Twelve Reasons Why Globalization is a Huge Problem
Posted by Gail the Actuary on March 15, 2013 - 5:52pm
Globalization seems to be looked on as an unmitigated “good” by economists. Unfortunately, economists seem to be guided by their badly flawed models; they miss real-world problems. In particular, they miss the point that the world is finite. We don’t have infinite resources, or unlimited ability to handle excess pollution. So we are setting up a “solution” that is at best temporary.
Economists also tend to look at results too narrowly–from the point of view of a business that can expand, or a worker who has plenty of money, even though these users are not typical. In real life, the business are facing increased competition, and the worker may be laid off because of greater competition.
The following is a list of reasons why globalization is not living up to what was promised, and is, in fact, a very major problem.
1. Globalization uses up finite resources more quickly. As an example, China joined the world trade organization in December 2001. In 2002, its coal use began rising rapidly (Figure 1, below).
In fact, there is also a huge increase in world coal consumption (Figure 2, below). India’s consumption is increasing as well, but from a smaller base.
2. Globalization increases world carbon dioxide emissions. If the world burns its coal more quickly, and does not cut back on other fossil fuel use, carbon dioxide emissions increase. Figure 3 shows how carbon dioxide emissions have increased, relative to what might have been expected, based on the trend line for the years prior to when the Kyoto protocol was adopted in 1997.
3. Globalization makes it virtually impossible for regulators in one country to foresee the worldwide implications of their actions. Actions which would seem to reduce emissions for an individual country may indirectly encourage world trade, ramp up manufacturing in coal-producing areas, and increase emissions over all. See my post Climate Change: Why Standard Fixes Don’t Work.
4. Globalization acts to increase world oil prices.
The world has undergone two sets of oil price spikes. The first one, in the 1973 to 1983 period, occurred after US oil supply began to decline in 1970 (Figure 4, above and Figure 5 below).
After 1983, it was possible to bring oil prices back to the $30 to $40 barrel range (in 2012$), compared to the $20 barrel price (in 2012$) available prior to 1970. This was partly done partly by ramping up oil production in the North Sea, Alaska and Mexico (sources which were already known), and partly by reducing consumption. The reduction in consumption was accomplished by cutting back oil use for electricity, and by encouraging the use of more fuel-efficient cars.
Now, since 2005, we have high oil prices back, but we have a much worse problem. The reason the problem is worse now is partly because oil supply is not growing very much, due to limits we are reaching, and partly because demand is exploding due to globalization.
If we look at world oil supply, it is virtually flat. The United States and Canada together provide the slight increase in world oil supply that has occurred since 2005. Otherwise, supply has been flat since 2005 (Figure 6, below). What looks like a huge increase in US oil production in 2012 in Figure 5 looks much less impressive, when viewed in the context of world oil production in Figure 6.
Part of our problem now is that with globalization, world oil demand is rising very rapidly. Chinese buyers purchased more cars in 2012 than did European buyers. Rapidly rising world demand, together with oil supply which is barely rising, pushes world prices upward. This time, there also is no possibility of a dip in world oil demand of the type that occurred in the early 1980s. Even if the West drops its oil consumption greatly, the East has sufficient pent-up demand that it will make use of any oil that is made available to the market.
Adding to our problem is the fact that we have already extracted most of the inexpensive to extract oil because the “easy” (and cheap) to extract oil was extracted first. Because of this, oil prices cannot decrease very much, without world supply dropping off. Instead, because of diminishing returns, needed price keeps ratcheting upward. The new “tight” oil that is acting to increase US supply is an example of expensive to produce oil–it can’t bring needed price relief.
5. Globalization transfers consumption of limited oil supply from developed countries to developing countries. If world oil supply isn’t growing by very much, and demand is growing rapidly in developing countries, oil to meet this rising demand must come from somewhere. The way this transfer takes place is through the mechanism of high oil prices. High oil prices are particularly a problem for major oil importing countries, such as the United States, many European countries, and Japan. Because oil is used in growing food and for commuting, a rise in oil price tends to lead to a cutback in discretionary spending, recession, and lower oil use in these countries. See my academic article, “Oil Supply Limits and the Continuing Financial Crisis,” available here or here.
Developing countries are better able to use higher-priced oil than developed countries. In some cases (particularly in oil-producing countries) subsidies play a role. In addition, the shift of manufacturing to less developed countries increases the number of workers who can afford a motorcycle or car. Job loss plays a role in the loss of oil consumption from developed countries–see my post, Why is US Oil Consumption Lower? Better Gasoline Mileage? The real issue isn’t better mileage; one major issue is loss of jobs.
6. Globalization transfers jobs from developed countries to less developed countries. Globalization levels the playing field, in a way that makes it hard for developed countries to compete. A country with a lower cost structure (lower wages and benefits for workers, more inexpensive coal in its energy mix, and more lenient rules on pollution) is able to out-compete a typical OECD country. In the United States, the percentage of US citizen with jobs started dropping about the time China joined the World Trade Organization in 2001.
7. Globalization transfers investment spending from developed countries to less developed countries. If an investor has a chance to choose between a country with a competitive advantage and a country with a competitive disadvantage, which will the investor choose? A shift in investment shouldn’t be too surprising.
In the US, domestic investment was fairly steady as a percentage of National Income until the mid-1980s (Figure 9). In recent years, it has dropped off and is now close to consumption of assets (similar to depreciation, but includes other removal from service). The assets in question include all types of capital assets, including government-owned assets (schools, roads), business owned assets (factories, stores), and individual homes. A similar pattern applies to business investment viewed separately.
Part of the shift in the balance between investment and consumption of assets is rising consumption of assets. This would include early retirement of factories, among other things.
Even very low interest rates in recent years have not brought US investment back to earlier levels.
8. With the dollar as the world’s reserve currency, globalization leads to huge US balance of trade deficits and other imbalances.
With increased globalization and the rising price of oil since 2002, the US trade deficit has soared (Figure 10). Adding together amounts from Figure 10, the cumulative US deficit for the period 1980 through 2011 is $8.6 trillion. By the end of 2012, the cumulative deficit since 1980 is probably a little over 9 trillion.
A major reason for the large US trade deficit is the fact that the US dollar is the world’s “reserve currency.” While the mechanism is too complicated to explain here, the result is that the US can run deficits year after year, and the rest of the world will take their surpluses, and use it to buy US debt. With this arrangement, the rest of the world funds the United States’ continued overspending. It is fairly clear the system was not put together with the thought that it would work in a fully globalized world–it simply leads to too great an advantage for the United States relative to other countries. Erik Townsend recently wrote an article called Why Peak Oil Threatens the International Monetary System, in which he talks about the possibility of high oil prices bringing an end to the current arrangement.
At this point, high oil prices together with globalization have led to huge US deficit spending since 2008. This has occurred partly because a smaller portion of the population is working (and thus paying taxes), and partly because US spending for unemployment benefits and stimulus has risen. The result is a mismatch between government income and spending (Figure 11, below).
Thanks to the mismatch described in the last paragraph, the federal deficit in recent years has been far greater than the balance of payment deficit. As a result, some other source of funding for the additional US debt has been needed, in addition to what is provided by the reserve currency arrangement. The Federal Reserve has been using Quantitative Easing to buy up federal debt since late 2008. This has provided a buyer for additional debt and also keeps US interest rates low (hoping to attract some investment back to the US, and keeping US debt payments affordable). The current situation is unsustainable, however. Continued overspending and printing money to pay debt is not a long-term solution to huge imbalances among countries and lack of cheap oil–situations that do not “go away” by themselves.
9. Globalization tends to move taxation away from corporations, and onto individual citizens. Corporations have the ability to move to locations where the tax rate is lowest. Individual citizens have much less ability to make such a change. Also, with today’s lack of jobs, each community competes with other communities with respect to how many tax breaks it can give to prospective employers. When we look at the breakdown of US tax receipts (federal, state, and local combined) this is what we find:
The only portion that is entirely from corporations is corporate income taxes, shown in red. This has clearly shrunk by more than half. Part of the green layer (excise, sales, and property tax) is also from corporations, since truckers also pay excise tax on fuel they purchase, and businesses usually pay property taxes. It is clear, though, that the portion of revenue coming from personal income taxes and Social Security and Medicare funding (blue) has been rising.
I showed that high oil prices seem to lead to depressed US wages in my post, The Connection of Depressed Wages to High Oil Prices and Limits to Growth. If wages are low at the same time that wage-earners are being asked to shoulder an increasing share of rising government costs, this creates a mismatch that wage-earners are not really able to handle.
10. Globalization sets up a currency “race to the bottom,” with each country trying to get an export advantage by dropping the value of its currency.
Because of the competitive nature of the world economy, each country needs to sell its goods and services at as low a price as possible. This can be done in various ways–pay its workers lower wages; allow more pollution; use cheaper more polluting fuels; or debase the currency by Quantitative Easing (also known as “printing money,”) in the hope that this will produce inflation and lower the value of the currency relative to other currencies.
There is no way this race to the bottom can end well. Prices of imports become very high in a debased currency–this becomes a problem. In addition, the supply of money is increasingly out of balance with real goods and services. This produces asset bubbles, such as artificially high stock market prices, and artificially high bond prices (because the interest rates on bonds are so low). These assets bubbles lead to investment crashes. Also, if the printing ever stops (and perhaps even if it doesn’t), interest rates will rise, greatly raising cost to governments, corporations, and individual citizens.
11. Globalization encourages dependence on other countries for essential goods and services. With globalization, goods can often be obtained cheaply from elsewhere. A country may come to believe that there is no point in producing its own food or clothing. It becomes easy to depend on imports and specialize in something like financial services or high-priced medical care–services that are not as oil-dependent.
As long as the system stays together, this arrangement works, more or less. However, if the built-in instabilities in the system become too great, and the system stops working, there is suddenly a very large problem. Even if the dependence is not on food, but is instead on computers and replacement parts for machinery, there can still be a big problem if imports are interrupted.
12. Globalization ties countries together, so that if one country collapses, the collapse is likely to ripple through the system, pulling many other countries with it.
History includes many examples of civilizations that started from a small base, gradually grew to over-utilize their resource base, and then collapsed. We are now dealing with a world situation which is not too different. The big difference this time is that a large number of countries is involved, and these countries are increasingly interdependent. In my post 2013: Beginning of Long-Term Recession, I showed that there are significant parallels between financial dislocations now happening in the United States and the types of changes which happened in other societies, prior to collapse. My analysis was based on the model of collapse developed in the book Secular Cycles by Peter Turchin and Sergey Nefedov.
It is not just the United States that is in perilous financial condition. Many European countries and Japan are in similarly poor condition. The failure of one country has the potential to pull many others down, and with it much of the system. The only countries that remain safe are the ones that have not grown to depend on globalization–which is probably not many today–perhaps landlocked countries of Africa.
In the past, when one area collapsed, there was less interdependence. When one area collapsed, it was possible to let cropland “rest” and deforested areas regrow. With regeneration, and perhaps new technology, it was possible for a new civilization to grow in the same area later. If we are dealing with a world-wide collapse, it will be much more difficult to follow this model.
This post originally appeared on Our Finite World.
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I dont think economists are worried over globalization - they wave their hands, put on sage smiles and state the free hand of the market works.......
I think others might have a different view point .......
Forbin
"In all recorded history there has not been one economist who has had to worry about where the next meal would come from"
--Peter Drucker
Hello HARM, Sorry if I'm being dense here, but I just don't get the meaning or point of that quotation. Is it saying that every economist in history has been wealthy? Or have I missed the meaning completely?
Speaking of wealth, it just so happens that I got my Bachelor's degree in Economics and after graduation (many moons ago) I actually worked for a couple of years as an "Industrial Economist". At the time, I was fresh out of college, newly married, with my first new car, and starting my first professional (yet quite modestly paid) job in a big, expensive U.S. East Coast city. And in that situation, I can assure you that there were more than a few times when an Economist did in fact worry about his next meal, his next car payment, and much else besides...
The point I was trying to illustrate with this Drucker quote is: I believe the reason *why* most economists (at least the ones quoted in news articles anyway) either don't think there's a downside to globalization or don't care (or both) is that none of them has ever personally experienced the negative consequences of it. This is because they are, by and large, wealthy and cater almost exclusively to the *extremely* wealthy and powerful --who are near unanimous in their praise of unregulated globalization (because it benefits them immensely).
As another smart guy put it, "It's difficult to get a man to understand something when his salary depends on his not understanding it."
Peak Oil deniers are starting to include some economic theory in their rebuttal. Instead of just saying that there is plenty of oil, or that there is plenty of oil given advances in technology of extracting it, there is starting to be some talk of of a "substitute good" as in "as one item (oil) goes up in price, some substitute of equal or better value will come along to replace it". Historically, firewood was replaced by coal, and whale oil by kerosene, and now they are certain that something else will painlessly replace oil.
Importantly, this is an argument on which both sides can have a well-reasoned discussion of the sort which can lead to minds being changed.
You and I may disagree on the effects of peak oil, but we should be able to discuss the details of a hypothetical transition to a substitute (electricty for cars, say). Based on those details, we may see that one or both of us had been basing our arguments on faulty assumptions regarding how easy or how hard the transition would be. If we find we still disagree (e.g., on whether enough generating capacity can be added), we can examine that aspect in greater detail, drilling down further and further until finally we have enough data that we agree on the underlying facts.
If you're a person whose views on peak oil are driven by data, not emotion, this kind of argument is perfect -- it reduces the discussion to data and numbers. If your views on peak oil are based on emotion and intuition, though, this type of discussion could be very frustrating, as your impassioned speeches about "the broader picture" are met with a stony "show me the numbers".
I look forward to seeing discussions of a transition away from oil-based transportation. Unfortunately, it looks like they will not occur in the mainstream until "total liquids" begins to fall. And probably a few years after that occurs as there first will be discussions of why "total liquids" should not be falling and would not be falling if: a) oil companies were not being hampered by misguided environmentalists and b) foreign governments would allow full production of their oil assets. There will likely also be some talk about taking over the oil that other countries control. Iran in particular will be in grave danger of destruction and subsequent invasion by the US as happened with Iraq.
I was delighted to see recently that Tesla has a model that can go over 200 miles on a charge, and there is a way to get the battery half-charged in a half an hour (for some reason they didn't list the time to get a full charge).
"(for some reason they didn't list the time to get a full charge)."
The rate at which you can charge a battery slows increasingly as you exceed about 85% of it's capacity.
http://www.saxton.org/tom_saxton/images/Tesla_Charging_240V_70A.png
http://www.saxton.org/tom_saxton/2010/07/tesla-roadster-charging-rates.html
Globalization is a problem (according to most economists). Few see growing trade deficits as a good thing.
http://www.infoplease.com/cig/economics/trade-deficits-bad-good.html
They lead to high debt for countries that are purchasing goods on credit, and a shift of wealth (and jobs) to countries that are manufacturing goods. They suppress wages in the borrowing country (when accompanied with high unemployment), which further leads to imbalances and a loss of purchasing power for countries with negative net trade. They also place greater emphasis on monetary policy to manage currency values rather than underlying economic fundamentals (and thus give rise to interventionists policies of the state over the economy). In general, a trade deficit results in a contraction in the economy (or slower growth than if the rest of the world was buying our goods, as opposed to the other way around).
re:
8. With the dollar as the world’s reserve currency, globalization leads to huge US balance of trade deficits and other imbalances.
Gail, I think this article sums up that Globalization is doing exactly what all thought it would do. It has certainly spread 'everything' around...for both good and bad. I do take exception to the # 8 above. Sure, the reserve status has allowed the over consumption to continue, but adults are supposed to learn to say no once in awhile. The reserve capability has been translated into words like 'exceptional', when the rest of the world knows it is simply an empire still in control and hanging on. The world buys and sells drugs with US dollars but I don't see that used as a excuse to justify hollow and hurting addicts filling themselves with chemical stimulus any more than the reserve status is an excuse for hollow souled consumers filling their lives with goods they don't need.
You can't buy a moral compass or value set at Walmart, folks. It isn't a new car model, either. Learn to say no before you are forced to and have nothing left.
Nothing wrong with sharing.
Regards....Paulo
Globalization is a phenomenon, not a policy. We can't change human behavior. We need to adapt to globalization, and energy policy is a key.
First, coal: the only way to dissuade 7 billion people and 250 nations from burning coal is to provide an economically superior substitute. Carbon taxes, cap-and-trade, renewable portfolio standards, etc don't work and won't work because developing nations won't adopt taxes and policies opposite to their self interest. Advanced nuclear power, such as the thorium molten salt reactor, can be cheaper than coal; exporting such reactors can wean the world from coal.
Second, poverty: affordable energy is a key for developing nations to rise out of poverty. With even modest prosperity, populations' birth rates drop, ending the rise in human competition for scarce resources such as oil, fresh water, and food.
