Tag Archives: Sustainability
Is an epic energy crunch in the making?
Last year I published a report with the (justifiably) bombastic title, “$500 per barrel: could oil price rise tenfold?” One of my central claims was that producing oil requires investment of real capital including materials, equipment and highly skilled labor, and that, “as more and more resources are required to generate the same amount of liquid fuels, energy production is becoming ever more expensive to society in real terms.” Thus, as it becomes more expensive in real terms (as the deteriorating EROEI figures indicate), the fact that energy has recently become cheaper in nominal (dollar) terms can only be a temporary abberation. EROEI stands for energy return on energy invested; in the early 1900s, we obtained 100 barrels euqivalent of oil per barrel invested (EROEI of 100 to 1); today we are at about 15 to 1 globally and at 11 to 1 in the USA. Continue reading
Our choice: wealth or GDP growth? It’s not the same.
Suppose you lived in a community where an old but well maintained bridge connected two river banks, enabling people and goods to move across. The bridge would represent a piece of community wealth, although its existence would only marginally impact the community’s ‘GDP’. Now suppose someone proposed to boost the community’s economic activity (GDP) by blowing up the bridge and building a new one. Continue reading
Central banks – what are they good for?
In 1912, the United States had no central bank and no personal income tax. It nevertheless managed to generate a $3 million fiscal surplus. Today, after a century of Federal Reserve’s management of the nation’s currency, the country is mired in unpayable debts, unending overseas military adventures and massive fiscal (and trade) deficits. Here’s a comparison, courtesy of Jim Quinn (the Burning Platform blog): Continue reading
Eurasian integration and the future of humanity
Developed world has come to a fork in the road. One of the paths leads in the direction of general military conflagration as the empire aggressively seeks to assert its dominance, bludgeoning every independent-leaning nation into submission. The other path leads toward peaceful economic integation, growth, cooperation and trade across the old continent. Western political elites, working on behalf of corporate interests seem to be doing their utmost to lead us into another World War. Meanwhile those independent-leaning nations are building bridges of cooperation and trade. A recent article by F. William Engdahl provides an excellent take on how that path is being forged. This could be one of the defining stories of humanity’s future. Continue reading
Economic growth is not a sustainable policy objective
It goes without saying that the key policy objective of fiscal and monetary authorities world over is to achieve and sustain economic growth. This unthinking adherence to orthodoxy is very unfortunate. We cannot hope to solve society’s problems unless we formulate the problems correctly. And we can’t formulate them correctly if we set inappropriate goals.
A while back, Jeremy Grantham made an illuminating projection: suppose that in 3030 B.C. the total possession of the people of Egypt filled a box measuring 1 cubic meter. Suppose further these possessions grew at a rate of 4.5% per annum. How large should this hoard get 3000 years later, in 30 B.C.?