third is “What can’t I do anything about at all?” Each person will gather his or her individual set of answers because of their particular circumstances and we expect that they will find it interesting to compare them with those suggested by our authors in the final section.
Overall, we think you will find that this is an optimistic book because, although the world is facing huge problems, there are also a lot of potential solutions. Consequently, there’s a lot that can be done. We hope that, by the time you have finished reading, you have found there are some things which you, personally, are in a better position than anyone else to do or to help others do.
Endnotes
1. Quoted by Richard G. Wilkinson, Poverty and Progress (Methuen, 1973), 115.
2. Keith O. Fuglie, James M. MacDonald and Eldon Ball, Productivity Growth in U.S. Agriculture (September 2007), downloadable at ers.usda.gov/publications/EB9/eb9.pdf
3. See “How three families started a movement and created an industry” at feasta.org/documents/shortcircuit/index.html?sc5/windguilds.html or pp. 203–7 in my book Short Circuit (Green Books, 1996).
On The Cusp of Collapse: Complexity, Energy and the Globalized Economy
DAVID KOROWICZ
The systems on which we rely for our financial transactions, food, fuel and livelihoods are so interdependent that they are better regarded as facets of a single global system. Maintaining and operating this global system requires a lot of energy and, because the fixed costs of operating it are high, it is only cost-effective if it is run at near full capacity. As a result, if its throughput falls because less energy is available, it does not contract in a gentle, controllable manner. Instead it is subject to catastrophic collapse.
Fragments from a Globalized Economy
• The eruption of the EyjafjallajÖkull volcano in Iceland led to the shutdown of three BMW production lines in Germany, the cancellation of surgery in Dublin, job losses in Kenya, air passengers stranded worldwide and dire warnings about the effects the dislocations would have on some already strained economies.
• During the fuel depot blockades in the UK in 2000, the supermarkets’ just-in-time supply-chains broke down as shelves emptied and inventories vanished. Anxiety about the consequences rose to such an extent that the Home Secretary, Jack Straw, accused the blockading truckers of “threatening the lives of others and trying to put the whole of our economy and society at risk.”
• The collapse of Lehman Brothers helped precipitate a brief freeze in the financing of world trade as banks became afraid to accept other banks’ letters of credit.1
Just as we never consider the ground beneath our feet until we trip, these glimpses into the complex webs of interdependencies upon which modern life relies only come when part of that web fails. When the failure is corrected, the drama fades and all returns to normal. However, it is that normal which is most extraordinary of all.
Our daily lives are dependent upon the coherence of thousands of direct interactions, which are themselves dependent upon trillions more interactions between things, businesses, institutions and individuals across the world. Following just one track; each morning I have coffee near where I work. The woman who serves me need not know who picked the berries, who moulded the polymer for the coffee maker, how the municipal system delivered the water to the café, how the beans made their journey or who designed the mug. The captain of the ship that transported the beans would have had no knowledge of who provided the export credit insurance for the shipment, who made the steel for the hull, or the steps in the complex processes that allow him the use of satellite navigation. And the steel-maker need not have known who built the pumps for the iron-ore mine, or how the oxygen for the furnace was refined.
Every café has customers like me who can only buy coffee because we are exchanging our labors across the world in ways that are dependent upon the globalized infrastructure of IT systems, transport and banking. The systems and the myriad businesses upon which they depend are only viable because there are economies of scale. Our global infrastructure requires millions of users across the world, the ship needs to carry more than coffee beans, and my café needs more than a single customer. The viability of my morning coffee requires the interactive economic and productive efforts of the globalized economy.
Thinking this way enables us to see that the global economy, and thus our civilization, is a single system. This system’s structure and dynamics are therefore central to understanding the implications of ecological constraints and, in particular for this analysis, peak oil.2 Here are some of its principal features.
The Global Economy Is Self-Organizing
The usually seamless choreography of the global economy is self-organizing. The complexity of understanding, designing and managing such a system is far beyond our abilities. Self-organization can be a feature of all complex adaptive systems, as opposed to “just” complex systems such as a watch. Birds do not “agree” together that arrow shapes make good sense aerodynamically, and then work out who flies where. Each bird simply adapts to its local environment and path of least effort, with some innate sense of desire and hierarchy, and what emerges is a macro-structure without intentional design. Similarly, our global system emerges as a result of each person, company and institution, with their common and distinctive histories, playing their own part in their own niche, and interacting together through biological, cultural and structural channels.
The self-organization reminds us that governments do not control their own economies. Nor does civil society. The corporate or financial sectors do not control the economies within which they operate. That they can destroy the economy should not be taken as evidence that they can control it.
The Global Economy Has Growth-Dependent Dynamics
We have come to regard continued economic growth as normal, part of the natural order of things. Recessions are viewed as an aberration caused by human and institutional weakness, the resumption of economic growth being only a matter of time. However, in historical terms, economic growth is a recent phenomenon. Angus Maddison has estimated that Gross World Product (GWP) grew 0.32% per annum between 1500 and 1820; 0.94% (1820– 1870); 2.12% (1870–1913); 1.82% (1913–1950); 4.9% (1950–1973); 3.17% (1973– 2003), and 2.25% (1820–2003).3
We tend to see global economic growth in terms of change. We can observe it through increasing energy and resource flows, population, material wealth, complexity and, as a general proxy, GWP. This can be viewed from another angle. We could say that the globalizing growth economy has experienced a remarkably stable phase for the last 150 years. For example, it did not grow linearly by any percentage rate for any time, decline exponentially, oscillate periodically, or swing chaotically. What we see is a tendency to compound growth of a few percent per annum, with fluctuations around a very narrow band. At this growth rate, the system could evolve, unsurprisingly, at a rate to which we could adapt.
The sensitivity felt by governments and society in general to very small changes in GDP growth shows that our systems have adapted to a narrow range of variation. Moving outside that range can provoke
