A Year Of Consequences

There has been much to chew on recently for those who have been following the discussion of limits to global oil production. The latest round of news started with the widely publicized news that two unidentified whistleblowers from the International Energy Agency were accusing the agency of painting a much more optimistic picture of remaining petroleum reserves than is warranted by the facts. According to the whistleblowers, it was pressure from the United States that induced the IEA to make misleading and false statements, in order to prevent “panic” or the emergence of threats to American access to the world's oil supplies.

This was followed by a statement from Professor Kjell Aleklett of Uppsala University in Sweden, in which he flatly stated that the IEA prediction of 105 million barrels per day by 2030 is “unrealistic.” In Mr. Aleklett's view, global petroleum production is more likely to be 75 million barrels a day in 2030. The salient point of the Uppsala forecast is that in their view, global oil production has already passed its peak, and will decline from here onward.

An increasing number of independent analysts, academics and oil industry insiders is saying the same thing – that the world has passed Peak Oil and that we are now living in the twilight of the petroleum age. More and more “coal mine canaries” are singing from the same sheet of music. The only matter of debate among these experts is whether the decline will be gentle and lengthy, or whether it will be drastic and sudden.

I'm not an oil industry expert or a geologist. But I have always been partial to the Oil Report of the German Energy Watch Group. Part of my preference has been that this report contained some pretty drastic near-term predictions, and thus it would be easy to see fairly soon whether the Energy Watch Group was on the right track. Their salient prediction was that global petroleum liquids production (consisting of the sum of conventional crude, natural gas liquids, “oil” from tar sands, and biofuels) would shrink from around 85 million barrels per day in 2007 to around 58 million barrels per day by 2020. This is a fairly steep decline, and if the Oil Report is correct, we should begin to see the proof fairly soon.

Now another analyst has generated a report containing similarly drastic predictions. Tony Erickson, a volunteer analyst at the website The Oil Drum, has just posted his latest “World Oil Production Forecast - Update November 2009‎.” His key points are that crude oil production (excluding biofuels) has already peaked, and that global oil production will decline by 2.2 million barrels per day each year between now and the end of 2012. Thus the German Energy Watch Group has been joined by another voice predicting a drastic near-term drop in global oil production.

If Mr. Erickson is correct, this means that by the end of 2010, the world will be producing 2.2 million barrels per day less than it is producing now. Due to the critical role of oil and petroleum products in the global economy, this means the very real probability that the global economy will shrink involuntarily and uncontrollably. Many things that people in the First World are used to having will become much more expensive and/or unavailable. 2010 may well be the year of another oil price superspike. Thinking of the implications for the fragile global economy may wreck your sleep tonight.

In America, many of us may have to make sudden, drastic adjustments for which most of us have not been forewarned, and which most would have rationalized away even had they known. Whereas some European nations like Germany and the Netherlands will be structurally more suited to a world of lower energy (think bicycles and mass transit, just for starters), we may find ourselves scrounging for hastily thrown-together means of adaptation. Better make sure your bike has a good lock.

Some might say that predictions like these are unnecessarily “alarmist” or even “apocalyptic.” Maybe so, maybe not. We won't have long to wait to find out. As Wallace Stevens once wrote, “Let be be the finale of seem...”

A Sign Called Desperation

Make Them Buy Brioche!

Come now, you rich, weep and howl for your miseries that are coming on you. Your riches are corrupted and your garments are moth-eaten. Your gold and your silver are corroded, and their corrosion will be for a testimony against you, and will eat your flesh like fire. You have laid up your treasure in the last days. Behold, the wages of the laborers who mowed your fields, which you have kept back by fraud, cry out, and the cries of those who reaped have entered into the ears of the Lord of Armies. You have lived delicately on the earth, and have taken your pleasure. You have nourished your hearts as in a day of slaughter. You have condemned, you have murdered the righteous one. He doesn't resist you.

– James 5:1-6, World English Bible (a public domain translation)

As I recently stated on this blog, the global “official” economy is tracing out a “phugoid cycle” of collapse driven by the increasing price fluctuations and scarcity of one key resource: crude oil. This process of this collapse threatens the notional wealth of all who are invested in this economy, and especially the wealth of the rich masters of this economy. It should be obvious by now that the governments of the West, and especially the US Government, are therefore being used to prop up the notional wealth of their richest citizens.

But in understanding the actions and strategies of these governments, we need to see just what “wealth” these governments are trying to salvage. What does the notional wealth of the rich actually consist of?

In the West, a large portion of that notional wealth consists of legally binding obligations placed by the rich minority on the vast poor majority. These obligations have value as generators of revenue streams which enable a small elite class to enjoy a lavish and leisurely lifestyle through the labors of their poorer fellows. Examples of this include the following:

• “Intellectual property” the copyrights of which are held as tradeable property, for things like software, published books and entertainment media like music and movies;

• “Market share,” secured by large enterprises driving competitors out of business;

• Monopoly arrangements, which are the ultimate end of increasing market share;

• Most importantly, interest-bearing debts owed by the poor to rich creditors, and by the rich to each other;

• And lastly, fees charged by insurers in exchange for a promise to cover the costs of financially catastrophic events.

These are the primary assets of many of the world's rich people, and some of these rich have no real assets beside these legally binding, revenue generating obligations.

These legally binding obligations are valuable only as long as the poor are either willing or able to honor them. The trouble for the rich is that from 1980 onward, real wages for the working class have been either stagnant or declining, while the things purchased by the working class have gotten steadily more expensive. Some of these things, such as college education and health care, were turned by their providers into “cash cows” whose price appreciated at a rate that far exceeded the rate of inflation. In order therefore to maintain economic activity and to protect their revenue streams, the rich providers of goods and services were obliged to offer these things on credit, forcing the poor consumers of these things to take on ever more debt until there was no way that most members of the working class could ever become debt-free during their lifetimes.

This arrangement worked as long as the members of the working class were able to pay the interest on their debts, the royalties on the intellectual property they consumed, and the fees on the insurance on which they relied. But from 2005 to the present, that ability to pay all of these obligations was eroded – first, by the spike in oil prices caused by constrained supply, and then by the explosion in costs of everything that depended on oil for its manufacture or delivery. This threatened to render many of the assets of the rich worthless, because those assets consisted of contracts between the rich and the working class in which the working class promised to pay a certain amount per year to the rich, and now the poor were no longer able to make their payments.

