If you’ve read practically all my posts and all the forum posts as well, you’re probably aware of the fact that one of the early catalysts for my own trajectory to what became ERE was my discovery of peak oil(*) in 2001. (I attribute the other two catalysts to the idea of anticonsumerism and fractional reserve banking.)

(*) I was fairly involved in this. For a time, I was the webmaster on the referenced site. I wrote a chapter for The Final Energy Crisis and I had what, at the time, was a top ranking site. This was at a time when coming sky-high oil prices was still thought of as a nutjob conspiracy and generally denied by agencies like USGS and IEA. Then in 2007-08 oil prices hit ~$150 and in 2010, the IEA came out with a 180 and admitted, that “hey, maybe resources on a finite planet aren’t infinite after all and the economic idea that demand will always create demand is a bit of a pipe dream—sort of similar to the story of an economist who jumps out of an airplane and start calling out bids, $50, $100, $500, $4000, $10,000 … under the presumption that a sufficiently large amount will cause a parachute to materialize on his back.

The three sites linked above was my primary wake-up call to realizing that the economic linear-progress StarTrek future I had envisioned may not be so realistic or likely as I had previously assumed.

I immediately started making fairly drastic lifestyle changes to prepare for this alternate future by practicing how to live on the reduced means of an energy-poor world. It was already clear back then that replacing oil and gas with alternative energy was pretty much a pipe-dream. There are simply FAR too many solar cells and windmills that needs to be build to compensate for the slide of output. Clue: You can’t solve meta-macro issues with something as simple as technology. Technology is not the [cause of the] solution. It is the [cause of the] problem!! What I mean is that technology creates a certain way of life. That technology can not be replaced with other technology and be expected to preserve this way of life—it will create a new way of life.

If you asked me ten years ago, how I saw the future, I was preparing for the eventual Mad Max scenario. Today I am far more optimistic. I have shown that one can live a very good life on a quarter of the resource use of an average American family. (This realistically compares to the energy use of our grand parents, thereabouts.)

I have not spent the past decade with an idle mind. Ten years ago, I didn’t know anything about economics. I knew little about history (other than as a list of memorized facts about kings and wars—the way I was taught history was in a sense similar to trying to understand a forest by a deep study of the limb of a tree, a mushroom, and a random bird; I was taught nothing about the connections.) Today, I’d like to think I’m somewhat wiser.

Also, I do not think the world is going to end. “The world as we know it” may end, but it’s going to happen so slowly that only a few deep thinkers (who suffer from the affliction of worrying about things they can’t change anyway) will see it. Yet, following the Eisenhower ideal of making a strategy or plan not in order to follow exactly but as a tool to think deeply about possible outcomes, I’ll plod along…

What we’re currently experiencing is not the end of the world. It is simply the winter stage of the Kondratiev cycle. The current Kondratiev cycle is built on cheap oil. This means things like globalization, personal cars, mass production, and generally cheap crap—excuse me “snazzy throwaway electronic toys” for everybody—predicated on planned obsolescence. Energy is cheap (but won’t be any longer) and with cheap energy comes cheap resources. Humans being what they are will happily waste cheap resouces. Incidentally humans aren’t unique in that sense. Pretty much any species will try to use resources as fast as they can. That’s because pretty much all creatures including humans have absolutely no foresight as a species. Anyway …

The current Kondratiev cycle began in 1949 and will likely end sometime between now and 2020, maybe 2025. We can call this “the cheap oil era”. The previous era was built on the chemical industry (plastic fantastic, war gas) and electricity (domestic lights, motors). The one before that on steel and railways. The one before that on steam power. The one before that on timber (which pretty much deforested many countries).

Each Kondratiev cycle lasts about 60 years plus minus a decade. There’s a generational theory behind this too. The winter season is the end of the cycle. This is the time when the system collapses under its own weight. We currently see the collapse of the financial system. The political system is also in dire straights. Traditional means of understanding no longer works but it takes some time for the old generations to realize that. They’re too calcified in their understand because they believe that since it’s been this way since they were born, it’s the only way. In particular, the young generation (Millenials) no longer see politics and red vs blue or left vs right. They see the two as essentially being the same thing (which it actually now is). The financial system has the same problem. Before the crash, the financials comprised 20%+ of the entire US economy. There you have an industry which essentially produces nothing but a governing system that determines where your money goes alongside with a government which by definition only makes things which the private market refuses to suply because the ROI is negative comprising over 50% of the entire. It’s bound to collapse.

