The work of Peter Pogany has been prominently promoted on this blog. I’ve put together a compilation document that summarizes, in his own words, Pogany’s thoughts on the thermodynamic unfolding of recent world history in the sub-epochs he calls Global System 0, Global System 1, Global System 2, and Global System 3. Click here to download the pdf document.
The heart of the document, World History as the Synoptic Narrative of Thermodynamic Unfolding, came originally as part of a 2010 paper called “What’s Wrong with the World? Rationality! A critique of economic anthropology in the spirit of Jean Gebser.” It was later published as Appendix B in the book “Havoc: Thy Name is Twenty First Century,” (2015). This paper is based mostly on the last edit printed in “Havoc,” with some additions that come from the original 2010 paper…and various additional quotes at the end.
My table, borrowed from one made by Pogany (see the pdf):
“This paper argues that (a) the emergence of classical capitalism in the 19th century answered the need for global-scale self-organization; (b) this scheme, interrupted by World War I, was replaced after World War II; (c) the implied transformation has been accompanied by a nonarbitrary, causally determined, irreversible socialization of intranational and international economic relations; (d) contemporary civilization is moving toward a new form of self-organization that would recognize limits to demographic-economic expansion. What will it take to go from the current hostile disgust with the dystopia of tightened modes of multilateral governance to people around the world on their knees begging for a planetary guild? It will take nothing less than a mutation in consciousness, as outlined in the oeuvre of Jean Gebser (1905-1973).”
(Thermodynamic Isolation and the New World Order, 2013)
The potential third global system that Pogany projected as a possibility was thus characterized:
“Long-term world equilibrium — GS3
The thermodynamic interpretation of global history predicts a halt to population and economic expansion for purely physical reasons. This general condition requires a new global system: GS3 – two-level economy/strong multilateralism/mostly government money (maximum reserve banking).
Legally binding international agreements on the use of nonrenewable energy and material resources, as well as on harmful emissions, would enlarge the government’s role in economic affairs since administrative methods would be needed to ensure national compliance with globally determined goals. The implied strong multilateralism would split national economies (hence, the world economy) into a free-market and a public authority-dominated sector. While carrying on the best traditions of constructive entrepreneurship, businesses in the first domain would bid for resources and emission rights; joint private-public ownership would prevail in the second one. The state’s substantial holding of private shares would eliminate most, if not all, income taxation.
The monetary system would be based on a global currency issued by the global central bank. The world currency would combine the discipline GS1’s gold standard vouchsafed and the flexibility GS2’s fiat money has provided (without the fractional reserve system, which, as will become obvious during the first half of the 21st century, is wholly incompatible with any consciously pursued economic steady state.) Much along the lines proposed by Keynes at the 1944 Bretton Woods conference, an international clearing house would keep cross-border trade in equilibrium.
Maximum bank reserves would restrict the ability of banks to extend loans. Just as under the prevailing minimum reserve system, some banks in some instances may keep no reserves at all; under the maximum reserve system some banks in some instances might be required to keep 100 percent reserves. While such an arrangement may not eliminate the creation of money through debt, it would certainly change its nature. The consent of depositors would be required to make loans, making financial intermediation once again the modest helper that draws together scattered household savings in order to place them into the hands of bona fide entrepreneurs. “Enterprise,” in the Keynesian sense, would squeeze out “speculation.”
The economic role of grass roots communities would increase significantly.”
This post grew out of a recent facebook discussion. Hat Tip to Bruce Kunkel for the title phrase “Cognitive Prison Habits.”
George Monbiot recently made some important points and asked questions we all should be giving some thought to.
“Green consumerism, material decoupling, sustainable growth: all are illusions, designed to justify an economic model that is driving us to catastrophe.”
“The promise of economic growth is that the poor can live like the rich and the rich can live like the oligarchs. But already we are bursting through the physical limits of the planet that sustains us.”
I would add the aphorism that “When you find yourself in a hole, rule #1 is to stop digging.”
The International Energy Agency has just released their yearly World Energy Outlook report, which tells us that current policies put us in a scenario that would add the equivalent of another China and India to today’s global demand for energy by 2040, and greenhouse gas reduction polices currently in play or being considered are “far from enough to avoid severe impacts of climate change.”
While the title of Monbiot’s post mentions consumerism trashing the planet, consumerism is not the fundamental problem (us) that he is addressing, nor is it unrestrained corporate power (them). More fundamental, giving rise to both of the above polarities, is the almost unquestioned commitment to growth that is built in to most of our systems. In Monbiot’s words:
” The promise of private luxury for everyone cannot be met: neither the physical nor the ecological space exists.
But growth must go on: this is everywhere the political imperative. And we must adjust our tastes accordingly…
A global growth rate of 3% means that the size of the world economy doubles every 24 years. This is why environmental crises are accelerating at such a rate. Yet the plan is to ensure that it doubles and doubles again, and keeps doubling in perpetuity. In seeking to defend the living world from the maelstrom of destruction, we might believe we are fighting corporations and governments and the general foolishness of humankind. But they are all proxies for the real issue: perpetual growth on a planet that is not growing.”