The truth is that a large number of working class people in the First World, and especially in the U.S. are now flat broke. They have lost incomes, they have defaulted on loans, they are no longer able to pay for insurance, their stuff has been repossessed, they can't afford cable or new flat-screen TVs and they have no spare change to purchase “intellectual property” like DVD's or music. Their obligations owed to the rich are now worthless, because they will probably never be paid. But there is a further threat to the “assets” of the rich: namely, that an increasing number of working-class people are waking up to what's being done to them by the rich, and are trying to create alternatives to dependence on the rich. This threatens such assets as the revenue generated by market share dominance or monopoly arrangements.

The government bailouts of banks and investment firms are an attempt to re-inflate the assets of the rich, by turning the vast mass of working-class taxpayers into collateral for loans that are now worthless, and to repair the revenue streams of the rich via government confiscation of the labors of the poor. The government has also been employed to criminalize certain alternatives to dependence on the rich, such as the recent “food safety” laws that place huge regulatory burdens on small organic farmers. But as economic activity continues to contract and revenues continue to fall, the rich and their stooges in government are desperately trying to take confiscation to a new level.

This seems to be the motive behind nearly all of the public discussion by the mainstream media and by politicians regarding health care reform in America. Our problem is that most Americans can't afford health care anymore without insurance (it cost less than $100 to have a baby in 1950; it costs $6,000 to $14,000 today), and most Americans can't even afford health insurance premiums anymore, as these premiums are already exorbitant and are continuing to rocket upward. Yet instead of talking about genuine health care reform (as in making health care universally available at a price people can afford), the public debate has been framed as a discussion of health insurance reform. This deliberately misses the point, and is nothing more than a ploy to protect two cash cow “industries” (the private insurance “industry” and the health care industry) and the notional wealth of their owners.

The response of the Congress and the medical/insurance lobby to the health care crisis has been to say, “What? Most Americans don't have access to health care? Then make them buy insurance!” The bill crafted by Senator Baucus and others is a case in point, as it would force all Americans to buy private health insurance or face an IRS tax penalty. This is as dumb as a bag full of rocks. If most Americans can't afford health care, how are they going to afford ever-more-costly health insurance? Will the Federal Government force the people I see next to freeway offramps and sleeping under bridges to buy health insurance?

“Ah,” some will say, “but these bills don't place that requirement on the poorest Americans.” However, placing that requirement on people who are already teetering on the edge of poverty will drive many of them over the edge. If people own the places where they live, or own some other asset like a car, yet can't afford thousands of dollars a year for private health insurance, will the Government seize their assets? Why are the Feds trying to fatten the profits of bloated businesses like Aetna and United Healthcare at our expense?

In continuing to impose ever-greater burdens on the poor and the working class, the United States has come to resemble France under Louis XVI, and the history of the U.S. from 1980 to the present has come to resemble the history of France under Louis XVI and his immediate predecessor. During that time, France had a huge national debt, caused by the wars and foreign adventures of the monarchy, as well as the lavish lifestyles of the monarchs. The French debt was so huge that no other European power was willing to loan money to the French monarchy. France also had a system of heavy and unequal taxation, in which the lowest members of society shouldered the heaviest tax burden, while the nobility paid little or nothing. Then there was the unwillingness of anyone in the French government to reform the systems of power and economy to make them more just and equitable. Lastly, there was the contraction of the French economy due to resource scarcity (crop failures and famine) in the 1780's, in which the poor suffered greatly while the rich maintained their exploitation of the poor in order to continue a lifestyle of conspicuous consumption.

The presence of these factors, combined with the lack of any avenue of escape for the French peasantry, led to the French Revolution. The friction that caused that explosion is exemplified by a saying attributed to Marie Antoinette, who is reputed to have heard that the peasantry could no longer afford wheat to make bread, and who said, “Then let them eat cake!” (“Cake” here is literally, “brioche.”)

We in the U.S. have had avenues of escape from the predations of our rich class, but they are being closed off from us. It would be fairly easy to neutralize the rich non-violently by becoming independent of them. Yet when that avenue is closed off, there no longer remains a safety valve for pent-up citizen rage against the rich who rob us. While history doesn't repeat, it does rhyme, as some bloggers have said. I don't think it's wise right now for anyone in our government to be saying, “Then make them buy brioche!” Not unless you want a nation full of people like Ann Minch.

* * *

P.S. Over the last several months I have been following another website that publishes content related to our present global energy, environmental and economic crises. It has come to my attention that some of the things I have said on this blog are taken up by the writers on that website a few days to a few months after I have said them. This is cool, as diverse people often wind up noticing the same things and commenting on them. What's not so cool is that I have found content on that site that sometimes mirrors almost exactly some of the things I've said, yet there's no attribution given. If I see examples of this again, I think I'll write a blog post titled, “What A Coincidence!”, complete with quotes, excerpts and links.

The Dearth Of Waters

I'm on the road today, on a trip to a jobsite inspection. I have just driven down from Portland to the coast, beneath a doomy, portentious sky lying like a blanket over hills soaked by rain, whipped by strong winds, and clothed with trees turning color. But my mind was entertaining a very different image as I drove.

It was a vision of a formerly green, well-watered valley, now become a parched, cracked landscape beneath a sky of brass in which hung a merciless sun. The land was littered with signs of a former prosperity and fertility that had evaporated away – plantings of trees now dead from drought, a few empty shells of decrepit buildings suggestive of a ghost town, skeletons picked clean, and a desperate, humbled mass of gaunt survivors now trying to figure out how to come to peace with their altered surroundings, that they might somehow live.

Yet their efforts were being thwarted by a small group of extremely wealthy people – the very people who had drained the valley of its life-giving water. For as the valley was being exhausted of its water, the drainers of the valley were sending their agents to seize the stored and hoarded water of the poor survivors. But not even this was enough to satisfy the exponentially increasing thirst of the rich. Thus they began even to seize the survivors to feed them into a giant machine in order to suck the moisture out of their bodies. The machine had several names. Two of its names were “Corporatocracy” and “Crony Capitalism.” Those who passed through this machine were spit back onto the landscape like so much human jerky.