The GI Joe generation came into being after WWII. That generation worked hard to build institution after a world that had razed the previous system in the analogy of what a fire does to a mature forest. Interestingly enough major wars rarely happen during the Winter season (1929-1949)—however, keep in mind that the instigator of WWII, namely Germany was an economic powerhouse at the time having moved into Spring season. Most wars occur during spring when nations start growing and competing for resources.

We will have some form of global war between 2020 and 2040. I’m calling it! This war will be between the current superpower and the next superpower for the next resource (not oil). In particular, it will be in a form that reflects the form of the next Kondratiev cycle. As you recall, the current one was industrial mass production and global transporation. Hence WWII was a Total War with the goal of large scale destruction. World War III will not be like this.

The GI Joe generation was followed by the baby boomer generation. The baby boomers worked hard to support the GI Joe vision (UN, IMF, the European Uninion, social security, Medicare—all mass (<=- yes, it was all mass-scale thinking) institutions for the purpose of ensuring that the Great Depression and WWII wouldn't be repeated. The boomers eventually become managers. In turn their advice to Generation-X was to work hard. All generations give the advice they received along to the next generation where it obviously won't work. It's like having a weed plant tell a tree that all it needs to do to succeed is to spread and grow as fast as possible. That's incorrect. A tree needs to grow slow and solid. While being advised to work hard in order to succeed, Gen-Xers found their jobs outsourced, being replaced with robots and global labor and competing with their cohort for jobs that usually receive anywhere between 50 and 500 applications. Cronyism, networking, politics and other factors replaced "old-fashioned" virtues like hard work and skill. People realized they needed to start gaming the system in order to win. The financial mess where in now is a prime example of what happens when that attitude becomes dominant. This also explain why different generations have such different takes on what "retirement" means. GI Joes are rightfully concerned with spending all their lives trying to make sure that the previous disasters never happen. Boomers think that having put in their hard work, retirement is the time to have fun. Gen-X thinks of retirement as having enough money to say "Fuck you" to a system they feel screwed them over. Millenials weren't told any lies but on the other hand they aren't receiving any hope either. They'll see Gen-X as the overseers of this collapse. Henceforth, Gen-X will have a poor legacy in the future as having made the choices (slashing SS, Medi*) that are needed for the system to survive. Humans tend to blame the helmsman for the storm. And the president for the economy. I'm sorry it has to be this way, but this is the way it is. Moving forward, the generation that hasn't come into play yet (Z, your average ten year old) will determine the form of the next cycle. X will be the cranky real-politik politicians, and Y/Millenials will be the managers. This will likely not be a cycle in which massproduced technology will be an answer to everything. You can stop hoarding money and supplies right now because they won't be the answer going forward. One possible solution with be the global relationships formed by the internet. Tribes, clans, or what have you. World War III might very well be a propaganda war concerning which cultural understanding should be the dominant one. I'm not kidding you. This may well be the way things go down. Just as the previous cycle would think of the use of weapons of mass destruction as incomprehensible and we see the idea of soldiers lining up 100 yards from each other and proceeding to launch disciplined rifle volleys at each other without taking cover as proper military conduct; the next form of war will be seen as "plain weird". People are always preparing for the last war. Similarly, people are preparing for the previous depression. We're hoarding money and supplies, but in reality, that's probably not what we should be concerned about. Rather we need to think about what the next Kondratiev cycle will focus on and concentrate our energies in that direction. Forward, not backward. Specifically, this means moving away from a lifestyle that's intensive in energy (driving, living far away, buying products from far away), massproduction (buying products instead of thinking and improvising), and quantity (more and bigger instead of longer and better). It means that there will be less opportunity for the frivolous waste of commodities that has characterized the era since 1949. Houses will be smaller and closer. Life will be more localized. Specialization will decrease. This, of course, is what ERE is all about.

Originally posted 2011-10-19 05:22:00.