Growth and senescence of civilization
Frequently Asked Questions
The assessment in the G&SC spread sheet and associated charts depicts a dire future for the Australian civilization. Are many people going to believe this?
People are conditioned to believe that money determines what will happen. They are used to progress in terms of what is happening in the operation of civilization and the benefits many people have gained. There would have to be a major change in their mindsets to accept that the economy will not continue to grow even though there has been a recession. Almost certainly very few people will believe the prognostications of the spreadsheet. The challenge is to develop its credibility and transparency so that it becomes a useful tool for emerging smart people power. It could well make a contribution to society assuming a realistic approach to living with nature rather than degrading this life support system
The assessment shows the economic growth of recent decades giving way to an abrupt transition to contraction. This is unbelievable. What justification is there for this transition?
The operation of civilization entails using up limited INMR. The rapid economic growth of recent times has entailed using INMR at an increasing rate. This could not possibly continue as the available INMR declines. That is the fundamental position. A powering down is inevitable, as society has to make do with a lower rate of usage of INMR as it becomes scarcer. That is an inviolate physical reality. The only question is how this rate can be affected by the decisions made by people, especially those in powerful positions, such as government and business. There are a number of signs that suggest the peaking is occurring now. The credit crisis is having an indirect impact on the productivity of many businesses and on the attitude of many people as regards their consumption. The developing depression will force many people to be much more frugal. The prospect of climate change is having a significant impact on the attitude of many people. The surge in fuel, food and water prices is also having an impact. This is having a flow on effect, with the crisis in the automotive industry being just one example. The mortgage crisis is affecting the buying power of quite a few. Many people are cutting back because they are worried that they will lose their jobs. A growing awareness of what civilization is doing to the environment is also contributing to a reduction in the rate of usage of INMR. It seems that all these factors are contributing to the transition from economic growth dominating the community view to ecological decline receiving due acceptance. There is still the common belief that the economy will recover from the current recession. That is contrary, however, to the reality that INMR is becoming scarce. Galloping fuel, food and water prices could well be the major indicator to all and sundry that the transition is already under way, despite what most commentators say.
INMR are irreplaceable natural material resources – so natural capital. RNMR are replenishable natural material resources – so natural income. Many materials can be recycled. Isn’t that a way of increasing INMR?
Not really. The recycled material is not INMR but it is a replacement for INMR material. It can be a very worthwhile process even though the recycling process uses INMR. WoEC (worth / ecological cost) is a useful measure of how worthwhile. The recycling of aluminum is well recognised as being worthwhile. And materials are the only components of INMR that can be recycled. The flow in the Murray River can be improved at a cost of using INMR but that is a remedial action only. It is clearly more worthwhile than using the same amount of INMR for a new freeway!
There are some items that seem to be both INMR and RNMR. How do you differentiate between them?
It is a question of judgment as to how much of the item is irreplaceable after being used. Soil fertility is commonly degraded by the removal of nutrients in the transportation away of food produced. A lot of nutrients are flushed down the toilets! This loss can be compensated to a degree by using chemical fertilizers to stimulate plant growth but the soil fertility is still decreasing in most cases. That represents a loss of INMR, but the soil will still be able to produce some food. That is RNMR.
The assessment of how classes will behave in the coming power down shows the consumption by the working class dropping quickly then remaining steady while the average rate continues to drop. It shows the elite rate dropping rapidly. This is almost unbelievable. How can this be explained?
The scenario presented follows the transition from the economic growth paradigm to the ecological degradation paradigm. It will ensure a major cultural change, as depicted, in order to cope with the inevitable powering down. There will be powerful economic, social and political forces to ensure that the poorest in society obtain sufficient to not only survive but continue to play a role as consumers. The businesses run by the elite need consumers of their product. These forces will ensure that the businesses that survive are those that provide worthwhile goods and services because they do not consume INMR at a high rate, so their WoEC is high.
Banks make a profit by changing interest on the money they lend to businesses to carry out their operations. Businesses make a profit from their operations while their workers at least make do on their wages. This ensures economic growth and it represents the wealth generation due to the know-how and skill of the persons involved. The indication from the assessment is that the economy is now transitioning to contraction. Why is there this largely unrecognized profound change in the economy and what will happen to the wealth creation process?
