Peak Wealth and Peak Energy
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Willem de Kooning Gotham News 1955 You could perhaps say that this is part 4 in a series on -America’s- peak wealth, even if it was never inten
[See the full post at: Peak Wealth and Peak Energy]Can’t help but think that ‘Too many consumers and not enough producers’ might also be a factor in all this. Further limiting supply, as demand increases along with population expansion.
On peak wealth, I was in the Silicon Valley area in the 70s 80s and 90s. I would have to place peak wealth somewhere between 95 and 2000, in the early stages on the IT Revolution.
Then again, there are “statistics” aren’t there? This one isn’t any more misleading than “GDP”, I suppose. https://www.tradingeconomics.com/united-states/productivity
I would also add that humans for some peculiar reason are unable or unwilling to factor in the cost and consequences of industrial civilizations waste stream, even smarterish people like C.A.H.
I want to offer an apology for my comments yesterday. It may have appeared that I was stereotyping our younger generations as not having critical thinking skills. By recognizing the encouraging number of younger readers of this blog, it’s obvious that the lack of those skills is not universal amongst them. By visiting and pondering the words of this site, you are surely demonstrating the ability and desire to think critically. I tip my hat to you.
After reading all the comments posted yesterday I can’t help but think that some of the discouragement comes from a lack of leadership in demonstrating what ethical trade, or economics, looks like. As a Christian, I plant the blame firmly on the church in America, and elsewhere. The church has been quite vocal about pointing out many sins in society. You know what some of those are. But I contend that many in the church have done a terrible job in speaking against greed and also corruption in government.
It would be a blessing to hear more instruction about producing something of value in society and trading fairly with others that are doing the same. That fair trade comes from the sense that the person you are trading with is made in the image of God and has inalienable value. The wealth of both parties can be enhanced through trade…and in not only in the physical sense, but the emotional, psychological, and spiritual senses as well.
Contrast that with the notion that I can become wealthy by not valuing someone and gaining the upper hand in the trade. Or, perhaps, just as disgusting, I can grow wealthy by undervaluing someones production or labor by gambling at the “hallowed” derivatives market. It could be said that cheapening one man cheapens us all.
I applaud the posting of the comments by Dr. Hall. I’m encouraged that the wisdom of the physiocrats of old is not dead. The physiocrats understood that economics was about energy transfer, and that all new wealth comes from the soil.
Chris M,
The physiocrats have been mostly mocked and derided for decades when in fact they may be correct. I often wonder if it is because their beliefs put much value on those who actually get their hands dirty as opposed to those who merely shuffle paper. I thought I was the only person who had ever heard the term physiocrat. Thanks for the reminder.
Mayor of Denver: Souix? The Souix live more in N. Dakota. Don’t you mean something more like Arapaho?
They’re calling the young “generation snowflake” and such. Perhaps it might be better to imagine GenY as mirroring the rest of the country: sheltered coastal suburbanites working for insider industries who might actually be snowflakes, contrasted with dirt poor, forgotten children who’ve grown up on welfare, beaten by parents and authorities alike, tough as woodchucks in the 92% of red counties in Flyoverland. Snowflakes, not so much. But hey, if they’re not the kids in the 20 blessed cities lke Denver, D.C., and Seattle, they’re just representatives of a vicious, selfish culture that deserves to die. Amirite?
Come to think of it, these are the same forgotten kids hustling in the inner cities. So, who are these snowflakes exactly? Your 0.5%? The 99 & 44⁄100% pure? And a generation that has all the jobs, a house, free retirement health care, a pension check while they’re eating ramen to pay undischargable student loans and dying in the E.R. calls Gen Y “entitled.” Yeah, we know you had it great all your life, we heard. You inherited a beautiful world. And now you’ve left everyone else a hollow, rotten husk. No wonder they don’t to talk to the older generations, what’s the point? How am I going to prepare or grow a garden? To get hand skills? Got no house, no stability, no savings, no tools, no job, and may never have one. All the institutions are dead or specialize in wealth extraction. The only thing you have are your friends, so you better believe they’re on txt, every day.