Third, oil: it's not going to run out soon, but it is finite, and substitutable. Inexpensive energy from high temperature sources such as the liquid fluoride thorium reactor can be used to synthesize substitutes -- hydrogen, ammonia, methanol, and dimethyl ether. It took a century to develop the petroleum technology we use today, and the oil companies have the expertise to manufacture at scale such new liquid vehicle fuels in the coming decades.
There's more in my book, THORIUM: energy cheaper than coal, described at http://www.thoriumenergycheaperthancoal.com .
...all this, so humanity can continue to consume all of Earth's other resources (the ones you didn't mention) at an ever faster rate,, you know; growth,, globally.
wow! so a working Thorium reactor is ....... where ?
Sorry until they are working then this is sorta wishful thinking
but yes maybe get them working and get them cheap , get the Anti Nuclear anything guys on board and alter all those nuclear proliferation treaties . And then manage to organize ourselves to build rockets to get stuff from the Solar system .... then maybe we wont trash the planet like a teenager's bedroom , just maybe...
but show me a working thorium reactor , like wise cold fusion and for that matter hot fusion ( I exclude the Sun here as PV is very much proven but still has issues with politics )
And it still produces radioactive waste like fusion will do , not as much Ill grant , but there is some.
Forbin
Yes, there are no working thorium molten salt reactors at present. Oak Ridge did develop and operate two molten salt reactors. The second was tested with uranium-233 created from thorium [in another reactor]. China is now developing a thorium molten salt reactor. Two quiet US ventures are well into designs and are seeking more investors. TerraPower is investigating the molten salt reactor, in addition to its more famous travelling wave reactor.
Mr. Hargraves,
Thank you for your posts, I have enjoyed your lectures and presentations online. You are on the right track, we just have to convince enough people.
SJC, welcome if you are relatively new.
There's much discussion over the years about nuclear, such as on TOD-- perhaps especially around the time of the Fukushima disaster. Perhaps you've read some of it.
I'm wondering where the economic factoring-ins of nuclear waste and disasters are. Perhaps "economics" still seems to need to catch up to the idea of the immeasurable, externalities and issues surrounding the commodification of nature, scale and so forth.
I recently saw this movie about Finland's nuclear waste burial site and issues. That's one "nuclear-power government" in how many? And Finland is one of the more stable, politically.
I'm also aware of something of Greenpeace's previous (1970's?) confrontation concerning the throwing of barrels of nuclear waste overboard in European waters and some recent concerns of corrosion, leakage and nuclear particles going up the food chain.
I fear that as, fundamentally, a tribal/band, small-scale limited-tech species, we are fundamentally incapable of such technologies that seem like pure folly, arrogance and recklessness.
By the way; how do/will we, as a species, get out of a nuclear lock-in? Sounds like an extremely dangerous path to be locked into.
With plate tectonics, porosity, subsurface water movement, volcanism, sea-level rise, erosion, earthquakes, wars, scale, time and so forth, 100 000 years seems a long time to have something dangerous like nuclear waste buried. Especially via short-term thinking that our systems seem rife with. I have my doubts whether short-term/near-sighted-oriented systems such that we seem to have and operate with are equipped to understand and manage long time scales and bigger pictures.
Even the climatologists seem to have fell short of the speed of the climate's positive feedback dynamics.
You/We need to factor that into economics and discussions too, not talk about nuclear or stuff like that outside of context and within the myopia of specialization.
The larger the scale we are as a species, what with our current footprint, the less errors we will be able to afford, the increasingly few errors will be left in our error-bank...
Far less "Oops! Ok, well, let's try this, then..."
TOP - I second your rec. for folks to watch "Into Eternity" for thoughtful insight into the issue of N waste burial. Haunting, that film. And also wonder, given your Thomas Berry quote, if you've seen "What a Way to Go: Life at the End of Empire", in which he speaks those words in his interview. Much else of value in that creative doc as well.
... and everything else you said - spot on.
Hi clifman, thanks, and yes I have. It's a favorite. In fact, at least a decade ago, a conscious decision was made to focus more on documentaries. I also saw the Nova episode Ghung recently mentioned-- the one with the seasonal Antarctic "in-ocean brine falls". Once and awhile, though, I'll still watch some fiction, like Melancholia, for example. ;)
There was a working commercial sized thorium reactor way back in 1977 and several small scale thorium reactors before that. The only technology to be worked out are tweaks to the reprocessing system for LFTRs. We could do large numbers of thorium reactors in the back half of this decade if that became a national policy.
Much as I am a fan of nuclear power, I am very skeptical that we could quickly get to the point of building large numbers of commercial thorium reactors. The actual amount of research experience with thorium reactors both in terms of the number of reactors of this type built and the number of years of reactor operation is really quite small in comparison to the amount of research experience with conventional pressurized water reactors. Despite the large number of commercial PWR reactors in use along with the many PWR reactors in use for naval propulsion it still seems to be difficult to introduce a new reactor design without incurring significant delays and cost overruns on the first few reactors. Before thorium based reactors can be deployed commercially we need to be certain that we have a design that will be safe and reliable for many decades. Unlike research reactors, a commercial power reactor is run by nuclear plant operators -- not by the team of physicists and engineers that designed it.
Actually PWRs can be retrofit with thorium, but that is not as attractive long term as the LFTRs. I agree it would take a serious national commitment to accelerate the development and deployment of LFTRs. But the technology is fairly well proven compared to some of the other alternatives tossed about.
You do not have a running prototype of the thorium reactor, so you have to build one and test it, this costs you 10-15 years. Then you have a price for a produced kWh. At the moment there is no guarantee, that this price would be much lower than for the last conventional reactors.
OTOH the USA has already a production capacity for 13 GW windpower per year (wind 3000 FLH, i.e. 2.5 GW wind are the equivalent of 1 GW nuclear power), this potential could be doubled within a few years with known costs without any problem. 26 GW wind per year are 10 reactors.
So why do you want to wait for a thorium reactor when you have the solution at hand?
This is my opinion, too. Both solar and wind are now mature technologies. It's literally a matter of making the investment in them. A fast ramp-up would probably require building more factories but compared to trying to make nuclear work it's a walk in the park. Then, when you're done, you have something that works very well, with no waste. Ideally, you could put solar over parking lots and on roofs, and then you don't even get the land use issue.
I think the reason nuclear is favored is that it is a)high tech and "futuristic," b)it delivers power in a very conventional way, and c)the allure of "so much energy from so little fuel!". Solar + wind requires some amount of storage and production of power is not guaranteed. It is a diffuse energy source rather an a concentrated one. But I find it odd that people can't imangine having, say, batteries in the house like they have a hot water heater, or imagine pumped hydro storage (which already exists). These are mature technologies that CAN meet existing energy needs.
Perhaps we will have to turn out some lights as well. Oh, the horror, having to cut back slightly!
I think also there is a bias in our current industrialized culture towards solutions that can only be accomplished by giant corporations, or "industrial complexes" of one sort or another. Rooftop solar panels do not provide guaranteed profits to oligopolistic corporations as well as nuclear reactors (or coal or gas power plants) do. Also, national politicians find it easier and more profitable to get their spending money from a few very wealthy corporations and owners than from a whole bunch of plebeians. The playing field is heavily tilted away from any kind of distributed power generation source, or anything else that may give the common folk some sense of "empowerment". ;)
In response to jstewart, after some more investigation into the current state of LFTR technology, I think you are right and I was way too optimistic. It is going to take some time. Maybe decent numbers in the back half of the next decade if we start a big program now.
Regarding "why not solar or wind instead of nuclear?" - It's not an either-or, it's all that are needed. We need to replace coal and other fossil fuel powered power plants with nuclear for base load, then solar and wind can pick up what they can. NG power plants can pick up standby and peaks.
You are trapped in US-centric thinking. The rest of the World and in particular China does not suffer from the sort of constipation prevalent in the in the West, and fossil fuel interests do not have nearly the same influence. Another point. It doesn't require thorium reactors (or fast uranium reactors) to begin to displace fossil fuels. Current designs are more than up to the task. France eliminated fossil-fuel sourced electricity in 20 years and that was with yesterday's designs.
Sorry, the new conventional nuclear reactors in France are from a economic point of view zombies, with according to French governmental agencies costs of 10 cent/kWh.
For this price I can produce without any problem electicity with onshore wind which is backed up with NG. In countries with NG or high pump storage capacity no real task.
Only if you can provide in comparison to onshore wind a cost efficient nuclear alternative you are in the game again, with current nuclear reactors no chance, therefore, the basic dilemma that new and (hopefully) cheaper designs cost many years of development.
Are you suggesting that 10 cents/kWh is expensive? This is actually quite close to the average price for electricity paid in the USA. And it is much lower than typical electricity prices in most European countries. It appears that any current rates significantly lower than this will typically depend not upon new solar and wind power, but upon established hydroelectric, or possibly geothermal power systems (as in Iceland).
In central Europe, much of the NG is imported from Russia, has availability issues, and is fairly expensive. This dependence may be become even greater in the near future as Dutch and British home-based NG supplies decline, and eventually Norway will also enter a phase of more serious decline. The high pumped storage capacity mentioned is more theoretical than actual. Wherever such high pumped storage potential exists in Europe, it has generally long ago been claimed.
If the French nuclear power is so outrageously expensive then why are other European nations lining up to buy surplus French electricity?
Also, one big reason that Germany has been able to implement as much solar and wind energy as they have lately, is that this energy supply is backed-up by quick and easy access to large amounts of surplus nuclear reactor-produced electricity from France, for those days when the sun doesn't shine and the wind doesn't blow in Germany.
data anylysis is not your strong point. :-)
1) 10 cent kWH production costs (without taxes, transmission fees etc.) is expensive, onshore wind is much cheaper.
2) You confuse power and energy: It is possible to provide for a few billion EUR per year 100% NG power with only 1000 FLH, then price of NG becomes secondary, coal/biomass to methane is easy. Even 100% NG power with twofold overbuilding of wind is competitive.
3) Pumped storage is available and underused or not connected to central Europe. That is the reason why electricity is cheap in Norway, get hard data please.
4)Up to 40 percent renewables there is no need for storage, between 40 and 80% it is nice to have, for a 100% scenario it is essential.
5) Is it really to much expected that you get correct data on German imports/exports of electricity? France is net-importer (not Germany), baseload in Germany is available in excess! Fraunhofer data are in English, no excuse to work with made up stuff.
Ok Ulenspiegel, Since data analysis must be such a strong point for you, I'm sure you can understand the following chart which shows electricity prices by nation - and this chart is taken from an article on TOD itself:
http://www.theoildrum.com/files/figure_1_2_big_0.png
...the whole article is at: http://www.theoildrum.com/node/7215
You should be able to admit from looking at this data that 10 cents/kWh is NOT an expensive rate for most of the world. The citizens of most nations would be happy to have their rates REDUCED to just 10 cents/kWh. The data above shows that for Household electricity rates (including taxes) only 3 nations in the world (Taiwan, Mexico and Kazakhstan) are below 10 cents/kWh and none of them are in Europe. Norway appears to be at about 9 cents, but with taxes included Norway is closer to 13 cents.
The industrial electricity rates for Norway are less than 10 cents. But as I said from the start, hydroelectric/dam-based power (or what you call "pumped storage") along with geothermal power, are 2 exceptions where very cheap electricity can be delivered by renewable energy sources today (and not by 2020 maybe).
However, good locations for both hydro/pumped storage and geothermal seem to be very restricted to relatively few geographic regions in the world - and most of these are already in use, claimed or problematic. I said that there was little chance of additional pumped storage becoming available (to backup solar/wind) in central Europe - and you replied with the case of Norway (Europe? yes, Central? no). And distance matters quite a lot with electrical transmissions. You even admit that it's "not connected to central Europe".
You say that France is a net importer of electric power, but that is only one data point from this winter, which was an abnormally harsh one in France. Over the longer term, there are many periods in the recent past where France has exported electricity to Germany and to several other nations. It is misleading for you to focus on a single data point when the full timeline of data is available (...or was that done to better support your cause?)?
It is also misleading to directly compare costs of nuclear versus onshore wind, unless you also factor-in the availability percentage for the source: for nuclear it's over 90% and for onshore wind it's closer to 35%.
For this reason, both wind and solar require stand-by sources of backup power for that +60% of the time when they are not producing significant output. Renewables start to look rather expensive, when you add back-in all the costs of those stand-by power plants (most operating with far less than ideal thermal efficiency due to scheduling uncertainties, the waste of extra startup/shutdown cycles, expedited startups, partial loading, etc.).
And if onshore wind really is as inexpensive as you say, then why are federal and state subsidies needed at all? If electricity providers want to reduce costs and maximize their profits wouldn't they be switching over to wind power as fast as possible, with or without government subsidies and prodding? (as they clearly have been doing with NG for several years now in the USA and possibly elsewhere)? No, they are not switching to wind in the same way as they are to NG, so it seems that the true costs of wind power are apparently not nearly as compelling as you claim.
BTW, how can you say that no storage is needed for a system with 40% renewables? What if the renewables are not producing significant power on a given day (a very likely possibility)? Do you just tell all the grid customers "Theres's no 'juice' for today, so just go back to bed. Maybe tomorrow..."? From what I know of the German people, such announcements might not be so well received, especially not for the 2nd time in a week or the 6th time in a month. And even if the Germans can accept it, there are plenty of Americans who would be very upset with this sort of 3rd world electricity supply situation (NOTE: nearly 40% of Americans claim to have a German ancestor ;^).
Re storage of energy: It is without any problem possible to combine reneables with NG or coal power plants and provide a constant power in a reliable way. Reliable power is not necessarily base load power.
"You should be able to admit from looking at this data that 10 cents/kWh is NOT an expensive rate for most of the world. The citizens of most nations would be happy to have their rates REDUCED to just 10 cents/kWh. The data above shows that for Household electricity rates (including taxes) only 3 nations in the world (Taiwan, Mexico and Kazakhstan) are below 10 cents/kWh and none of them are in Europe. Norway appears to be at about 9 cents, but with taxes included Norway is closer to 13 cents."
I was talking about production costs for electricity from new reactors (6000 EUR/kW, 7500 FLH) in comparison with wind. (1500 EUR/kW, 3000 FLH). What do you get with 8% capital costs and 2% operation costs, 20 years for pay back of loans? I get 8 cents vs. 5 cents.
Consumer prices are not relevant for an investor :-)
"You say that France is a net importer of electric power, but that is only one data point from this winter, which was an abnormally harsh one in France. Over the longer term, there are many periods in the recent past where France has exported electricity to Germany and to several other nations."
Both countries are net exporter of energy, it depends how you count transfers from Franc to other coutries via Germany. On base of contracts between French and German producers and customers France was very likely net importer from Germany in 2012, 2011 it was different.
"And if onshore wind really is as inexpensive as you say, then why are federal and state subsidies needed at all? If electricity providers want to reduce costs and maximize their profits wouldn't they be switching over to wind power as fast as possible, with or without government subsidies and prodding?"
To give newcomers a fair chance on a market that is ruled by conventionals FITs are essential, BTW even nuclear power get still them :-)
In Germany, according to guys in planning offices, more than 50% of the the new windpower do not longer apply for the FITs but is now part of fixed contracts with utilities. PV in Germany gets now less than the productions costs.
Wind is owned in Germany by citizens, conventional capacity by utilities, you do not see the problem for the utilities? And you assume that large utilities have a motivation to change stupid simple business models that have favoured them in the past? The future of the large four German utilities and EdF is not shiny IMHO.
For France the question is how to replace more than 50% of its nuclear capacity which will be older than 40 years until 2030. With last reactor designs electricity from nuclear power plants is uncompetitive. The same is true for the USA.
A nice series of articles on this issues in published in the Bulletin of the Atomic Scientists"
Norway does not have very much "pumped storage", but 99% of its electrical generating capacity is large-scale hydroelectric, which is very cheap compared to other methods of generating electricity, and very flexible. When Denmark has a surplus of wind power, Norway holds its own hydroelectric power in storage in its mountain water reservoirs and buys electricity from Denmark at very low rates instead.
When the wind stops blowing and Denmark is short of power, Norway opens up its hydro dams and sells the power it has saved back to Denmark at very high prices. This is one reason why Norway has some of the lowest electricity prices in the world, and Denmark some of the highest.
Norway and Sweden have underused pump(ed storage) capacity according to Norwegian engineers and many of their huge reservoirs could easily be equipped with (more) pump capacity, however, the first sensible step is to replace the Norwegian summer demand with PV or wind energy from central Europe and use in winter the "saved" water.
Yes, but their hydroelectric reservoirs are not "pumped". They run the water through the turbines once, and then it is gone on its way downstream. They do not normally pump the water uphill back into the reservoir, which is what "pumped storage" means.
