boys is coming to its inevitable bad ending.
What difference can one man make in all of this madness? I’ve met enough good people in my lifetime to know that they are out there. They are just few and far between. Therefore the hope is that the impending “reset” bludgeons today’s amoral self-absorbed jackasses and their dumbfuck ideas into abject oblivion, all while keeping enough of decent humanity still intact to rebuild upon.
I realize that’s a stretch, but it’s all I’ve got…
P.S. Scroll down. My new blog background reflects the end of a graceless age and the (eventual) promise of a new and better one. Not the end. The beginning.
Or it might just be the stronger Prozac. Who knows?
What is correct way to model the future course of energy and the economy? There are clearly huge amounts of oil, coal, and natural gas in the ground. With different approaches, researchers can obtain vastly different indications. I will show that the real issue is most researchers are modeling the wrong limit.
Most researchers assume that the limit that they should be concerned with is the amount of oil, coal, and natural gas in the ground. This is the wrong limit. While in theory we will eventually hit this limit, because of the way fossil fuels are integrated into the rest of the economy, we hit financial limits much earlier. These financial limits include lack of investment capital, inability of governments to collect enough taxes to fund their programs, and widespread debt defaults.
One of the things I show in this post is that Economic Growth is a positive feedback loop that is enabled by cheap energy sources. (Economists have postulated that Economic Growth is permanent, and has no connection to energy sources.) Economic Growth turns to economic contraction as the cost of energy extraction (broadly defined) rises. It is the change in this feedback loop that leads to the financial problems mentioned above. These effects tend to lead to collapse over a period of years (perhaps 10 or 20, we really don’t know), rather than a slow decline which is easily mitigated.
If, indeed, most analysts are concerned about the wrong limit, this has huge implications for energy policy:
1. Climate change models include way too much CO2 from fossil fuels. Lack of investment capital will bring down production of all fossil fuels in only a few years. The amounts of fossil fuels included in climate change models are based on “Demand Model” and “Hubbert Peak Model” estimates of fossil fuel consumption (described in this post), both of which tend to be far too high. This is not to say that the climate isn’t changing, and won’t continue to change. It is just that excessive fossil fuel consumption needs to move much farther down our list of problems contributing to future climate change.
2. It becomes much less clear whether high-priced replacements for fossil fuels are worthwhile. In theory, they might allow a particular economy to have electricity for a while longer after collapse, if the whole system can be kept properly repaired. Offsetting this potential benefit are several drawbacks: (a) they make the economy with the high-priced replacements less competitive in the world marketplace, (b) they tend to run up debt, increase government spending, and decrease discretionary income of citizens, all limits we are reaching, and (c) they tend to push the economic cycle more quickly toward contraction for the country purchasing the high-priced renewables.
3. A large share of academic writing is premised on a wrong understanding of the real limits we are reaching. Since writers base their analyses on the wrong analyses of previous writers, this leads to a nearly endless supply of misleading or wrong academic papers.
This post is related to a recent post I wrote, The Real Oil Extraction Limit, and How It Affects the Downslope.
Types of Forecasting Models
There are three basic ways of making forecasts regarding future energy supply and related economic growth:
1. “Demand Based” Approaches. In this method, the analyst first decides what future GDP will be, and uses that estimate, together with past relationships, to “work backwards” to figure out how much energy supply will be needed in the future. The expected needed future energy supply is then divided up among various types of fuels, giving more of the growth to types that are favored, and less to other types. Very often, estimates of growth in energy efficiency, growth in “renewables,” and growth in the amount of GDP that can be generated with a given amount of energy supply are included in the model as well.
This method is by far the most common approach for forecasting expected future energy supply, especially at high levels of aggregation. One advantage of this method is that can provide almost any answer the analyst wants. Governments are paying for reports such as the EIA and IEA forecasts, and oil companies are paying for forecasts such as those by BP,Shell, and Exxon-Mobil. Both governments and oil companies prefer reports that say that everything will be fine for the foreseeable future. Demand Based approaches are good for producing such reports.
Another advantage of this approach is that the analysts don’t have to think about pesky details like where all of the investment capital will come from, or how large an improvement in the ratio of GDP to energy consumption can actually occur. They can simply make assumptions and point out that the forecast won’t come true if the assumptions don’t hold.
2. “Hubbert Peak Model”. This model is based on an interpretation of what M. King Hubbert wrote (for example, Nuclear Energy and the Fossil Fuels, 1956) . The basic premise of this model is that future supply of oil, coal, or gas will tend to drop slowly after 50% (or somewhat more) of the fuel supply potentially available with current technology has been extracted.
In fact, we don’t really know how much oil or coal or natural gas will be extracted in the future–we just know how much looks like it might be extracted, if everything goes well–if there is plenty of investment capital, if the credit system works as planned, and if the government is able to collect enough tax revenue to fund all of its promises, including maintaining roads and offering benefits to the unemployed.
What most people miss is the fact that the world economy is a Complex Adaptive System, and energy supply is part of this system. If there are diminishing returns with respect to energy supply–evidenced by the rising cost of extraction and distribution–then this will affect the economy in many ways simultaneously. The limit we are reaching is not that oil (or coal or natural gas) extraction will run out; it is that economic system will at some point seize up, and rapidly contract. The Hubbert Peak Method shows how much fuel might be extracted in each future year if the economy doesn’t seize up because of financial problems. The estimate produced by the Hubbert Peak Method removes some of the upward bias of the Demand Model approach, but it still tends to give forecasts that are higher than we can really expect.
3. Modeling How the Economy Actually Works. This approach is much more labor-intensive than the other two approaches, but is the only one that can be expected to give an answer that is in the right ballpark of being correct with respect to future economic growth and energy consumption. Of course, observing signs of oncoming collapse can also give an indication that we are nearing collapse.