Maybe it's a hokey image (a novelist I am not!). But I think it fits the economic news I've been reading lately. This week, the Oregonian newspaper is running a series on the housing and foreclosure crisis. One of their stories talks about a couple who owned three houses during the height of the real estate boom, yet is now reduced to sharing a condo with a relative and taking food stamps. While it is certainly possible to find fault with this couple for over-reaching, the article makes the telling point that the (really big) banks are getting all kinds of help from the Federal Government (really, that's us taxpayers), while the banks are giving absolutely no help to the average debtor. The Oregonian article also describes the plight of many other people who were not over-extended, yet got into trouble because of the present economic downturn, and who were given no help by the banks.

There's also a blog I recently discovered, called The Automatic Earth, which talks about how out of 4 million home mortgages in trouble so far, only around 1700 have been permanently modified under the Federal mortgage rescue program. Yet the banks were given $75 billion to help rescue distressed homeowners. (You can read more here: Don't audit the Fed, pull the rug) Lastly, I have noticed that people are finally starting to get angry about the medical insurance “industry's” attempt to force the Federal government to define “health care reform” as “forcing everyone to buy private insurance.” Many more people need to get angry, and to let their anger be known. Otherwise, we'll all be sucked dry.

But now, speaking of literal water, I have noticed that my post, The "Congress Created Dust Bowl", seems to be a bit more popular than I expected it to be. Thanks to all of you who have read and commented on it. I mention this post because of a conversation I had with a co-worker a couple of weeks ago. He talked disparagingly about how “the Federal Government is interfering with economic growth by cutting off water to California central valley farmers!” Of course, he knows my views and he was trying to get a reaction out of me.

I mentioned to him that there was a sea in the Soviet Union which the Soviet government ruined in order to promote economic growth in a certain region. Basically, they pumped the sea nearly dry over a period of a few decades. Unfortunately, I couldn't remember the name of the sea during my conversation (although the mention of this event did silence my co-worker). But now I remember: it's the Aral Sea. The Wikipedia article on the Aral Sea shows how much it has shrunk since the 1960's, and describes the corresponding ecological damage:

• The Aral Sea fishing industry, which at one time produced one-sixth of the Soviet Union's entire fish catch, has been wiped out.

• The muskrat population in some of the adjoining deltas has been wiped out.

• The sea has shrunk to ten percent of its original size and is now nearly three times as salty as the ocean.

• The dry plains left by the sea's disappearance are covered with salt and toxic chemicals, which are blown onto neighboring populations via dust storms. This has led to high rates of certain cancers and lung diseases.

These are just some of the effects of human stupidity and greed in that part of the world. Could the people demanding more irrigation water from the Sacramento River do the same thing to that river that was done to the Aral Sea?

Answering that question would not be very difficult. One would only need to know how much water was being diverted for farming, how it was being altered, and the likely effect of the diversion and altering (pollution) of the water on the river and its ecosystems. But that doesn't seem like the sort of science project that would interest Fox News or the people putting up the “Congress Created Dust Bowl” signs.

Making The World Sick, One Country At A Time

(Warning: this is a long post.)

The predicament that marks the probable end of our industrialized society has two stages. The stage most easily visualized by many of the first thinkers on this subject has its roots in the Limits To Growth scenarios first analyzed by the Club of Rome. Its most popularized images look like scenes from a dystopian science-fiction movie starring Charleton Heston or Will Smith or Mel Gibson or Harrison Ford – famine and the failure of technology; poisoned landscapes and cities with zombies running in the streets; “World of Warcraft” meets “Survivor” – in short, a “hard crash.”

However, there is a prior stage to the effects of resource scarcity: economic upheaval and contraction. The images that fit this are found in Dorothea Lange Depression-era photography; scenes from John Steinbeck's Grapes of Wrath; the Dust Bowl; tent cities; people losing jobs as the economy contracts; people being priced out of oil-based “necessities” as prices continues to increase; and people being thrown out of their homes, having their things repossessed and living under bridges due to “lack of sufficient funds.”

The second stage may be coming shortly, but the first stage is where we are now. The response to the onset of this first stage on the part of leaders in government and commerce by and large is as follows (there are, of course, exceptions): 1. A refusal to rearrange the social/political/economic systems under their control to make them more resilient in the face of the disruptions of Stage Two; and 2. A manic attempt to sustain their existing systems, which are unsustainable, and for which the writing is already on the wall. The leaders in government and commerce are now diverting all available public resources to this attempt to sustain the unsustainable.

Preparing for industrial and economic collapse in all its stages is therefore up to individual citizens. The captains of finance, economics and government will not institute the necessary changes, because such changes would reduce their power, prestige and access to wealth. This is why it's up to citizens. Yet the very nature and policies of the existing systems and their masters actively hinder the efforts of ordinary people to become resilient in the face of collapse. This hindrance comes either through government policies and laws that make resilience difficult, or through economic arrangements that bleed ordinary people dry so that they have no resources left for building resilience.

Such is the case with health care in the United States, that act of formerly selfless service embodied by the family doctors of decades ago and television doctors such as Dr Kildare, Ben Casey and Marcus Welby. This “service” has metastasized into a money-sucking “industry” so expensive that whereas the normal delivery of a live baby cost less than $100 in 1950, it now costs anywhere from $6000 to over $12000 today. According to one source, American national health spending is expected to reach $2.5 trillion in 2009, accounting for 17.6 percent of gross domestic product (GDP). Health expenditures are expected to increase at a rate of 6.2 percent per year from now to the year 2018, which is faster than even the most optimistic estimates of growth in GDP for this period. Part of the expense of American health care is due to exploding administrative costs. But there are other contributors, such as costs for prescription drugs that are rising at over twice the rate of inflation, cost increases for medical equipment and consumables, and inflation in employer-sponsored health insurance premiums which have risen at four times the rate of inflation during the past decade.