Some of their huge reservoirs have already pump capacity, which is according to Norwegian engineers underused, the same in Austria. However, this pump capacity would be much too small to store the huge excess production from UK and Germany in a 100% reneable scenario.
1) Central Europe provides in summer Norwegian/Austrian demand (-> no downstream flow of their water).
2) Underused pump storage is activated.
3) more pumps turbines are built.
We have as first step to connect Norway and Austria with sufficient transmision capacity.
Norway is not running its electrical system for the benefit of other countries, it is running it for the benefit of Norwegians. It is not going to add pumped storage ability unless other countries pay it to do so. Are other countries going to pay Norway (already a very rich country) to add storage ability so the other countries can store their wind energy in Norway? Norway is not going to do it otherwise, and may refuse to do so even then because of environmental worries.
The beauty of storage in Norway and Austria is that you can only harvest in winter what you have delivered in summer.
European countries like the UK and Germany are actually building HVDC connections to Norway.
Of course Norway will charge companies who want to store energy, with depleting NG and oil reserves the business model "green battery of Europe" becomes more attractive. In Norway the people have to find of course a consense and new rules because high power connections of Norway with rest of Europe means that Norwegian utilities may get much higher prices for electricity in Germany than on their domestic market. I would think of quota model like export not larger than imports, i.e. customers of the high domestic natural production are still only the people in Norway.
That's only correct to some degree.
France is heading with electricity in the winter-time like no other European country and sometimes faces severe troubles at very cold days. In the winter of 2012/2013 German wind-power helped to balance the stresses French AKW's (reactors). At other days of course it's the other way around.
OK, we have the overall situation that France exports >10% of its gross electricity production, Germany around 4%, therfore, both countries are netexporter.The export is in case of France usually baseload and in case of Germany intermediate load or baseload.
The actual German-French exchange depends what counts as imports, if as in some data sets transfered energy (France-Austria via Germany) is counted as German imports then Germany may be net importer from France, if only contracts between French and German producer and customers are counted, French is very likely net importer. But this is hairsplitting. The German imports did not signifficantly change after the decommission of the nuclear power plants.
If you are interested in new data try:
http://www.agora-energiewende.de/service/aktuelle-stromdaten/strom-importexport/?tx_agoragraphs_agoragraphs[controller]=Graph#TxAgoraGraph_PowerImportExport_1360537200__1360623600_a
go to the bottom half of the page (Historische Daten, historic data) and type in a 2 day span, then you get not only a saldo but also a breakdown of exports/imports to or from individual countries. This works for days after the 1st Dec. 2012.
The last weeks clearly show, that France receives more electricity from Germany than Germany from France, the power duration curve indicates base load. Austria and Switzerland are used for storage of peak production.
As of Jan 31, 2013, Germany still had 9 of their larger nuclear reactors running, each one >1.3 GW gross capacity. Since 2011, 8 German nuclear reactors have been shutdown, but only 4 of these were of >1.0 GW capacity. You can see the list at the following link:
http://www.euronuclear.org/info/encyclopedia/n/nuclear-power-plant-germa...
(NOTE: in the above source, 27 reactors are listed as being shutdown in Germany, but 19 of these were shutdown from 2005 and earlier, and many of these were small prototype and experimental reactors.)
What some are suggesting is that with the shutdown of the remaining nuclear reactors, Germany will find itself in need of importing significant amounts of electricity from neighbors during those periods when the renewables are not delivering enough power.
Actually, I tend to applaud Germany's increase in renewables - they have proven to the world that shifts of this kind can be made. But a continuation of this shift will depend on very large investments (meaning big increases in public and private debt) and this may prove problematic within Germany's current austerity-dampened economy. It should further be noted that along with the partial German shutdown of nuclear plants, there is also the following point from the Bulletin of Atomic Scientists:
"...[in Germany] more than 20 new coal-fired power plants are being planned or already under construction; together, they would achieve a total output of 10 gigawatts and could, in terms of power supply, replace nuclear power plants that are still operational."
from: http://www.thebulletin.org/web-edition/op-eds/the-coming-german-energy-t...
To whatever extent Germany leaning towards just replacing nuclear power with coal-produced power, I would say that this is not such a good development at all - and perhaps some portion of this represents an overreaction to Fukishima-driven paranoia.
Everyone's "ok" for now, but a lot of the health effects of radiation are longer-term. Sounds like healthy paranoia-- especially with governgangs that care little and engage in coverups and covert operations, etc..
I won't be drinking my usual Japanese iced macha lattes unless I can source matcha from elsewhere-- an example of a hit on Japanese trade from techno-mismanagement. (Maybe I could try a local matcha grow-op.)
BTW, can nuclear be funded/insured outside of the tax-theft state oligarchy model? (I hope not either way, anyway.)
Whether these are valid tests or not (Anyone like to chime in?), it does give one pause:
(Video) Veritas Caute:
You may wish to drink only wine from before 1946, just to be safe. In particular, avoid the '63 vintage, which contains over 1 Bq/kg of cesium 40.
From the mass of the neutrino to the dating of wine
On the other hand, it may all be moot, since your body contains about 60 Bq/kg of Potassium 40.
Thanks, Merrill. I'll read the link a touch later.
I like to take everything with a grain of salt, and unless otherwise clarified, will assume that you're suggesting radiation in the tea at those levels is normal if not perfectly safe, except before 1946, which may be when nukes started detonating. Makes me wonder about cancer rates since then.
My SWAG would be that cancer rates are more a product of modern chemistry than modern physics. For example, California imposed strict regulations on the flamability of furniture covering and children's sleepware. Manufacturers not wanting to make different products for California and elsewhere began treating their goods with tris(1,3-dichloro-2-propyl) phosphate. Alas, it was later found that tris(1,3-dichloro-2-propyl) phosphate is a carcinogen. But not until after children had been exposed to the chemical for years.
I'm rather shocked none of the "radiation is good for you" crowd hasn't bothered telling us how it's needed for life
http://menawa.wordpress.com/2012/12/29/russian-scientists-whoneed-radiat...
Calling radiation Sunshine units is another example of attempting to minimize the issue of adding radioactive material to the biosphere.
Sorry, you confuse power and energy:
1) In Germany, there are around 3 GW wind and 3-4 GW PV added PER YEAR, this means these are able to provide additional 12 TWh electricity per year, a little bit biomass give 2 TWh p.a. more, hence there will be 120 TWh more electricity from renewables in 2022, the decomission of all nuclear reactors will only cause a loss of 100 TWh, therefore, from the energetic point of view there is no bottle neck expected, neither by green groups nor by the lignite producers. :-)
The assumption, that Germany will have to import large amounts of electricity is usually a result of propaganda or the unability to check some numbers.
2) The amount of NG power plants, written off coal power plants etc. is sufficient to provide enough power during winter.
3) Windpower is owned in Germany by the citizens and there is absolute not problem to finance these projects, if a energy cooperative needs money they simply sell industry bonds and can expect 2 times more offers from citizens than the volume of the bonds is. This is excactly the horror scenario for the large utilities as in repowering projects there will be 25 GW added power in the next ten years which will kill around 80 TWh conventional production per year! Or as a manager of one of the large four utilities put it: "It will work even without us"
4) Your coal power data are not correct, please check the data of the German transmission net agency (Bundesnetzagentur), we will see an net addition of 2 or 3 GW coal power until 2015 (whopping 2% of the conventional capacity), most projects are canceled. The German wikipedia gives a nice list, too. Even the lignite producer assume a constant coal power (see 1!). New coal power plants and cc NG power plants need high FLH, no chance for economic operation in Germany anymore for domestic demand.
You keep saying that I confuse power and energy, but then you don't offer any further explanation.
In casual conversation, energy and power are often used to mean nearly the same thing, and the 2 words are probably considered by most English speakers to be essentially interchangeable. I would suggest that "energy" is not all that easy to define in common terms.
My attempt would be to say that "energy" is a fundamental force which enables all heat, action and motion in matter, and which binds matter itself together at the atomic level. While "power" is a measured amount of energy applied over some unit of time. But I don't see where I've misused the terms.
As for my coal power data not being correct, I used the very source of information that you had just recently recommended to me: "the Bulletin of Atomic Scientists"! And I saw other sources make similar points about Germany building out more coal plants to deal with upcoming nuclear reactor shutdowns.
Just for a reference, Public Service of New Hampshire is charging me 9.2 cents/kWh for the generated electricity. That's the retail price, so their cost to generate is less. They use about 85% fossil fuels to power their plants. PSNH used to charge more (12 cents/kWh I think) before they got out from under the Seabrook nuclear plant.
I found these youtube interviews to be informative at the layman level, of what was done, and plausible reasons why we are not seeing thorium commercial electricity-generating reactors showing up yet.
Dick Engel & Syd Ball - ORNL Molten Salt Reactor Engineer Interview shot for THORIUM REMIX
and
ORNL Thorium Molten Salt Reactor Experiment Researchers - Dick Engel & Syd Ball - Dinner & Interview
"...We can't change human behavior. We need to adapt to globalization..."
This seems a tad fatalistic, don't ya think? Why would any of us want to "adapt" to an economic model that is (a) unsustainable environmentally and economically, (b) undermining democracy and rule of law everywhere, and (c) literally killing the planet?
"...the only way to dissuade 7 billion people and 250 nations from burning coal is to provide an economically superior substitute"
Perhaps so, but you are missing the larger question: why do we *have* to have a world population of 7 billion people (and rising)? Would we --and the environment-- be better off or worse off with only 2 billion? 1 billion? Would it be easier or harder to transition to sustainable/next-gen energy sources if the population were much lower? (Keep in mind humanity only reached our *first* billion a mere 200 years ago.)
Re: thorium and Gen-IV MSRs, I have been advocating for this here at TOD for years (and have received considerable flack for it). Regardless of whether or not Gen-IV MSRs can be scaled up in time or cheaply enough to replace FFs or produce the expected benefits ("burning" long-lived radioactive waste from older reactors), no technology is likely to "solve" the problem of infinite growth on a finite planet. Finding sustainable replacements for FFs is a big problem, but convincing enough of our fellow human beings that population growth cannot continue unabated forever without dire consequences for us and the global ecosystem is a much bigger one IMO.
Population should be lower, but the first goal should be to get it to stop growing. That will be tough, particularly in the United States, where not only would family size limitations be met with massive criticism, but immigration is also a sacred cow.
Total fertility rate has fallen below the replacement level in almost all OECD countries, and the only exceptions are tiny (Ireland, Iceland, New Zealand, Israel). Even less-developed members (Mexico, Turkey) had moved below replacement level by 2010.
Accordingly, it's not unreasonable to argue that increased prosperity will naturally tend to curb population growth.
Increased prosperity?! Interesting observation. As I look about the world I see economic recession, bursting bubbles, contracting economies and decreased prosperity due to the global economic system hitting physical limits.
So according to your theory I guess that would mean we are in for a massive spurt in population growth...
This indeed allready happens in the most affectet countries, e.g. the fertillity rate of the US of A, which has historically been very high for a "developed" economy, mostly driven by very high rates of the hispanic population, is down to 1.85 from 2.15 only 5 years ago. The same occurs in many places all over the world. E.g. Brasil is now far below replecement level.
By the way you're statement "[...] I see economic recession, bursting bubbles, contracting economies and decreased prosperity [...]" is a little bit US of A - and perhaps Southern Europe - centric. Overall this doesen't describe the current situation, which does not mean it will be that in the near future.
In order for a low fertility rate to benefit an OECD country, the citizens have to prevent their business leaders and politicians from increasing population via immigration. That is not an easy task, especially since any calls to stop it are immediately labeled as racist, since the immigrants are non-white or "ethnic white" and the countries they are trying to get into are white.
So any discussion of population growth in OECD countries has to also talk about their immigration policies (or as they refer to it - migration flows).
As one example of how hard it is to get immigration stopped - during a period when the US unemployment rate was 10%, there was no discussion of stopping it, or even reducing it, even temporarily. Another example is how business leaders, when asked to talk about solutions to the economic malaise, will champion immigration in their opening remarks, apparently heading off at the pass any talk that might arise of reducing it, and even talk about increasing it, at least for "tech workers".
Canada has been taking steps to increase the percentage of immigrants who have skills currently in demand. This involved discarding hundreds of thousands of applications that had been in the queue for years -- a hugely unpopular move with the immigration lobby. There is also a moratorium on accepting applications for the family reunification class though applications submitted before the moratorium are still being processed. There has been no reduction in the number of immigrants though despite a weak economy in most of the country.
I don't expect immigration levels to be dropped until politicians finally come to the conclusion that the days of high economic growth are not coming back. In the meantime, politicians and indeed most of the public, believe that population growth is an absolute requirement.
"I don't expect immigration levels to be dropped until politicians finally come to the conclusion that the days of high economic growth are not coming back."
With Harper firmly in control, don't count on that ever happening. Furthermore, as PO progresses and the global economy worsens, Canad's oil production will be seen internally as our saviour. I envision the Conservatives being in power for quite a while -- until their policies lead to our demise. Because, of course ... it's all the environmentalists' fault, right ... for standing in the way of oil production and therefore robbing us all of jobs, growth, and prosperity, as the current propaganda says...
In the United States, given the romanticized and mythical feelings towards immigration (thanks a lot statue guy and poem gal), I suspect that immigration will continue during an economic leveling off, and also during an economic decline. It is too ingrained in the American psyche. I think that you will hear louder arguments for continuing it with the traditional rhetoric being employed, long (as in a few decades) into any economic decline from Peak Oil. It will initially be pushed as it is now, as part of the solution. At some point it is likely to be referred to as a scapegoat. And hopefully at some point, it will ultimately be labeled as part of the problem.
I don't think the right question to ask is whether a country should take or not take immigrants but what kind and how many. Immigration is good as long as it is restricted to people with very good education, desirable skills and/or lots of capital to invest in their adopted country. For example, the influx of wealthy Chinese fleeing Hong Kong was a net positive for Canada. The problem with US immigration is that it is mostly based on family reunification and not skills or capital investment. As a result, the "quality" of average immigrant is quite low.
If I was in charge I would restrict immigration to the following groups:
1. People with extraordinary achievements in sciences, arts, culture and sports.
2. People with graduate degrees in Sciences, Technology, Engineering or Math (STEM) from a US or Canadian university who can get a job offer with a starting salary that is at least 2 times the per capita income.
3. Those who can immediately invest at least $10 million in the US and create at least 5 jobs for US citizens. Such people can be given a temporary visa that can be converted to a permanent residence visa after 5 years if the business is still running and the people are still employed.
4. Spouse and minor kids of anyone who qualifies based on the above criteria.
If you take skilled workers into a country you are making it harder for natives to get skilled jobs. You are making it harder for natives to maintain skilled jobs. There will be less native people doing those skilled jobs at every age bracket, but it will increase as they get older. Native people will have a much more difficult time making a career out of their profession. Why hire a 50 year old who has similar, but not identical experience to what you are looking for, when you can just take a 25 year old guy with good grades and a Masters Degree from some country with a much much lower standard of living?
I would not be convinced by the exhortations of business that they require skilled workers until we had a few decades moratorium on them and there was evidence built up to support the claims. The United States is the third most populous country in the world and is the number one country in self-aggrandizing rhetoric. So we, of all countries, shouldn't need any more skilled workers.
It is not a zero sum game. I work for a company started by an Indian entrpreneur. A sigificant number of companies in silicon valley are started by Indian and Chinese immigrants. A significant number of researchers in the US are foreign born. I thought it was obvious that for any society there is a net gain in importing highly educated and competent people.
So you don't want even well educated people to come to the US. Then why should the rest of the world buy your products and treasury bonds? Why should global trade be conducted in US dollars (which generates demand for them)? How may Americans will lose their jobs if the rest of the world thinks the same way?
There is virtually no immigration into Japan. They are not doing too well on the employment front, are they?
Despite the political rhetoric of our day, starting a company does not create jobs. Job creation is a macro economic event. A town has a burger place that employs 10 people. Someone comes from India and opens up a burger place that employs 10 people. Does the town now have 20 people employed making burgers? Only if people decide to spend money on burgers that they used to spend elsewhere. Which means that the pizza place or the burrito place, will have to layoff or close down. If your company takes business away from foreign companies that employ foreign workers, then we could say that it transferred jobs to the United States.
If the third most populous country which has according to its' politicians - the greatest people in the world - cannot produce enough researchers, then US companies can employ the foreigners as researchers in their home country. Which would allow the extra benefit of not having to increase US population and deal with more resource depletion and trash and city rejiggering and housing cost increases, and also to save money on their wages.
If it was "obvious" to everyone then CEOs wouldn't constantly have to try and sell it would they? It's obvious that a house on the beach is a great place to live, it is the house next to the junkyard that real estate agents have to continuously try and sell people on. And the same CEOs that tell us what a great idea infinite worker/tech worker importation is also tell us how great job exportation to the third world is - for everybody - not just them and their shareholders.