That wealth creation process is unrealistic because the associated depreciation of natural wealth is not taken into account. It is an unsustainable delusion that has been around for a longtime. Many claim that we have every right to use the available natural bounty. They say this without taking into account that most of this natural bounty is consequently being divested and it will run out in due course. That is the stark reality despite all the contrary rhetoric. It will catch up with us in the not too distant future. Now back to the wealth generation process. It entails the production of money. That is what is happening and the money produced can be used to buy goods and services. That is the reality of how the monetary system is working. That cannot continue as ecological forces take over control. Rising oil prices could well be the catalyst but it will be the combination of many depleting components of natural capital that will ensure the continuing contraction of the economy. Many of the operations of civilization will have to cut back through lack of fuel. The wealth generation process will die off because its foundations have crumbled. Inflation will serve to reduce the spurious financial wealth that many people have accumulated and help pay out debt. Governments will have to judiciously manage taxation and expenditure to cater for the contracting economy without losing votes by appearing to be doomsayers. ‘growth’ will disappear from their vocabulary. Banks will continue to fund industry but they will have to be more circumspect to counter the growth of bad loans. Many businesses will fold as the demand for their goods plummets while others make do by meeting the basic needs of the population but their profits will be low. Many of the population will find it hard to manage even though they cut back on consumption of stuff. Those who are well off, due in the main to the housing boom, will tend to thrive at the expense of the masses. Science and technology, however, will turn from advancing the frontiers to sustaining the foundations.
The population is shown to still be increasing while the per capita usage of INMR declines rapidly. Is that realistic?
The population issue is a very sensitive one. The conservative population profile is based on the premise that a number of political, social and economic factors will tend to reduce the birth and immigration rates from their current levels. But, even then, the population will increase for a while, even as the rate of consumption of INMR falls. There is tremendous potential to reduce the consumption of stuff and be frugal while enjoying an improved quality of living. Many of those who look at the realistic situation, like Lovelock of Gaia fame, expect that there will be a population die off. This may come about due to a plague. This examination presumes that no such traumatic event occurs. Subsequent runs could take such an event into account, if deemed a real possibility. The less realistic population profile shows that the higher population will find it very difficult to make do on the remaining INMR in the latter half of this century. They will become very dependent on RNMR for the basics. The cities and associated infrastructure will have largely disintegrated. Most businesses will have closed, often through bankruptcy and many people will have turned back to learning the basics, such as growing vegetables, to manage on their depleted income.
Society is used to using money to control what happens. It seems likely that the current recession will develop into a depression as society attempts to cope with the powering down. That will probably mean appreciable inflation so the dollar more closely represents what can be done with the declining INMR. Won’t that hurt the working class and some of the middle class the most?
That will probably be so. The only hope is that the governments wake up soon enough to implement a range of policies to encourage a more egalitarian powering down. There will be a major problem for them in managing health and benefits for the aging population. Use of the spreadsheet would help them to understand what is happening and assist them in being proactive rather than reactive. However, there is little doubt that the elite will use the leverage of their money to resist powering down as much as possible, especially as it threatens their wealth generation dogma.
Figs. 4 and 5 suggest that the per capita usage of INMR will be about 20% of the current value in 2050 and 5% at the end of the century. That really is quite unbelievable. What can be done to make this scenario more credible?
Firstly, the powering down depicted here is consistent with the views of a number of authoritative people like Georgescu-Roegen, King Hubbert, Lovelock, Trainer and Heinberg. Secondly, it is developed by a means that presents a number of credible and mutually consistent examinations of trends. The one presented here is for Australia but it does not differ materially from similar examinations for the global population and for the US and for China. The prognosis is grim but the underlying fact is that civilization has already used up much of the INMR. Numerous ecological problems are bound to grow rapidly in the years ahead even as natural resources like oil become very scarce. Climate change is already showing signs of the increasing variability that will cause many problems, especially in relation to food production. Combine that with the impact of the shortage of fossil fuels on food production, transportation and storage and it is quite plausible that many in the undeveloped countries will starve if they are not struck down by the lack of potable water and the associated diseases.
This predicted powering down with a growing population seems to indicate a lower employment rate. Using INMR at a lower rate indicates less work in producing the goods made by using INMR. Is that the right interpretation?