The only study to date modeling how long the economy can grow without seizing up is the one documented in the 1972 book The Limits to Growth, by D. Meadows et al. This analysis has proven to be surprisingly predictive. Several analyses, including this one by Charles Hall and John Day, have shown that the world economy is fairly close to “on track” with the base scenario shown in that book (Figure 1). If the world economy continues to follow this course shown, collapse would appear to be not more than 10 or 20 years away, as can be seen from Figure 1, below.
Figure 1. Base scenario from 1972 Limits to Growth, printed using today’s graphics by Charles Hall and John Day in “Revisiting Limits to Growth After Peak Oil”http://www.esf.edu/efb/hall/2009-05Hall0327.pdf
One of the findings of the 1972 Limits to Growth analysis is that lack of investment capital is expected to be a significant part of what brings the system down. (There are other issues as well, including excessive pollution and ultimately lack of food.) According to the book (p. 125):
The industrial capital stock grows to a level that requires an enormous input of resources. In the very process of that growth it depletes a large fraction of the resource reserves available. As resource prices rise and mines are depleted, more and more capital must be used for obtaining resources, leaving less to be invested for future growth. Finally investment cannot keep up with depreciation, and the industrial base collapses, taking with it the service and agricultural systems, which have become dependent on industrial inputs (such as fertilizers, pesticides, hospital laboratories, computers, and especially energy for mechanization).
Jorgen Randers’ 2052: A Global Forecast for the Next Forty Years
In 2012, the same organization that sponsored the original Limits to Growth study sponsored a new study, commemorating the 40th anniversary of the original report. A person might expect that the new study would follow similar or updated methodology to the 1972 report, but the approach is in fact quite different. (See my post, Why I Don’t Believe Randers’ Limits to Growth Forecast to 2052.)
The model in Jorgen Randers’ 2052: A Global Forecast for the Next Forty Yearsappears to be a Demand Based approach that perhaps uses a Hubbert Peak Model on the fossil fuel portion of the analysis. One telling detail is the fact that Randers mentions in the Acknowledgements Section only one person who worked on the model (apart from himself). There he thanks “My old friend Ulrich Goluke, for creating the quantitative foundation (statistical data, spreadsheets, and other models) for this forecast.” Ulrich Goluke’s biography suggests that he is able to prepare a Demand Model spreadsheet. It would be hard to believe that he that he could have substituted for the team of 17 researchers who put together the original Limits to Growth analysis.
The Need to Add to the Original Limits to Growth Analysis
The original Limits to Growth analysis was primarily concerned with quantities of items such as resources, pollution, population, and food. It did not get into financial aspects to any significant extent, except where flows of resources indicated a problem–namely in providing investment capital. One thing the model did not include at all was debt.
In the sections that follow, I show a model of how some parts of the economy that weren’t specifically modeled in the 1972 study work. If the economy works in the way described, it gives some insights as to why collapse may be ahead.
Economic Growth Arises from a Favorable Feedback Loop
Economic growth seems to arise from a favorable feedback loop, as shown in Figure 2, below.
Figure 2. Author’s representation of how economic growth occurs in today’s economy.
This model above is intended to reflect the situation from, say, 1800 to 2000. The situation was somewhat different before the use of fossil fuels, when far less economic growth took place. Furthermore, as we will see later in this post, the model changes again to reflect the impact of diminishing returns as the cost of energy production increases in recent years and in the future.
The critical variables that allow economic growth to take place are (1) cheap energy available from the ground, such as coal, oil, or natural gas–if cheap renewables were available, these would work as well (2) technology that allows us to put this cheap energy to work to make goods and services, and (3) a way to pay for the new goods and services.
Debt. In this model, debt plays a significant role. This happens because fossil fuels allow a huge “step up” in the quality of goods and services, and debt provides a way to bridge this gap. For example, with fossil fuels, we have electric light bulbs, metal machines in factories, and farm machinery, all of which vastly improve efficiency. The ability to pay for the new fuel and the new devices using the fuel, is much greater after the new devices using the fuel are put in place. The way around this problem is simple: debt.
The use of debt becomes important at many points in the economy. Increased debt can theoretically help (a) the companies doing the energy extraction, (b) the companies building factories to create the new goods and services, and (c) the end consumers, since all of these benefit greatly from the services that cheap fossil fuels provide, and can better pay afterward than before.
Government debt, such as debt used to finance World War II, can also be used to start and maintain the cycle. John Maynard Keynes noticed this phenomenon, and recommended using an increase in government debt to stimulate the economy, if it was not growing adequately. The detail he was unaware of is the fact that the debt only works in the context of cheap energy supplies being available to make use of this debt, enabling growth.
How the Feedback Loop Works. The loop starts with the combination of a cheap-to-exploit energy resource, technology that would use this resource, and debt that allows those would like to gain access to the resources to have the benefit of them, before they are actually able to pay cash for them.
This combination allows goods to be produced which initially may not be very cheap. Over time, new methods are tried, allowing technology to improve. Consumers are able to buy increasing amounts of goods and services, both because of their own increased productivity (enabled by fossil fuels and new technology) tends to raise their wages, and because the improving technology lowers the cost of goods. Government services are expanded as tax revenue per capita increases. Infrastructure such as roads are expanded making the economy more efficient.
In this context, profits of companies grow, allowing reinvestment. Investment is also enabled by increasing debt. This allows the cycle to start over again, with better technology and more infrastructure in place. The economy tends to grow, and the standard of living tends to rise.
Overview. One way of explaining the tendency toward economic growth is that a cheap-to-extract fossil rule has an extremely high return on investment. This very high return enables benefits to all: workers receive higher wages; businesses receive higher profits; and governments receive both higher tax revenue and the ability to build new roads and other infrastructure cheaply.
Another way of describing the tendency toward economic growth is to say that the value to society of the (cheap) energy product is far greater than its cost of extraction. This difference provides a benefit which flows through to many parts of the economy. Economists do not recognize that this situation can happen, but it seems to be a major source of economic growth.
The Spoiler: Diminishing Returns
The problem with energy extraction is that we extract the inexpensive-to-extract energy sources first. Eventually these sources get depleted, and we need to move on to more expensive-to-extract energy sources. I illustrate this situation with a triangle that has a dotted line at the bottom.