Are you claiming that the world only buys US Treasury bonds because we take in lots of people from the third world? That they only trade with us because we are taking in lots of people from the third world? That the world uses dollars for international trade only because the US takes in lots of people from the third world? Can you provide some links that support the above taking place as a reward for the US taking in lots of people from the third world?
Japan - a country with one of the highest standards of livings in the world - has an unemployment rate of 4.2%. The United States unemployment rate is currently 7.7%, while California, which gets a disproportionately large percentage of immigrants in general, and tech workers in particular, has an unemployment rate of 9.8%. You might want to pick another country that doesn't take in immigrants to use as an example of why the United States should.
Yeah - when the business people and talking heads say that we need "unskilled foreign labor to do the jobs Americans don't want to do" they forget to include the phrase "for the amount those jobs pay"
Absolutely. Or maybe it should be "for the amount we want to pay". That also applies to the skilled worker "shortage". The more they can get the government to tilt the tech worker/employer supply/demand in their favor, the less they have to pay.
Would you like to exile Americans not fulfilling the above criteria as well, then?
Henriksson, of course not! No self respectin God fearing American would ever allow such thing! The again, denying millions of their fellow citizens basic health care, that kinda solves the problem in a roundabout way. At least those people probably won´t live long enough to collect Social Security and be a burden on the well off...
No.
Ding ding ding!!! +99
How does one "synthesize" hydrogen? If memory serves, Hydrogen is the lightest element in the universe, is highly reactive and does not exist in atomic form anywhere on earth (except in miniscule quantities). You can only extract it from other molecular compunds --mainly water-- using processes such as electrolysis.
I think he meant dilithium crystals.
In addition to electrolysis, there are also high temperature processes. I suppose "synthesize" was a bad choice of words by Hargraves when applied to hydrogen.
You offer only a claim that at the moment nonexisting reactor type will deliver cheap energy. Until proof exists we will discuss with real numbers and also assume that electricity from other sources (which BTW already exist) may be used to produce simple chemical compounds that could be used as chemical feedstock.
I could go on at length here about problems with building safe truly proliferation proof and production scale Thorium MSRs (and have done in the past) but will now say simply that China has dropped the completion date for its test baby 2MW reactor back again to 2020. No timescale given for anything beyond that. Assuming China actually builds it we will see if anything comes of it. Let's hope they don't just leave it to go critical again and blow itself apart a couple of decades later as almost happened at Oak Ridge. Guess they believed the hype it was safe and forgot about it.
http://www.ornl.gov/info/ridgelines/nov12/msre.htm
The USA and India have admitted testing U-233 (bred from Thorium) nuclear weapons. China hasn't admitted to it that I know of.
U233 requires special handling considerations in addition to the chemical reactivity of metallic Uranium. U233 invariably has some contamination with U232 which is a gamma emitter. Even low energy gamma rays can be quite lethal.
Actually there's a publicised method developed by Oak Ridge using the THOREX process and Protactinium-233 decay, which avoids any significant U-232 contamination. That's why multiple countries have managed to build bombs with it despite what the Thorium sales brochures would have us believe.
http://www.ornl.gov/info/ornlreview/rev25-34/chapter4.shtml
But watch the video at 14:58
http://www.youtube.com/watch?v=ENH-jd6NhRc
$50,000 back when would have done the cleanup back when.
Penny-wise and pound foolish bureaucrats said nah...
Now a bunch of newbies are touting their prowess and blaming the old guys.
We can - and do - change human behavior, with laws. And we can enforce international laws with sanctions, boycotts and bombs - unless the United States is the one not following the international law, in which case bombs is out and the other two may see bombs going the other way.
Globalization is a phenomenon, not a policy.
Globalization is not a phenomenon, it is old fashioned greed. It's having a price point that gives you an economic advantage to drive out your competition. It is also mass delusion that you can have a high standard of living, clean water, good roads, good schools, and buy dirt cheap products from a country willing to work far cheaper than you, have poor or non existent wage and hour laws, suffer environmental degradation.
You are simply wrong. It is policy. The policy that we are expected to compete against countries without wage and hour laws, environmental rules and regulations on pollution, and minimum wage. And this is OK because it isn't in my direct back yard. We are the "information economy", the "service economy", and now the food stamp economy.
Oh, and never mind the un-level global playing field? - We will not have an import tax that takes into account the cost differences imposed by our better standards so that our own businesses can stay here and pay taxes here and provide jobs here and, and, and...
The grand solution is more cheap energy from apparently non working nuclear energy sources? Yes, more nuclear waste, the red headed stepchild still ignored until we get an earthquake. Cheap, abundant fuels will make all 250 countries: a) burn more, b) burn less? Never mind Co2, never mind melting glaciers from these new synthetic fuels. More heat generating nuclear plants will cure that too, the biggest problem is that we need more of them. We need enough reactors that we can burn this new fuel instead of the old one and in larger quantities, that my friends will solve all our problems.
Wow!
Now just wait a cotton picking minute here. Globalization is international trade. Globalization is a country with a surplus in one resource selling it to a country with a scarcity of that resource.
Without globalization Japan could support 50 million at the most instead of the 128 million it supports today. Many countries would see massive starvation without imported foods and other commodities.
Globalization is indeed a phenomenon. It is just the evolution of trade between nations. It just naturally happened when bigger fossil fueled ships, aircraft and cross border trucks and trains came into being.
Free trade between nations is not a policy, the exact opposite would be a policy. That is if a country refused to allow any exports or imports that would be policy. You would need border guards at every crossing and at every airport making sure nothing of value left or entered the country.
Globalization just happened. It was exactly what one would expect to happen if a country had free trade, or even trade that was not so free. Any type of trade or travel across borders is part of globalization. So it the transfer of information across borders.
Globalization is not good or bad, it just is. It is part of the modern world and unfortunately it will likely insure that when some nations start to crash, it will have a domino effect, eventually causing a global crash.
Globalization means all nations are in this economic mess together and what affects one also affects the others to varying degrees.
Ron P.
When we are trying to deplete finite resources as fast as we can, it is pretty clear a big "oops" will happen sometime. It is too bad we as a world didn't think of this sooner, and limit population. Of course, even now, we are not limiting population.
Globalization is indeed international trade. It used to be called that too - international trade. Why then does it get a new term - globalization? Does it make the process of selling out entire industries by mass merchandisers for low, low pricing sound better. It is so amazingly short sighted that the result is predictable. Declining wages for the rank and file, profits ever increasingly concentrated at the top. They give to politicians to keep their industries protected. Yes, I call that greed, not a phenomenon, this has been easily observable to anyone willing to look, which we weren't until it bit us in the butt and then everyone goes 'wow I didn't see that coming, did you?'
Globalization to where we wholesale ship our jobs to who ever will work the cheapest "worked" for a while. I call it policy because it was. The policy of ignoring the long term problems that some knew would one day arrive at our doorstep, that was a decision, and it was made. It may have occurred over time but is wasn't a surprise to me. It was ignored, intentionally. Now it looks like mass merchandizes have eaten the goose who laid the golden eggs. Walmart is suffering.
The gaping vulnerability it leaves us with is also mentioned in this piece from a financial crisis viewpoint. The idea that we are going to somehow 'get along' for decades is not realistic. I'm not even touching the financial aspects, but war does happen, will happen. How many reactor cores will go critical during a war, how many storage pools? More reactors woohoo! Sounds incredibly short sighted to me.
I would like to continue but I really have to get back to work, more later.
D
Globalization is much more than international trade. Globalization also includes establishing a system of finance, commercial law, business practices, accounting standards, communications standards, etc. such that multi-national businesses can operate as seamlessly as possible across national borders. For example, Yum! Brands is not interested in raising chickens in China and exporting chicken parts to the US -- It is interested in raising chickens in China and selling them at KFC outlets in China.
The establishment of this system, based on Anglo-American financial standards, throughout the "Free World" was the post-WW II solution to controlling the post-War world order without the messiness of de jure colonial governance. Instead of direct colonialism, the previous relationship between the US and Latin American "banana republics" was more or less extended to the rest of the non-Communist world. US companies, including US oil companies, worked in fairly close concert with the US government to extend US economic and political domination during the last half of the '20th century. Bankers and businessmen replaced the missionaries and soldiers of an earlier age.
Another difference though, from Great Britain's example in the '19 century (see comment below), was that globalization prospered US service industries while hollowing out US manufacturing due to imported goods from foreign captive suppliers. In Britain's example, British manufacturing prospered due to cheap raw materials imports, while British agriculture was hollowed out due to cheap agricultural imports carried on British ships from farming and ranching areas penetrated by British financed and built railways.
However, the US dominance in service industries depends on legal barriers to entry by others, on greater expertise in delivering the services, and on constant innovation. Thus the desparate calls for more protection of intellectual property and for better education of the US workforce in order to compete. It is unlikely that either of these tactics will succeed in preserving dominance because information technology has lowered the cost of duplicating and transmitting information to nearly zero. Clever kids around the world can learn as much as their talents, interests, and self-discipline will allow.
The priest's power came because he spoke for god. The prince's power came because of his birth. The financier's power came because of what he owned. What is next principle that power will be based upon?
Gold and natural resources.
Better information about which way is up.
I think there's more to it than this, Ron. I would echo Merrill's comment above. Globalization is more than just international trade, it is unrestricted international trade. What in many respects may seem like "free trade" isn't really, because international currencies are involved. And currencies are manipulated. This is why the Chinese Yuan can remain low despite the fact that China's the one who's manufacturing all this stuff and should therefore be a superpower with a strong currency.
The current global monetary system is based on the SDR -- Special Drawing Right -- which is a basket of currencies the trade surplus nations buy to balance their accounts. The SDR is composed of the Dollar, Euro, Yen and Pound. This is how the US and UK can continue to run such a huge trade deficit for so long. The SDR is basically the instrument the western banking cartel (the BIS -- Bank for International Settlements) has used to extend the western Anglo-American empire around the world. And China goes along with this. It buys SDR's to keep its exports up -- to keep Americans consuming the products it exports.
I'm not a proponent of free trade, but at least if we are going to have it, then let the currencies float so the countries can equalize a bit better. If this had happened then the Yuan would have risen and the dollar dropped decades ago to more sane levels, and the drain of manufacturing from the west to the east would have slowed and stopped. Westerners would have had to accept a lower standard of living as they would be brought down by a billion poor Chinese competing with them. But at least this would have provided the market signals that the world is not a prosperous place anymore and would have killed consumption in the 1990's when it should have (as I think we'd all agree here), when the world would have still had a chance to maybe move towards sustainability. Instead, the market manipulation allowed the western countries to continue to live under the illusion of prosperity, which was all instead a facade due to the SDR-facilitated perpetual trade deficits. Instead of developing alternative energy and powering down, we focused on buying SUV's and participating in real estate bubbles.
The problem here is that this SDR-based global monetary system is an unstable situation because we now have a combination of 1)unrestricted trade, and 2) currency manipulation, which combine to stretch the rubber band, in an era where the limits are being tested due to resource shortages constraining growth and causing debt to spiral out of control. Therefore, the fundamentals of our current situation are not being expressed in the markets and this always leads to a gradual build-up of unsustainable flows that eventually break the dam. Basically, the existence of the US and Europe, and Japan, depend on a single market manipulation technicality. When this finally blows up in the coming financial collapse, then those trade flows will end. There will be winners and losers in this, and China will come out as a net winner because it is accumulating the world's remaining gold supplies from western central banks. But it won't be all rosy there, because its exports will tank because the western world's currencies will collapse. This will cause Chinese unemployment to go up, despite the fact that the Yuan will go up in value. In fact, one of the reasons most of the world's countries are competitively devaluing their currencies is to try to boost their employment levels. They are also doing it as a way of repudiating unsustainable debt levels.
So basically, it's true that Japan is being propped up by its manufacturing exports and probably couldn't feed its own population without those. And the UK will be a basket case Malthusian Collapse when this transition happens (I'd get the hell out of that country ASAP, to anyone still there). America will also suffer, although it can still feed itself and it still has decent oil production and lots of coal left. China doesn't have enough natural resources to support itself and when international demand for manufactured goods falls off the cliff then it won't be able to pay for resource imports (it, like the US, imports half its oil) via manufacturing exports. But it will be able to pay for them with gold.
So the fundamentals you explain above how Japan can't take care of itself are true, and this fundamental will soon become reality. It's scary when you think about how bad of shape the world is in today, and the current financial ponzi scheme is the only thing propping it up. Few countries want this to change, because it will involve massive social upheavel form one corner of the world to the other. But change it will, violently and quickly, basically when China decides it's time and it's hoovered up all the world's available gold supply. Globalization, in an environment of free trade + currency manipulation, is the main culprit responsible for this mess, and the reason why the fundamentals of resource depletion have been mostly hidden for so many decades.
Free trade is a myth, the strong always give orwellian names to the deals they strike with the weak, eg. US & EU ag subsidies never have been reduced as promised, Capital roams free and near-taxless while people & liability are held by borders.
International trade is good, free trade neoliberal globalisation is corporate racketeering is bad.
"never mind CO2" ??
Liquid Fluoride Thorium Reactors (LFTR) actually release NO Carbon-dioxide (CO2) into the atmosphere at all. And use of LFTR can actually lead to a major reduction in our existing nuclear waste problems, because they are able to "burn" most of the currently stored nuclear waste from conventional nuclear reactors, to not only eliminate large volumes of problematic waste, but also to produce useful electricity in the process!
And it is well known that LFTRs produce relatively little nuclear waste of their own, and what is produced is dangerous for far shorter periods of time, compared to the waste from traditional reactors. This small amount of waste material is a function of the very high efficiency of LFTRs in using Thorium fuel (versus the wasteful "Once-Thru-Only" variation of the Uranium fuel cycle, as practiced in the USA). It's been estimated that using proven LFTR technology the entire lifetime energy requirments for one person (including all transportation) could be met by an amount of Thorium smaller than one ping-pong ball (one study said just half of one ping-pong ball could do it!) AND this was based on average per person energy usage by Americans in recent years.
Liquid Fluoride Thorium Reactors (LFTR) actually release NO Carbon-dioxide (CO2) into the atmosphere at all
Rather easy to do with non-existent commercial reactors producing civilian power.
Now, what things WILL be "allowed by law" into the atmosphere from operating LFTR plants?
because they are able to "burn" most of the currently stored nuclear waste from conventional nuclear reactors, to not only eliminate large volumes of problematic waste, but also to produce useful electricity in the process!
http://fairewinds.org/content/thorium-reactors
And it is well known that LFTRs produce relatively little nuclear waste of their own, and what is produced is dangerous for far shorter periods of time, compared to the waste from traditional reactors.
http://www.forbes.com/sites/energysource/2012/02/16/the-thing-about-thor...
It's been estimated that using proven LFTR technology the entire lifetime energy requirments for one person (including all transportation) could be met by an amount of Thorium smaller than one ping-pong ball (one study said just half of one ping-pong ball could do it!) AND this was based on average per person energy usage by Americans in recent years.
So?
Part of the issue the anti-PV people point out is electricity isn't a dense storable energy like oil.
An unanswered question:
Exactly how do these fission plants avoid the failure modes of sleeping security guards, earthquakes, and even war?
And your cost estimates, for a reactor technology that does not yet exist, is based on what?
What is service life on these reactors ... cost of start up inventories of uranium or plutonium (and advanced fuel cycle development on national or international basis), will they be carrying fully liability against plant accidents and sodium leaks, who covers development costs for a first of a kind technology (investors are already turning away from uncertain costs and build times for conventional plants), what is the burnup rate, how does the recycling plant work and at what efficiencies, etc., etc.
None of the costs are known for such a plant. Saying it can beat coal, with new conventional plants coming in at £165 per megawatt hour, seems like a bit of advanced marketing and hyperbole, references to your own book notwithstanding.
Well as FiniteQuantity pointed out we can change human behavior with laws. And we can do so also with the promise of reward or the threat of punishment. I think what you really meant to say was: "We can't change human nature." And on that I agree.
I am not going to enter the thorium debate. I simply don't know enough about the subject to argue it one way or the other. But I have, in the last few years, gone from pro nuke to anti nuke simply because I have become a believer in the "fast crash" scenario. And if we do have a fast crash many nuke plants will likely just be abandoned. This of course would be disastrous for any humans and wildlife for many miles around and for many years into the future.
Ron P.
Thanks Robert. Although the subtitle to this blog is 'Discussions about Energy and our Future', there is quite a blind spot regarding nuclear. Which is very likely to be our energy future. The technical level is high here regarding fossil-fuels, but on nuclear uhhh .... a good example is found in some of the responses to your post.
It is not cheaper and it does not exist.
Current nuclear technology is more expensive to build than anything else. You think a future, undeveloped one, that needs fuel breeding is cheaper??? This is nonsense. There is a reason there are no thorium reactors after decades of research: they are not simple and not cheap.