It certainly is but there are a number of amelioration factors here. Firstly, the forced reduction in the rate of usage of some of the INMR components will stop people from buying stuff that they then throw out whilst still useable. Lower hours of work with a lower income can actually be beneficial in many respects. It will enable many to learn the benefits of having their own vegie patch. It will also encourage the sense of community as people work together to ease the powering down. But it will still be a painful process for many, especially those whose current skills will not be worthwhile in the future. Production and selling stuff will suffer a dieoff. Workers in the automotive industry are already learning about this the hard way. The process will be easier if they understand that ecological degradation is the reality. Economic growth is not sustainable. It has produced fiat money and the delusion of progress but at an intractable eco cost.
You claim that authoritative people have been predicting something like the scenario depicted here for some time yet the general view is still that the economy will recover from the current recession and economic growth will then resume. Won’t the authorities tend to ignore the view presented here with skeptics backing the economic growth paradigm by careful use of misleading wording? That has happened with both climate change and peak oil. And look what has happened to the view expressed by the Club of Rome in ‘Limits to Growth’ and the follow up books.
That is perfectly true. But the use of the transparent G&SC spreadsheet and its associated documentation on the issues addressed makes it easier to counter arguments of the denialists. The findings of the world model used by the Club of Rome were not nearly so transparent. So, the denialists were able to put forward selective arguments that were hard to refute. The aware people will be able to use the spreadsheet to support their arguments in a manner that even the politicians should be able to understand. However, there will still be many with vested interests who will try to refute what is really the stark reality of what Tityas has done to its life support system, Gaia.
Aren’t there already numerous people who appreciate what has gone wrong, even if they do not understand the Dependence on Nature Law, and are doing something about it? The Internet seems to have been a very valuable means of communicating this concern. There seems to be many groups focusing on various aspects of what has happened and what can be done about it. Many people are striving to wake up the politicians at all levels.
That so certainly so and this movement is growing rapidly. But it is growing from a very small base. The spreadsheet will be a useful tool for this emerging people power and their followers. It should help to promote wiser use of the remaining INMR. That will not stop it being used at a high rate but can mean that it is used in a sounder fashion, so making it easier for the population at large to adapt. It might even mean that the elite will find pride in leading the population down a sound path!
There has been appreciable controversy about the timing of peak oil. Isn’t there also considerable uncertainty about the holistic scenario depicted here?
Yes, but only to a small degree. INMR consists of a number of items so the uncertainty about the aggregate is less than the uncertainty about individual items. Peak oil may be further off than many believe but a number of other factors may cause the food supply problem to head the agenda sooner. In addition, the perspective presented here is based on the Dependence on Nature Law. There is no uncertainty about INMR declining but there is some uncertainty about the rate. The spreadsheet provides a transparent means of assessing the credibility of and the sensitivity to the multitude of factors involved. But that limited uncertainty about the detail does not mean the holistic view is uncertain.
The components of INMR are listed but there is no indication there of which ones are the most critical.
The figures below show the estimates for the year 2000 in the seven aggregated components. ‘total’ is the percentage of INMR left at that time. The societal needs are included in INMR to represent skills, including farming, that past generations used to provide many of the needs in conjunction with using RNMR. These skills have been lost, so represent a draw down of INMR. Many of them will be re-learned in the future as powering down takes place. The consequential increase in that component of INMR will not offset the decline in the others.
The terms used are more indicative of the reality than some of the common terms. ‘exhaustible energy’ refers to the energy obtainable from exhaustible natural resources such as the fossil fuels and uranium. ‘inexhaustible energy’ is preferred to the common ‘renewable energy’ simply because energy cannot be renewed. Insolation is an inexhaustible source of energy. These figures can easily be adjusted to reflect the availability of additional data and to reflect the weighted opinions of others.
The figure of 53.39% remaining in 2000 is a crucial figure. What is the basis for that estimate of how much has been consumed to that date?
Something like 50% of the global oil stock had been consumed at that time. The availability of fuel for the mining of minerals will limit their exploitation. CSIRO has given a figure of 50% for the depletion of soil fertility. The Limits to Growth has a table giving figures of the expected limits for many minerals. The EU recently published a list in which many items are expected to become scarce in coming decades. In both cases, the limits are optimistic because the lack of fuel for the extraction process is not taken into account. The accuracy of this estimate of remaining natural capital can be improved by judgment by others as well as by access to additional data. However, it is unlikely that a refined value will differ appreciably from that figure, as it is the aggregation of a number of materialistic items. The weight assigned to the various items depends on the judgment of their worth to industry. The developing scarcity of the rare earth minerals are causing concern because of their need in the electronics industry. That is but one example of the developing problems.
