October 15th, 2009

Last week, I gave you a current report on Peak Oil from the peanut gallery. Now let’s get it from the horse’s mouth. … Jay Hanson has some interesting thoughts for us to consider at this moment in our human evolution.


America 2.0

Jay Hanson

The “bad news” is that “peak oil” marks the beginning of the end of capitalism and market politics because many decades of declining “net energy” [1] will result in many decades of declining economic activity.And since capitalism can’t run backwards, a new method of distributing goods and services must be found. The “good news” is that our “market system” is fantastically inefficient! Americans could be wasting something like two billion tonnes of oil equivalent per year!!

In order to avoid anarchy, rebellion, civil war and global nuclear conflict, Americans must force a fundamental change in our political process. We can keep the same political structures and people, but must totally eliminate special interests from our political environment. A careful review of the progressive assault on laissez faire constitutionalism and neoclassical economics, from the 1880s through the 1930s, explains how this can be done legally and without violence. These early progressives showed how we can save our country. All that is lacking now is the political will. I call this adjustment of our political environment “America 2.0.”

To achieve America 2.0, we must first separate and isolate our political system from our economic system so that government can begin to actually address and solve societal problems rather than merely catering to corporate interests. The second step is to retire most working American citizens with an annuity sufficient for health and happiness, as government begins to eliminate the current enormous waste of vital resources by delivering goods and services directly. This would allow most adults to stay at home with their families but still receive the goods and services they need to enjoy life. …

The criterion of “profit” has shaped our political decisions since the founding of our country, but now that we are facing peak oil, new “scientific systems” criteria must replace “profit” or our civilization will “collapse” like so many others have throughout history.

In order for America to survive this crisis, a moderate, “doable” modification to our political environment is required. This paper does not attempt to describe a complete system to replace state-sponsored capitalism and market politics. My modest goal here is to show a way forward which could avoid the worst. …

http://heatusa.com/blog/wp-content/uploads/2009/06/hubbert-peak-graph.png

Our present “business-as-usual” model, which requires endless economic growth and endless job creation, is no longer physically possible. Here’s why:

1. Business-as-usual depends upon jobs and markets to distribute goods and services.

2. Economic growth and increasing job availability require increasing net energy.

3. Net energy correlates with peak oil and both are expected to decrease for decades. …

4. Decades of decreasing net energy will cause job opportunities to decrease for decades because less and less energy will be available for economic development.

5. Globally, millions of new workers enter the job market each year, but job availability is expected to decline by millions of positions each year. Eventually, the projected high unemployment among young men will cause catastrophic political failures similar to those that led to Hitler’s takeover of German democracy. Therefore, business-as-usual is no longer a viable method of distributing goods and services and a new method must be found—and soon!

Historians will say that “peak oil” marked the end of the second free trade episode. If we don’t abandon capitalism now, we will be forced into another global war over resources. …

The “good news” is that: The Market is fantastically inefficient. Yes, that is correct: The “market system” is fantastically inefficient! Our present way of distributing goods and services wastes enormous amounts of natural resources, but gigantic resource savings are possible. As an illustration, let’s make a rough estimate of per capita food energy requirements and current waste:
If we wanted our government to distribute food directly instead of using the market, how much energy would be required to produce and deliver provisions to each and every American?

Adults need about 3,000 nutritional calories of food each day. Let’s allow 30,000 calories to produce and another 3,000 calories to deliver food to every American. That’s a total of 36,000 calories per day.

Just how much energy did the American “market system” actually consume? In 2006, Americans consumed an average of 231,008 calories per day, so 231,008 minus 36,000 equals 195,008 calories wasted each day. This simple calculation suggests that Americans could be wasting something like 2 billion tonnes of oil equivalent per year! That’s FAR more oil wasted than all the oil produced in the Middle East! …

In order to prevent collapse on the downside of the net energy curve, Americans must force corporate special interests completely out of our political environment. A careful review of the progressive assault on laissez faire constitutionalism and neoclassical economics, from the 1880s through the 1930s, explains how this can be done legally and without violence. These early progressives showed how we can save our country. All that is lacking now is the political will. I call this adjustment of our political environment “America 2.0.”

