I've written a fair bit recently about declining oil production, price volatility, economic crisis and painful adjustment to some kind of post-oil economy. My thesis, and it's supported by considerable detailed research - including a major report (PDF link) Robert L Hirsch prepared for the US Defense Department that found the transition will take two decades and be extremely disruptive - is that our civilization is making a very big mistake by ignoring peak oil and defering whatever coordinated steps we may take to prepare for the coming time when the rate of oil production goes into permanent decline.
So-called "cornucopians" argue that we have nothing to worry about and that market forces will bring supply and demand into balance whatever happens to the rate of oil production.
The big problem with this dogmatic optimism is that there's simply no guarantee markets will bring supply and demand into balance by delivering new sources of energy to market and providing new technologies to improve energy efficiency.
Peak oil implies not just high prices (which would provide unambiguous price signals to innovate) but extreme price volatility: wild swings in energy prices as the marginal cost of producing an additional unit of energy skyrockets, and the resulting super-spike in prices stalls economic growth.
In such a volatile environment of spikes followed by recessions, investment in new technologies actually slows due to a tightening of capital markets and the increased risk of soft or unreliable demand.
Markets do achieve a balance (of sorts) between supply and demand, but only through a painful and progressive ratcheting down of living standards as the economy lurches from one crisis to the next, squandering its scarce wealth on shoring up vulnerable oil-era industries rather than laying the groundwork for new post-oil industries.
What we may end up with after twenty years of economic chaos (if we're lucky) is a new equilibrium at a drastically lower standard of living and much sharper income inequality between the remaining wealthy and a vastly expanded underclass of working poor.
If we're not lucky, all that unremitting economic chaos could simply pull our civilization apart. It's not unthinkable: in our own time, plenty of seemingly stable societies have collapsed into lawlessness, warlordism and even genocide.
Thomas Hobbes had the vital insight that civilization rests on a shared expectation of civility and lawfulness. Because I assume that the people around me are going to behave lawfully (for the most part) and that the rule of law will be enforced fairly and consistently, I don't need to expend my own resources in a defensive posture.
In the absence of that shared expectation, I may feel the need to arrange for my own self-defence, by barricading my home and acquiring powerful weapons as a deterrent.
The problem is that others, also operating in the absence of shared lawfulness, will reasonably worry that I am building up my armaments so that I can attack them and steal their scarce resources. They, in turn, will start building their own arms (even if they, like me, are not aggressive in intent).
Now we're having an arms race, and even more wealth is being drained out of food, shelter, infrastructure, etc. to pay for defense. If I become certain that someone else is planning to raid my base, I may decide to raid them pre-emptively (or vice-versa) - again, even if I'm not violent and aggressive by nature.
Add in the odd person who really is aggressive and megalomaniacal, and you have a recipe for warlordism and widespread violence.
This is what Hobbes meant by the war of all against all. What many casual readers of Hobbes' Leviathan don't realize is that it does not assume people are inherently violent and aggressive.
Rather, he understood that security is a collective action problem: if each person is responsible for their own security from others, everyone ends up less secure. The solution - a shared governance structure that individuals accept and that applies to everyone equally - is the reason why violence in our civilization today is orders of magnitude lower than even a couple of centuries ago.
Steven Pinker, a prominent cognitive psychologist at Harvard, makes a compelling argument about the dramatic decline in violence over time and the roles that shared expectations play in allowing people to be increasingly civil, respectful and humane toward each other.
If the legal, social and economic underpinnings of this shared civility start to collapse, the collective action problem resumes and the deadly calculus of competitive self-defence can reassert itself.
Every civilization throughout history has eventually collapsed - mainly through a combination of resource depletion and negative returns on added organizational complexity - and we'd be fools to think our own civilization is somehow exceptional in this regard.