One of the most important presentations that I think should be mandatory basic education for everyone is Albert Bartlett’s “Arithmetic, Population, and Energy.”
Bartlett claims that “The greatest shortcoming of the human race is our inability to understand the exponential function.” He talks about the arithmetic and the impacts of unending steady economic and population growth, including an explanation of the concept of doubling time.
Consider these questions (hat tip to Penelope Whitworth) – “Where does that commitment [to growth] come from? Is it programmed into our genes, or our consciousness, or inherent to biological life forms? Part of the “genetic code” of the cosmos? Is it a sociocultural thing? Could we have a humanity whose value system isn’t around growth?”
I addressed these isssues in my 2015 ITC paper, Patterns for Navigating the Transition to a World in Energy Descent. Growth is a natural pattern that exists in all natural systems. However, some tend to fetishize and reify this pattern as a primary imperative. For many it has become something of a “myth of the given” – we don’t even question it. The first step is to recognize and respect this as a natural pattern, but to realize it needs to be balanced and integrated for optimal health with all other natural patterns (see my brief intro to PatternDynamics: Following the Way Nature Organizes Itself to Deal with Complexity.
In natural systems, growth tends to expand exponentially in the early phase when resources are abundant; then comes a phase of climax, where things can settle down into a more cooperative mode, somewhat approximating (comparatively, and for a period of time) a steady state. The best example is to look at a barren landscape, where fast growing weeds compete with one another for dominance. After a long period of time, this landscape could, under the right set of conditions, eventually evolve into a mature old-growth forest ecosystem, which is a perfect example of interconnected mutual support and reciprocity. This in contrast to the competitive growth pattern exhibited by the “adolescent” patch of weeds.
The question becomes, are humans smarter than yeast, which grows rapidly until all available resources are consumed, followed by a collapse? Can we successfully transition to a climax stage which mirrors the steady-state of an old-growth forest, or are we now near our final climax, to be followed by an unrecoverable collapse?
Even those who question unfettered growth are enmeshed in the system that tends to keep driving it forward. Integral Economist Peter Pogany saw this commitment to growth as part of the “source code” of the self-organizing world system that emerged in recent history. As systems tend to reinforce and sustain themselves and their dominant patterns, it can be very difficult to try to manipulate and change the system’s direction (see Donella Meadows’ “Thinking in Systems: A Primer”). In Pogany’s view, it will take a (brutal) chaotic transition (which has already begun) to get the system to change course to a new, Gebserian, integral world system that is not wedded to the Growth pattern as a prime directive. Pogany saw this chaotic transition “as a necessity to precipitate a crisis of consciousness that would eventually lead to the wide-spread “integral a-rational” consciousness structure, as based on the thinking of cultural philosopher Jean Gebser” (see my articles Chaos, Havoc, and the American Abyss, and Consciousness and the New World Order.
In my 2015 paper for the Integral Theory Conference (cited above, but also posted here), I quoted from Edgar Morin and Peter Pogany to describe what Bruce Kunkel has called the “cognitive prison habits” that keep us locked in to pursuing endless growth and development at all costs. To requote the quotes quoted in that paper:
Edgar Morin referred to “development” as:
“The master word, adopted by the United Nations, upon which all the popular ideologies of the second half of this century converged…development is a reductionistic conception which holds that economic growth is the necessary and sufficient condition for all social, psychological, and moral developments. This techno-economic conception ignores the human problems of identity, community, solidarity, and culture… In any case, we must reject the underdeveloped concept of development that made techno-industrial growth the panacea of all anthroposocial development and renounce the mythological idea of an irresistible progress extending to infinity” (Morin, Homeland Earth: A Manifesto for the New Millenium, 1999, pp. 59-63).
Addressing this “myth of the given,” Peter Pogany pokes fun at his own profession (of economists):
“Historically, geocapital [matter ready to be used to feed cultural evolution] has registered a net increase; additions and expansions more than offset exhaustions and reductions. This long-lasting successful experience led to the culturally ingrained confidence in the possibility of its eternal continuation. Economic growth theory keeps “deriving” the same conclusion over and over again: Optimally maintained economic expansion can continue forever. Translated from evolutionary scales to our own, this is analogous to “Since I wake up every morning I must be immortal” (Rethinking the World, 2006, p. 118).”
I suggest we join Morin and Pogany in renouncing the irrational exuberance that expects irresistible progress and economic growth extending to infinity. To break out of this cognitive prison habit may be very challenging indeed. However, at some point there will be no choice. It’s time to stop digging that hole that we think is taking us up the mountain.
I’ve just completed a new page on my website dedicated to promoting the work of Peter Pogany, which you can find here, and I’d like to use this post as a way of alerting everyone to this new page, and to provide a brief summary of what you’ll find there.
Peter Paul Pogany (1936-2014) was born in Budapest, Hungary, and later moved to the U.S. to continue his education and begin his career. He worked as an Economist for the U.S. International Trade Commission (where he contributed to many high-profile U.S. government studies on foreign economic issues), and was an Adjunct Professor at George Washington University.