The assessment gives a figure of 2.6% per annum for the rate of consumption of INMR. It indicates that rate is about the peak and will continually decline in the future. Many would question that apparent presumption. Is there a sound basis for it?
Yes, there is. That quoted rate is only an estimate but it will decrease as time goes on for simple physical reasons. Resources become harder to exploit as they become scarcer. The Deepwater Horizon disaster is an example of the problems the oil industry is having. That will be the developing situation for all minerals. Innovative technology can influence the speed at which the rate decreases but it cannot reverse that trend. A feature of the spreadsheet is the use of the comparison between constructive forces (CF) and the destructive forces (DF) to provide estimates of the rate of use of natural capital. All organisms go through the process where CF>DF during development and reaching maturity when CF=DF and then on to senescence with CF
There is talk about the possibility of substantial oil finds in the Arctic Sea. That would increase the remaining INMR. Couldn’t that make an appreciable difference to future prospects?
It does not change the principle. At best, it will give some of society more time to adapt. However, it could also increase the complacency of people so reducing the likelihood of introducing worthwhile measures. The US exuberantly wasted their abundant oil resources last century and so became dependent on costly imports. Britain subsequently made a similar mistake. The advantage of the spreadsheet is that it gives a systematic manner of examining the likely consequences of a range of policies. It will be more credible, transparent and flexible than the world model in Limits to Growth. It will be much harder for skeptics to condemn its findings, as they would have to provide detailed refutation of the factors incorporated.
Australia is regarded as one of the rich countries. Doesn’t that mean that it is in a better position to cope with the powering down that this assessment indicates?
It is regarded as being rich because so many of the population enjoy a high material standard of living. The fact that so much is bought on credit contributes to that delusion. But a bigger factor is that much of the development has come about by exploiting some of our supposedly abundant natural material resources, like iron ore, coal and uranium. I say supposedly because the exploitation is so dependent on the availability of fuels from oil. How will these mining operations be carried out when the available fuel is half the current rate? It is only now that there is growing awareness of the declining availability here of the more important natural resources, fertile soil and water. We have this high material standard of living largely because of inappropriate use of INMR. Consequently, Australians will find it harder to power down than those in quite a few other countries, like Sweden. What will happen to the cities as the natural capital essential to their operation and maintenance becomes scarce? The Americans and British are more vulnerable than we are. And it is horrifying to think of what will happen to the working classes in China and India.
The young in particular are enthralled with the information revolution and its impact on entertainment, education and communication. You talk about powering down. Does the assessment suggest that this revolution is doomed?
That question indicates the value of the spread sheet as it is a means of assessing the impact of a number of interdependent factors to provide a transparent credible assessment of specific issues like the one you have just raised. It shows the impact of the declining availability of rare earth minerals on the capability to produce many of the electronic devices being so enthusiastically snapped up. This issue will hardly show up in the principle charts but it is important for the sake of the credibility that it is clear that the issue has been addressed. An index of issues is being associated with the spreadsheet in the Issues document so that it will be easy to ascertain whether an issue has been considered and if it has, what impact it has had. I consider that will be an important part of the development of the G&SC spreadsheet. It should become a very useful credible and transparent systematic tool in due course.
You appear to be confident about the usefulness of the spreadsheet. Why is that?
I have fifty years of experience in gaining understanding of issues by means of research. I have used various tools to help me, often by recording and manipulating information on computers. The spread sheet is an advance over many of the previous computer-based methods for this systematic handling of information. I have found it enlightening in its augmentation of my consideration of numerous issues. I can think through an issue and the record the findings in the spread sheet. The record is available if I need to consider the issue again so it is not so dependent on fallible memory. In addition, it is an efficient means of having constructive discussions with others on the issues.
I gather that you believe, based on your experience in developing the prototype, the G&SC spreadsheet can help people to make sound decisions in the difficult times ahead. What do you see as being the program now?
I put it and associated documentation on this web site so interested people can access it to examine the results from runs that have been carried out, make suggestions on the estimates in cells and carry out runs for cases of particular interest to them. I have also volunteered to develop it for our political parties. I am hopeful that it will help them to wake up to realities. They still believe in the economic growth paradigm that is leading to devastation for the coming generations.