From Transition Culture UK
A useful place to start in an exploration of what exactly is happening to the global economy, in particular in the light of how it relates to peak oil and climate change, is with a look at what are the assumptions we have made thus far about the economy. Do they still hold after the events of recent months? Did they ever actually make sense in the first place? What are the assumptions about the economy and the financial system, as well as about the basic resources, both natural and cultural, on which we have based our decisions for the last 50 years – are they still valid? Chris Martenson, author of the Crash Course, puts it thus;
“Here’s how it all sums up. There are some knowns. We know that energy is the cause for all growth and complexity. We know that surplus energy is shrinking. We know that the age of cheap oil is over. And we know that because of this, oil costs will consume an ever-greater proportion of our total budget. And because of these knowns, there are some risks. There is the risk that our exponential money system will cease to operate in a world of declining energy surplus. It might simply not be suited to the task. And there is the risk that our society will be forced to become less complex. If you really think about it, that is a very loaded sentence right there.”
Chris Martenson http://www.chrismartenson.com/
Our assumptions, in brief, have been as follows;
- economies can grow forever, that every year we will trade more, make more money, produce and consume more goods and reach more customers to sell them to
- this indefinite economic growth and the raw materials needed to make ever more goods will always be available cheaply, and that the energy required to make them will always be available, cheaply
- we will always be able to access cheap credit, and that we can borrow from the future on the assumption that the future will be richer, more technologically adept and more solvent than the present
- the UK can move from being a society with a manufacturing base and a diverse and resilient agriculture, to having an economy based on services and knowledge, or as comedian David Mitchell puts it, “ringtones and lattes”
- the value of our homes would increase in the long run, and that we could use them as cash dispenser machines, and so the more houses we built, the more people could borrow huge sums, forever
- somehow all that extra economic growth and ‘progress’ will give us more flourishing lives and communities and the only likely alternative is poverty, unemployment and a break-down in law and order
Clearly these assumptions are now highly questionable.
Keep reading Economies in Transition→
See also Richard Heinberg interview→
Hat tip Energy Bulletin
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