Figure 3. Resource triangle, with dotted line indicating uncertain financial cut-off.
Businesses start by extracting the cheapest to extract resources, found at the top of the triangle. As these resources deplete, they move on to the more expensive to extract resources, further down in the triangle. Looking downward, it always looks like there are more resources available–it is just that they are more expensive to extract. This is why reported reserves tend to increase over time, even as supplies are depleted. The limit is a financial limit, illustrated by a dotted line, which is why virtually no one can figure out when the limit will actually arrive.
One somewhat minor point: When I say, “Cheapest to extract resources,” I am referring to broadly defined costs. What businesses want is resources that produce goods and services most cheaply for the consumer. Thus, they are really concerned about cheapesttotal cost, considering the entire chain that goes all the way to the consumer, including refining and transportation. The costs would include energy used in extraction, labor costs, transportation costs, taxes, and the cost of debt. It probably should include the cost of mitigating pollution effects as well.
A major problem is that as the cost of energy extraction grows, the favorable gap between the cost of extraction and the benefit to society (as mentioned in the previous section) shrinks. There are many ways that this problem manifests itself in the economy. Figure 4 shows a list of such problem with respect to higher oil prices:
Figure 4. Image by author listing some of the problems created by rising oil prices.
One indirect impact of these issues is that there are more layoffs and fewer new job opportunities. If we calculate average wages by taking (total US wages) and dividing by (total US population), we see that during periods of high oil prices, wages tend not to grow, as they had in periods when oil prices were lower–just as we would expect (Figure 5, below).
Figure 5. Average US wages compared to oil price, both in 2012$. US Wages are from Bureau of Labor Statistics Table 2.1, adjusted to 2012 using CPI-Urban inflation. Oil prices are Brent equivalent in 2012$, from BP’s 2013 Statistical Review of World Energy.
Another issue is that it is not just the price of oil that rises. The price of natural gas rises as well. We have not felt this in the United States, because demand has kept the price down below the price of shale gas extraction. The cost of coal, delivered to its destination, has risen because transport uses oil, and transport costs are a significant share of total costs. The cost of base metals has also risen since 2002, because oil is used in metal extraction. Food prices in general have tended to rise as well, because oil is used in production and transport of food. When wages are close to flat, and the cost of many goods are rising, workers find that their paychecks are increasingly squeezed.
While costs of making goods in the US are rising, and paychecks are stagnating, an increasing amount of goods are imported from areas around the world where energy costs and wage costs are lower. This helps keep the cost of consumer goods down, but it makes the problem of lack of jobs for US workers worse.
With all of these things happening, the government has more and more problems with its funding. Expenditures continue to rise, but taxes flatten, as the government tries to help the economy grow by not raising taxes to match expenditures (Figure 5, below).
Figure 6. Based on Table 2.1 and Table 3.1 of Bureau of Economic Analysis data. Government spending includes Federal, State, and Local programs.
Government expenditures can be thought of as expenditures out of the surpluses of the economy. As indicated previously, these are to a significant extent possible because of the favorable difference between the cost of extracting fossil fuels and the benefit those fossil fuels provide to the economy. As the use of fossil fuels has grown over the years, these government services have grown. In recent years, the presence of more unemployed workers has driven a need for more government services.
Since the early 2000s, government revenues have flattened. The lack of revenue, together with the ever-rising government spending, is what is driving continued big deficits. The danger is that this difference cannot be fixed, without huge cuts to programs that people are depending on, like unemployment insurance, Social Security and Medicare.
How the Economic Growth Loop Changes to Contraction
In my view, what causes a shift to contraction is a shift to higher energy costs. With higher energy costs, there is less surplus between the cost of extraction (broadly defined) and the benefit to society. Because of the smaller surplus, the parts of the economy that use this surplus, such as government spending, must shrink.
Figure 7. Higher energy cost leads to unfavorable feedback loop. (Illustration by author.)
We gradually find that all the great things we had learned to enjoy–inexpensive roads and other infrastructure, cheap goods, rising wages, and rising government serves–start going away. We increasingly find consumers maxed out on debt. We also find companies (especially energy companies) reporting lower profits, so they have more trouble investing in new energy extraction. The government cannot collect enough taxes for all of its services, so finds itself needing to keep raising its own debt levels.
The government can kind of “paper over” its difficulties with growing debt levels for a while, by using Quantitative Easing (QE). QE has the effect of making the interest the US must pay on its own debt lower. It makes the cost of business investment in new plants and equipment (including shale oil drilling) cheaper. It also helps stretch the incomes of increasingly impoverished workers by allowing monthly payments on homes and cars to be lower than they would otherwise would be.
The Party Ends With a Thud
Most readers can deduce that a shift from a growing economy to a shrinking economy is not a pleasant situation. It has all of the makings of collapse.
One of the big problems is debt defaults, as it becomes increasingly impossible to repay debt with interest. This creates conflict between borrowers and lenders. Debt defaults are also likely to cause huge problems for banks, insurance companies, and pension plans, because of the impact on their balance sheets. Some institutions may close.
To the extent new credit is cut off, the lack of credit cuts off new investment in energy extraction, in buying new cars and trucks, and in almost everything else. Such a cut-off in credit is likely to increase job layoffs and to lead to yet more defaults. Lack of investment in new energy extraction causes oil supply to fall quickly–far more quickly than standard “decline” models would suggest.
Businesses that in the past found that they could benefit from “economies of scale” as they grew find that fixed costs stay the same, even as sales shrink. This means that they either need to raise prices to cover their higher per-unit costs, or lose money.
Governments find that they need to cut government services to balance their budgets. Discontent grows among citizens as those who lose their benefits become very unhappy. Discord grows among political parties, because no one can agree how to cut programs equitably.
We don’t know how this will end, but we do know that the Former Soviet Union collapsed into its constituent parts when fossil fuel surpluses were reduced, prior to 1991. Egypt and Syria both have had civil unrest as their oil exports ended. Clearly very large government changes are possible, as surpluses disappear.