My impression is that it may have been after his retirement that he felt free to more deeply explore and begin writing, relating his expertise in economics to thermodynamics, history, philosophy, and other big picture ideas.
It is my belief that Pogany’s work is essential for anyone wanting to grasp the implications of integral economics, of which I’ll be writing more about in the future.
In 2006 Pogany’s major work was published: Rethinking the World, “the result of several years of full-time, independent, transdisciplinary research.”
In Rethinking the World, Pogany delved deep into his understanding of history as a thermodynamic process.
From the blurb about Pogany’s book:
“The still expanding human biomass and mindlessly pursued economic expansion are straining against the planet’s physical limits. Oil! Energy! Ecology! Growing vulnerabilities in hyperlinked national economies! The transformation of the current global system, “mixed economy/weak multilateralism,” into a radically new one, “two-level economy/strong multilateralism,” looks like the only way to avoid drifting toward extinction…
His 2006 book does not once mention Jean Gebser, but from 2009 to 2013, Pogany wrote a number of insightful articles and essays relating ideas from Gebser’s magnum opus, The Ever-Present Origin, to the predicament the world is now facing, and the ways in which Gebser’s ideas about stages of consciousness, especially the yet to come stage of the integral structure of consciousness (a universal “intensified awareness”), support Pogany’s own program of New Historical Materialism. Many of these essays were prepared for presentation to the International Gebser Society at their annual conference.
Sadly, Peter Pogany passed away on May 25, 2014. His final book, Havoc, Thy Name is Twenty-First Century! Thermodynamic Isolation and the New World Order was published posthumously in 2015. This work is a slight alteration and expansion of a paper published in 2013 (see below).
Here is the blurb for this book:
“Just to maintain our standard of living, we need to grow the worldwide economy at an unsustainable rate.
As we seek to hit such lofty targets, we’re bound to deplete our resources and cause environmental crises on a scale that we have never seen before. Revolutions, terrorism, and wars will follow.
Peter Pogany examines the problems we face and argues that human culture is governed by thermodynamic cycles of steady states interrupted by chaotic transitions. Specifically, he postulates that a steady state was interrupted by World War I, with a chaotic transition following World War II, which has led us to the current world order.
His theory predicts that global society is drifting toward a new form of self-organization that will recognize limits to demographic-economic expansion – but only after we go through a new chaotic transition that will start sometime between now and the 2030s.
Havoc, They Name is Twenty-First Century, delivers sobering thoughts on where the world is headed, but it also offers a glimpse of a bright future that we can embrace once we get through the darkness to come.”
With the two books above, and the essays linked below, you’ll obtain a good understanding of Peter Pogany’s ideas, which I believe are unique, timely, insightful, important, broadly considered, and with wide application. Even better if you can read this material alongside Gebser’s The Ever-Present Origin, and other works and ideas presented on this website (see here and here).
Below are a list of important essays and longer papers that I would like to highlight. Check the Pogany Page if you’d like to see descriptive summaries for each essay.
Presentations to the International Gebser Society Conference:
“Fifth Structure” – emergence in economics: Observations through the thermodynamic lens of world history (presented October 2009) [Download pdf]
New scientific evidence confirms Gebser’s concerns about technological overreach (presented October 2010) [Download pdf]
Gebser’s relevance to the global crisis (presented October 2011) [Download pdf]
An Aperspectival Opinion on the Future of “Smart Money” (presented October 2012) [Download pdf]
Tributaries to Gebser’s Social Thought (presented October 2013) [Download pdf]
Longer Papers at Munich Personal RePEc Archive (MPRA):
What’s Wrong with the World? Rationality! A Critique of Economic Anthropology in the Spirit of Jean Gebser (2010)
[Available here: https://mpra.ub.uni-muenchen.de/27221/]
Jeremy Johnson also did a great job as the official conference blogger. Some of you might be able to identify me in the first photo on this page (Jeremy and Tim were two of my five suite-mates, which also included Chris Dierkes, Gaby McDonald, and Trevor Malkinson).
Abstract
This paper considers current concerns about resource depletion (“energy descent”) and the unsustainability of current economic structures, which may indicate we are entering a new era signaled by the end of growth. Using the systems thinking tool of PatternDynamics™, developed by Tim Winton, this paper seeks to integrate multiple natural patterns in order to effectively impact these pressing challenges. Some of the Patterns considered include Energy, Transformity, Power, Pulse, Growth, and the polarities of Expansion/Contraction and Order/Chaos.
We tend to have horrible visions associated with downturns and “collapse.” Can we even entertain the possibility that we might be entering a period of decline in energy and standard of living? Can we re-examine our assumptions about “growth” and “development”? Jean Gebser’s emphasis that every mutation of structure is preceded by a crisis is considered and Howard T. Odum’s ideas about energy as the basis of man and nature informs the discussion. Edgar Morin’s dialogicMethod of active inquiry in regards to the interplay of polarities assists in our understanding and response to the complex challenges we face.
Integral Leadership Review – the world’s premier publication of integrated approaches to leading and leadership.