On the other hand solar PV is now really cheap, wind is really cheap. Both are cheap and simple. Energy storage (and using it in transportation) is our huge problem and thorium does not solve that. Cheap electricity we already have.
It maybe also a little bit political and a shift regarding what "risks" we (the puplic opinion) accept.
Regarding nuclear and nuclear waste it's also to some degree hysterical. "Oh Fukushima, i will not go to Osaka this year - to dangerous." "What, in the Chinese coal industrie tousands are dying every year? Must be because of China. How cares, anyway i buy this cheap plastic consumer-piece from China - i'm soooooo greeeeen."
In Nature for 12 December 2012 there is an article on proliferation hazard with thorium reactors, written by four British nuclear engineers. The feasibility of making a gun-type bomb with U233 was investigated in the 1950s, and a device was made, but yield was low because gamma radiation from U232 contamination in the U233 target fouled up detonation.
The article describes how to produce U233 without significant U232 contamination. The key is that the decay chain (chains?) that produce U232 are fast but the decay chain for U233 has one step, decay of protactinium 233 to U233, with a half life of 27 days. It is difficult to separate U232 from U233 but quite straightforward to separate Pr233 from U232--two methods are outlined, step by step, in the article. Once the Pr233 is separated from the other products it can be left to decay into quite pure U233.
Thorium 232 can be irradiated in research reactors or small power reactors, and the decay chains set going.
That's Pa233 not Pr233.
It seems to me that for some of these problems (#5-8) you are looking at results too narrowly–from the point of view of an OECD country, even though those countries are not typical. Those same "problems" are the wealth pump working in reverse as the U.S. empire begins its decline.
If you live in an OECD country, and you see globalization touted as the way to solve almost every problem, you start wondering about the truth of the story you are being told.
From the point of a country that is now getting more, everything (at least temporarily) looks rosy.
Perhaps we need a global government. Not a U.N., but an actual government to come into existence.
It could be that part of the reason globalization is an issue, is because there is no one entity responsible for: accountability, governing, and enforcement (as mentioned in the article).
It would have to collect taxes, have a constitution, army, etc, ...and all countries would be under it.
It may seem a bit of a sci-fi idea, but it could really be done. After all we already have governments at the city, county/burrough, state, and country levels, oh and the EU too.
I was just going to say, those are positive aspects of globalization! Money flows to poor countries, and the people there enjoy a better standard of living, better health, etc., and this is supposed to make me against globalization?
Sure, where I live it gets a little bit harder, but most of that is a distribution of wealth issue anyway. If billions of people now have a better life, how am I supposed to complain?
I think it would be better if we saw it more fully as what it is - globalization is the spread of industrialism, which is a lot less rosy saying "poor people have jobs and money". We are exporting a way of life that is destroying the world as we speak, and in exporting that way of life the way we are we are setting up these poor countries for many bad outcomes, despite the rise in standard of living. China's horrible pollution problems, and the accelerating destruction of the oceans, are two examples of serious damage that is caused by exporting industrialism. The most serious one, of course, is that we are setting them up for a fall as fossil fuel prices rise - getting to middle income status won't mean much if it all falls apart right afterwards. Exporting a car centric, fossil fueled lifestyle can only end in tears.
The way I see it, the problem is not globalization per se, but the rise of multinational corporations and the spread of industrialism. Currently the world is in the thrall of an ideology where the natural world exists to be exploited, and short term material gain is more important than long term health and sustainability. If seven billion people have that attitude the end result cannot be good.
>> I was just going to say, those are positive aspects of globalization! Money flows to poor countries, and the people there enjoy a better standard of living, better health, etc., and this is supposed to make me against globalization? <<
Totally agree. Points 5,6 and 7 are very US-centric. However, any benefits to the USA (apart from cheaper stuff at WalMart) do seem to be going to the top 1%...
"any benefits to the USA (apart from cheaper stuff at WalMart) do seem to be going to the top 1%..."
I don't think that is only happening in the US, it is a function of globalization in all of the countries where labor can be exported to another place where labor is cheaper. This is the other "race to the bottom" where corporations can destroy labor organizations, and thereby, any leverage labor has to demand a larger share of industrial output.
As investors gain more of the financial benefit of industrialization they gain political power, which they can use to increase gain more economic benefit through a whole range of governmental policies.
Globalized industrialization leads not only to environmental destruction, it is accompanied by feudalism.
How would globalized industrialization lead to feudalism. Not sure feudalism would be worse than a seriously underpaid lower class. Our industrialized system seems to lack much reciprocity. As soon as the owner can find a cheaper source of labor, you're done.
Globalization gives rise to monopoly power (not true competition between small and large companies operating on a level playing field). It makes us all into paupers (consumers) and not owners of our own labor who can bargain for fair wages. Labor becomes an empty commodity, a replaceable item like currency, that merely circulates the globe in search of the lowest wage.
Guilds or trades are a more advanced form of capital, where cooperation and social life is given respect and due merit. People have rights, they are not abstracts replaceable cogs in a machine. That one country is able to take away the rights of workers doesn't mean that such country should be favored by globalization and become a staging ground for quicker and unsustainable rates of wealth generation. We tried that with slavery and other forms of colonialism, where rights were unfairly distributed to classes of people and regions (environmental protections too).
Free markets, yes, global markets, yes ... but not at the cost of the social contract (and basic human rights and dignity that we enjoy at home and through our political associations and constitutions). Typically, we enforce fair labor and environmental standards through tariffs, bilateral agreements, import quotas, etc. Where these are absent we get capitalism run amuck and even direct violations of basic human rights. That consumers at home get a benefit from this (in the lower cost of goods) seems to be a particularly narrow and partial way to see the issue.
It's not clear that's true. For example, Europe's Gini coefficient of wealth inequality has stayed fairly low, increasing only slightly in the last 5-10 years (from 29 to 30.8 in EU-15 since 2000, and from 30.6 to 30.8 in EU-27 since 2005).
Europe is not doing very well, though. A lot of what it has is available only because of current laws. Without economic growth, it will be impossible to give the pensions that are planned and the other big benefits to workers.
I think with Europe we need to wait another couple of years, to see the true fallout of what is happening now. I expect the Gini co-efficient will be higher.
Europe is not doing very well, though. A lot of what it has is available only because of current laws. Without economic growth, it will be impossible to give the pensions that are planned and the other big benefits to workers.
I think with Europe we need to wait another couple of years, to see the true fallout of what is happening now. I expect the Gini co-efficient will be higher.
Perhaps a walk on the wilder side of our planet is in order.
You need to visit some of the places where billions of people are not now nor will they ever benefit from globalization! You need to see up close and personal the negative side of globalized growth. The poverty, misery, and ecological devastation that is caused by this great thing call global economic growth. The benefits tend to acrue to a rather small minority of wealth hogs...
For the rest it already ain´t all that peachy and I´ll bet it will only get worse!
FM – “You need to visit some of the places where billions of people are not now nor will they ever benefit from globalization!” Been there…seen that up close and ugly. Been many months since I got to rant about Equatorial Guinea, that small island nation snuggled up against Nigeria. Your statement got me thinking: EQ may be THE poster child of the worst case of imbalanced globalization that’s condoned by not only the U.S. but all those tender hearted members of the EU.
They export one local product to the globe: energy…oil and LNG. Half comes to the U.S and the rest to the EU. With their huge ff income and small population they have not just one of the highest per capita incomes in Africa but on the entire planet. But because they are controlled by a well documented homicidal dictator the vast majority of the people live in deplorable poverty even by African standards. Women carry pots of water on their heads they fill at a fountain in the city center…in the capital of the richest African nation. I was told by a non-EQ African that the country’s wealth and power are controlled by an extended family of 300 or so. Lots of examples but here’s just a couple. The penalty if a citizen is caught discussing EQ politics or the oil export biz with a foreigner is death. And now the govt doesn’t even have to waste money on a trial: El Presidente changed the constitution to allow him to order execution without a trial. But as he explained it: since God communicates directly with him if it’s OK with Him then who can complain?
BTW you won’t find much on a net search about the EQ. The last investigative reporter that snuck into the country as a tourist was caught and had the crap beaten out of him and deported. It really surprised me that he just didn’t disappear without a trace. I was told that happens a lot in EQ.
I did several hitches working offshore EQ. I know what the situation is on the ground there. The U.S., with I suspect the full support of most African govts, could rescue the citizens without firing a shot. Except for El Pesidente’s body guards the rest of their forces are armed only with machetes. Park an aircraft carrier a mile offshore and invite El President et al to hop on Swiss Air and retire with his $billions in Zurich. And we could then steal 70% of their export revenue and with the other 30% enrich the lives of the people beyond their wildest dreams. But why should we or the EU upset the status: we get the oil and there are no environmental regs. As witnessed by the $30 million/year of NG flared from just the one platform I worked on. The operator offered to pipeline the NG to the shore for free but El Presidente turned the offer down. Easier to control the population when they are starving.
BTW there’s a movie, The Dogs of War, that so tells the story of EQ even though it was made before El Presidente took control after assassinating his uncle, the first president for life. Even spookier: there was an failed attempted invasion very similar to the one that succeeds in the movie. And guess who organized the real failed invasion: Margaret Thatcher’s son.
Perhaps, but it's certainly true that international trade has helped raise the standard of living for many hundreds of millions of people. It's had a huge effect in China (1.4B), a smaller but significant effect in India (1.3B), and a substantial effect in much of the rest of SE Asia. Indeed, a friend of mine who was fashionably anti-globalization had her mind changed by talking to the everyday people she met in Vietnam and Cambodia. China alone has lifted hundreds of millions of people out of poverty in recent decades, in large part with the help of globalization.
That's not to say it's a panacea -- it's not, it's just trade -- but that trade is helping to raise the standard of living for such an enormous number of people that complaining about how it "raises our gas prices" reads more like satire than a serious argument.
You ask the wrong questions! The truth is that these billions of people [in the "3rd world" and also the EMA of our days] would not be alive today whether there was never an industrial revolution and the advantages of modern science and medicine taking of in Europe around 1600.
There would be maybe 200 million people in Africa today and not > 1 billion and counting. Same for South-East Asia etc. Would the world be better of? Maybe, after some of you're rosy conceptions of "nature". Nevertheless the entropy in a closed system is always increasing and earth will be cocked up anyway in about 2 billione years +/- 1 billion years from now. Who says that our industrial civilistation (and their suggestet collapse) doesen't lay the ground for a new round of evolution in the ever-ongoing entropy catalyst-support of self structering sytems ("life")? Is it good or bad? Should 5 billion of the 7 billion people that life today have never been born? Is it better to feed 10 Million Somalis now [because we are capable for now] and accept that maybe in 30 years 30 million will die by famine [because there is nobady left then to help these people]? Should we stop researching the fusion and instead help "the poor" with that money? Many people would agree. So many questions, so little knowing ... The entropy is counting ...
And please - don't say something like "after mankind all nature will be death" - nope! This planet had seen greater energy-absorptions (P-Tr) like we are ever able to unfold in our current state.
While the Renaissance certainly laid some of the scientific groundwork to allow the industrial revolution to commence it was the ubiquitous access to coal and later other fossil fuels that made it really take off. Without fossil fuels, it is highly doubtful we would have 7+ billion people on this planet today. We certainly would not have had a green revolution or anything resembling modern agriculture.
It seems we humans were fortunate, or perhaps unfortunate to have received a large inheritance of easily accessible and very dense reserve of energy in the form of fossil fuels. However, much like yeast falling into a vat of sweet fruit juice, we have exploded in our population, are using up what remains of our fossil fuel inheritance faster than ever and are now starting to choke on our own waste...
We have yet to prove we are any smarter than yeast!
Ironically, the key event is probably the Black Death, about 1350. This epidemic reduced global populations by about 20% and European populations by 20 to 70%, depending on locale. This impulse function set in motion the sucessive waves of economic development and social change, punctuated by periods of total warfare and imperial expansions to relieve internal stresses, that have characterized subsequent European history.
http://en.wikipedia.org/wiki/Consequences_of_the_Black_Death#Social_and_...
Interesting point! When society is always living at the edge of its limits, it is hard to do very much.
"Secular Cycles" by Nefedov/Turchin is a very good book regarding this topic!
Thanks for the reference. I found the Introduction and Conclusion chapters online. Their discussion of the role of elites in the sociopolitical domain seems interesting, but I need to read more.
Prior to WW I, the European elites had reached some degree of cohesion and integration. They spoke the lingua franca. They traveled widely. They studied at each other's universities. The nobility intermarried. Railroads, telegraph and steamships had knit together their businesses in a web of trading relationships. In other words, the elites then were "Europeanized" in much the same way that the elites are now "globalized".
The question is whether the globalized elites maintain cohesion in the face of increased social stress, or whether they fracture and develop rivalries. If they remain cohesive, then society becomes increasingly stratified, with the members of each strata firmly keeping their foot on the neck of the next strata below. If they fracture, then we have a replay of WW I & II, but with an entirely new set of weaponry.
They're already fracturing. Just look at the US Congress.
It's unlikely that the US will break up. Of more concern is whether elites in various regions of the world will develop regional blocs, inter-bloc competitions and rivalries, and eventually go to all out war.
The US has dissolved 2 times before - why not again?
It's not in the interest of the Military Industrial Complex.
Prior to WWI their was some kind of "European integration", thats true.
But the main driver was the emerging of the German State, which only occured 1870 after the German-French war. Afterwards, Germany rapidly rised as the unprecedented continental power in Europe, only counterbalanced to some degree by the British. German was the scientific language of the worl before WWI. All the Ashkenazim (Einstein, heinrich Heine, van Neuman, Oppenhaimer has German-Jewish roots) which later emigratet to the US of A where at this time lifing and teaching in German empire or in influenced region like Eastern Europe.
http://en.wikipedia.org/wiki/Ashkenazi_Jews
German settlements at this time reached gradually till the Ural all over Eastern Europe and the Balkan. After WWI and II Germany was stripped of 40% of its terretories and up till ourdays most Germans moved backwards to the German State where their ancestors emigratet from about 1100 onwards.
http://en.wikipedia.org/wiki/History_of_German_settlement_in_Central_and...
But Germany laked global influence and was acting impolitic as ever [as today]. This finally combined with a untalented leader [Kaiser Willhelm the II : "I belive in the future of the horse, the automobile is temporary trend" - he was so much before his time :-)] finally manifestet in WWI and II and brought Germany to the knees - which was right given the sins of the "Holocaust".
Earlier in the 19th century England and France were more important in science, Paris and Vienna were centers of arts and culture, and due to the political and cultural influence of France under the Bourbons, French was spoken in the courts an universities throughout Europe. By the 1840s we see the beginnings of mass tourism by the bourgesoise organized by Thomas Cook and the establishment of "Alpine clubs" for mountaineering.
I view the events of 1870, with the unification of Germany by Prussia and the re-unification of Italy as a reorganization of power in a Europe which had already been changing. Germany under Bismark is sort of parallel to China under Deng Xiaoping, in that an important economic region of the world was reinvigorated and rose to great power status. The disintegration of the Soviet Union is similar to the Austro-Hungarian Empire, which became increasingly disjointed along ethnic lines.
The US bears resemblance to both the British Empire and the Austro-Hungarian Empire, the two greatest powers after the Napoleonic Wars (settled at the Congress of Vienna). It's economic and military predominance resemble Britain's. It's sclerotic political establishment and ethnic patchwork resemble Austria-Hungary's. And due to the immigration of large numbers of central European artists and academics, its academic and cultural institutions are more European than British.
Let us say that one writer, one very famous writer, saw and anticipated what was going to happen. Let us say that he was alive in the late 1500s in London.
Let us say that he wrote the famous line "Juliet is the sun"....
Let us say that his works circulate values (in a hidden way) that are more durable than those values circulated by market forces.....
In that sense, this long-dead writer can be said to be more clever than yeast.
There is in theory the possibility of living sustainably, if one is not depending on fossil fuel resources and imported goods from around the world. Population control has to be part of this as well. Back years ago, quite a few countries did keep their populations down (sometimes by infanticide), recognizing that it made no sense to allow population to grow above the number it was possible to feed. As soon as globalization comes in, any idea of limits seems to go away--at least until the limits suddenly hit with a vengeance later.
There is in theory the possibility of living sustainably, if one is not depending on fossil fuel resources and imported goods from around the world. Population control has to be part of this as well. Back years ago, quite a few countries did keep their populations down (sometimes by infanticide), recognizing that it made no sense to allow population to grow above the number it was possible to feed. As soon as globalization comes in, any idea of limits seems to go away--at least until the limits suddenly hit with a vengeance later.
No, the problem is exponential growth. Until that is solved, nothing is solved.