This list of potential impacts could be expanded endlessly, but I will spare readers from a more comprehensive list.
As we embark on a new year, it’s important to keep the really big elements of our global predicament squarely in mind. To that end, we’re surfacing this excellent discussion on population growth that Chris recorded in 2012 with Bill Ryerson of the Population Institute.
At the heart of the resource depletion story that we track here at PeakProsperity.com is the number of people on earth competing for those resources.
The global population is more than 7 billion now and headed to 9 billion by 2050. If world population continues its exponential growth, when we will hit planetary carrying capacity limits with our key resources (or are we already exceeding them)? What are the just, humane, and rights-respecting options that are on the table for balancing the world’s population with the ability of the earth to sustain it?
Population management is an inflammatory issue. It’s nearly impossible to discuss without triggering heated emotions, and rare is the leader who’s willing to raise it. And by going unaddressed globally, the risk of problems created by overpopluation grow unchecked. War, poverty, starvation, disease, inequality…the list goes on.
Which is why we feel we need to have the courage to address this very important topic directly. And to have an adult-sized conversation about these risks and what can done about them.
In this podcast, Chris talks with Bill Ryerson, founder and president of the Population Media Center as well as the president of the Population Institute. They explore the current forecasts for world population growth, the expected future demand on world resources, and the range of options available for bringing them into balance sustainably.
We are adding about 225,000 people to the dinner table every night who were not there last night. So that is net growth of the world’s population on an annual basis of a new Egypt every year. In other words, 83 million additional people net growth annually. And that, from a climate change perspective alone, is a huge increment. Most of this growth is occurring in poor countries, so on a per-capita level, the people being added to the population have much lower impact than, say, if Europe were growing at that rate. But nevertheless, just from a climate perspective, with most of that 83 million additional people in low per capita greenhouse-gas output countries – this is between now and 2050 – at this rate of growth, it is the climate equivalent of adding two United States to the planet.
Clearly resources like oil, coal, and gas are non-renewable and will eventually run out or become more and more expensive and therefore not reliable as a source of energy. But what is the renewable long-term sustainability or the carrying capacity of the environment in each geographic territory, and globally? What is the current and projected future human demand for those resources, and do we have sufficient natural resources to meet our needs?
Doing this kind of accounting is not difficult. There are very good robust scientific designs for measuring resource capacity and human demand, and projecting out what do we need to do in some time in the next few decades in order to get from what is clearly population overshoot to achieving something that is in balance. Because as long as we are in overshoot – and the global footprint network’s calculation is we are now at 50% overshoot – that means we are digging into the savings account of our ecological systems, as you mentioned: the fisheries being one, forests being another. We are eating into the capital to sustain the growing population.
They also explore why population management is such a uniquely controversial topic. Not only are moral, civil, and religious beliefs in play, but the debate is also heavily influenced by large corporate and governmental organizations protecting their interests. So it’s no wonder that a calm, respectful, and reasonable conversation on population remains so elusive.
But we’re going to try to have one here.
Needless to say, our moderators are on high alert and will step in if they are needed. Thanks in advance for your conscientious, levelheaded, and respectful comments. We have the chance to do substantial thinking on some really meaty questions here. Let’s make good use of it.
Click the play button below to listen to Chris’ interview with Bill Ryerson (46m:26s):
America was not infinite; it only seemed that way to early European explorers, conquerors, and settlers for whom the size of the known world had suddenly doubled and the quantity of effectively unclaimed resources increased by far more than that. This sudden immeasurable and unearned abundance, it is clear, authorized a new set of cultural practices that would not have been deemed appropriate by a people confronted by visible boundaries and limits. But I am less concerned with past crimes than I am with the beliefs and expectations that lead us into the future. The stories we continue to tell ourselves about the discovery of America, its conquest and settling, the Enlightened awakening from an age of unreason are similar to those that helped develop and profoundly shaped a new way of thinking about the world whose main contours are still in place today. The remaining question is how deep beyond these specific practices and habits of consumption does the false image of the infinite run? Our way of life is clearly not sustainable; but what if our way of perceiving reality–our fundamental political, economic, even scientific categories—were also inalterably deformed by the false image of an infinite land? Is philosophical Liberalism compatible with a finite planet and a way of life designed to live on it? How fundamental are the changes we must make in order to recast the American way of life to fit on a finite, increasingly crowded, planet?
In his one and only full book, Notes on Virginia, Thomas Jefferson provide clear evidence to the first point, that American cultural practices were shaped by this terrible misconception of limitlessness, even if its most destructive and inescapable consequences might come home to roost only decades, even centuries later. In a brief aside in Notes on Virginia, Jefferson contrasts European and American farming practices. Unlike European agriculture, which he admits is more intensive and careful in its approach, the character of American agriculture is formed by the fact that a parcel stripped of its fertility can be abandoned for another: “The indifferent state of that [careful agricultural practices] among us does not proceed from want of knowledge merely; it is from our having such quantities of land to waste as we please. In Europe the object is to make the most of their land, labour being abundant; here it is to make the most of our labour, land being abundant.” This is an astonishing admission by Jefferson; and it is indicative of a remarkable culturally-, or perhaps geographically-conditioned lack of foresight, the apparent unimportance of the question: how much land we might really “waste as we please?” The same lack of foresight appears in most discussions over energy and the environment today, even as we can calculate their finite nature with considerable accuracy. Ours is a history of a certain kind of success enabled by a particular kind of miscalculation.