Since I’ve been denied a stake in jobs, corporations, or government, and priced out of houses and hobbies, I’ll be over here playing a game on my smartphone. It’s the only thing I can afford and at least at home with friends I won’t be squeezed raw and insulted. K? BAI.
The American dream was the product of industrious and clever people working hard within a relatively benign political system that encouraged business in various ways, but that all of these things also required a large resource base relative to the number of people using it.
Being a foreigner, it always surprises me that certain people in the US have no inkling of the amount of free energy that they have received from their black gold for hundreds of years. And no, I’m not just talking about oil.
I’m talking of course, about slavery. To imagine that somehow the American Dream was not built upon a nightmare for millions is a gigantic blind spot and one which continues to be ignored in the mainstream economic paradigm.
The benign political system was great for some because it allowed generations to have their labour extracted at minimal cost. That’s a lot of GDP points right there.
Of course, the Arab slave trade allowed the same thing to happen during the Golden Age of the Arab/Islamic world. Free labour has always been the bedrock of most societies that have had any kind of functioning middle or upper class. And to think that you or I do not at this very moment still benefit from this labour extraction is fanciful.
Hotrod,
I never heard of the physiocrats until I read the book I keep touting here–Unforgiven..the American System Sold for War and Debt by Charles Walters.
You might deride the physiocrats until you get stranded on a deserted island with a bunch of other people. What will you and the others decide to do first in order to survive? Create a bank and print money? I think not. I think it’s more like applying labor to the resources at hand.
Just my guess.
Thank You Dr Hall and everyone who has left comments on this and the previous essays in this series.
When I was in 10th grade in Yokohama, Japan, one of our teachers told us about a computer projection at MIT, presented in a book called “The Limits to Growth”. It seemed obviously true, but the consequences seemed a long way off. Now they seem imminent in Austin, Texas, and have been imposed upon humans in much of the world, already. I have been digging in the soil and becoming a gardener since the move to sustainable-paradise (rural Hawaii) broke-down in 2013, when the clinic I worked for there had hard times, and needed me to see half-again as many patients every day as before. I worked all the time, never had a garden, and returned to Austin humbled yet again.
We are where we are now. It’s no time to move. Here is the result of my serious vegetable gardening project in a “postage-stamp” back yard in central Texas. I get good vegetables, only what’s in season, and I spend more on this project than I save on groceries, a lot more. This is way more work than people conceptualize, but it’s a work-out, too. I’m actually becoming a moderately good gardener. I’ve put in a vegetable garden at work in the break area. Most people I work with live in apartments. The sugar snap peas are being discovered, though I really had to pick them and walk them around the clinic again and again, making people try them. I still haven’t figured out how I can get people a plot to garden… The garden and gardener are pictured last July 4.
https://www.johndayblog.com/2016/07/liberty-garden-central-texas-climate.htmlTrippytaka,
You’ve done right in expounding on the point I was making before, about people trying to grow in wealth and power by undervaluing others.
In a complex society, with multiple divisions of labor, such an undervaluing is a fool’s errand. Depriving labor of proper income, which becomes an almost insidious form of slavery, deprives them of the means to consume their own collective production. The common remedy for that has been to issue the people debt, both directly and through government borrowing. But debt is a subversive thing, when allowed to come to full measure, forces the ownership of nearly everything into the hands of a small percentage of the population. That is a condition ripe for revolution.
It’s my understanding that there have been things in history called peasants revolts. It is also my understanding that such things are not pleasant. Someone here can correct me, if I’m wrong about that.
Hopefully we won’t get to that painful point.
John Day, I agree that vegetables and eggs etc. produced at home is far more expensive than if you were even working minimum wage jobs to pay for even organic produce. Without the huge energy component in the mix of our lives it would be a much larger chunk of our income/time spent on food being a necessity of our existence. When many years ago Nicole Foss advocated here to gain some control over the necessities of our existence I factored food production too heavily in the mix for what the situation is now. Now it is more about debt minimisation, tight social cohesion with friends, clients etc, then fuel and water etc.