There's been much controversy this year over the possibility of Federally mandated health care reform. I really don't expect the Democratic or Republican Parties at any level of government to craft genuine reform of the sort that would lighten the economic burden for the recipients of that care. Some of our expectations regarding American “health care” may also be unrealistic, including the expectation that the Government can afford to pick up the tab for health care as it is currently practiced in the U.S. for all residents of the U.S. My suspicion is based not only on the unjustifiable rate of rise in American health care costs, but also on the fact that most of the wealth we could have devoted to equitable Government-backed health care and other safety nets has been squandered on covering the monetary losses of the rich. Our remaining tax revenues will largely be dedicated to servicing our large public debt, and the ability of our government at all levels to borrow additional money will shortly be severely curtailed.

I think it is also unrealistic for the masters of the health care “industry” - the doctors, hospitals, HMO's, insurance providers, drug companies and providers of medical technology – to expect that the system they have created can survive unbroken and unchallenged once almost no one but the rich can afford to use it. Already that system has priced 86.7 million Americans out of health care from 2007 to 2008. In 2008, at least 46.3 million Americans were without health insurance for a full year, according to the U.S. Census Bureau. In 2009 these numbers will only increase, due to the explosion of job losses, exhaustion of workers' unemployment benefits and continued escalation of insurance costs.

In short, I expect the nature and experience of health care to change drastically in the United States over the next several years. Increasingly, it will resemble the care provided in many Third World countries. Hopefully we will witness the adoption of some of the more beneficial and fair systems now operating in the Third World. Yet before we all rush to the countries of the developing world for inspiration and guidance, we need to see how the architects of the present American system of health care have attempted over the years to wreck viable, low-cost Third World alternatives. These attempts at wreckage were intended to protect and increase the revenue streams from the world's poorest people to the First World providers of expensive medical intervention and treatment.

The History of Western Medicine in the Third World

In his paper, “The Life And Death Of Primary Health Care,” David Werner writes that from colonial times until recent decades, the providing of Western medical service to the Third World was not equitable. The most expensive services were directed to the privileged, whereas health services directed at the “natives” were few, and were designed mainly to keep them healthy enough to work for the rich. But in the post-World War II era, there was a dawning awareness of health and health care as fundamental human rights. This led to efforts by rich countries to make Western medical practice more widely available in Third World countries.

However, this approach to expanded health care proved to be unsustainable, since Western medicine was too expensive even then for most Third World governments to widely support, or for indigenous peoples to use. This was partly due to the influence of budding multinational pharmaceutical corporations whose advertising induced a dependence on expensive treatments while eroding traditional forms of self-care. By the late 1970's it was widely recognized that the standard Western model of health care was failing in the developing world. This realization led to an international health care conference hosted by the World Health Organization in Almaty (formerly Alma-Ata) in the former Soviet Union in 1978.

Alma-Ata And Its Aftermath

The Alma-Ata Declaration of 1978 defined health as “a state of complete physical, mental and social wellbeing, and not merely the absence of disease or infirmity...” This declaration set forth this health as a primary goal to which governments should strive, and deemed existing health inequalities to be unacceptable. In order to achieve the goal of universal health, the declaration proposed a “Primary Health Care” which was defined as “...essential health care based on practical, scientifically sound and socially acceptable methods and technology made universally accessible to individuals and families in the community through their full participation and at a cost that the community and country can afford ...”

The implementation of this Primary Health Care was to involve all major elements of community life, such as sanitation, the provision of safe and healthy food, access to clean drinking water, housing and other basic needs. Very importantly, this implementation was to be community-based, “...requiring and promoting maximum community and individual self-reliance and participation in the planning, organization, operation and control of primary health care, making fullest use of local, national and other available resources; and...developing through appropriate education the ability of communities to participate ...”

The Alma Ata Declaration was revolutionary its emphasis on addressing the root factors of health and giving ordinary people more control over their health and lives. It proved to be too revolutionary for the heads of the governments of the First World, who systematically transformed Primary Health Care into merely another program for extending conventional Western, top-down health services into the Third World. This was accomplished by the promotion of “selective” Primary Health Care by donor countries; by the increased shifting of costs of Western medicine onto end users (ordinary poor people) via “Cost Recovery”; and the takeover of health and social policies of Third World governments by the World Bank and the International Monetary Fund (IMF), which enticed many countries into taking loans with ruinous repayment terms, then forced those debtor countries to dismantle their social safety nets as part of their repayment.

One word on “selective” Primary Health Care: one of its initiatives was the so-called “Child Survival Revolution” that focused on growth monitoring, oral rehydration therapy (ORT) (for diarrhea), breast-feeding and immunization. The approaches implemented in this “Revolution” favored expensive treatments sold by pharmaceutical corporations – especially the pre-mixed ORT packets that were pushed instead of homemade foods and liquids.

The gutting of Primary Health Care as a viable option, combined with the World Bank's forcing debtor countries to dismantle government-sponsored social safety nets, led to a deterioration of health in the developing world. In addition, the World Bank has insisted on privatization of services formerly provided by governments, and has been an active agent in expanding the role of private health insurance in Third World health care.

American-Style Health Insurance – Coming To A Country Near You

Private health insurance is a very fast-growing worldwide market. The insurance “industry” is especially interested in the developing world, where it grew more than twice as fast as in the First World from 1994 to 2004. The promotion of private health insurance is especially attractive to the Organisation for Economic Co-Operation and Development (OECD), an association of thirty nations, most of whom are the richest in the world, and whose member countries are home to the largest multinational insurance and investment firms. One OECD study notes the extensive penetration of private health insurance in Latin America, while discussing strategies such as subsidized coverage in order to boost penetration in East Asia. However, even the authors of that study admit that the introduction of private health insurance “...might also lead to cost escalation, a deterioration of public services, a reduction of the provision of preventive health care and a widening of the rich-poor divide in a country's medical system.”

Private health insurance is threatening to displace other options, partly through advertising that seeks to induce dissatisfaction with public health care, and partly through the promotion by the World Bank of so-called “free market” policies and privatization of social services in Third World countries. In fact, since 1993 the World Bank has pushed a view of Third World health care as simply a means of enhancing worker productivity for economic growth – a view that is very similar to the colonial view of the purpose of medicine in the Third World: to keep the natives healthy so they can work for the rich.