Am I making too much of an off-handed remark, a moment of hyperbole buried in an otherwise dry and rather boring recitation of fact and figures about the commonwealth of Virginia? I don’t think so and for a number of reasons significant to our topic. Jefferson’s statement about the wasting of land and the constant push westward to find new land was not an obscure sentiment, but was the basic policy and practice of Southern planters. George Washington’s description of plantation management was similar:
“a piece of land is cut down,” its forests stripped away, so that it can then be “kept under constant cultivation, first in tobacco and then in Indian corn (two very exhausting plants), until it will yield scarcely anything (quoted in Kennedy 17). At that point, it would be abandoned in favor of new land obtained at the ever-receding frontier. As historian Robert Kennedy shows in his book, Mr. Jefferson’s Lost Cause: Land, Farmers, Slavery, and the Louisiana Purchase, the life of colonial planters was far more mobile and unsettled than the image of old southern families would suggest: “the evidence of local records in Georgia, Alabama, and Mississippi indicates that the average planter family moved at least twice in a generation,” while the wealthiest planters engaged in ramped land speculation across the western frontier. The result, as Kennedy argues, was “a migrant agricultural capitalism with results deadly to humans and to the land itself.” “As the practice of working soil to death and slaves to exhaustion was repeated over and over again, the desolating army of King Cotton moved on a broad front across the South, drawing people away from home and leaving blighted hopes behind. By 1847, the first cotton lands planted in Georgia were already exhausted; the number of white farmers in Wilkes County fell by half in twenty years” (21, 14, 21-2). This practice was made possible by the low price of abundant land. As Jefferson remarked, “we can buy an acre of new land cheaper than we can manure an old one” (12).
This cycle of careless over-use, destruction, and self-displacement was repeated most rapidly by the wealthiest Southern Planters with huge land holdings and thousands of slaves, all of whom were focused on commodity crops such as tobacco and cotton. But these wasteful practices, and an accompanying ideology of short-term profit, can be seen throughout the American experience, from the first fur traders to the fracking industry today. In a chapter entitled “The Economics of Extinction,” in her beautiful Reflections from Bullough’s Pond, Diana Muir tells of the pre-colonial trade in beaver pelts, a trade driven by European fashion, the debt held by many early European settlers, and by the precarious and constant need to hold a surplus against the vicissitudes of life in a foreign land where, as Muir puts it, the Europeans, like us, believed that “one could never pile up too many goods” (11). Between around 1630 and 1675 all the beavers in New England were turned into coats and hats, hunted into extinction.
The loss of beaver however did not spell only the end of a lucrative trade, but the dying of an entire ecosystem that was responsible for the initial abundance experienced by the first settlers, as well as the entire way of life for the Native Americans. The beaver pond, after all, provides habitat for hundreds of species as well as an entire microscopic universe. As Muir describes it, the dead leaves that fall into the stagnant waters of a dammed stream creates algae, which in turn produces “food for the tiny creatures that feed the small fish that feed big fish that feed the majestic osprey. . . . Sedge, moss, arrowhead, pickerelweed, water milfoil—every plant between the ferns far up the bank and the duckweed floating on open water is home to some animal or its young, a necessary food for some growing thing” (6). But the loss of the beaver, nature’s greatest architect and landscaper, has an even greater geographical and hydrological impact upon the land, and in a way that directly affects an agricultural people. A beaver dam is a wonder of water management, moderating “the seasonal extremes of rainfall, trapping the rains of April to release them in slow, even seepage through the hot, dry days of summer and early fall” (6).
When settlers first arrived, Muir notes, New England was home to tens of thousands of beaver ponds. As important as the slow release of water, moreover, was the way millions of gallons were held behind the dams, creating a constant seepage into the ground. The result: a “reservoir of ground water so abundant that it burst in ever-flowing springs [even] on the beach,” a ground water source necessary to all “the abundance of every kind [that] impressed the first Europeans to reach these shores, abundance of strawberries in the fields and of deer in the woods, abundance of trees, and an astonishing abundance of fresh, clear water” (7). The beaver gone, the forests felled, the ground turned into fast-eroding fields, this became the hardscrabble New England that we know today. But it scarcely mattered to the European settlers; rivers could be turned into industrial mills and new land could be acquired further west, with little cost to this new economics of extinction that had great and varied abundance to churn through. Recalling Huber and Mills, the logic of the wealth retrieving machines of these new white Americans advanced much faster than the abundance retreated—over the decades, they closed in on the receding horizon.
If this economics of extinction was made possible by the cheap supply of land and the cheapness with which the lives of its inhabitants were treated, how was it justified? Most individual participants in any destructive form of commerce keep their noses down and, for the most part, are just trying to make a living or compete with their neighbors, or live up to some status-filled ideal; for them, no justification beyond immediate gain is required. But a “big picture thinker” with epic ambitions like Jefferson, one who was designing a new way of life, would require something more. This is where the notion of the infinite or the limitless scale of the Americas comes in, a notion that appears repeatedly throughout Jefferson’s work and, more significantly, informs the sort of expansionary policy that Jefferson inaugurated and that has become one of the few political solutions that has proved successful decade after decade ever since Jefferson’s purchase of the Louisiana Territory: when in doubt, expand and grow, a policy that has evolved from Westward expansion and Indian removal, to foreign conquest and economic imperialism. All of these expansionary solutions have been similarly cloaked with self-congratulatory stories of manifest destiny, American exceptionalism, an American Empire of Liberty or Beacon of Hope, a seven-billion member global middle class powered by Windows, and, most improbably, the myth that there are no limits to growth. This has also provides the model for categorical disregard of ecological limits that much of the world has adopted.
It is true that Jefferson is often presented as the patron saint of American homestead agriculture, the spokesman for the virtuous and modest aspiration that American citizens might bind themselves to a piece of land which they would nurture and husband, while engaging in informed participation in the difficult task of self-government. Jefferson clearly favored this agricultural model over the more commercially and financially-minded manufacture or trade promoted by Alexander Hamilton and John Adams, with whom Jefferson battled over the identity America might assume. In a famous letter to John Jay, Jefferson writes: “Cultivators of the earth are the most valuable citizens. They are the most vigorous, the most independent, the most virtuous, and they are tied to their country, and wedded to its liberty and interest by the most lasting bonds.” In order for the audacious American experiment in self-rule to work, the nation would need to be bound together by people also bound to the earth, or so Jefferson professed. While the image was modest, the ambition was immense and the arc of simple virtue reached towards the infinite: an Empire of Liberty.