Globalization in itself is not a problem, there could be a no growth globalized economy without a problem. Globalization only spread exponential growth from Western countries to the rest of the world. Yes, even population growth was spread from the west, via the green revolution (industrial food production).
Since there is absolutely zero indication that we will solve this problem, nature will solve it for us. The solution is always the same for exponential growth: COLLAPSE. Like it or not, there is no other way out. You can mitigate it in some geographical locations, but overall it will be very bad for people.
Oh, so it is so that globalization just happened to develop, and that if it was somehow scaled back everything would be fine. Hmm. Well, I think I'll let someone who spoke of and predicted globalization over a hundred years before it took place speak:
It is a nice thought, to make a few adjustments and the machine can just work like you want to work again. But it cannot be fixed, because it isn't broken. It's working exactly like it's supposed to do, but it's just as it's said: The world is finite. And no politician can do anything except prepare for a soft fall when the economic and political system they work in presumes infinity. The only option is overthrowing this system and substituting for it a better one, one that can work in a finite world.
reading this brought to mind Easter Island .......
Forbin
...and Easter Island reminds me of what I am learning from the book "Collapse" by Diamond, of which I am 1/2 of the way through in reading ; )
Very impressive quote in this context! It's quite amazing that these century-old, over-the-top predictions have largely come to pass.
I've always thought that Capitalism is the most successful economic system as long as your primary goal is to consume resources as rapidly as possible. As we, per force, transition toward a goal of husbanding resources we'll need some other system to organize things.
Unfortunately, "Communism" as a political ideology was a complete fiasco and now has too much baggage to be a useful economic model today. Personally, I lean toward Communitarianism as a philosophical model.
For a more practical, political agenda in the US it's really hard to beat the Green Party Platform.
Nice quote. I think Marx was wrong about something, though:
It's not capitalism but industrialism that does that. In the communist countries, you had all of the rapaciousness, all of the urbanization, all of the assimilation of groups practicing traditional lifestyles, and all of the same modes of production in play. Of course, Marx was in favor of industry, despite how the above reads; he merely thought the benefits could go towards different people. Yet communism just ended up copying capitalism, because the underlying ideology was the same.
It does bring up the question, which came first, globalization or industrialism? Marx sees world trade as undermining feudalism and birthing capitalism, which then births industrialism. But perhaps it was the rise of industrial ability - the ability to build ships that can conduct global trade, the ability to mass manufacture firearms, etc. - that led Europe towards imperialism and globalization. Marx's thesis seems more likely, but it shouldn't be accepted without investigation.
Ahh, now I'm making a mess of it, because I've brought imperialism in there too - but you sure can't unwind these threads, like the East India Company and the British Empire...
You are not making a mess of it.
England ramped up coal production in the 1500s in response to the inability of depleted forests to keep up with the fuel needs of a growing population. The coal was shipped by sea (the geography was perfect, with the coal near Newcastle in the north, where there was a river and the destination, London, with great access to the sea.)
Shipping developed in England because of coal. This is not my thesis, by the way, but from a good book, Coal:A Human History, by Barbara Freese.
Coal and fossil fuels have been great "enablers", making it possible for man to satisfy all desires and have all his dreams come true...at the expense of the planet.
But nothing short of worldwide depletion and world economic collapse could possibly convince people to change. People have such ambition, drive, social skills, ingenuity......they would not have it go to waste, they cannot help themselves as they reach for higher summits....trips to Mars, the fashions in Paris, strawberries in December.
A few weeks ago a senior mechanical engineer at work who is nearing retirement said that if you can dream of it, it can be done, some way.
We are living in mass delusion.
Exactly. It's not capitalism or communism or whatever other political ideology someone feels like praising or demonizing. It's industrialization, plain and simple.
the world trade at the scale seen since the industrial age was only made possible by... the industrial age.. indeed it could more accurately be seen as part of the same phenomenon of industrialization itself. 'imperialism' is yet again just another aspect of the spread of the Machine to every inch of the globe. Those who surfed the wave were the 'imperialists' and those who got rolled under, a bit less fortunate. The wave has washed the whole world, though, and the 'imperialists' have found themselves getting run over by their own monster plenty of times. That's how it works.
I did not read anything in Gail's thread that even implied that globalization just happened to develop. I don't even know what you are implying with that statement. Globalization did happen but not by happenchance. It was the natural result of diplomacy and the ability to ship large amounts of goods over the oceans and between nations. Globalization was the natural result of the evolution of governments, economics and commerce.
And I did not read anything in Gail's thread that even implied that if globalization went away everything would be just fine. But everything she did say is true. Globalization, like fossil fuel, has brought with its blessings, a devil as well. That was the message I took from her post.
Ron P.
One problem, I think, is that people were sold so called free trade agreements and the WTO as a positive sum game. It was sold as benefiting both the developing world and the U.S. That is, it was promised that everyone would get richer due to comparative advantage and the overall efficiency and productivity of the system would be increased with the economic blessings flowing down to the J6P's of the world.
For a lot of reasons, this ain't necessarily so and Gail has documented the atrocities. Maybe it is a bit U.S. centric but perhaps a lot of people would have made different decisions years ago if they could have predicted what has actually happened. Some did, but they were considered naive freaks. Remember the big "sucking sound"? Well, Al Gore kicked his ass in a debate and besides, he had a high squeaky voice and, yes, he was sort of a freak.
One question is how much longer will the Amercan people be duped by the promise of globalization. It is rather clear after all this time that trickle down is a sham and that the overwhelming percentage of the benefits have gone to the uber, upper class, the Romney's of the world.
I don't think we can rewind the clock by simply dismantling globalization but part of the bargain should be redistribution of income away from those who have primarily benefited to an obscene amount.
Well, the last wave of globalization was mass production methods developing in emerging economies like India and China, which China has taken up and developed even more so than Europe and the U.S, and then exported its production to other countries.
Unfortunately, resource limits have been hit, with both the U.S having reached peak water some time ago, and China's situation is even worse.
http://ga.water.usgs.gov/edu/wateruse-trends.html
http://www.forbes.com/sites/jackperkowski/2012/04/23/quenching-chinas-th...
http://www.chinadaily.com.cn/cndy/2013-03/05/content_16276240.htm
I can't find U.S water use in 2010 from USGS, despite the previous trend of reporting it every 5 years. Apparently the report is delayed, and the next report is in 2014.
Peak water?
I agree water scarcity is a severce problem because of many countries excedding their carrying capacities through fossil fuels - Saudi Arabia cames to mind - i strongly regret this as a "global" phenomen.
For example in parts of Germany there is allready trouble because we do not use as mutch water as 20 years ago and the infrastructure (canalisation, sewage plants) was build for a much larger population, which simply is no longer there and will never return. In parts of East and Central Germany (Ore Mountains, "Harz") the population is down 1/2 since 1900.
According to the USGS document peak water usage in the U.S was in 1980. Any additional use or industrial capacity is due to sharing what is left, although obviously Americans (and Canadians) have high water use rates.
Peak water and not having enough water are different issues.
yes, I don't quite know what happened in Germany .. I don't know what trouble you are referring to (?).
As I read your comment I kept mentally susbstituting 'THE BORG' for bourgeoisie, resistance is futile! >;-)
But what is more telling is:
The jet airplane and the fiber optic network ultimately doom the bourgeoisie monopoly on information. Information wants to be free.
Ah, one more example of a few smart (if obvious) observations mixed up with some absurdly wrong conclusions!
The author keeps getting stuck on some hang-up he has about the 'bourgeoisie'... whereas the real source of everything he complains about is the combination of industrial technology and the resources to feed it. If those conditions are met then sooner or later an industrial revolution like the one we saw, will happen. Trying to divert this phenomenon into some kind of gripe about different social strata (usually a prelude to someone's attempted riling up of other people to fight for the political hegemony of those stirring up the trouble) then reduces the piece to stinking demagoguery.
The Machine is easily understood as a physical phenomenon, politics and social forces don't really stand a chance against it and are not necessary to understand it.
You're mixing it up. Politics and social forces created the machine, and only those who understood the machine they were creating.
13. Globalization discourages large-scale warfare, allowing populations to grow unimpeded.
Larger nations and regions joined at the global economic hip simply can't afford to go to war with each other, and free global resource trade means they don't need to, at least, not yet. Only smaller countries that actually consider their resourses theirs (ie: Iraq) need to fear having their populations decimated. Smaller proxy wars are considered good for business.
Of course, the lack of large wars allows the world population bubble to grow further. Since there are still limits somewhere else, we still have a problem--but it is a bigger one--later.
Even the most costly and horrific war in our history, the second world war, was unable to stop population growth even temporarily. World population is now growing much faster in absolute numbers per year than it was in WW2 so even a war on that scale would barely dent population growth.
I think it further highlights the fact that even WWII didn't touch most parts of the world. In countries where there was fierce fighting like for e.g. Russia, the population loss was to the tune of 12%, for Ukraine it was 14% and for Poland 16%. And remember that most of it were young males in the prime of their age.
http://en.wikipedia.org/wiki/World_War_II_casualties
A WWII like war in Asia and Africa would reduce the world population dramatically.
No offense, but are we supposed to be hoping for this?
If anything, that's a major plus. The problem as I see it is that women's liberation and the fall in birthrates down to replacement level that almost inevitably occurs lags behind the other health measures. So you get a huge jump in population as better medical care becomes available, perhaps followed 20 years later by women's emancipation and a drop in birthrates.
War, along with disease, famine, poverty, and environmental destruction, can sometimes lower populations, but you can achieve the same result in a much more positive and lasting way with women's emancipation.
Well said!
It accelerated it. The reconstruction phase after World War II led to the largest increases in resource extraction ever.
Does (did) just the threat of large-scale conflict act to throttle growth? Are nations and marketeers who percieve a much lower threat of global conflicts more free to take risks, exploit markets and open relations with former potential enemies? Which is a greater driver of consumption, nations on war watch, or free, open and more peaceful global markets?
"Which is a greater driver of consumption, nations on war watch, or free, open and more peaceful global markets?"
The answer that comes to my mind is, "it depends on what you're selling." If you're selling arms, then you can make a LOT of money on war. Military-industrial complex is the phrase that comes to mind. A substantial part of the US economy is based on going to war elsewhere, or preparing to go to war elsewhere.
On the other hand, if you're talking about Somalia or Congo, consumption is probably lower than if they were free of conflict.
Are you seriously trying to argue that discouraging large-scale war is a bad thing? Are you trying to make toxic associations between misanthropic wing-nuttery and peak oil?
For anyone who's ever been frustrated that peak oil often gets dismissed as the domain of a bunch of misanthropic cranks, here's your problem. This kind of statement doesn't make you "brave" for "speaking hard truths"; all it does is mark you as someone prone to grandiose but unrealistic statements, which substantially undercuts anything else you might say.
One could say that misquoting another's comment undercuts your post; it's the Pitts. Further, have we intentionally 'discouraged' large-scale war or just found it preferable to fight smaller ones; perhaps it is what it is; a knock-on effect of globalization. Would you insist on the same moral assignations to exploring the effects that modern medicine and antibiotics have had on population? What about animal population explosions due to the elimination of predators? I ask because it seems like a convenient way to avoid discussing things we are uncomfortable with. I submit we're past the point where we have the luxury to stifle considerations of inconvenient truths.
Your post, above, makes the point that globalization has lifted many people out of poverty; a good thing until one wants to discuss if poverty is an important part of the human condition, human evolution, or a necessary limit to humans overshooting their resource base. What then, Pitt? We're running out of room while shoving aside millions of other species; pushing them into extinction forever. Try assigning your morality to that. Unless we explore and come to terms with the reasons (all of them) that this process is occuring, we have a moral dilemma that squashes all others. These things are what they are, and don't care for, or need, our approval.
I've not misrepresented what you wrote in any way.
The article was titled:
Twelve Reasons Why Globalization is a Huge Problem
It then provided a list:
1. Globalization...
...
12. Globalization...
You then provided a thirteenth element to this list, clearly formatted so as to fit in:
13. Globalization discourages large-scale warfare, allowing populations to grow unimpeded.
You clearly added "discourages large-scale warfare" to the list of "reasons globalization is a huge problem"; all I did was summarize the situation for brevity.
My intent was to point out that that sentiment will not be viewed kindly by most people. Regardless of what you had intended to convey, what you actually wrote sounded like a misanthropic desire for mass violent death. If that wasn't your intention, I urge you to consider your phrasing and write more thoughtfully.
Where I am wing-nuttery is already here.
"Globalization discourages large-scale warfare, allowing populations to grow unimpeded." is not the same as "Globalization is a Huge Problem...[because it] discourages large-scale warfare"
They are not even close!
Do you have a serious reading comprehension deficit or are you just trying to pour gasoline on the fire?
Whatever, it's doubly wrong. There's a counterexample to the claim that globalization discourages large-scale warfare: World War I. And warfare does not appreciably affect the trajectory of populations; they return to trend quite rapidly.
World wars may have been just globalization growing pains,, and can we know what the population and cumulative consumption would have been without wars?
Human civilization is a malignancy with unending growth and the perpetual life of corporations and individuals as implicit and explicit goals. Globalization is a metastasis of the industrial cancer, the HeLa people on Wall St. and other exchanges cheering for more, more, more, unaware they cheer their own eventual bankruptcies and extinctions.
We create new tools on the run, hoping to expand the resource base for the growing cancer. Soon we will attempt to control the body/ecosystem that we are destabilizing (a euphemism for killing), through geo-engineering. Each new energy source has been greater than the last allowing the tissue culture dish to get larger and larger to accommodate the natural and unfortunately malignant growth in human numbers. The human population and economy always grows to the edge of the culture dish leaving little or no excess energy to accommodate transition. The pressures of human economic and population growth continue to push against the edges of the dish waiting for the next technological tools to unlock yet more resources. When that technology fails to deliver the malignancy will scour the previous energy landscape for those resources missed on the first pass and when those are depleted, the human cancerous endeavor will rapidly deteriorate within the toxic environment it has created for itself.
Could any other organism have developed the cooperative social behavior, information-manipulating mind, and tool manipulating hands to allow unrestrained cancerous expansion? Ants can build infrastructure, go to war, enslave other species, and grow fungus crops but none of them can make the leap to tool development that allows consumption of all. Is globalization a problem? Only in that it allows an even more rapid consumption of the body/ecosystem. The cancer spreads. Death or recovery, do we really have a choice?
Cancer is indeed the analogy that comes to mind with endless growth. It is hard to come up with a nice solution.
The "Age of Discovery" could be more properly called the "Age of Metastasis", when European cities first planted replicas of themselves around the world.
"In the US, domestic investment was fairly steady as a percentage of National Income until the mid-1980s (Figure 9). In recent years, it has dropped off and is now close to consumption of assets (similar to depreciation, but includes other removal from service). "
Is the implication of this that effectively all domestic investment is being used to maintain current assets, not to produce new ones? Which must mean that we are on a downwards slope to some previous age?
Peter.
I expect that part of what is happening is that some previous investments are not being kept up period. Roads are being turned back to gravel. Water pipelines are not being maintained until they fail. Electric transmission equipment is not replaced until it fails.
Instead, we are building new football stadiums and giant new hospitals. We are adding on to universities and dorms for universities, so that all of the unemployed can go to school. None of this is very productive in the long run, however.
Good one Gail.
Just one question: what exactly are the semi-barbarian countries?
At the moment the most 'barbarous' nation on earth seems to be the US, since it has been the instigator of the most socially and economically destructive wars worldwide over the past fifty years or so. Most Americans see the USA as a virtuous State, but others see it differently. It's all a matter of belief and perception, and terms, of course. But I just wondered...
Gail did a masterful job in laying out fundamentals of globalization.
But when analyzing the US and World consumption of resources and especially the huge rise in the US government deficits we must never overlook the costs of War which is currently about $1 Trillion per year for the US. If you look at Chart 11 which graphs US govt spending vs income you will notice the very short time period of the Clinton surplus around 2000. Which then was replaced by a huge spike in US government spending for Iraq, Afghanistan and the whole National Security War on Terror by Bush coupled with the tax cuts for the rich. Despite the increases in
spending for food stamps, unemployment benefits and other help to the unemployed you also see a downturn in Federal spending.
It needs to be repeated over and over that War spending is the major cause of the US deficit. And US war spending is undoubtedly tied to globalization as the US economic empire tries to insure that no countries leave its orbit of influence and control especially in regards to oil.
the US war machine accounts for 5% of US oil consumption and the Pentagon is the biggest oil consumer and greenhouse emitter of any institution on Earth.
These are huge resources which could be redirected from Empire and globalization for plutocrats profits into Green Transit and Green New Deal investments for Main Streets all over the USA.
Clinton's surplus took place when oil prices were low. I expect this is as much of the cause as anything else.
