Survival__ Structuring Prosperity for Yourself and the Nation - Charles George Smith [72]
It is foolish to blame "speculators" for the rise in food and energy, when the human population has doubled in 40 years and the consumption of energy and food has exploded as a result. Yes, technology in the form of the Green Revolution enabled vastly greater yields per acre; and yields in many places can still be increased with fertilizers, improved seeds and so on.
But all of this was the result of cheap, easy-to-pump, readily available oil. All the miracles resulted from cheap oil, and now that it's gone--yes, yes, there is more, but it's not cheap or easy to pump--then we have to replace it with some other energy source.
Petroleum and natural gas are wonderfully adaptable energy sources, handy for making fertilizer, plastics, and other chemicals as well as for fuel. Both are readily stored and possess very high energy densities. Yes, Lithium-ion batteries also have a high energy density, but it isn't a matter of drilling a hole and complex lithium-ion batteries gush out. It takes tremendous energy and technology to fashion lithium-ion batteries, and as a result they're expensive.
If the market responds to the oil price-revolution with sufficient verve, capital and innovation, perhaps a rich brew of petroleum replacements will appear in mass production. But there is a peculiar feedback loop at work; there has to be enough energy on hand to build this new infrastructure of solar-cell factories, algae-to-biofuels plants and all the rest. If we consume all the cheap oil in a vain attempt to maintain the status quo, then the replacement becomes ever more costly. And then we have a price-revolution on our hands which looks eerily like the ones which swept Europe in the 13th, 16th and 18th centuries.
So where does this leave us?
The intersection of four long-term cycles suggests that the era from the present (2009) to 2021 will be troubled indeed, and may result in a war, revolution or equivalent re-ordering of U.S. society and perhaps the world.
It doesn't take much thought to anticipate the post-cheap-petroleum era might be fraught with risk and turmoil as the transition--messy and unpredictable in some ways, but predictably messy in any event--takes place. Based on the history so painstakingly assembled by Fischer, we can anticipate:
Ever higher prices for what I call the FEW Essentials: food, energy and water.
Ever larger government deficits which end in bankruptcy/repudiation of debts/new issue of currency.
Rising property/violent crime and illegitimacy.
Rising interest rates (by a lot, not a little).
Rising income inequality in favor of capital over labor.
Continued debasement of the currency.
Rising volatility of prices.
Rising political unrest and turmoil.
Chapter Twelve: Squeezing the Middle Class
As noted above, the Roman Empire's decline can be traced to a variety of causes. But we can summarize them collectively as the middle class being squeezed to death by the over-reach of the state and its Plutocracy/Elite managers.
Stated another way: as the Elites' interests diverge from those of the society as a whole, the middle class is caught in a financial and political vice between the State and Plutocracy and the large underclass dependent on the largesse of the State. As each class (the Plutocracy and the class of unproductive citizenry) become ever more dependent on the State's power and revenues for their privileges and entitlements, they demand the State's share of national income expand at the expense of the middle class.
Since the Plutocracy and the underclass both need the State's power (to exclude the Elites from service and taxes) and revenues (to fund entitlements), they will fight ferociously and ceaselessly for their share of the dwindling national income. The middle class, distracted by the pressures to remain productive in a declining economy, have neither the time, will, capital or organization to match the upper