Integral Leadership Review is a bridging publication that links authors and readers across cultures around the world. It serves leaders, professionals and academics engaged in the practice, development and theory of leadership. It bridges multiple perspectives by drawing on integral, transdisciplinary, complexity and developmental frameworks. These bridges are intended to assist all who read the Integral Leadership Review to develop and implement comprehensive shifts in strategies by providing lessons from experience, insights, and tools all can use in addressing the challenges facing the world.
This blog has been quiet for a little while, as I’ve been busy trying to do some non-blog writing.
I’ve been invited to present a paper at the upcoming Integral Theory Conference in the San Francisco Bay area (July 17-19, ITC), so I’ve been working away at that paper for a while. For a sneak peak on the topic I’ll be presenting on there, check out my presentation in Bellingham, WA on May 21 (see below). At the conference I get 20 minutes to present. Here, speaking at the local Bellingham outpost of the Institute of Noetic Sciences (BIONS), I get 1 1/2 hours.
The original title I proposed for my paper was “Patterns for Navigating Transitions in a Descending Energy World.” I’m using the systems thinking tool of PatternDynamics(TM) to address the issue of what David Holmgren calls “Energy Descent,” i.e energy depletion, or “peak oil” – and its association with the idea of limits to growth. And its relationship to integral theory. The paper has turned out to be a bigger project than originally envisioned, and will likely become a multi-part project.
The blurb for my presentation in Bellingham on May 21, 2015 is below. For a good introduction to the Integral Theory Conference, check out Jeremy Johnson’s post on The Unthinkable Present.
Opportunities for Spiritual & Social Transformation
David MacLeod
We will explore the world in crisis and chaos as an opportunity for social and spiritual transformation as we form stronger connections to the earth’s natural patterns and to each other.
This presentation will consider appropriate responses to current concerns about resource depletion, climate change, and the unsustainability of current economic structures; all of which are leading some to argue that we are entering a new era signaled by the end of economic growth and declining fossil fuel energy.
We tend to have horrible visions associated with downturns and “collapse.” Can we even entertain the possibility that we might be entering a period of decline in energy and standard of living? Can we redefine “growth” to refer to our human potential rather than to our GDP? Perhaps we can learn to expand our consciousness and increase cooperative behaviors as we ride the wave down the peak oil curve.
This presentation will be supported by a new systems thinking tool called PatternDynamics™. Inspired by Permaculture’s emphasis on natural patterns and principles, PatternDynamics combines the patterns of nature with the power of language. The result is a tool which helps us understand and communicate ways of supporting resilience. We will learn some of the dynamic patterns that could assist us in creatively navigating our way through an energy descending world.
DAVID MACLEOD is a member of the PatternDynamics™ Community of Practice and is committed to community resilience as a co-initiator of Transition Whatcom. He was named an “Environmental Hero” by RE Sources for Sustainable Communities, and appointed to a city and county Energy Resource Scarcity/Peak Oil Task Force. He has contributed articles to Resilience.org, Integral Leadership Review, and Beams & Struts. David has been invited to present an academic paper on the topic of tonight’s discussion at the Integral Theory Conference this July in the San Francisco Bay area. David holds a BMus degree from Western Washington University, a Level II (b) accreditation in PatternDynamics™, and a Permaculture Design Certificate. He blogs at https://integralpermaculture.wordpress.com/.
Today I would like to bring your attention to a recent essay by Richard Heinberg that has been received to high acclaim over at the Resilience.org.Resilience is a website operated by the Post Carbon Institute, for which Heinberg is a senior analyst. Heinberg has been writing about energy for 12 years, and is the author of books such as Cloning the Buddha: The Moral Impact of Biotechnology; The Party’s Over: Oil, War, and the Fate of Industrial Societies; Powerdown: Options and Actions for a Post-Carbon World; Peak Everything: Waking Up to the Century of Declines; Blackout: Coal, Climate and the Last Energy Crisis; The End of Growth: Adapting to our New Economic Reality.
In his latest essay, Our Renewable Future, Heinberg demonstrates that he is what I would call an energy realist. He does not demonize the fossil fuel industry, but he clearly lays out the formidable challenges we face as the climate crisis worsens and as easy access to these fuels continues to recede. Nor does he communicate as would a lobbyist for the renewable energy industry, hyping the benefits and downplaying the problems in this field.
Instead, Heinberg approaches the problems from multiple perspectives and honestly conveys his own biases, and encourages us to broaden our thinking:
I consider myself a renewable energy advocate: after all, I work for an organization called Post Carbon Institute. I have no interest in discouraging the energy transition—quite the contrary. But I’ve concluded that many of us, like Koningstein and Fork, have been asking the wrong questions of renewables. We’ve been demanding that they continue to power a growth-based consumer economy that is inherently unsustainable for a variety of reasons (the most obvious one being that we live on a small planet with finite resources). The fact that renewables can’t do that shouldn’t actually be surprising.
What are the right questions? The first, already noted, is: What kind of society can up-to-date renewable energy sources power? The second, which is just as important: How do we go about becoming that sort of society?