Conclusion

Because of the power held by the medical and insurance industries in the United States, I expect that the present attempts by our leaders to “reform” our health care system will turn out as badly as the attempt by the WHO to implement the Alma Ata Declaration. As that declaration was thwarted by the rich, I expect that our health care “reform” will also wind up as simply another means of moving money from the pockets of poor people into the coffers of the rich. Ah, but that's what our health care system is already...

Sources:

• “Health Insurance Costs,” National Coalition on Health Care, http://www.nchc.org/facts/cost.shtml

• “Paying The Price: The High Cost of Prescription Drugs For Uninsured Americans,” Maryland Public Interest Research Group, http://www.marylandpirg.org/home/reports/report-archives/health-care/health-care/paying-the-price-the-high-cost-of-prescription-drugs-for-uninsured-americans

• “Employer-Sponsored Health Insurance Erosion Continues, Will Likely Accelerate Through 2009,” Elise Gould, Economic Policy Institute, September 2009, http://www.epi.org/publications/entry/jobspicture_20090306/

• “The Life And Death Of Primary Health Care,” David Werner, International People's Health Council Global Summit, 1995, www.healthwrights.org/.../Life_and_Death_of_PHC-Global_Summit_Sweden.pdf

• “Health for All Beyond 2000: The Demise of the Alma-Ata Declaration And Primary Health Care in Developing Countries,” John Hall and Richard Taylor, The Medical Journal of Australia, 7 November 2002, http://www.mja.com.au/public/issues/178_01_060103/hal10723_fm.html

• “Declaration of Alma-Ata,” International Conference on Primary Health Care, Alma-Ata, USSR, 6-12 September 1978, World Health Organization, www.who.int/hpr/NPH/docs/declaration_almaata.pdf

• “Rich Countries and World Bank Must Stop Pushing Privatized Health In Poor Countries,” OXFAM International, 12 February 2009, http://www.oxfam.org/en/pressroom/pressrelease/2009-02-12/rich-countries-world-bank-must-stop-pushing-privatized-health-to-poor

• “The IMF And The No User Fees Policy In Health,” Sandra Graham, Jamaica Observer, 15 August 2009, http://www.jamaicaobserver.com/columns/html/20090814T200000-0500_157495_OBS_THE_IMF_AND_THE_NO_USER_FEES_POLICY_IN_HEALTH_.asp

• “Private Health Insurance for the Poor in Developing Countries?”, Denis Drechsler and Johannes Jütting, OECD, August 2005

• “Is there a role for private health insurance in developing countries?”, Denis Drechsler and Johannes Jütting, German Institute for Economic Research, October 2005

The Limit of F(x) As x Approaches C(ollapse)

Ooh, a storm is threatnin'

my very life today,

If I don't get some shelter,

Oh yeah, I'm gonna fade away...

– The Rolling Stones, Gimme Shelter

I have previously stated that our present global economic and political systems are breaking, due to a declining resource base and a deteriorating natural environment. I have also stated my belief that the masters of these systems are not interested in fostering or even allowing local, resilient alternatives for ordinary people. Instead, their aim at present seems to be to maintain the present systems at all costs, and to force ordinary people to continue to rely on these systems.

The present economic and political systems are also predatory and catabolic, in that they tend to devour large numbers of ordinary people in order to enrich the masters of these systems. While the enrichment of these masters has also historically come through economic and industrial expansion, the base of natural resources necessary for this expansion has begun to contract, because many of these resources are now used up. Because the base of natural resources is now contracting, there is no longer the opportunity for large-scale economic growth. Therefore, the catabolic, thanatoeconomic character of our present systems will become more prominent, as the rich will only be able to maintain and increase their wealth by jacking increasing numbers of the poor.

I have come to believe that under these circumstances, it is not possible at this time for most people to build truly resilient, permanent communities that are immune to trouble from economic collapse. There are some sectors of the population (such as those who are very well off) that will be able to form such communities. Yet most people will be prevented from achieving this because of crippling loads of personal debt, as well as the desperate attempts on the part of banks and government at all levels to keep prices of essential assets so high that obtaining them requires taking on additional debt. In short, most ordinary people are finding that most of their resources are being taken from them by rich predators, or that most of their resources are going toward defending themselves from these predators. The best that individuals and communities can do is to achieve a sort of “relative” resilience based on having a multitude of skills and strategies for coping with a rapidly changing economic and political situation.

This changing economic situation is increasingly looking like a hard crash. Our present system is unsustainable, yet its masters will not willingly choose a sensible, orderly and equitable transition to a state of lower economic activity and energy use. Rather, they will try to maintain the status quo until they simply can't anymore, and then some things will break down catastrophically. A good question is when that breakdown will occur, and what will be the limiting conditions which force such a breakdown. We might also ask what such a breakdown will look like.

As far as limiting conditions go, there are several authoritative thinkers who have written about these things. Rather than trying to reproduce their work, I'll merely offer my summary two cents' worth. My focus will primarily be the United States and its government at all its levels. The limiting conditions I see are as follows:

1. Government debt. As debt increases without bound, so does the yearly revenue required to service that debt. (To service debt means to make the regular payments with interest that are required as part of the contract between borrower and lender to pay off the debt.) When the revenue required to service the debt exceeds yearly taxes taken, governments must default. Then, no more debt is issued, the creditors come knocking, and governments collapse or cut their spending drastically.

2. Post-Peak Oil. Crude oil production is inextricably linked to the output of industrial economies. If the world is post-Peak and oil production is falling, the global economy must contract. This is especially true of the United States. As the American economy contracts due to a declining resource base, the ability of the various levels of the American government to borrow more money or to service existing debt declines. This pushes us further toward default and collapse. (By the way, when estimating the severity of future oil supply constraints, I rely on the German Energy Watch Group's Oil Market Report predictions.)