This tension between a modest virtue and a grand ambition is illustrated in the same letter to Jay: the stay at home virtues of the yeoman farmer, tied to the land and a local community is also a sort of tool or device to be used in a far more ambitious dream in which “most valuable citizens,” whose way of living Jefferson would never have accepted for himself, appear as pawns in a policy of expansion and growth that did not develop any strategies, in the end, to limit itself. “We have now lands enough to employ an infinite number of people in their cultivation. As long therefore as they can find employment in this line, I would not convert them into mariners, artisans or anything else. But our citizens will find employment in this line till their numbers, & of course their productions, become too great for the demand both internal & foreign. This is not the case as yet, & probably will not be for a considerable time.”
Our first clue to this broader motive comes in the very question that Jefferson is addressing: the paternalistic one that asks, how should we put our new citizens to work? What occupation might best serve the political needs of the nation? But beyond the social engineering, as people on the right would refer to this today, the answer exemplifies a common Jeffersonian assumption buried in his similar response to other political questions, many of which employed for political advantage the seemingly unlimited space of the American continent. That we could waste as much land as we please makes the virtues of being tied to the land and the liberty of the nation optional and, like everything else, disposable. “We have now lands enough to employ an infinite number of people in their cultivation.” Was there really room for an infinite number of farmers? Is Jefferson serious? While he may have admitted that it wasn’t really infinite, only infinite for all practical purposes, here and elsewhere he nevertheless proceeds as if it were truly infinite or that any distant limits need not be a concern of his. The only foreseeable limits that Jefferson can even imagine are established not by land constraints, but by limits to the demand of agricultural products.
It is also interesting to consider these words in light of the post-Keynesian economic theory of Krugman and Reich, in which economic problems are generally presumed to be ones of demand rather than supply, and in the light of our multi-billion dollar advertising and marketing industry, whose main function is to address problems of demand by goading us into wanting and needing more. If there is a limit to how many farmers Jefferson thought the United States might support, it is not land. It is instead demand for their products, food, but also fiber and tobacco. This belief in infinite land pops up repeatedly in Jefferson’s writings and speeches. We have seen the way Jefferson has made some sort of truce with the wasteful techniques of agriculture in Notes on Virginia, assenting to the sacrifice of soil and “lasting bonds,” alike, to some principle of productivity or profit, and a corresponding inability to anticipate how long it might take to waste all our land. The same sort of indifference to the quickening power of exponential growth appears in his first Inaugural Address, where Jefferson predicts that this “chosen country” would have “room enough for our descendants to the thousandth and thousandth generation.” This, we might note, is more than ten times the generations there had been since the birth of Christ. We should also note that in the same address Jefferson spoke favorably on the exponential population expansion that the young nation was experiencing: “you will perceive that the increase in numbers during the last 10 years, proceeding in geometric ratio, promises a duplication in little more than 22 years.” This growth is viewed with nothing but optimistic pride: “we contemplate this rapid growth and the prospect it holds up to us, not with a view to the injuries it may enable us to do others in some future day, but to the settlement of the extensive country still remaining vacant within our limits to the multiplication of men susceptible of happiness, educated in the love of order, habituated to self-government, and valuing its blessings above all price.”
Jefferson’s comments on agriculture can be slightly, and perhaps purposefully, confusing. The wealthy planters who received the benefit of most of Jefferson’s policies do not share the ethic of the family farm. Likewise, it is disingenuous to suggest that labor was not plentiful in the new world, where millions of slaves toiled and were necessary to this economics of extinction. In the above mentionedMr. Jefferson’s Lost Cause, Robert Kennedy argues that in addition to the better-known divide between Jefferson’s agrarianism and Hamilton’s commerce and industry, agriculture had two distinct strains of its own. One of these, represented by the Yeoman farmer of the sort written about to John Jay, was the kind of farming Jefferson favored, at least in principle and within his soaring approbations. In contrast, was the slave-based, commodity-centered, Southern plantation, a clear precursor to today’s industrial agriculture. While Jefferson despised the slavery upon which the plantation system was built, and was eventually to mourn the devastation to the land that it wrought, he nevertheless suited his policies around the needs of the wealthy planter and at the expense of the yeoman farmer. The Louisiana Purchase and the spread of slavery westward was the most significant example of this, but the same sacrifice of his ideal pervaded a much broader series of decisions, all of which are well-documented by Kennedy. An Empire of Liberty founded on the virtues of the cultivators of the earth was the “lost cause” referred to in Kennedy’s title.
The yeoman farmer was less dependent on the money economy and foreign markets. Small family farms were far more self-sufficient and, because they were less capital-intensive, were not as ready or as able to uproot themselves even for the cheap land at the frontier. In Jefferson’s day it was already apparent that the small and diversified farmer, often laboring without slaves, provided what we would today call as more “sustainable” model. They would manure an acre of land rather than abandon it for another. This model of agriculture and its attendant virtues is significant to our broader understanding of Liberalism and America, and our attempt to find a path towards a sustainable future. As Kennedy would tell it, American history is a struggle between these two competing strains of freedom and democracy, a struggle that tore at Jefferson himself. Kennedy argues that the struggle between the free, independent, and ecologically minded family farm, on the one hand, and the more exploitative and destructive plantation, on the other, often hung in a close balance. It could have gone either way. He is particularly critical of Jefferson, who for a variety of personal and political reasons, never had quite the courage necessary to defend his ideals. In this way, Kennedy believes Jefferson could have possibly prevented the growth of slavery, the underdevelopment of the South, and even the civil war.