As we’ll see, once we begin to frame the picture this way, it turns out to be anything but bleak.
I believe this to be an extremely important essay, and the embedded links provide even more depth, providing a great resource for essential 21st century energy literacy.
Or, What I’ve Learned in 12 Years Writing about Energy
(7000 words, about 25 minutes reading time)
Folks who pay attention to energy and climate issues are regularly treated to two competing depictions of society’s energy options.* On one hand, the fossil fuel industry claims that its products deliver unique economic benefits, and that giving up coal, oil, and natural gas in favor of renewable energy sources like solar and wind will entail sacrifice and suffering (this gives a flavor of their argument). Saving the climate may not be worth the trouble, they say, unless we can find affordable ways to capture and sequester carbon as we continue burning fossil fuels.
On the other hand, at least some renewable energy proponents tell us there is plenty of wind and sun, the fuel is free, and the only thing standing between us and a climate-protected world of plentiful, sustainable, “green” energy, jobs, and economic growth is the political clout of the coal, oil, and gas industries (here is a taste of that line of thought).
Which message is right? Will our energy future be fueled by fossils (with or without carbon capture technology), or powered by abundant, renewable wind and sunlight? Does the truth lie somewhere between these extremes—that is, does an “all of the above” energy future await us? Or is our energy destiny located in a Terra Incognita that neither fossil fuel promoters nor renewable energy advocates talk much about? As maddening as it may be, the latter conclusion may be the one best supported by the facts.
If that uncharted land had a motto, it might be, “How we use energy is as important as how we get it.”…
In my final post in the Holiday Smorgasbord series, I want to share two articles that are each directed at (and finding fault with) different ends of the political spectrum. I don’t think the point of either of these articles is to demonize individuals who embrace either conservatism or liberalism, but rather to point out that in general we are not being served by the mainstream political discourse from either perspective. I find these articles by Michael Klare and Erik Lindberg to bring an appropriate balance to one another. I close with the alternative offered by Peter Pogany.
Fossil-Fueled Republicanism
Michael Klare’s latest post offers his take what the latest U.S. election results portends for the immediate future:
Pop the champagne corks in Washington! It’s party time for Big Energy. In the wake of the midterm elections, Republican energy hawks are ascendant, having taken the Senate and House by storm. They are preparing to put pressure on a president already presiding over a largely drill-baby-drill administration to take the last constraints off the development of North American fossil fuel reserves.
The new Republican majority is certain to push their agenda on a variety of key issues, including tax reform and immigration. None of their initiatives, however, will have as catastrophic an impact as their coming drive to ensure that fossil fuels will dominate the nation’s energy landscape into the distant future, long after climate change has wrecked the planet and ruined the lives of millions of Americans.
Six Myths About Climate Change that Liberals Rarely Question
This post by Erik Lindberg is, as of this writing, showing 551 comments on the Resilience.org site – by far the largest number of comments I have ever seen on a single post at that site. Some liberals are taking offense, but I think are missing the point, as I stated at the top of this post.
Myth #1: Liberals Are Not In Denial
“We will not apologize for our way of life” –Barack Obama
The conservative denial of the very fact of climate change looms large in the minds of many liberals. How, we ask, could people ignore so much solid and unrefuted evidence? Will they deny the existence of fire as Rome burns once again? With so much at stake, this denial is maddening, indeed. But almost never discussed is an unfortunate side-effect of this denial: it has all but insured that any national debate in America will occur in a place where most liberals are not required to challenge any of their own beliefs. The question has been reduced to a two-sided affair—is it happening or is it not—and liberals are obviously on the right side of that.
If we broadened the debate just a little bit, however, we would see that most liberals have just moved a giant boat-load of denial down-stream, and that this denial is as harmful as that of conservatives. While the various aspects of liberal denial are my main overall topic, here, and will be addressed in our following five sections, they add up to the belief that we can avoid the most catastrophic levels of climate disruption without changing our fundamental way of life. This is myth is based on errors that are as profound and basic as the conservative denial of climate change itself.
Now, if this is the situation we find ourselves in with mainstream political discourse, with its unwillingness to consider options other than continued growth (about which see yesterday’s post here) – is there hope for meaningful action? If folks want to explore this further, consider the work of Peter Pogany, whom I’ve been reading lately. Pogany has pointed out that we currently live in a “world order” or “global system” (since approximately 1945) that is basically not capable of voluntarily moving beyond the paradigm of economic growth; therefore a chaotic transition to a new global system will be required :
“The current world order cannot deliver long-term sustainability on a planetary scale. By design, it is incapable of recognizing humanity’s thermodynamic reality. A new form of global self-organization is needed and it is probably waiting in the wings.” (http://blog.gebser.net/)
Pogany doesn’t mean there’s something all set up that we can easily and seamlessly transition to. On the contrary, he sees world history as a “thermodynamic process of self-organization,” which “precludes smooth transition from one relative, globally valid steady state to the next.” (quoted from his 2006 book Rethinking the World).