The war machine unfortunately is a huge generator of jobs. There are direct military jobs, jobs outsourced to private industries, and jobs associated with making all of the war materials. Spending on the military acts as justification for more debt, too. I am sure there are other reasons for war too, such as maintaining the dollar's reserve currency status, and if we could, to get more oil. Without wars, GDP (the way it is counted) would drop by a fair amount. This gives a big incentive to keep up big military operations.
This is exactly right, and it is what happens when an economy moves from manufacturing to services. Entertainment, Education, and Health are where the jobs are. Especially Health.
Spending on education should be productive, but the US is doing it wrong. The biggest payback comes from early childhood education of the poor three-quarters of children, the next from investing in primary education for those same kids. Those should be both free and of the same quality in every suburb and city center in the nation.
As for the others...the USA is so rich that it can afford an enormous amount of waste. By far the greatest part of the cost of healthcare is spent on the last six months of people's lives. However that is what we collectively value the most. Entertainment is also highly valued, and some of the spending on sports is useful for robotics researchers.
Peter: "Is the implication of this that effectively all domestic investment is being used to maintain current assets, not to produce new ones? IMHO that statement epitomizes what's going on in the shale plays in the U.S. today. It’s easy to see the rise in U.S. oil production thanks to the shales. In the last year with oil continuing to hang around $100/bbl and every more drilling by U.S. pubic companies with their well-publicized success in the unconventional plays their stock value (market capitalization) must be booming also. From:
http://markets.on.nytimes.com/research/markets/usmarkets/industry.asp?in...
Unfortunately I could only find a record of the change in market cap back only 12 months. I think a 5 year history would be more representative since much of the increase in drilling and production has been rising ever faster over time. But we’re stuck with what may represent an overly optimistic snapshot of the U.S. oil/NG industry as it has changed in the last 12 months. Market cap represents Wall Street’s and the public assessment of how these new plays and technologies have helped the pubcos ward of the evils of PO. From the link:
“The Integrated Oil & Gas industry consists of companies engaged in the exploration, production, refinement and distribution of oil and gas. Companies classified in this industry usually have global operations and significant activities in both Exploration & Production and Refining & Marketing operations.”
In the last year the market cap index the NYT tracks of the 30 largest U.S integrated energy companies has DECLINED 3.7%. How can that be? The industry has been drilling more and more successful oil wells and has increased domestic rate to the highest level in a couple of decades. It has been adding “new assets”.
But this has been accomplished at a price. A price the market factors into all those gains. IMHO this represent as good a measure, in the eyes of Wall Street, of the industry’s desperate efforts to unsuccessfully avoid the inevitable faith of the oil patch: even though oil prices are higher (and may get higher yet) there are not enough reserves left to develop at a cost that allows sufficient profitability for much of the industry to survive. As I’ve opined before: were it not for the high oil prices that have allowed the industry to pursue the shale reserves I doubt half the public oils would still be functional today. IMHO the boom in the oily shales isn’t proof the effects of PO aren’t heading our way but is actually evidence it is upon us today. The necessity of developing such high cost oil production in order to attempt to just maintain the value of the industry seems obvious to me. It matters little how profitable these plays may or may not be. What’s critically important is that they allow companies an opportunity to at least maintain if not increase their reserve base. A reserve base maintenance that Wall Street often values more than profitability.
Maybe market cap isn’t the best indicator…maybe it is. Such analysis is beyond the scope of a humble geologist. But, for the moment, this is what I have in front of me. That and the rush towards high cost oil reserves by the pubcos that my private company won’t pursue due to their marginal profitability…or less.
14. Globalization undermines democracy and rule of law everywhere.
Globalization has led to the rise of multinational banking institutions, corporations and industrial cartels that pay little heed to the laws or regulations of any country. These multinationals assume (quite reasonably) that if one particular nation gives them grief over taxes, working conditions, pollution, fraud, monopolistic behavior, etc. they can either ramp up bribery of politicians and regulators there, threaten the populace with economic blackmail (sue us and we'll crash the economy) or simply relocate to another country where government officials *can* be captured. They are in effect more powerful than any government. Robert Frank was a book about this called Richistan.
I am afraid you may be right about globalization undermining democracy and rule of law. Corporations stand behind every candidate elected to office. What each corporation is interested in is how policies will benefit his corporation. So even what looks like democracy is very slanted in its outlook.
It's gotten so bad in the U.S., I believe that voters would be better served by being given information about which corporate interests a political candidate is beholden to instead of wasting time publishing their bio/statements. Revolving door corruption and bribery are so common that you would be better served writing a letter to politicians' unelected owners than the politicians themselves.
"To: The Hon. Lord Blankfein:
Dear Sir,
There is something important I'd like to bring to the attention of your stable of Senators and Congressmen..."
Yes. The idea that was floated here the other day by someone on some thread (sorry, porous s/t/memory) that things might get so bad that politicians would rebel against their corporate sponsors misses the reality that said politicians and corporations are essentially one and the same (revolving door) and where there is any distinction to be drawn between them, the corporations wield all the power - rebel, little politico, and you'll simply be replaced in the next election. Become a really vocal rebel, and your plane is likely to crash...
Gail,
I'm a bit confused about points 1, 2, 4, 5, 6, and 7. Are we saying these are net negatives for humanity? For people living in the developed world? Or for the world as it's own entity (ignoring the human experience)?
I'm not one to say that there are no negatives that come along with globalizatoin; but it seems odd if we're saying that poor people finally being able to consume more, work more, have access to finanical markets, and produce more waste is the problem. I'm not even downplaying the negative impact that this has on the environment, stocks of finite resources, etc. I just think I'd rather have that "problem" then live in a world, where Billions of people live without a tiny fraction of the luxuries I enjoy.
I guess being that I have a background in economics, the lense I'm looking through is probably the one we're criticising. However, that we'd like to have all the poor people become less poor to me seems like it should be the primary goal (i suppose this is where we disagree?). The manner in which they become less poor, while being extremely important, just strikes me as a secondary concern.
Edit: maybe it's just semantics? perhaps you are looking for a new definition of "poor" and "rich"? Ie. that we should have different 'goals' for development rather then the consumption based economic model that we currently have?
If humans are going to live on the planet earth for a very long time, we need to do something other than emulate a cancer growing in a patient's body. Continued growth--no matter what it looks like--doesn't work on a finite planet. It kills all of the inhabitants, which is a problem. Economists seem to have lost sight of the finiteness issue.
A reader sent me a link to this article yesterday, The Deficit Gamble by Laurence Ball, Douglas Elmendorf, and Gregory Mankiw, published in 1995. According to the abstract:
Evidently, these (now well-known) economists didn't understand that we live in a finite world, and that growth can quite quickly be expected to reach limits. To me, not understanding that the world and its resources are finite is as basic a mistake as not understanding that the world is not flat. It gives a very distorted view of what is possible in the world.
The question is whether the disease is terminal or just becomes chronic.
The situation post WW I&II in the US was highly anomalous, since historical factors had left the US in possession of a great share of the globe's wealth. A high natural resource base (acquired by consistently agressive means) had been exploited under conditions of limited manpower. This caused high wages for working men in the 19th century relative to Europe, even with the flood of emigration. As a result, the US in the '50s was both rather more rich and more equal than most societies before or since.
Other societies, such as India and China before the imperial invasions, or Latin American countries which had only intermittently been at war, had societies which were far more unequal. Indeed, pre WW I imperial Europe was not a hotbed of equality -- note the dark Satanic mills of Victorian England, the displaced crofters of the Highlands, the starving Irish peasants, etc.
Unless there is another episode of total war mid '21st century (which is quite possible and which might significantly reduce population with biological weaponry) it is likely that the alternative is a highly structured and regimented society similar to those of the past. The developed nation states would be more equal economically, their economic systems would be more similar, and economic inequality would be much greater within each nation. The result would be perhaps 500 million people with something similar to a Japanese or French living standard (mainly in North America, Europe and Northeast Asia), and the rest of humanity living much more poorly.
The natural behavior of k-selected species (which includes humans, plus most other large mammals) is hierarchical behavior when there are not enough resources to go around. The intent is to marginalize those at the bottom of the hierarchy so that those at the top will survive. (This is natural selection, or "survival of the fittest" unfortunately.)
Since World War II, countries with access to oil have been largely insulated from scarcity. This allowed some countries to have fairly equal distribution of resources. This distribution seems to have significant health benefits as well.
I am afraid as we hit limits, more hierarchical behavior is to be expected. In some sense, businesses, including global businesses, are part of this hierarchy as well. It seems to me that they will be increasingly "eating everyone else's lunch." The ones who do best may be those near the top of these organizations--not that this is a result the rest of us would like.
My feeling is that 'events' will overwhelm everyone.
We are heading into a new epoch, the like of which we have never seen. There will doubtless be comparisons made with the past, but the outcome will likely be very nasty indeed for very many people. I just can't see Europe being immune from the troubles occuring in the rest of the world, since Europe is not self-sufficient, and has very permeable borders.
I was recently in Jordan, a poor country and one having he same tensions exhibited in much of the rest of the Arab world; namely, a burgeoning population without the agricultural, industrial or energy resourses to cope with them. I was told that the population is about eight or nine millon, and over half the population is under fifteen - I certainly saw a host of small children everywhere I went! Which means that in five years about four million more people will be looking for work in a country which is already water and land stressed, with very little in the way of economic resources. It was food prices and unemployment which were the cause of the Arab Springs in Tunisia and Egypt, and there are now stresses in Morocco and indeed the 'rich' Gulf countries. And none of these stresses is being addressed, they are simply being buried under a cover of political discontent.
The world is very friable now and anything can happen I'm afraid.
I´m sitting in São Paulo Brazil at the moment and I wish I had some reason to disagree...
There are very dark clouds gathering on every horizon as far as the eye can see.
People everywhere are deluded and from what I can see are profoundly unprepared for the coming changes.
Cheers!
Fred
Egypt will be an interesting test case.
Egypt's population is 83,688,164 according to CIA Factbook. It's land area is 995,450 sq km, of which 2.92% is arable and 0.5% has permanent crops. That works out to 0.1 acres / person. It imports about half of its calories, mainly as wheat, for which Egypt is one of the major importers. Wheat is used to make bread that is sold at greatly susidized prices.
With about 40 million people living on imported grain, Egypt is too large to subsist on NGO food charities. On the other hand, tourism has dropped markedly, and its remaining major earner of foreign exchange is the Suez Canal.
Thats very true. We're heading to "interesting" times indeed.
"The natural behavior of k-selected species (which includes humans, plus most other large mammals) is hierarchical behavior when there are not enough resources to go around."
This doesn't seem right. From what I understand, humans exhibit hierarchical behavior generally in proportion to the complexity of their society. So, in a tribal society you have relatively little hierarchy, maybe a chief or big man but he's not all powerful, but as you increase the numbers and complexity you create a class system.
The Inuit live in an extremely resource-scarce environment, but at least formerly their society was very loose and pretty egalitarian (or rather, self-sufficient). In contrast, Hawaii at the point of western contact was very intensely farmed and fished, with abundant resources, yet had the most complex hierarchical society in the entire Pacific with a rigid class system.
The period after WWII was different, sure, but it was also in the wake of a major war and after decades of organized labor. On top of that, in the US the taxes were agressively progressive, with 90% marginal income taxes on very high incomes. It was an anomaly if anything, the product of socialist ideas and mass organization. Despite this, even in that period there were clear class divisions, with rich dynasties like the Kennedy family having outsized influence. In the 19th century, the South was rigidly hierarchical with slavery, but the West with far fewer resources and poor development was much more egalitarian - and this continues to this day.
Abundance of resources is what makes complex society possible. The ability to build a hierarchy depends on resources.
Gail I believe the article you cite is refering to fiscal/monetary policy. Given that it is reffering to the US with a fiat currency it seem that they are talking about a wildly different issue then what your post was about (finite natural resources).
By my read of the abstract it is saying: running a deficit is a gamble, that likely produces a positive expected value (ie. the bet is that the rate paid on the debt is lower then income growth) although it is likely far from an optimal policy at all times (alluded to in mentioning the return on government investment is less then the return on private investment), it can impact the future trajectory of growth thus making it an optimal policy in certain cases.
Are you proposing that many in "economics" land are treating finite resources as though they were fiat (abstractly)? As in, that we think we can print oil, like we can print money (we can just come up with some new technology that will keep us swimming in oil)? I'd say that the way MSM portrays things, this isn't really as ridiculus as it may seem. Alot of people probably do think this (in a sense).
Economists seem somehow to think that fiscal monetary policy can produce a result that is very different from what happens in terms of real resources, which are indeed finite. A big part of their problem is their lack of appreciation for the connection between the finite resources and the fiat money. What value will fiat money have, if it completely leaves behind the resources which really are the base of the economy?
That the Federal Reserve has to monetize debt in order to keep interest rates falling to near zero bound is the signal, in my mind, that indeed this process has limits.
The article is pure trash, policy masquerading as economics, and if you read the article, the authors seem to know it.
Apparently these people believe that fossil fuels are infinite. Quite the mistake, isn't it.
Please, let's not conflate globalism with problems like energy usage, global warming, and unemployment. These problems are not necessarily caused by global trade.
There are many benefits to globalization. For example, how else would you get your daily coffee without trading with Columbia? It can also improve relations between countries. It makes no sense to attack your trading partners.
The problem doesn't lie in globalization and globalized trade, it's the inequalities that exist between governments and the means used to produce and transport goods. If China had the same clean air rules as the US, we'd be much better off from a climate change and resource perspective. If China had the same labor rules as the US, we'd see a lot more domestic manufacturing.
Instead of throwing out the baby of globalization with the bath water, we need to instead push for uniform labor and environmental standards. The path to this seems to involve ceding more power to international government, but we need to get past our apocalyptic fears of one-world government and start thinking as citizens of Earth. As long as we insist on exclusive home rule while buying into global trade, it only enables other countries to race to the bottom and keep burning all that coal. The only other alternative is complete isolationism and mercantilism, which would require us to invade China to grab all the cheap lithium to keep our computers running.
I think you're confusing global *trade* with globalization --they are not the same thing. Globalization is a particular subset of an ultra-conservative philosophy of Free Trade and what might be termed Free Market Fundamentalism, as promulgated by the dominant economic school of today: trickle down "freshwater" economics and cornucopianism. A.k.a. "Chicago school" economics, a.k.a., Reaganomics, a.k.a., right-Libertarianism, a.k.a., Ayn Rand objectivism.
People who are against "globalization" are not against trading with other nations. They are merely against surrendering their political, economic and environmental sovereignty to multinationals in order to do so.
I don't understand what you are saying. Do or don't globalist policies equate to policies of labor and resource arbitrage, which maximize corporate profits ?
Yes, "globalist policies" aka "globalization" does all that. All I was trying to point out is, being against globalization (right-wing laissez-faire philosophy) does *not* automatically mean you are against all forms of international trade --including Fair Trade, trade that respects the environment, working conditions, national sovereignty, etc.
This is a replay of Great Britain's experience during the 19th century. After the French Revolution / Napoleonic Wars, Great Britain emerged as the world's great superpower and dominant economic empire. At mid-century, she freed trade in her own economic interest. However, by 1900, the wisdom of the policy had become debateable, particularly with the rise of Germany and the United States as major economic competitors.
British Free Trade, 1850-1914: Economics and Policy
Interesting! We don't seem to learn from experience.
Gail, what do you think of this document ?
http://babel.hathitrust.org/cgi/pt?id=mdp.39015078699306;num=15;seq=27;v...
link is a full-text of : Oil fields as military objectives [microform] : a feasibility study : prepared for the Special Subcommittee on Investigations of the Committee on International Relations / by the Congressional Research Service, Library of Congress.
I assume the document is authentic. :-)
Why doesn't China invest more into natural gas, as its a lot more environmentally friendly than coal, not that expensive, and, compared to oil, a lot more accessible and abundant? I understand how they prefer coal, as they have huge resources of it and its cheap. But I thought they used more natural gas than this.
I know that they are investing in natural gas, to the extent they can. Shale gas has also been mentioned, but it is hard to see that they have enough water for fracking.
Chinese shale gas potential. From
http://www.scientificamerican.com/article.cfm?id=china-slow-to-start-fra...
After more than a decade of spectacular growth fuelled by coal, China finds itself sitting on a bonanza of shale gas. Its reserves are the world’s largest, beating even those of the United States. But developing this vast resource won’t be easy, as a bidding last month for shale-gas leases made clear.
“The resource is huge,” says Jane Nakano, a fellow of the Energy and National Security Program at the Center for Strategic and International Studies in Washington DC. “But the shale deposits are more complex than ours, and the above-ground challenges are probably even larger” than the geological ones.”