Kennedy’s thesis also suggests that Liberalism contains within it a sustainable strain based on lower levels of consumption and waste, and an economy tied more closely to an ecology. This view would in some sense cast doubt on my thesis that Liberalism is inherently expansionary and inherently anti-ecological. My primary response is: good! All the better if Liberalism and Enlightenment reason have the seeds of a sustainable rebirth buried within them. My goal is not to overthrow the principles of the Liberal Enlightenment just for the fun of it, but to articulate ways in which our Liberal Expectations, as they have evolved, might be reformed to fit into a finite planet. The future prospects of my two year old twin sons become all the more better if, indeed, we can retrace our steps and take some other fork in the road. They will care not a bit whether they inherit an inhabitable planet with an intact society that is Liberal, Post-Liberal, or something with an altogether different label. I am more than happy to welcome those parts of our tradition and our reigning political ideology that accept limits to consumption, that don’t value growth for growth’s sake, or believe that every problem will be solved with more technology and a step further from the soil and the land.
In any event, a number of questions still remain even if we except Kennedy’s thesis: why, most significantly, has our tradition of the yeoman farmer given way time and time again to the powers of expansion and growth? What forces or internal logic has transformed our family farmers into an industrial agricultural complex, our tradesmen and artisans into assembly line workers, our store-owners into cogs in a big-box machine, our local bankers and accountants into Wall Street masters of the universe, the good earthy folk of the North East and the Mid-West into iPad-punching account executives, marketers, and global salespeople? We have, I will argue, designed all our life supporting systems—our food, our trade, our manufacturing, our waste disposal, even our political elections—as if the world were limitless, our resources and dumps infinite. Was there ever really anything else? Did ecology ever stand a chance in the face of so profitable an economy of extinction?
It is of course satisfying to think it did, especially if we can find a villain to blame. Kennedy’s description follows the pattern we saw in our discussion of partisan warfare: the forces of destruction are thus isolated into a particular group. In this case, the Southern, slave-owning plantation owners provide a welcome target for educated, progressive, northern middle-class people. They, we can happily say, were the problem. Those values, not ours, are unsustainable. But one need not look very far to see that Jefferson’s yeoman farmer may have just been a somewhat slower version of the Southern Planter. While Kennedy emphasizes several times that the Yeoman model was successfully instituted in the North East, and areas north of the Ohio River, the marks they may have left on the terrain have long since been plowed under. A state like Wisconsin or Illinois was, at one time, the seat of diverse agriculture and then for a time the center of grain production. But wheat will deplete the soil quickly and thus the wheat belt was forced west, leaving Wisconsin to Dairy pastures. The only thing that has allowed states like Iowa or Kansas to remain in grain production was the introduction of chemical fertilizers, which have temporarily obscured the complete destruction of its soils.
Perhaps, to answer the questions posed above, like absolute power, unlimited space corrupts. Or perhaps the scales of judgment and reason cannot be balanced except against a background of limits and finitude. The illusion infinite space, like infinite energy or resources, at the very least lets one off a number of ethical hooks and solves all sorts of practical problems: without limits “and” replaces “either/or” and governing becomes the far easier project of adding benefit to benefit. Expansion helps fill the coffers; free land, like today’s tax cuts or stimulus checks, stills unrest. A bigger pie means less struggle over the relative size of one’s piece. One must believe that there is infinite land or develop some economic fantasy about a permanently growing dematerialized knowledge economy in order for this sort of “solution” not to look like you are just kicking the can down the road. Which is more or less what Jefferson did with regards to slavery, where we can see a similar sort of tension between short-term gain and the deeper principles necessary to a democratic nation. The immediate economic gain of a slave economy provided exports of sugar, cotton, and tobacco that a young cash-starved and highly indebted nation needed. For even as Jefferson believed that slavery would destroy the national soul, the lure of fantastic gain from wasted land and lives was too much for his virtue or his reason or some other part of him that was not as strong as we retrospectively might have liked. But as long as there were no visible limits, the day of reckoning could be postponed. This “problem” would have to be solved, but only later. We may scorn Jefferson’s views on slavery and remain unforgiving towards his obvious historical cultural and racial bias. But do we not tell a similar sort of story about our tremendous waste and destruction of the planet? Yes, someone needs to do something. But not yet, not until we fix the economy or make sure everyone has good internet access, or a job free from manual labor. Part of the work of reworking our political and economic beliefs and expectations involves the tricky task of separating various threads from our history.
In his magnificent portrait of the United States, The Unsettling of America, Wendell Berry observes that “one of the peculiarities of the white race’s presence in America is how little intention has been applied to it.” America was of course discovered, and its inhabitants misnamed, in the course of a ill-navigated search for a short route to India; despite this fundamental and originary disorientation–or perhaps because of it–the continent was, Berry points out, thereafter “laid open in an orgy of goldseeking” whose object of desire was “always somewhere further on.” This combination of misplaced intentions and spatial bewilderment marked the beginning of a restless settling and unsettling characteristic of our culture, to treaties brokered only long enough to be betrayed, to trails of broken bodies and broken spirits and the demeaning of life and work upon which the unstoppable push westward was beaten and eventually paved. From the first days plunder to the present, Berry argues, we the inhabitants of the Americas have continued to “displace ourselves. . . with the same mixture of fantasy and avarice” (3) that Columbus and Cortez first combined with such explosive results. Jefferson is of special interest to this story precisely because he is not entirely given over to this fantasy and avarice, but is concerned about the virtues necessary for peaceful democratic self-rule. Jefferson was no conquistador. Peace and independence ranked far higher in his scheme than sudden riches. And yet he cannot resist what Berry refers to as this tendency to displace ourselves and what I would refer to as the mist-taking of America, both of which cannot be fully dissociated from the disorientating experience of an incomprehensibly large space at the edge of which Christopher Columbus ran aground.