But he does see, based on his own work, as well as that of Jean Gebser (The Ever Present Origin) that after a period of chaotic transition, we will move “toward a new form of self-organization that would recognize limits to demographic-economic expansion. What will it take to go from the current hostile disgust with the dystopia of tightened modes of multilateral governance to people around the world on their knees begging for a planetary guild? It will take nothing less than a mutation in consciousness, as outlined in the oeuvre of Jean Gebser (1905-1973).” (quoted from his 2013 paper on Thermodynamic Isolation and the New World Order).
This is no fairy tale, and yes, human agency is definitely involved. Pogany’s approach is a systems thinking approach with a the laws of thermodynamics as a foundation, and built around his own expertise as an economist; he calls his approach new historical materialism.
“Only Cassandra may know whether the “best” (a quick global transformation), the “historically conditioned expectation,” or the worst (no global transformation, not even in the wake of an ecological disaster) is in the womb of time.”
Too woo-woo? Only if you consider previous transformations to be woo-woo. Pogany sees the French revolution as a chaotic transition to Global System 1, characterized as “laissez faire/metal money,” and two world wars and the Great Depression as the transition to the current Global System 2, characterized as “mixed economy/weak multilateralism.” What will it take to transform into a radically new Global System 3, which he expects to be characterized as “two-level economy/strong multilateralism,” and which, he says “will favor cooperation over competition; acquiescence over indifference; responsible sociability over isolation; integrative open-mindedness over stubborn, perspectival dogmatism, altruism over extrasomatic hedonism.”
Sadly, Peter Pogany passed away in May of this year. May he rest in peace.
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Review, in case you missed the previous posts in this series: A Holiday Smorgasbord of Recommended Reading, Listening, and Watching by David MacLeod
The primary deliverable from the IEA is the massive World Energy Outlook (WEO) report that is released annually in November. Concerned about peak oil, I began reading the Executive Summary to this report 10 years ago.
Here’s a story from KUOW’s Ashley Ahearn that aired on NPR on how climate change is affecting the glaciers in Washington State – focused on the Easton glacier on Mt. Baker, and the Skagit River it drains into. Since 1900 we’ve lost about 50 percent of our glacier area, and this makes the Northwest “uniquely vulnerable to the effects of climate change.”
Two voices that I have been following off and on for the last decade, and who have both been warning about limits to growth, and more importantly what we as individuals can do about it: Nate Hagens and John Michael Greer.
In today’s installment of our Holiday Smorgasbord, I bring you two voices that I have been following off and on for the last decade, and who have both been warning about limits to growth, and more importantly what we as individuals can do about it.
Nate Hagens on Limits to Growth: Where We Are and What to Do About It
Nate Hagens, a former “wolf of Wall Street” stock trader/money manager, and then a popular writer (for a long time under the ‘Sasquatch’ nom de plume) at The Oil Drum website. Here is his presentation at the recent Degrowth conference in Vancouver, B.C. It’s long – an hour and a half, but worth watching. Hagens talks about the big picture of energy, money, environment, behavior (how neurotransmitters and hormones motivate our behavior), where we are in 2014, and some take-aways on what we can do in our own lives. Along the way he shares his own story – and how he’s never been happier. Interestingly at this “Degrowth” conference, Hagens makes it clear that he’s not advocating for degrowth – rather he thinks the end of growth is a reality, and we have to deal with it. His top-level recommendation is to “embrace life.” Nate Hagens – Limits to Growth: Where We Are and What to Do About It
Facts, Values, and Dark Beer
Another memorable post by John Michael Greer, wide ranging and addressing some deep questions, such as the meaning of life, especially in the context of a difficult future:
Claiming that one such sphere is the only thing that makes human life worthwhile is an error of the same kind. If Ervino feels that scientific and technological progress is the only thing that makes his own personal life worth living, that’s his call, and presumably he has reasons for it. If he tries to say that that’s true for me, he’s wrong—there are plenty of things that make my life worth living—and if he’s trying to make the same claim for every human being who will ever live, that strikes me as a profoundly impoverished view of the richness of human possibility. Insisting that scientific and technological progress are the only acts of human beings that differentiate their existence from that of a plant isn’t much better. Dante’s Divina Commedia, to cite the obvious example, is neither a scientific paper nor a technological invention; does that mean that it belongs in the same category as the noise made by hogs grunting in the mud?
…As for me—well, all things considered, I find that being alive beats the stuffing out of the alternative, and that’s true even though I live in a troubled age in which scientific and technological progress show every sign of grinding to a halt in the near future, and in which warfare, injustice, famine, pestilence, and the collapse of widely held beliefs are matters of common experience. The notion that life has to justify itself to me seems, if I may be frank, faintly silly, and so does the comparable claim that I have to justify my existence to it, or to anyone else. Here I am; I did not make the world; quite the contrary, the world made me, and put me in the irreducibly personal situation in which I find myself. Given that I’m here, where and when I happen to be, there are any number of things that I can choose to do, or not do; and it so happens that one of the things I choose to do is to prepare, and help others prepare, for the long decline of industrial civilization and the coming of the dark age that will follow it.