The modification that I am proposing could reduce natural resource consumption by something like 90% and greatly reduce, or possibly eliminate, civil violence caused by the inevitable post-peak-oil-economic collapse.

Our present method of distributing goods and services works something like this:

•     Our government loans money to banks, so bankers can operate businesses (which require buildings, computers, furniture, lights, air conditioning, employees, commuting, etc.)

•     The bankers then lend money to other businesses, like restaurants, real estate developers, etc. (which also require buildings, computers, commuters, advertising, accountants, etc.)

•     So the employees of these restaurants, real estate developers, etc. can buy a car and drive to the store (with even more buildings, computers, commuters, etc.)

•     Just to buy a loaf of bread!

The “market system” has to be the most inefficient organization possible! Why not simply have government pay someone to pick up that loaf of bread at the bakery and deliver it to the consumer? This is a form of distribution that would eliminate the banks, most of the other businesses, and all the stores. Most Americans would no longer need a car to commute to work or run to the store! However, some private businesses that provide critical services would still be operated but at our government’s direction.

We could use the same efficient method of distribution for everything that Americans really “need.” Shoppers would order provisions online, in the same way that Amazon or Netflix works now, and then their orders would be delivered the next day. And a medical care caravan could regularly drive through neighborhoods, filling teeth, giving checkups, and so on.

But first we must separate and isolate our political system from our economic system so that government can begin to actually address and solve societal problems rather than merely catering to corporate interests. The second step is to retire most working American citizens with an annuity sufficient for health and happiness, [10] as government begins to eliminate the current enormous waste of vital resources by delivering goods and services directly. This would allow most adults to stay at home with their families but still receive the goods and services they need to enjoy life.

Unless something is done now to prevent it, America will face anarchy, rebellion, and civil war on the downside of the net energy cliff. In order to maintain public order, the state must do one thing: take special interests totally out of politics.

The urgency, necessity, and practicality of this proposal should be apparent to all sectors of society if they could be brought to understand how our social systems are depleting our physical systems. I am convinced that if Americans were given the honest science and engineering behind what needs to be done, the vast majority would willingly make a peaceful transition to a “sustainable retreat.”

Besides wanting to sell their ephemeral products and services to an unsuspecting public, special interests also want to prevent the state from solving social pathologies because they can profit from treating the symptoms. These special interests can do no better because they are machines programmed to create profits!

ALL special interests—even universities, charities, and churches—depend on perpetual economic growth for their budgets, but the laws of thermodynamics tell us that perpetual economic growth is physically impossible. Therefore, ALL special interests must be removed from the political environment.

The first simple step is to remove the “personhood” Constitutional protections from corporations, which could probably be done by the President acting alone, via his “police powers.” Certainly it could be done by the Supreme Court or Congress if they had the political will to do so. Once corporations are firmly under democratic control, the federal government can begin correcting the abuses of capitalism as gracefully as possible. We want to preserve and include the great achievements of capitalism while removing its pathologies.

What follows are six political steps, listed in order of priority, that are designed to mitigate the societal disruptions of the net energy cliff:

1.      Remove the “personhood” Constitutional protections from corporations.

2.      Make it a federal crime for corporations to advocate anything (including, but not limited to, advertising) in the mass media.

3.      Make it a federal crime for anyone employed by a corporation to lobby elected or appointed officials directly or indirectly.

4.      Mandate public financing for elections.

5.      Assemble teams of the country’s best and brightest medical doctors, scientists, engineers and other thinkers—but no representatives of religious groups, economists, or other special interests—to recommend public policy. (We do not need a Manhattan Project for economics—on how to save the corporations and their outrageous profits; we need a Manhattan Project on how the country can survive the net energy cliff!)

6.      Encourage public debate on proposed changes.

Read the entire essay with images, footnotes, and links  by Jay Hanson …