Tuesday, April 8, 2008

Citizen Species

I thought the narrative Charles Hall posted to the Oil Drum website yesterday made a lot of sense. To wit:
... Oil was cheap, $3.50 a barrel, at the start of 1973. The US was the world’s largest producer. Peak oil had just occurred but no one noticed. Demand kept growing, US supply fell, foreign suppliers gained leverage. Political events and bulldozer accidents intervened. The price increased by a factor of ten, to $35 a barrel. The proportion of GDP that went to buying oil increased from about 4 percent to 13 percent, restricting discretionary spending for all. All around the world oil that had been found but not developed (as it had not been worth much) suddenly became profitable to develop, and it was. By the 1990s the world was awash in oil, and the real price fell to nearly what it was in 1973. The proportion of GDP that was energy fell to about 5 percent, essentially giving everyone a sudden free extra 8-10 percent of their incomes to play with. Many invested in the stock market, but the burst bubble of 2000 cured many. Real estate was a “safe” bet, so many invested into what was really a huge surplus square footage of McMansions etc. Just as my mother recounted to me about 1929, speculation became rampant. Then as energy prices have increased over the past 6 years an extra 5 to 10 percent “tax” has been added to our economy, and that much of the surplus wealth disappeared. Speculation was no longer desirable or possible as everyone was tightening their belt because of increased energy costs. This may or may not be accurate and it certainly is not a sufficient explanation by itself sufficient (we would have to add in the failure of Allen Greenspan etc to do their regulatory job) but two of my energy-savvy financial friends say “that just about captures it”. In systems theory language: the endogenous aspects of the economy, that the economists focus on (Fed rates, money supply etc.) became beholden to exogenous forcing functions that are not part of their training.
The question this raises for me is whether the US government has any ability to "stimulate" its economy now, such as by sending out checks for $500 to every taxpayer. For most recipients, that money will help them stretch through the end of the week, or perhaps the end of the month. Then what?

We just completed a 3-day workshop in Natural Building here at the training center in Summertown, and it was completely subscribed and a good time had by all. Lots of young couples and some people brought their whole families, teenagers especially. There was no need for us to dwell on the shadows our collective future throws; it was enough just to show how to build homes without going into debt, from materials found on site, or nearby, or from throwaways in a wasteful society.

We have a few weeks now to continue with the apprentices, completing the mudbrick, thatch, living roof and earthbag structures begun or advanced in the workshop. Then we have a 3-day biofuels class (growing, converting your car, troubleshooting) on May 2-4, and a 4-day course on herbal medicine (growing, foraging, preparing, administering) on May 14-18. We will also have a new group of apprentices arriving in May, hoping to have a more in-depth experience of meeting their food, fuel, and building needs and, then returning to their communities to teach.

What many call "social capital" we are now seeing as the only real capital we have any control over. Securities, currencies, bonds, loans ... all paper. You can't eat it, although you may be able to build with some of it (we are making fidobe bricks in a CINVA ram). Natural capital such as rainfall, climate, soil and wildlife are quickly reaching a domain well outside human management capabilities. Climate change is canceling all our bets; humbling us and showing what puny and insignificant creatures we really are.

And yet, we can still build up our social capital. We can learn how to make soil, store water, and plant forests. We can re-learn that most important of all lost skills -- fertility restraint. Having been read our rights now, we can step down from the dock and take our proper place as citizen species.

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