There’s a lot of confusion going on right now – as the price of gasoline in the U.S. is declining, we are becoming ever more complacent. Today we saw another steep drop in the price of oil to a four year low under $68/barrel. Is this a sign that peak oil is dead, and that we have indeed entered a new era of energy independence in the U.S., thanks to the fracking phenomena, giving us an expanding bonanza of shale oil and gas? Today’s installment in our Holiday Smorgasbord series takes a look at these issues, and the significance of the decision made yesterday by OPEC to keep oil production at current levels.
The Collapse of Oil Prices and Energy Security
Let’s begin with this question: Why are oil prices collapsing, and why is gasoline getting cheaper? I think this is the question on many people’s minds. And then there is the further question, why might this be a problem?
There are a number of possible reasons why oil prices are decreasing. Check out Kurt Cobb’s piece to explore a number of these reasons. The reason that makes the most sense to me, and I think intelligent consensus has pretty much converged upon, is that OPEC is currently flooding the market with oil in an attempt to recapture market share from the higher cost unconventional shale oil being produced in the U.S.
Why might this be a problem? Ugo Bardi explained the situation quite well in a recent briefing he gave to the EU Parliament. Bardi is a physical chemistry professor at the University of Florence, in Italy, and is a leading authority on resource depletion.
“I have to alert you that there is [an] ongoing crisis – perhaps much more worrisome – that has to do with crude oil. This crisis is being generated by the rapid fall in oil prices during the past few weeks. I have to tell you that low oil prices are NOT a good thing for the reasons that I will try to explain. In particular, low oil prices make it impossible for many oil producers to produce at a profit and that could generate big problems for the world’s economy, just as it already happened in 2008.”
Bardi further explains:
“Ultimately, it is the cost of production that generates the lower price limit. Here, we get into the core of the problem. As you see from the price chart above, up to about the year 2000, there was no problem for producers to make a profit selling oil at around 20 dollars per barrel. Then something changed that caused the prices to rise up. That something has a name: it is depletion.
Depletion doesn’t mean that we run out of oil. Absolutely not. There is still plenty of oil to extract in the world. Depletion means that we gradually consume our resources and – as you can imagine – we tend to extract and produce first the least expensive resources. So, as depletion gradually goes on, we are left with more expensive resources to extract. And, if extracting costs more, then the market prices must increase: as I said, nobody wants to sell at a loss. And here we have the problem…
So, you see that, with the present prices, a good 10% of the oil presently produced is produced at a loss. If prices were to go back to values considered “normal” just 10 years ago, around 40 $/barrel, then we would lose profitability for around half of the world’s production. Production won’t collapse overnight: a good fraction of the cost of production derives from the initial investment in an oil field. So, once the field has been developed, it keeps producing, even though the profits may not repay the investment. But, in the long run, nobody wants to invest in an enterprise at so high risks of loss. Eventually, production must go down: there will still be oil that could be, theoretically, extracted, but that we won’t be able to afford to extract. This is the essence of the concept of depletion. “
“We have been hearing for so long that the problem of “peak oil” will be inadequate supply and high prices that we cannot adjust our thinking to the real situation. In fact, the two major problems of oil limits are likely to be shrinking debt and shrinking wages. The reason that oil supply will drop is likely to be because customers cannot afford to pay for it; they don’t have jobs that pay well and they can’t get loans.
In some ways, the oil prices situation reminds me of driving down a road where we have been warned to look carefully toward the left for potential problems. In fact, the potential problem is in precisely in the opposite direction–to the right. The problem gets overlooked for a very long time, because most of us have been looking out the wrong window.”
And so let’s look at Chris Martenson’s Crash Course on Shale Oil. Martenson has a way of taking a complicated subject and presenting it in a way that is clear and easy to follow. This is a 28 minute video that provide some context for what follows below.
An Energy System Under Stress and the Last Tango in Paris
On November 12th a cautious, mainstream, historically optimistic organization – the International Energy Agency (IEA) put out what is perhaps it’s most urgent warning yet in its major yearly World Energy Outlook report. As I pointed out in a previous post (Watching the Watchdogs: 10 Years of the IEA World Energy Outlook), the IEA has only very slowly come around to discussing possible supply disruptions. Serving the energy industry as well as trying not to offend mainstream political and economic sensibilities, and not wanting to disrupt financial markets, you can imagine a cautious approach to addressing issues such as peak oil or climate change. And so, when they put out warnings, it probably means it’s very late in the game indeed.
In the above 39 minute video, IEA Chief Economist Fatih Birol calmly and methodically outlines the 2014 report, where we hear some of the following points:
Energy security is a heightened and growing risk – set to move up very high in the international policy agenda.
“…if the oil prices remain at the current (<$80) level, the capital spending in 2015 in the United States will decline up to 10% compared to 2014…a downward pressure on the investments in light tight oil (shale oil) as a result of these prices.”
Upward pressure on oil demand growth and downward pressure on price may lead to a growing reliance on Middle East oil, “where instability is the name of the game,” before 2020.