3. Food supply collapse – due to climate change and other environmental degradation, and post-Peak Oil. There is a real possibility of food shortages in the First World within the next few years, due to the collapse of agricultural water supplies because of overuse, misuse and climate change-induced drought. (See http://www.theecologist.co.uk/News/news_round_up/293297/colorado_river_running_on_empty_by_2050.html, and http://www.latimes.com/news/local/la-me-climate-farms22-2009jul22,0,7564338.story for instance.) Famine will also reduce economic activity and hinder the servicing of government debt.

4. The present, ongoing economic contraction consisting of business failures and hundreds of thousands of people losing their jobs each month. This leads to more loss of income, more loan defaults on private debt and more bank failures. Of course, those who hold the debts of people who have been thrown out of work will not want those debts to become worthless – thus more lenders will call for more “bailouts” (i.e., transfer of bank debt to Government books). Yet the Government is getting closer to being caught in a maxed-out condition where further debt transfers become impossible.

5. The collapse of the powers of the corporate state. As government access to debt collapses, so will government ability to try to protect big business from incurring loss (no one will be able to afford to pay the bulldozers to knock down abandoned houses anymore, for instance, nor will any government be able to afford to enforce anti-competitive laws against small farms and small food producers).

6. The pledge of dis-allegiance if the Government tries to increase its ability to service debt by means of an excessive (confiscatory) tax burden on the poor and middle class. Should we tax the rich? Absolutely yes! But so much of the Government's activity of late has been to burden working class taxpayers in order to secure the wealth of the top 5 percent of the American economy. (Think AIG and Goldman Sachs, for instance.) This can go on for only so long.

What will a breakdown look like? I have a pretty good idea of what it will look like at first in many neighborhoods, as it is already starting to happen. First, there will be a rare, small number of people who have prepared quite fully. Chief among their preparations will be the elimination of all debt. (This is why I say they will be somewhat rare. Within the last couple of years, I have met only two other people who have paid off their houses.) These people will increasingly find themselves the odd men out (or odd women out) in neighborhoods where many people's homes are getting repossessed and becoming vacant. Also, those who still have a “job” in the conventional sense will increasingly be a minority. Lots of neighbors will suddenly have lots of unplanned-for “free time.” There will also be more store closures, so that it becomes harder for people in a neighborhood to obtain the things they need. There will be an increase of homeless people as well, and as time passes, an increase of renters or squatters. Neighbor whose house is paid for, meet your new neighbor: the squatter or renter who just moved in next door. In this state of flux, there will be a great need for wisdom, tact, politeness and diplomacy in forming new relationships. For perceptive souls, these conditions may also present opportunities for “culture repair.”

What are effective strategies of personal and group resilience for such conditions? The answer depends on whether one intends to stay in a particular place at all costs, or become a migrant. “Should I stay or should I go?” That depends on what holds you to a place. “If I stay, but if I owe,” what should I do? Develop a suite of alternative gigs in case you get laid off. Make sure that whatever you do, you make enough to pay down your debt. “If you stay and you don't owe,” this gets easier – you just have to worry about utilities and property taxes, as opposed to a mortgage. If you rent, most of this still applies – develop a suite of gigs that earns enough money so that you can pay your bills. In all cases, reduce other expenses so that you have enough money for the essentials. (Note: this will involve learning a fair amount of self-reliance skills.)

Why a suite of alternative gigs? Because the official economy is no longer willing or able to guarantee an income to a person who simply pursues a single career or profession. As an example, this last week, I was riding a MAX train home when I ran into a co-worker from my office. We talked about the fact that both our departments are very, very slow right now, as well as strategies for dealing with possible layoffs. He is a piping designer by profession (as in piping for large industrial plants), but he is also a sports referee. If my office shows him the door, he's got a large number of games lined up where he can referee and get paid for his services.

But are you already out on the street – have you fallen from “respectability” due to loss of income? There are strategies you can pursue for protection and mutual aid. I will have more to say about these strategies in a future post. Some of these will be useful not only for those who are homeless, but for other groups usually targeted by our predatory system.

One thing I must emphasize: I am a Christian. Therefore I believe in an absolute moral standard. I will not therefore ever suggest turning to certain criminal or unethical deeds as a coping strategy.

Is Community Resilience Possible At This Time?

My post, "Escaping the Thanatoeconomic System," marked a change of my mood from mildly optimistic to quite sober (maybe even somber), as I came to realize the full implications of some of the societal trends I have been following. For a long time I had realized that not only is our present economic system breaking, but that it is not in the interests of the masters of that system to foster local, resilient alternatives for ordinary people. Yet I had been reasonably optimistic that ordinary people of small means could engineer local, resilient safety nets of alternative systems by which they might decouple from the official economy. Of course, this ability would depend on the presence of local resources for these safety nets, as well as a certain minimum level of access to these resources.

While I still think that some members of the populace might be able to build such safety nets, I have recently come to believe that the majority of Americans will probably not be fully able to do so at present, due to lack of access to the necessary resources. While there are some things that most people will be able to achieve, there are also things that will be beyond the reach of all but the most affluent.

One thing that may be beyond the reach of most people at present is building local, permanent resilient neighborhoods and communities. The reasons for this are obviously tied to land use and ownership. Most people rent, or they “own” in the sense of making installment payments on a loan used to buy a house. During the run-up to the 2005 peak of the housing bubble, prices of homes were continually and wildly inflated, far beyond the ability of most people to pay, while wages for most workers remained stagnant or declined in real terms. Then the economic collapse began, triggered by the rise in oil prices leading to the spike in 2008. That economic collapse has resulted in millions of jobs lost, as well as further erosion of incomes; yet there has been no debt relief for people who bought houses during the bubble years. A debtor living in a regular, modest house (I'm not even considering McMansions) is not resilient in the face of economic shocks, but is brittle, and is likely to end up out in the street in the event of a job loss or some sudden large expense.

Now one thing that could have provided opportunity for many people to build resilience is a sudden, large-scale reset of real estate prices nationwide. Had prices been allowed to fall to a level that people could actually afford in this present economic climate, more people would have been able to find homes that they could afford to stay in for the long term, and they would have been free to work on other strategies of resilience, such as gardening and energy efficiency. Indeed, there were and are places where this reset has occurred – places like Detroit and Flint, Michigan, and other cities in the Midwest. As word got out about home and land prices in places like these, forward-thinking people moved to these places in order to build a more sustainable life for themselves.