I guess I am saying I have worked out that it is better to earn a dollar right now and set up the infrastructure for survival/thriving as things get tougher rather than purely homestead (which baby boomers had a better shot at funding than we have now (I’m in my early 40’s).Here in Australia potatoes are $2 per kilo (which is a lot of calories) and when you can get $40 per hour gardening or consulting or building and $20 per hour to be a farm hand or dish washer or whatever – you work out over time that a lot of energy is wasted in the garden and that the time for gardening may not be now. Planting nut trees and citrus and Oaks – perhaps, because of the long turn around time but potatoes – no.
We learn a lot from looking back at history and it helps with risk analysis in terms of our life decisions but we best be careful not to dwell and chew up huge hours altruistically gardening or on the net lamenting if we don’t have our financial position first sorted out. Having said all that I still put in at least 10 hours a week in my garden and get very pissed overtime a wallaby or an insect takes my harvest!
My 2 Cents
I meant to chime in when the question arose whether there are any younger readers of this blog. I do not really count as young — I am in my mid-40s. But I have been reading this blog for a long time. I even remember when Ashvin was writing for TAE, and that was quite a long time ago.
I think there are a few people in every generation who grasp the problem. But what to do about it? I got out of the financial system in 2008. I paid off all my debts including my mortgage. I keep my savings in physical cash and physical gold. I try to avoid the banks as much as possible. I lost some weight and started exercising to maintain and improve my health. We have a car, but my wife drives it. I ride the bus to work (which would be impossible in America but is very clean, convenient, safe and reliable where I live). We ditched the television when my daughter came along. I have a good job and live in the city. If things go south I will move out to the countryside where my wife’s extended family still farms, and where I could dramatically reduce my expenses practically overnight. What else can I do? Maybe buy some land and a place in the country? I am still thinking about that one. I think prices will come down and my purchasing power will go up if I wait.
Having done all of these things, I don’t have much to say. This is why I do not post very often. To think about these things regularly, for me, is like watching the teakettle to see when it will boil. I tend to be right in the long term, but all wrong about timing. I knew Countryside would eventually collapse, and I bought puts on it. Well, it kept going up and I lost my money on that bet. Then a couple years later everything finally unraveled and it collapsed. I was right, but all wrong about timing. I feel that the entire economy is one big Countryside at the moment. But I have no idea when we will reach the tipping point. I may be wrong about all this, in which case that’s just fine.
An economist actually refers to the physiocrats. I knew there was a good reason to like this gentleman.
Boogaloo
If I may inquire; what country are you residing in?
I ended up in Thailand working for a U.S. toy company and stayed after leaving the company.V. Arnold
Korea, with no plans to ever live in my home country again. I have thought about retiring in Vietnam or Malaysia if circumstances change for the worse here. Thailand is also a good choice, but I have not been there for many years.
Boogaloo
How do you like Korea; I’ve heard more than one westerner comment on their cultural militarism.
Ditto on ever returning to home country, not in a thousand years.
We live 90k west of Bangkok in a semi-rural area; about 80k from the Burmese border.
Yep, Thailand is just fine and still very inexpensive outside of the three big cities and major tourist areas (which I avoid like the plague).
CheersVery good discussion here as always.
For those interested in origins and foundations of the physiocrats thinking (which also is the origin of Economics in general), I highly recommend L.S. Andersen’s essay “Land Taxing Physiocrats” in a recent Land and Liberty:
Interesting that Quesnay, the father of political economy, developed his ideas in response to Colbert and French mercantilism. While Mercantilism was about exploitation, Economics was to be the science of Justice.
O how far it has fallen!
V. Arnold,
Korea suits me, but it certainly isn’t for everyone. Speaking the language helps a lot, but no matter how well I learn to speak the language, I will always be regarded as an outsider. I am fine with that.
Boogaloo
Thanks for the response.
It’s the same for me here; and I can speak Thai, but not with the fluency I would like.
I think this is true for Asian cultures in general. And yes, I’m fine with that also.
One thing I have learned is to not trust westerners, especially Usians here. Their bias is so obvious, and very disturbing in general; not 100% though, but close.
In any event, I appreciate your responses very much, thank you.
Any further input is encouraged, cheers.
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