Regardless, we’re likely to see declining output from the U.S., Canada, and Brazil by 2020, by which time we’ll almost certainly be more dependent than ever upon the Middle East conventional oil to meet our oil supply demand [this after having stated in their 2010 report that conventional oil peaked in 2006. At that time they stated that it would be unconventional oil and natural gas liquids that would fill the gap and allow supply to grow through 2035].
The $550 billion in subsidies for fossil fuels needs to be reconsidered.
Climate talks scheduled to take place in Paris in 2015 may very well be our Last Chance to keep global warming to 2 degrees C. This could be our “Last Tango in Paris.”
Fatih Birol:
“The main message, I believe, coming from our report, in terms of energy security there is a heightened risk, growing risk at present in a number of parts of the world that are strategically important from an energy perspective: Iraq, Middle East, Libya, North Africa, Russia, Ukraine – these are all signals to us, highlighting the importance of energy security and I believe energy security is set to move up high in the international policy agenda. Volatility in the Middle East puts questions on the investment trends, and therefore it may well mean substantial challenges around 2020 for the oil supply…
“We do need to get a clear direction in Paris next year [2015 United Nations Climate Change Talks]. A “Last Chance in Paris,” we believe – like “Last Tango in Paris,” there is Last Chance in Paris – and if we are not able to do that, we may well say goodbye to the world we used to see for several centuries. And we believe government policies, looking at the complexity and the amount of the challenges we are facing (energy security, climate change), government policies are crucial to steer the global energy system on to a better, safer course.”
OPEC Declines Action as World Oil Prices Hit Record Lows
The information above provides context for yesterday’s much anticipated OPEC meeting, where they declined to make any production changes. As Fatih Birol warned above, this non-action keeps a downward pressure on the oil price and poses big problems for the shale oil industry, which needs prices above $80 a barrel to keep their heads above water. And if the shale oil industry falters, so does the hope for even a short term respite from concerns about an adequate oil supply for world markets.
On NPR, Ari Shapiro introduced the story by saying “You don’t usually hear swearing when OPEC countries gather in the refined meeting rooms of Vienna, Austria. But the organization that once dominated world oil markets is now coming to terms with its dwindling clout.”
Reporter Peter Kenyon explained the problem: If OPEC were to cut production, they would cede market share to American producers of shale oil, whose current production has limited the ability of OPEC to control price. If OPEC does not cut production, that will hurt the less well-off OPEC producers who are in need of higher priced oil revenues. However, (as pointed out above), this more so hurts the Americans as OPEC tries to push the expensive to produce shale oil out of the market.
Kenyon quotes energy analyst Cornelia Meyer with the MRL Corporation, who confirms what is said by the varied sources above in this post: “You will obviously see less investment in the sector, especially with the shale oil production. They’re very cash flow driven. So if you see less investment there, that will translate pretty quickly in less production in the U.S.”
And so we come to today, Nov. 28, 2014, where USA Today has just reported Dow ekes out record close; oil plummets 8.2%. “A barrel of Texas Intermediate crude was at $67.74 Friday afternoon Eastern Time — a whopping 8.2% drop.” In the short term, it’s a relief for consumers and markets, but the signals this sends for the medium term are troubling.
“The global energy system is in danger of falling short of the hopes and expectations placed upon it. The short-term picture of a well-supplied oil market should not disguise the challenges that lie ahead as reliance grows on a relatively small number of producers.”
Today’s installment of our holiday smorgasbord features an approach to the environmental crisis and the energy crisis and the economic crisis that I’m very thankful for…Permaculture.
Permaculture, A vision of a post-oil world
Yves Cochet
Yves Cochet has written the preface to the French edition of David Holmgren’s Permaculture: Principles and Pathways Beyond Sustainability. Yves Cochet was a minister for the environment in the French national government, and is now an elected member of Euro parliament for the Greens.
In his own Preface in the original, Holmgren was very clear that “Permaculture is a creative design response to a world of declining energy and resource availability…” and that it “was predicated on the likelihood of some degree of collapse and breakdown in technology, economics and even society…”
In my copy of the book I have a star by this paragraph:
Insofar as permaculture is an effective response to the limitations on use of energy and natural resources, it will move from its current status as “alternative response to environmental crisis” to the social and economic mainstream of the post-industrial era. Whether it will be called permaculture or not is a secondary matter.
– David Holmgren
In the new French edition, Cochet shows a keen understanding of Holmgren’s thought. It is clear, it is succinct, and I think very well captures David Holmgren’s message on the essence of Permaculture, and I highly recommend taking a look at the English translation. Translated by Eugene Moreau and edited by David Holmgren.
More than an agricultural technology, permaculture is a vision of the societies of tomorrow, ours, which will be confronted with the evolution of energy and climate systems. Permaculture is not only another way to garden: it is another way of thinking about and acting on the world, a global philosophical and concrete change. At the same time permaculture draws together strategies of resilience in the face of imminent radical transformations, if not collapses.
– Yves Cochet
Download the entire translated preface from David Holmgren’s website here: Permaculture, a vision of a post-oil world. And join me today in giving thanks for Permaculture!
Sadly, Peter Pogany 
integral permaculture 