Book: The Coming Economic Collapse

I recently read The Coming Economic Collapse by Stephen Leeb and Glen Strathy. It’s from 2006, so it’s interesting to see how it’s predictions are playing out.

It’s sold as an investment book, subtitled “How you can thrive when oil costs $200 a barrel”, but the majority of it is a general overview of the oil situation, with a few pages of specific investment advice at the end.

I found it interesting to read as a book about the environment, resource consumption, war, and survival. It got me thinking about some possible strategies to reduce planetary damage.

Mostly I hear about the climate crisis - the global heating caused by CO2 from burning fossil fuels. What I don’t hear people talking about is the problem of what happens when the oil runs out. Regardless of planetary heating, no more oil is a big problem. I think the main idea of the book is that oil is a finite resource. Basically all the oil to be found has been found, and demand is only increasing, particularly from developing countries. The effect on price is obvious.

Following are notes and quotes from the book, and at the end further thoughts provoked by it.

There are gargantuan energy-income sources available which do not stay the processes of nature’s own conservation of energy within the earth’s crust ‘against a rainy day.’ These are in the water, tidal, wind, and desert-impinging sun radiation power. The exploiters of fossil fuels, coal and oil, say it costs less to produce and burn the savings account. This is analogous to saying it take less effort to rob a bank than to do the work which the money deposited in the bank represents.

– Buckminster Fuller quoted from “Utopia or Oblivion”

Failure of Governments

Governments can’t do long term. They are limited to short term thinking - the next election at most.

Authoritarians:

• ignore problems until the effects seriously felt.
• Leader’s influence makes everyone else ignore them too.

Groupthink ruins ability to make decent decisions or even admit to seeing the facts.

Asch Conformity Experiment. People were asked to compare the length of lines. When most people in a group were instructed to give an obviously wrong answer, 70% of subjects said the medium line was the longest.

Milgram experiment. People will give someone painful or possibly fatal electric shocks when told to by someone in authority.

Conclusion seems to be: we have leaders in a structure which cannot deal with the problem. This is human nature. Therefore, we must not trust or submit to undeserved authority, and take action ourselves.

Chindia

China and India are growing. Whatever grows the fastest will come to dominate. They already use 90% what US does, by PPP (Purchasing power parity), i.e. physical stuff and services. 35% world population.

(Appears to be 36% in 2018 by my calculation from UN data).

Gas prices in the UK have increased 250% since January, largely because China is buying it all. (BBC)

Historically, oil price increases did not reduce demand (in the 1970s). Maybe this shows people are forced to buy oil if there is no alternative. Need to develop better tech / infrastructure.

Economic Growth

He links oil usage, and generally energy usage, to economic growth. Restricting supply causes industry shut down and job losses. Conservation of oil would cause unemployment.

What is economic growth though? Does it mean an increase in real wealth, or just that the numbers keep going up? It seems to mean bigger numbers, but maybe we can have better lives with better quality stuff and less waste from throwing away broken things.

“Two-hundred-dollar oil will challenge the government’s ability to manage the economy through fiscal an monetary policy.” Expect stagflation as in 1970s, he says. We have not got to $200 yet, but it is high, and we have the additional problem of covid. People are demanding higher salaries to come back to work after a long period of being under paid, governments have been printing money over lockdowns, and may do so more to subsidise gas bills, so I expect it’s going to get worse.

“economic growth has become an absolute necessity in today’s leveraged, high-debt world”. “a debt-heavy economy cannot tolerate a slowdown in growth.” See also “Money as Debt”, a documentary film that can be found on youtube which explains the requirement for growth of money supply to pay off debt.

the transition to a zero-growth society would likely bring about a host of problems. In the first place, it would mean considerable changes to our culture. We would have to learn to see higher consumption as immoral and measure progress more in terms of quality and efficiency.

We need to change what we want.

Hippies and Culture

renewable forms of energy carry a negative stigma because people associate them with hippies. Oil, by comparison, is as much a part of mainstream, conservative America as ten-gallon hats, fast cars, baseball, and Thanksgiving turkey. It is what “real” men living in the “real” world make “real” money from.

Luckily I think the stigma of renewable energy is reducing, but the challenge remains of how do you get a Texan to stop driving and eating beef? Hm, what if pollution causes sexual problems for men? :p

My Ideas

These are vague notes I’ve not thought about much yet.

Sell climate change action to people by what they care about: money and power. Convince people oil prices are going up, so you need to switch to something else for profit. Certainly with gas in the UK, price increase is now obvious, but it is amazing how people are able to deny inevitability until it is here.

How do you make solar power cool like Musk did for electric cars? What would Saudis think of building / installing solar panels? I guess laugh, but they have so much sun!

Reliance on oil is reliance on foreign countries that have it. Develop local manufacturing of solar power and electronics or you are fucked by China. Also China has 80% of world lithium supplies, I read somewhere, and demand for that is huge with a switch to electric vehicles. Interesting the US is sending some new nuclear submarines that way. AUKUS

The book says: “The effort required will be huge - on the scale of fighting a major war.”

Consider energy shortage a matter of national security. Thereby get the DoD to wage war on energy shortages and climate change. Not by stealing oil though, as they generally have specialised in so far. Put the budget into developing alternatives, and resources into mitigating climate disaster, building the climate refugee camps, evacuation logistics, etc.

Make it a matter of pride like the space race. USA is better than Russia because we have the best fancy new green tech.

Make renewable energy more profitable. Subsidies?

Make solar panels feel like oil and meat for Texans.

Mentally bring the climate threat forwards so even short sighted people can see it and panic. How? Link current events to climate change, …

Offer individual advice which also helps society.

Protest

Helps create some sort of climate of possibility of government listening to people maybe. Most people ignore hippies though, and protesters are automatically hippies / punks / anarchists / other bad words. Try to rebrand protest I suppose.

Show direct, specific, real threats. People don’t listen to something that might happen in the future. You need to make it personal and immediate. Also it should be directly related to the problem, not something with a vague link to the people you are complaining about.

Example arguments for capitalists

Subsidies for oil industry are unamerican. They are unfair to small businesses. They go against free markets.

Pollution is unhealthy and costs NHS / insurers money. You tax money must pay for the damage.