What is the big screen reality ? It is the economic/energy equation.
“Economist and resource analyst Jeff Rubin is certain that the world’s governments are getting it wrong. Instead of moving us toward economic recovery, measures being taken around the globe right now are digging us into a deeper hole.
Both politicians and economists are missing the fact that the real engine of economic growth has always been cheap, abundant fuel and resources.
But that era is over. The end of cheap oil, Rubin argues, signals the end of growth – and the end of easy answers to renewing prosperity …”
I’m pretty clear in my own mind having researched this matter exhaustively now for the past 7 years (as a physicist and businessman, as it happens). Unless and until our politico-economic Establishment adjusts its paradigm, ie adjusts its view of how the world works within a revised economics framework, then we’re going to see more and more articles like this one making futile screams for a return to industrial age rates of economic growth (whilst debating relatively trivial economics indicators that miss the fundamental point).
It ain’t gonna happen, guys, it just ain’t gonna happen: in my book the laws of physics trump an obselete economics paradigm any day (a paradigm largely developed within mankind’s industrial, ie fossil fuel era). Recognising that you have a problem is half the battle in solving it. If we think that the developed world’s debt problem and the interminable recession/depression that appears to be going with it is killing us today, just wait and see how things look tomorrow when we haven’t re-established that ‘urgently needed growth’.
“If growth in world oil supply is constrained and may possibly begin to fall in total in not too many years, this adds to the downward pressure on world GDP growth for all of the areas of the world. Thus, re-examination of GDP growth assumptions seems to be in order. Perhaps slow recent growth is not an aberration – perhaps future real GDP growth will be even lower …”
Perhaps indeed. Are our politicians and economists preparing our complex societies for a lower energy future, I wonder, and the economic contraction that goes with it, or are we sleepwalking in to something pretty disastrous here?
How long before European electorates wake up to the massive destruction their politicians have inflicted on them?
Let me tell you something; for as long as the developed world’s politicians fail to grasp the economy as an energy equation, “massive destruction” will be an understatement for what happens over the next decade or so.
But even now, concepts like ‘the economy as an energy equation’ or, dare I say, ‘the end of growth’ are treated by the economics Establishment as the rantings of raving lunatics. So, an urgent return to economic growth it shall be then; or else.
PS Anybody noticed a slight problem with energy in India recently? Do you think the situation there (and elsewhere around a world desperate to re-establish rampant economic growth … they need/want 6% pa in India apparently) will get (a) better, or (b) worse over the coming years?