I'm not suggesting that this collapse is inevitable or that it will follow peak oil, but it's absolutely a possibility. At the same time, our civilization does have some important circumstances in our favour that previous civilizations did not:
1. Universal comprehensive education. We're the first civilization in history to commit to educating everyone, not just the children of the elites. This has dramatically increased the average productivity of citizens, as well growing as the pool of researchers, engineers and creative professionals.
2. Science-Based Worldview. Our civilization is still magical in many ways, and we still hold many taboos and irrational beliefs, but our systematic efforts to understanding how the world works are based on empiricism - a rigorous, peer reviewed process of testing hypotheses about how the world works for predictive power. This has resulted, in part, in an rapid and accelerating explosion of new methods, technologies and operating models in a virtuous cycle of self-reinforcement.
3. Regulated free markets. At its best, a regulated free market combines the confidence and predictability of well-maintained public infrastructre and open, transparent, rules-based contracts and transactions with freedom to invest, develop and market inventions. Price signals in an open market are generally (though not universally) much better at allocating resources than the command of a narrow leadership.
4. Liberty. Our civilization is broadly committed to the maximum personal freedom (including freedom of expression, movement, and association) that can be shared by all. A society committed to freedom is better equipped to tolerate open discussions and heed warnings in time to respond to them.
5. Democracy. At the same time, our civilization is committed to the idea that the government ought to represent the public interest as expressed by the citizens themselves. Of course, in practice this is susceptible to bureaucratic imperatives, mission creep and co-optation by interest groups, but it is emphatically possible for citizens to self-organize and hold their political leaders accountable.
6. Feedback systems. All the education and information in the world won't help us if we can't share it and make effective use of it. Between universal education, a vast and growing body of public knowledge, personal freedoms, and democratic accountability, citizens need to be able to get good information about the challenges we face and insist that our governments respond appropriately.
Throughout the 20th century, our main feedback systems were top-down: university researchers publishing papers in academic journals; books; newspapers and magazines; television (both news and current affairs fiction); and government reports. During this time, it was very difficult for citizens acting on their own to gather and coordinate information, publish their own content, and communicate directly with decision-makers.
Dark Age Ahead, the last book Jane Jacobs wrote before she died, argued forcefully that these traditional feedback systems are starting to unravel, to a serious risk of our society no longer being able to respond effectively to challenges.
However, as Clay Shirky argues in his recent book Here Comes Everybody, the development and widespread public adoption of the internet and its related technologies - email, websites (including blogs and social web applications), IRC and so on - means the infrastructural and administrative costs of sharing information, pooling resources, collaborating and publishing content have collapsed.
This has resulted in a huge and rapidly growing amateurization of feedback. For the first time, content publishing is becoming a true meritocracy, available to everyone regardless of institutional connections.
This represents a crisis for the established systems of information professionals that have coalesced around scarce and expensive publication technologies (printing presses, television broadcasting stations), but an historically unique opportunity for much broader citizen participation in information sharing and decision-making.
Our institutional, top-down feedback systems are growing moribund, trapped as they are in bureaucracy, self-preservation, co-optation by narrow interests and path dependence from their previous investments in scarce publishing technologies.
This failure is evident, for example, in the absolute and relative paucity of mainstream discussion about peak oil, a theory that rests on abundant evidence and is well-accepted by most oil geologists and energy investment professionals.
Left to their own devices, the traditional feedback and decision-making bodies in our civilization will likely not acknowledge until too late that the economic assumptions that served us yesterday - an assumption of cheap, available, reliable oil - are already starting to betray us.
That means it's even more important for citizens creating their own parallel information sharing and collaborative systems to step up and fill the empty societal feedback role that will motivate our democratic government to lay the necessary groundwork for the cascade of economic and personal choices to get us through this crisis.
Groups like Raise the Hammer have had some success at collecting and sharing information, but we have a long way to go at putting that awareness to work through new productive collaborations that achieve results. As a society, we need to act quickly to create new institutions of feedback and response in time to bootstrap ourselves off dependence on oil.
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