fared in the recession and their general ability to pick up again. Even so, growth begins again, focusing maybe on more “sustainable” production and consumption.
However, the return of growth will not raise the purchasing power of the economy to its previous level because oil production will be limited by resource depletion; the lack of investment in production; the entropic decay of infrastructure and productive capacity; and the lower purchasing power which will reduce the price that the economy can afford to pay for its oil. The recovery will be cut short as rising oil, food and energy prices produce another recession.
The sequence of events in the oscillating decline model is therefore as follows: economic activity increases — energy prices rise — a recession occurs — energy prices fall — economic activity picks up again but to a lower bound set by declining oil production. As a result, the economy oscillates to a lower and lower level of activity.
There are good grounds for believing that this process has already begun. At least one authority links the record oil prices in 2007 to the pricking of the credit bubble.21
Collapse Dynamics
The oscillating decline model does not account properly for some of the embedded structures of the global economy which, while relatively obvious, have been obscured by the fact that they were adaptive in a growing economy. If oil production declines, and we cannot fill the gap between the energy required for growth and what can be produced, as we saw in the oscillating decline model, this limits the availability of other types of energy, then the global economy must continue to contract. In short, humanity is at, or has exceeded, the limits to growth.
Embedded structures that fail to contract in an orderly manner will break down. The structures that will break down include the monetary and financial system, critical infrastructure, global economies of scale, and food production. As argued earlier, these structures are deeply interdependent. As a result, they will reinforce each other’s collapse. Their collapse undermines the whole operational fabric and the functioning of the global economy and all it supports.
It has been argued so far that our civilization is a single, complex adaptive system. Complex adaptive systems, and the sub-systems of which they are comprised, are a feature of open thermodynamic systems. And while they show great diversity, from markets to ecosystems to crowd behavior, their dynamic properties have common features. For most of the time complex adaptive systems are stable, but many of them have critical thresholds called tipping points, when the system shifts abruptly from one state to another. Tipping points have been studied in many systems including market crashes, abrupt climate change, fisheries collapse and asthma attacks. Despite the complexity and number of parameters within such systems, the meta-state of the system may often be dependent on just one or two key state variables.22
Recent research has indicated that as systems approach a tipping point they begin to share common behavioral features, irrespective of the particular type of system.23 This unity between the dynamics of disparate systems gives us a formalism through which to describe the dynamic state of globalized civilization, via its proxy measure of Gross World Product (GWP) and its major state variable, energy flow.
Catastrophic bifurcation is the name given to a type of transition where once the tipping point has been passed, a series of positive feedbacks drives the system to a contrasting state. For example, as the climate warms, it increases methane emissions from the Arctic tundra, which drives further climate change, which leads to a further growth in emissions. This could trigger other tipping points such as a forest die-off in the Amazon Basin, itself driving further emissions. These positive feedbacks could mean that whatever humanity does would no longer matter as its impact would be swamped by the acceleration of much larger-scale processes.
Figure 2 shows how the system state responds to a change in conditions. The state of a system could represent the size of a fish population, or the level of biodiversity in a forest, while the conditions could represent nutrient loading or temperature (both effectively energy vectors). The continuous line represents a stable equilibrium; the dotted line an unstable one. In a stable equilibrium, the state of the system can be maintained once the condition is maintained. In figures A and B we see two different responses of a stable system under changing conditions. In the first, a given change in conditions has a proportional effect on the system state; in the latter, the state is highly sensitive to a change in conditions. In C and D the system is said to be close to a catastrophic bifurcation. In both of these cases there is an unstable region, where there is a range of system states that cannot be maintained. If a system state is in an unstable regime, it is dynamically driven to another available stable state. If one is close to a tipping point at a catastrophic bifurcation the slightest change in the condition can cause a collapse to a new state as in C, or a small perturbation can drive the system over the boundary as in D.
Small Changes Can Produce a Big Response
FIGURE 2. The state of a system responds to a change in conditions. The continuous line represents a stable equilibrium. In A a change in conditions drives an approximately linear response in the systems state, unlike B where a threshold is crossed and the relationship becomes very sensitive. The fold bifurcation (C, D) has three equilibria for the same condition, but the one represented by the dotted line is unstable. That means that there is a range of system states that are dynamically unstable to any condition. Source.24
The state of our civilization necessarily depends on the state of the global economy. I mentioned earlier that the global economy has been in a dynamic but stable state for 150 years or so, because it has had compound economic growth of about 3% per annum within a narrow band of fluctuation during that time. The state of the global economy is indicated by annual GWP growth of approximately 3%, and GWP is absolutely dependent upon rising energy flows.
To argue that civilization is on the cusp of a collapse, it is necessary to show that positive feedbacks exist which, once a tipping point has been passed, will drive the system rapidly toward another contrasting state. It is also necessary to demonstrate that the state of the global economy is driven through an unstable regime, where the strength of the feedback processes is greater than any stabilizing process. It acknowledges that there may be an early period of oscillating decline, but that once major structural components (international finance, techno-sphere) drop or “freeze” out, irreversible collapse must occur.
In the new post-collapse equilibrium state we would expect a collapse in material wealth and productivity, enforced localization/de-globalization, and collapse in the complexity as compared with before — an expression of the reduced energy flows.
Collapse Mechanisms
The Monetary and Financial System
As I write, fears are being expressed that a Greek sovereign default may be inevitable and that, as a result, the markets might refuse to lend to Ireland, Portugal and Spain, causing them to default as well. In Ireland, as in other countries, deflation is continuing as the money supply contracts, and people retrench their spending because of fears of future unemployment. As our debt burden becomes greater in relation to our national income, it adds to the instability in the eurozone. A contagious default would be a major blow to German and French banks, which have lent to all four countries. The economic historian Niall Ferguson argued that US fiscal deficits could lead at some point in time to a rapid collapse in the United States economy, noting “most imperial falls are associated with fiscal crisis”.25 Such a crisis would drag down every other economy, including those of China and Saudi Arabia.
These examples point to three things. One is that while money may not have any intrinsic value, it can nevertheless decide the fate of nations and empires. The second is that in an integrated globalized economy,