Yet these places also attracted speculators looking to get rich by playing a real-life version of “Monopoly.” I believe they also attracted the notice of the masters of the banking and finance sector as well as their friends in various levels of government. These people had a vested interest in preventing any fall in real estate prices, since most properties had been bought on credit and these properties were collateral for securities priced at an inflated value. What has therefore emerged over the last several months is a concerted effort to keep the price of housing high by artificially restricting access.

Thus we have seen cities bulldozing abandoned properties; cities foreclosing on people who can't afford to pay their property taxes; the withholding of foreclosed houses from the market by the banks that own them; and cities creating “land banks” consisting of abandoned properties which the cities either demolish or remodel in order to collect revenue and bring housing prices back up. (Sources: “Unpaid Property Taxes Hit Cities, UPI, 30 July 2009, http://www.upi.com/Top_News/2009/07/30/Unpaid-property-taxes-hit-cities/UPI-99581248962645/; “Land Banks Gain Popularity As Way To Fight Urban Blight,” USA Today, 9 July 2009, http://www.usatoday.com/news/nation/2009-07-09-landbanks_N.htm; “Flood of Foreclosures: It's Worse Than You Think,” USA Today, 23 January 2009, http://money.cnn.com/2009/01/21/real_estate/ghost_inventory/index.htm)

Many of these strategies were anticipated in the United States Housing And Economic Recovery Act of 2008, signed into law by President Bush, which, among other things, set aside $4 billion for the establishment of land banks and the redevelopment of abandoned, foreclosed or “blighted” properties, in order to boost real estate prices. These strategies continue to be supported by the American Recovery and Reinvestment Act of 2009, signed into law by President Obama. These strategies are part of a broader effort to protect the rich from a loss of the notional value of their assets, yet they continue to put basic resources such as houses and land out of reach of ordinary people of limited means. Any regular person trying to buy a house nowadays is still likely to be subjected to an unsustainable burden.

And the attempt to reinflate the housing bubble is only one example of the imposition of unsustainable burdens on the American working class. Another glaring example is the continued bailouts of the banking sector, bailouts which now number in the trillions of dollars, just to cover the losses of bank “assets” which had been built on loans that are now unrepayable. Lest anyone take this as a signal to become stupidly partisan, let me remind any readers that this mess is bipartisan. Both Democrats and Republicans are to blame. The net effect of the bailouts will be to saddle ordinary Americans with yet another unsustainable burden – that of being turned into collateral for a huge mass of bad loans.

These are just a few examples of the way in which our predatory system is taking from ordinary people the very resources they need in order to foster resilience. These examples illustrate the extent to which the masters of our present system will go in order to maintain the status quo. It was considering these examples that made me increasingly pessimistic about our prospects for a “soft landing,” an orderly and equitable transition to a state of lower economic activity and energy use. I don't think we will achieve a “soft landing,” because the masters of the present system will do their best to keep things as they are until they simply can't any longer, and then some things will break down catastrophically.

What will such a breakdown look like? I can't say with any confidence. There are people much cleverer than I who have thought about these things. I've read Dmitri Orlov; now I may get my hands on a copy of Joseph Tainter's The Collapse of Complex Societies. Is now the time for communities and neighborhoods to try to foster resilience? I think it may not be possible at this time. (But if anyone can prove me wrong, feel free. I'd welcome it.) It may only be possible for individuals to foster resilience, and if communities try for such a goal, it may only be possible for groups of nomads or migrants. Building permanent, local resilient communities might have to wait until our present system has gone a little further down the road of collapse. In the meantime, allow me to recommend Jeff Vail's blog (http://jeffvail.net), where he tackles some of the same questions (although he does a much better job, in my opinion). His latest series is called “The Rise of the Diagonal Economy and the Transition to Decentralization,” and he's just getting started. There is also a post on the internet titled, “"Peak Civilization": The Fall of the Roman Empire,” by a man named Ugo Bardi. Note especially what he says about the emperor Diocletian.

“What advice do you have, then?” someone may ask. Unfortunately, I don't have any right now. I need time to think about this some more. These thoughts have definitely changed the character of the upcoming interviews I was planning to do for this blog; now I'll have to approach things from a different angle. Someone else might be asking, “Do you see any other examples of large-scale hindrances to community resilience?” My answer is that if I tried to think of all the potential hindrances, I'd be here typing until midnight, and I'm trying to cut down on that sort of thing... ;)

Escaping The Thanatoeconomic System

“For if they do these things in the green tree, what will be done in the dry?”

- Luke 23:31, World English Bible

Thanatos: death (Greek).

Let me begin with some insightful comments made by blogger Stormchild on my recent post, “Airlines And Moral Systems Failure.” That post dealt with the financial squeeze now being experienced by the major airlines due to Peak Oil and economic collapse, and my belief that airlines are now resorting to cost-cutting measures that are beyond the bounds of reasonableness, measures that put the flying public at risk.

Stormchild observed that, “...we live in an economic system that rests, ultimately, on human sacrifice, and almost none of us realize either this fact or its implications.” She also observed that, “In order to function, our system actually requires a permanent underclass, AND needs a certain number of people to be deprived of their livelihoods at regular intervals. [Consider the obscene fact that a company's stock price goes up when it indulges in mass firings.] This same system places little or no value on preserving human lives; business schools in this country will actually teach you how to determine when liability exceeds profitability – a.k.a., how many people you can afford to kill before it gets too expensive.”

These observations are quite accurate. The fact that our present official globalist economy functions in this way speaks volumes about the motivations of the masters of this economy. Our large-scale, energy- and capital-intensive industrial economy is a predatory machine run by predatory masters, and those of us who are not rich enough or well-placed enough to be its masters are its prey. That means that the majority of people on earth are prey. Over the duration of this economy, the conditions imposed on us who are prey have oscillated between moderately decent and horrible, against a backdrop of industrial and economic expansion due to the acquisition of ever larger quantities of natural resources and labor which served as feedstocks for this economy.