Contrary to popular legend, Columbus did not believe the Earth was flat. That myth was brokered by Washington Irving in an attempt to make pre-modern Europeans appear irremediably stupid and ourselves, in contrast, impeachably advanced. But Columbus did believe the Earth to be significantly smaller than it is and, because of a simple, almost comic, transcription error, insisted that the 19,000 mile westward trip from Europe to Asia was more like 2,000. Had he not run aground when he did, on an unmapped land, Columbus and his men would have soon starved to death as they drifted off into obscurity. Until his death, nevertheless, Columbus maintained that with his landing in the “East Indies” he had indeed found passage to the edge of Asia. But given the overriding purposes of the day, it scarcely mattered which hemisphere Columbus had stumbled upon, and his staggering geographical disorientation did nothing to diminish his jubilation, nor inhibit the ensuing orgy of plunder or the grandeur of the fantasy and avarice with which he carried it out. His initial impression of the first Native Americans he encountered was how their open friendliness and thus how easy they would be to slay or enslave, both of which he promptly set out to prove. In his first report to his sponsors in the Spanish Court, Columbus likewise promised them “as much gold as they need. . . and as many slaves as they ask.” The mortality rate in the Islands Columbus visited approached 90% in many cases. Although we don’t like to think about it too much, we, middle-class Americans, are the beneficiaries of this mistaking of America, and it is only by turning away from the details of his three eventual rampages through the Caribbean and the coast of Central America that Columbus remains a celebrated hero in the United States.
In this way did Columbus begin a process which I would call the mis-taking of America: where cognitive, accounting, or navigational errors actually leads to a great and successful plundering, where “Indians” are either removed or made invisible according to a philosophy based on a distinction between civilization and savagery; where civilization attempts to wash itself clean in a state of nature, which it then proceeds to clear, mine, and develop into oblivion; where the political and spiritual renewal that an empty frontier promises is used to justify the emptying of that frontier of its native inhabitants so that it might be reworked according to European ideals of property, cultivation, and advancement, often by slaves kidnapped from Africa—with the whole charade of avarice held together with high-sounding philosophical and scientific fantasy. Thus do cognitive and error and moral blindness feed off of each other and thus do they create a disorientation and moral unmooring–one which can be seen most vividly today in our relationship to energy and the environment.
I am not of course the first to depict the particular moral and political development of the United States in terms of the vast space of the Americas. This honor likely goes to historian Frederick Jackson Turner and his late nineteenth century “Frontier Thesis,” according to which our national development was best explained by our history of westward expansion. Turner’s overriding purpose was to explain the uniqueness of the “American character,” especially in comparison to the European one, which was at the time mired in conflict. My question, of course, is quite different in that it asks “how is it that we, the most enlightened and technologically advanced people, are unable to see where our current trajectory will take us?” But the role of a vast and bountiful space takes center-stage in both approaches. While for most nations, according to Turner, “development has occurred in a limited area,” America has developed through its continued expansion into an open frontier: “Up to our own day American history has been in a large degree the history of the colonization of the Great West. The existence of an area of free land, its continuous recession, and the advance of American settlement westward, explains American development” (The Frontier in American History 1). More specifically, as the frontier line advanced, Jackson proposes, settlers were continually confronted with primitive, even savage conditions, and the newly cast civilization was repeatedly forced its forge itself anew out of the wilderness: “this perennial rebirth, this fluidity of American life, this expansion westward with its new opportunities, its continuous touch with the simplicity of primitive society, furnish the forces dominating American character” (2).
Turner, of course, remains oblivious to the peoples and the cultures who did in fact inhabit a frontier that was neither free nor open. His is a history most clearly written from the standpoint of the conqueror. Armed with Enlightenment principles such as the “state of nature” in which human civilization would be laid bare and cleansed of its sediment so that it might enjoy perennial rebirth, Turner provides one more example of the mis-taking of America. The American character, according to Turner, is marked by:
a coarseness and strength combined with acuteness and inquisitiveness; that practical, inventive turn of mind, quick to find expedients; that masterful grasp of material things, lacking in the artistic but powerful to effect great ends; that restless, nervous energy; that dominant individualism, working for good and for evil, and withal that buoyancy and exuberance which comes with freedom–these are traits of the frontier, or traits called out elsewhere because of the existence of the frontier. Since the days when the fleet of Columbus sailed into the waters of the New World, America has been another name for opportunity, and the people of the United States have taken their tone from the incessant expansion which has not only been open but has even been forced upon them.
Not adequately characterized, here, is a blinding arrogance that is shared by Turner, an inability to understand who, at this meeting point between “savagery and civilization,” the real savages were. The terrible “expedients” that these restless heroes were so quick to find need to be named, the “great ends” need to be defined. For these were a people who had tools and weapons of great power, and beguiling trinkets; they carried devastating disease, were unmoored by exuberance and opportunism, and were animated by new beliefs that released them from any sense of bounded limits. They were smart, no doubt, and quick. But they were not wise. They knew how to conquer and exploit, but it is unclear they ever learned how to settle.
In discussing the “unsettling of America,” Wendell Berry suggests that “the first principle of the exploitative mind is to divide and conquer. And surely there has never been a people more ominously and painfully divided that we are—both against each other and within ourselves (11). The roots of this divide—which, in contrast to Turner, Berry believes to be the most significant product of our restless advance against a settled frontier–of course lie in our history: in a history where we have been competing with each other and the earth at the expense of both. In contrast to the illusion of infinity provided by the immense stretch of land embedded in our modern picture of the world, Berry looks to the divine as a source of wholeness that might heal these divisions. But “we can make ourselves whole only by accepting our partiality, by living within our limits, by being human—not by trying to be gods” (95).
To this I would only add that the lure of infinite reason becomes insensible to that reason’s limits. As Alasdair MacIntyre reminds us, “reason is calculative; it can assess truths of fact and mathematical relations but nothing more. In the realm of practice therefore it can speak only of means. About ends it must be silent” (After Virtue 54). But our reason and logic has been ruthlessly self-assertive. In the age of infinite reason, and upon the land where it was unleashed, our ends, unguided by anything else, are given to the aggressive impulses of expansion—bigger, faster, more, and yet more still. Liberalism, at least as it has evolved so far, might be described of as a system where the ends—the values and goals that guide our practices—are a reflection only of the calculating and opportunistic means we have mistaken with truth itself: expansion, because we have cleared the space for it; wealth, because it makes everyone wealthy; growth, because it permits future growth; competition, because it keeps us competitive; freedom, because it prevents any hindrance to our aims, whatever they might be.