Toward Ecosophy

Once again I'm on the Hermitix podcast with host James Ellis, but this time we're talking about something a little different:  the economic ideas in my book The Wealth of Nature: Economics as if Survival Mattered, which is currently out of print but will be reprinted sometime soon (fingers crossed!) in a new edition from Founders House. 

If you've followed my previous podcasts with James you know that it's a lively conversation covering a lot of ground. This time we talk about the incompetence of modern economic thought when that deals with nature, the difference between money and wealth, and a great deal more. Check it out here on Anchor.fm and here on YouTube. 

I don't know how many of my readers have been keeping track of the price of oil, but -- ahem -- it's rising again. West Texas Intermediate (WTI), one of the two standard benchmark grades of crude oil, ended the day a little below $70 a barrel; Brent -- the other standard benchmark -- was just below $75 a barrel. Just a few years ago they bottomed out in the low $40s. Now some thoughtful observers are starting to warn of an imminent oil shock. 

It's hard to tell at this point whether the price of oil will keep going up until it cracks $100 a barrel and once again starts drawing blood from the world's economy, or whether we'll see another downward lurch before the next oil price spike. My guess is that we're nearing the next spike. The gimmicks that kept petroleum prices under control for a while -- frantic extraction of shale oil and tar sands, on the one hand, and economic policies that suppressed demand by forcing a growing fraction of people in the industrial world into poverty, on the other -- were never more than temporary kluges; they postponed the problem while doing nothing to fix it and, inevitably, made the final consequences worse. 

The predicament we're in isn't hard to understand. The Earth is a sphere, and therefore contains a finite amount of fossil fuels; we're drawing down that stock of fossil fuels at a breakneck pace; most of the good stuff -- light sweet crude, anthracite coal, and so on -- was extracted and burned a long time ago; and now we're trying to keep the global industrial system running on low-grade fuels that are increasingly costly to extract and yield less and less energy. Renewable resources can't meet more than a small fraction of the demand -- despite whopping government subsidies in many nations, renewables account for only 9% of energy production worldwide, and 7% of that consists of hydroelectric; wind, solar, and all the other renewable resources produce a fraction of one per cent each. 

The solution isn't hard to understand, either.  We have to reduce our consumption of energy, and the products of energy, to levels that can be supported indefinitely by renewable resources -- let's say, 10% of current energy consumption. "We," furthermore, means you, personally, and me, and everyone else. The only choice we have is  whether we do this deliberately, or whether shortages, soaring prices, and economic dysfunction do it for us. 

You've heard this before, dear reader. I've talked about it at length since the early days of my old blog, The Archdruid Report.  The only thing that's changed since then is that billions more barrels of oil from our planet's dwindling supplies have been extracted and burnt. There may be another round of short-term fixes that will push off the day of reckoning a little further...or there may not. What will you do?