Now this economy and its masters are under stress as its resource base declines, and as its base of capital also shrinks. This should be of great concern to us who are the world's prey, because of the well-known tendencies and behaviors exhibited by predators under stress. The recorded history of such tendencies and behaviors give us a clue as to what we can expect from our present globalist, corporatist system and its masters as that system experiences increasing stress.

I have written about the need to foster resilient neighborhoods as preparation for a post-Peak world of economic collapse. My writing has been partly a blind, groping, feeling exploration for solutions to the immediate, present threats that I see in neighborhoods, communities and cities in the U.S. In thinking about these things, I have also read many of the writings of other thinkers, people whom I believe to be far more knowledgeable than me regarding Peak Oil, climate change, and their likely societal effects.

But I have noticed a tendency among many of these writers to think only of the scientific or technical implications of the effects of resource constraints and climate change on our social arrangements. So there are endless discussions about how post-Peak oil production declines will affect finance, global shipping and land-based transportation, or about the importance of mass transit and localized food production, or about personal preparedness along the lines of organic gardening and relocating to ideal “lifeboat” locales. Those who discuss “resilient communities” have tended to approach the subject by laying out high-level theories of optimum social organization, organization whose effectiveness is often bolstered by technological advances (see Global Guerrillas: THE RESILIENT COMMUNITY, for instance). The sense of many such writings is that resilient communities are a futurist vision that's always just around the corner.

These theories have value, and I would not discourage them. Yet they do have a blind spot. Pardon me for saying so, but many of these discussions and theorizings sound so very “upper middle-class white.” Therefore, they ignore the present relation between our predatory global economy and the large numbers of people who are its prey. This is a dangerous omission. Consider the dictionary definition of resilience: “an ability to recover from or adjust easily to misfortune or change.” In order to have this ability, one must have a stable resource base from which to draw in order to deal with the stresses of misfortune and change. Those who are deprived of that resource base are not resilient, but brittle and prone to break down. Consider a well-fed, athletic, well-rested teenager who is suddenly thrown into an ice-cold pool. The experience is undoubtedly a shock to him, yet once he swims to the side and gets out, he easily recovers from it. The same is not true of someone who is seriously ill, malnourished and sleep-deprived.

Being treated as prey robs people of the reserves of strength they need in order to be resilient, for all their resources are either consumed in coping with their predators or are taken from them by their predators. Here are some recent examples of our masters treating us as prey:

• The U.S. Congress has been trying to pass broad “food safety” laws in response to public concerns over tainted food and food recalls. The problem is that these laws don't correct the bad practices of the large agribusinesses that produce tainted food, but rather, the laws impose such a huge regulatory burden that they drive small, sustainable farmers out of business. Thus they force us to rely on the big agribusinesses instead. Just last week, the House of Representatives passed such a bill – H.R. 2749.

• U.S. mortgage lenders are, by and large, not cooperating with the recently enacted $75 billion Federal program to prevent foreclosures. This is because lenders who foreclose are able to collect lucrative “junk” fees on delinquent loans. Such fees include late fees, title search fees, legal filings, and appraisal fees. (Sources: Homeowners ask government in lawsuit: Where's the foreclosure relief?, and Profit motive may trump plan to modify mortgages.) Heaven help you if you get in trouble on your mortgage, because the banks sure won't – they get more money from making you homeless.

• Amid California's recent budget crisis, the Governor was proposing a budget that would protect the outlay of State funds to the private prison industry – even though there were many headlines about the need to slash social services. At present, there are three corporations operating private prison chains in the not-so-Golden State. (Sources: Schwarzenegger Talks Private Prisons and Budget Cuts | Youth Radio, and http://reason.org/blog/show/solving-the-ca-budget-governat, from Reason Magazine which should perhaps be named Un-reason Magazine for praising such an evil arrangement.) Meanwhile, “Governator” Schwarzenegger seems uninterested in genuinely rehabilitative ways of dealing with California's prison population, as these might be bad for somebody's business.

• The City of Los Angeles has been criminalizing homelessness under the direction of its police chief, William Bratton and his “Safer City” initiative. Under this initiative, it is illegal to sit, sleep or store personal belongings on sidewalks and other public spaces. Also, if you look shabby and are caught jaywalking or loitering, the police come after you, whereas the police don't seem to notice the same offenses when done by people who don't “look” homeless. Los Angeles is just one example of the broad criminalization of homelessness in America. (Sources: Los Angeles accused of criminalizing homelessness, LA is "Meanest City" for Homeless: Study, and A Dream Denied: The Criminalization of Homelessness in U.S. Cities.)

I believe that these examples illustrate how our present economic masters will increasingly treat us as their opportunities for further enrichment through economic growth disappear. Even while it was expanding, the official economy always had catabolic tendencies – i.e., there were always some members of that economy who were consumed by it rather than being allowed to function as members of that economy. But as our economy continues to contract, its catabolic tendency will be amplified, and may well become its main characteristic. As more and more people slide from middle-class status to poverty, these people will increasingly discover what it means to be preyed upon, as they are consumed in order to satisfy those who are still rich.

If these things are so, then figuring out how to build resilient communities must take into account what sort of people are the prospective members of that community. Are they poor? Are they people of color? Are they both? If so, then they must not only contend with the general exigencies of post-Peak Oil, climate change and general economic collapse, but they must also be able to devise effective protection from their predators. (By the way, most of us are going to get a lot poorer.)

This is something that I don't hear many resource and sustainability activists talking about. I don't think, for instance, that the Transition Towns movement has thought about this. But this is what concerns me. How does someone keep from having his house repossessed? How do people of color protect themselves from police racial profiling and selective arrest? Where can homeless people go to find a place of stability where they can regroup? If you get thrown in jail – even for a stupid reason – how do you find a job afterward? Some of the abandoned houses I showed in my last post are in my neighborhood. How do we fix problems like this? How can poor people rebuild social safety nets that are now being dismantled by the rich? How can we stop getting jacked?

These are questions I've tried to answer in my posts on neighborhood resilience. I'm a little frustrated right now, because I haven't come up with satisfactory answers. Maybe I'm just not clever enough. But why are there so few other “collapse-aware” thinkers who are trying to tackle these things? We need answers, and right now.