So if they want to develop their shale, they need, like Gail said, huge amounts of pressurized water to be injected into the rock-formations, right? So this means that they have to choose between a future of water for drinking and farming or for fracking... Not an easy choice, at least if they start investing huge amounts of money on the shale gas extraction. They also use more and more water on hydroelectricity.
http://blogs.ft.com/beyond-brics/2012/09/19/china-running-short-of-water...
http://tech.fortune.cnn.com/2012/12/14/2030-chinas-coming-water-crisis/
I think the unstated attitude in Australia towards China and India is
- it's their turn to get rich
- they can do the dirty work for us.
To me it seems schizophrenic that we can have a domestic carbon tax while encouraging the growth of coal exports. One new coal venture is aimed squarely at India
http://www.thehindu.com/business/Industry/gvk-and-aurizon-in-stake-sale-...
OK the export money is nice but it comes back as increased global CO2 but conveniently not on Australia's books. I would bet after a couple of years they want to bring out guest workers from India so they don't have to pay them so much. It also seems likely increased coal shipments will damage the Great Barrier Reef with only minor incidents so far.
The world may not have enough easily mined coal for everybody in India and China to create the same per capita emissions (~20t) as some Western countries. Those two countries have 2.5 bn out of the world population of 7 bn. Since China and India are doing the dirty work for us I think countries that want serious climate change action should penalise goods imported from there. A coalition of say Europe, Australia, Scandinavia, California and others could slap a punitive 20% carbon tax on goods made in China and India. When they lose some 5 billion tonnes of annual CO2 the import tax can be lifted. Otherwise domestic carbon taxes are almost a waste of time.
I wrote an earlier post, complaining about this issue Climate Change: The Standard Fixes Don't Work. Also, Why Coal Consumption Keeps Rising: What Economists Missed.
Twelve Reasons Why Globalization is a Huge Problem
Posted by Gail the Actuary
Wow. Gail you sound like an Occupy Wall Street protester!
I can't argue with your points . . . but I can only say that conventional economic theory would say those are all ultimately good things. But then again, I think conventional economic theory does not really produce the most desirable result.
Personally, if someone compared me to an Occupy Wall Street protester, I'd take it as a compliment. It's funny how the media consistently portrays Occupy Wall Street protesters (or Peak Oilers for that matter) as "radical" merely for pointing out obvious truths --e.g., we do not live in a true democracy/meritocracy, but a plutocratic oligarchy; infinite growth is impossible on a finite planet, etc. Does stating blindingly obvious (but politically uncomfortable) truths make one a "radical"? I guess in today's delusional get-rich-quick Xanax society, it does.
Gail,
Thanks for -again- telling us in a laser-sharp way where we stand. Unlike in the work of the authors of "Limits to growth" I see a lack of positivism in your discours. When I read Limits to growth and their 30y update, I discovered some positivism. Sometimes a little bit unrealistic or idealistic; I had the feeling they had been writing down optimistic paragraphs to serve a certain class of readers (e.g. young people). But anyway: it was not entirely black.
Can you, honestly, provide us with Meadows-like positivism? And if no: What should we do?
Sincerely
Verwimp
This is a tough one. Dennis Meadows was writing when the problem was farther in the future. I know that Dennis Meadows is much less positive now than he was back in 1972, and even the 30 year update. He thinks that it is basically too late now to fix the situation.
I feel like I see the story folding out in front of me, and I don't want to mislead people. One positive point is that we don't know over what time frame the collapse will take place. Based on analyses of prior collapses, it could take as long as 50 years. A better guess might be 5 to 20 years.
Another point is that gardening or planting a few trees is probably somewhat helpful, if that is an option. If nothing else, you will have some good exercise and get your mind off the problems at hand a bit.
A third point that is hard to make in a post is that we don't really know if God has a plan behind all of this, that we don't understand. In many ways, the rise of human civilization seems so miraculous that there must have been a creative force behind it. If there was, then there may just as well be a further plan now--one we don't understand. It doesn't do us any good to worry. We are better off spending our time appreciating the things that we have today--Things that people in the past never had access to.
Writing a book for a publisher definitely affects the slant people put on things. I know Charlie Hall and Kent Klitgaard's book, "Energy and the Wealth of Nations" never mentions the population problem, even though Prof. Hall often talks about the subject in person.
Thanks a lot for your answer. Apologize for the fact that I have given you a tough one.
You're probably right. We should enjoy what we have today. Rough waters ahead.
Thank God, I´m an atheist! >;-)
The interpretation of The Book of Revelation has been replaced by a whole new secular scientific eschatology.
I would say that if there is a God, it appears he is not a good planner. So much creativity but too little of it applied to actually ensuring, you know, a future.
You were looking for joy in the limits to growth report ? :-)
LOL. No, not exactly. But, you know: joy is best when it comes unexpected. :-)
There was this interesting quote:
"Yes, the planet got destroyed.
But for a beautiful moment in time we created a lot of value for shareholders."
http://sustainableman.org/
My take is that we fought two world wars where both sides were human. The third has been ongoing since the end of the second and this time the adversary is nature. We have inflicted our industrial juggernaut on the planet and are in the process of systematically destroying it!!
Don't forget that at the end of the day, in this war, humans fall in the same category as the rest of nature. The machine we created will devour us just as soon as the rest of the living world. It is a remarkable flavor of exceptionalism and magical thinking that allows some people to blind themselves to this fact (while much of the earth's human population suffers from the process of being devoured!)
Yes, we indeed wage a war on ourselves as well..
I know of no other species that kills itself off in such great numbers...and we are suppose to be the intelligent ones.
The book "Why Nations Fail" looks at the political/economic history of the world and derives these basic requirements for sustainability:
Strong central government with enforcement of laws
Equal treatment under the law for all
A representative government
Workers to retain enough of the fruits of their labors to lead a life without fear
Workers to have ready access to ladders to increase their position in society if they work smart and hard
Looking at the world as a whole, it is clear that none of these elements are present, so what we are left with is an international economic/political Wild West from which each country must provide its own protection
Current worker wages in China are $300 a month for 100+ work weeks or about $0.70 an hour. Even if Chinese wages were to double every five years, it will take on the order of 30 years for them to even reach our poverty level. Forcing US workers to match these labor rates in order to remain competitive would result in revolution.
In addition to globalization, we are seeing major unemployment produced by automation. First it was phone operators and secretaries -- now it is radiologists and legal researchers.
These effects are being seen globally with China exporting clothing fabrication to Bangladesh and Foxconn announcing that they are buying one million robots.
We must find a way to support those out of work or we will witness the collapse of our political/economic system.
There are only a couple of ways to handle this -- make government the employer of last resort and tax to pay for it or induce businesses to keep their payrolls in line with their historic ratio to profits. Payroll support could be accomplished by limiting unions to negotiating for only wages and hours, but greatly strengthen their ability to organize. Another method would be to impose an excess profits tax on those profits reported to shareholders which are out of line with payrolls.
Any of these methods could only be effective if they were imposed on all US businesses and were protected as stated at the beginning by wage-equalization tariffs.
It would appear that that's what is needed-- the collapse of "our" political/economic system. It's a disaster. Same with nuclear power.
We, as a species, no longer have the luxury of grand experiments-- certainly not the ones that clearly are not working. (What's the "definition" of insanity?)
Humans, that evolved in small-scale tribal/band local contexts, are not equipped to effectively deal with the likes of Walmart Governments™.
One of the most recent KunstlerCasts speaks with a guest about secession, incidentally, with a Vermont focus. Recommended.
It's time to think and get outside the
boxmonster.I haven't read, "How Nations Fail." Your observations are interesting. With businesses all wandering around off-shore, it is hard to even figure out what US businesses really are. I know as a consulting actuary, a lot of our work related to off-shore captive insurance companies. This approach saved taxes and made a lot of nice trips to vacation spots for executives.
Richard Nixon was once lauded for "opening up China". The idea being that he was providing American businesses access to 1 billion consumers. As it turned out, he opened up 1 billion people to be employed by American CEOs. Although having said that, all of those jobs may have just gone to other countries instead. And it would have been those other countries that Walmart encouraged their suppliers to move production to in order to cut costs. Nobody had to open up India and they have been the beneficiary of plenty of American jobs.
Gail
As much as I respect your work shouldn't this article be titled "12 reasons why globalisation is a huge problem for the US"? Given the US has 6% of the worlds population and consumed 25% of the worlds resources before that latest onslaught of globalisation the foundations of unsustainable growth and ecological damage were well established and as such I find a lot of the comments which conveniently apportion the majority of the cause on globalisation without any introspection a little bit nauseating.
I didn't until now think the "our" in the TOD tagline "discussions about energy and our future" was so parochial.
Yup.
There may be an argument why its bad for the world, but its not being made here.
For example Figure 1. This purports to show that world fossil fuel growth has increased. However, globalisation would be expected to concentrate particular sectors and sectors that concentrate will show large growth in the the places they concentrate. All Figure 1 shows is that coal burning has concentrated in China. It doesn't demonstrate anything about whether that concentration is having global effects.
Figure two is at least global is geography, but its still too narrow in economic scope. All figure 2 shows is that as oil runs out, coal becomes more attractive. The effect in Figure 2 demonstrates nothing about globalisation, because it is all to do with peak oil.
The real problem the US has with globalisation, is that a major sector in the US is grossly inefficient by world standards. Health care costs twice as much in the US and produces worse outcomes than in other rich countries. The US is going to continue to suffer as long as it insists on grossly overpaying for bad health care.
Good point
With Aldi's lower prices you lose your freedom
http://www.dicksmithfoods.com.au/media/press-releases/aldis-lower-prices...
Food company Heinz will fill its last bottles of tomato sauce in Australia today as the production giant ends its Australian tomato processing operations after 70 years.
http://www.abc.net.au/news/2012-01-06/heinz-factory-closing-today/3760676
Every one of Gail's comments is absolutely true, but each shows the *value* of globalization: a massive transfer of cash, technology, and living standards to the world's poor, which has lifted 2+ billion people from abject poverty and near starvation to comfortable (if not very exciting) lives.
Yes, this comes at a cost to the world's rich countries, to the environment, and to the social fabric of developing countries. But the only tried and proven alternative to globalization so far has been isolationism and neglect. If you want to go back to the '90s, when 1/5 of the world enjoyed a lifestyle powered by cheap fossil fuel and secure assembly-line jobs while the other 4/5 lived without reliable food or shelter, electricity, or medical care, I suggest you chat with the other 4/5 first.
Our fossil fuel way of life is unsustainable. But it's immoral to deny that way of life to everyone else when they'll still suffer the consequences. And if we're all going to face a day of reckoning, I'd rather face it alongside billions of healthy, well-educated people with high-tech skills and mass production abilities than saddled with billions who've been deprived of the resources and talents to help find solutions.
Perhaps there's a third way, which leads to health and wealth for all without facing a fossil fuel ultimatum. I hope so. But of the two ways we've tried to run the world so far, globalization is by far the best choice, and I'm willing to bet that the optimistic "third way" can't succeed without it.
Manmade CO2 emissions totalled 34 billion tonnes in 2011. A per capita average of OECD countries and oil rich OPEC countries seems to be about 15 tonnes per year. Now 7 bn X 15t = 105 bn tonnes a threefold increase from now if everybody in the world gets the same deal.
The delusion is compounded by the fact that wealthy countries say they will get rid of emissions but for the 'poor people' coal is OK. Why can't they have the new technology as well? It kinda looks like the rich countries either don't believe their own hype or like colonialists they don't think others can do it on their own.
Useful link http://www.businessspectator.com.au/news/2012/7/20/science-environment/c...
Reading some of the comments about the downside of exporting jobs from the US through globalization of trade a different perspective came to mind. Perhaps the US has been a huge beneficiary of such a process for many decades…and even today. I think one can make the argument that we’ve gained much more than we’ve given up.
The perspective: the oil exporting countries, by not keeping their production for domestic use and expanding their own manufacturing base creating many well-paid jobs, have provided the U.S. with a product that has allowed us to build a vibrant economy. Imagine, as difficult as it might be, had very little imported oil reached the U.S. What would our economy look like today? How low would wages be? How high would unemployment be?
It might seem to be a stretch but keep it simple: Company A transfers production capability to Country Y. Company A gives up ability to employ domestic workers. Company B transfers its production capacity, via oil exports, to Country X. Similar dynamics IMHO. Fortunately for the U.S. the oil exporters chose fund their economies by monetizing their capabilities instead of using them to expand manufacturing. Not that far-fetched when you consider the largest owner of oil in the U.S. is the federal govt. Does it export that oil to other countries or does it keep it domestic to help drive the economy? Imagine if the KSA had taken the same approach to globalization that China has: instead of swapping their oil for cash they could be the leading producer of electronics, solar panels, refined fossil fuels, steel, automobiles, etc. Heck, with all that sun and enough water thanks to abundant energy they might have even become a major exporter of food. Besides the capex they also had another critical but abundant resource: human labor. I can imagine huge cities occupied by immigrant works run by a very small Saudi management teams.
But they chose to take the immediate cash flow and satisfy their society by just writing checks instead of creating a manufacturing economy. Which is exactly what the U.S. did with imported oil. And that was OK by the KSA population...in the past. But now as the prospect of finite reserves may be sinking with the KSA other considerations may come to the forefront. The ELM effect may be accelerated if the KSA decides to stop monetizing more of their oil and begins to redirect an ever increasing amount to building out their economy in other directions. Think about it: what would you do if you were responsible for the future of the citizens of the KSA? If deglobalization would be good for U.S. job growth how much better would it be for the KSA?
We have less oil and coal in the world because we exported so many jobs to the third world and we also have more climatic change from global warming. Those are two pretty big negatives for the job exporters, regardless of how any other factors are viewed.
That can't be emphasized enough. I saw a TV show that had an interview with the person in charge of the Long Beach port. She said that 24 billion dollars a year in finished products came in from China. 6 billion a year was shipped to China, and it was raw materials. Not a sustainable model.
But as someone said, if you let them, every CEO will eventually ship every job they can overseas. In every case, it saves the company money, gets the company more profits, gets the CEO a bigger bonus. It is not sustainable for a country, bad for workers, but great for a company until the country collapses economically. So it needs to be solved by the country. But at this point, both parties in the United States are in full support of the practice. The president has specifically said during a stop in India, that sending them our jobs was not a problem.
Most of the economic arguments for Globalization distort meanings to make money. For example, Exxon-Mobil and others drilled and connected Ghawar field to service US customers. That's really not trade. Most of the business with China is US companies relocating. That's not trade, it's outsourcing.
For free trade to work, countries have to float currencies and they have to sell excess production. Does anybody think we're doing that now? This is just corporations fleeing US wage and benefits packages and environmental laws.
The story told to sell this rim job was we were keeing the high end here in the states. That explains why the fastest growiing occupation in America is butt wipers in nursing homes? US Enginnering Colleges are stuffed to the brim with Asians. The only way they create American jobs is if we grant them citizenship.
Anyway, great article Gail.
Gail, excellent article, would not always agree with your points. Top points this time.
Pizza delivery and software development will be the only things left to do in the US.
There have been a lot of software jobs exported and probably many more to come. There are a lot of people coming in to do programming jobs. In fact, the status quo is for business leaders to not only lobby for a continuation of the practice of giving tech workers, which includes programmers, special visas (H1-B), but to lobby to increase it. But maybe bringing in people to take software jobs creates more pizza delivery jobs for Americans.
There have been a lot of software jobs exported and there are a lot of people coming in to do programming jobs. In fact, the status quo is for business leaders to not only lobby for a continuation of the practice of giving tech workers, which includes programmers, special visas (H1-B), but to lobby to increase it.
Hi Gail.
I wonder if you ever heard of the french demograph Emmanuel Todd?
http://en.wikipedia.org/wiki/Emmanuel_Todd
This guy has been a kind of an oracle for historical trends during the past decases.
In 1998 he wrote "The Economic Illusion: Essays on the stagnation of developed socities", a very good and still up to date book about the rise of neoliberalism.
Todd is a strong advocate of new forms of "intelligent protectionism" because he think that the current free trade system is destroying democracy.
I was wondering how Peek Energy would have an effect on this and if it would be basicly some kind of back door protectionism.
At a minimum, we should be allowing trade wherein all costs are externalized, including working conditions, hours of work, overtime provisions, environmental regulations, health regulations, safety regulations, etc. Most importantly, there should be a carbon tax which reflects the carbon content of goods exported. The word "free" becomes germane in the sense that countries are "free" to reduce things like carbon content.
Under the current situation, the U.S. encourages the high carbon content of goods it imports from China by opening up tens of thousands of acres of federal land for coal strip mining which is then exported. And then we have these absurd articles about how the U.S. is supposedly reducing its greenhouse emissions while not taking into account all the coal that we are exporting.
The "good" news is that soon we will not have to worry about exporting jobs because all of the jobs will have already been exported.
"There ain't nothin' more powerful than the odor of mendacity!" Big Daddy from Cat On A Hot Tin Roof
Agree with all points.