The Crash Course - Chris Martenson [124]
Figure 25.2 Oil Prices During the Undulating Plateau: Rising to the Sky
Image: Jeanine Dargis
At every turn of the cycle on the undulating plateau, social and economic complexity shrinks. Adjustments are made to the new reality of less energy, which for many brings an unpleasant and unwelcome period of transition. Thousands of job classifications, mainly service-oriented and not directly connected to the production of secondary wealth, are no longer relevant and disappear. Patterns of living re-form around the new reality of less energy and a greatly simplified economy. People find ways to live closer to work and food, adjust to having less mobility than in the past, and retrain or “reskill” themselves in order to find income-producing work.
The good news is that the undulating plateau offers people and nations the luxury of time to mentally, emotionally, physically, and financially adapt to the unavoidable new reality. No major financial disasters or wars break out, allowing critical resources to be marshaled and appropriately directed.
Prepare to Be Surprised
The biggest surprise to me would be if the future actually resembled any of the scenarios I just described. I’m both prepared and expecting to be surprised. The basic rule about complex systems is that they’re inherently unpredictable, at least with respect to the precise details of exactly what, when, and how much will transpire.
However, the larger model, in which a complex system will become simpler if starved for energy, is a known quantity. Imagine that our economy is a snow globe. As long as it continues to be shaken vigorously, the flakes will remain in a suspended state of complexity. Cease the input of energy (the shaking), and the flakes will settle and assume a much less complex state of existence, no longer bumping into hundreds of their neighbors in interesting and unique configurations. We may not be able to predict exactly how, where, and when all the flakes will settle, but we know that they will.
I’m not at all sure how a massive, complex global economy predicated on exponential growth will change when net energy declines. But here are my best guesses:
1. Tertiary wealth in all of its many forms, but especially those whose major value derives from the assumption of future growth, will decline in value and prominence. Said simply, we face decades of sub-par (at best) to catastrophic (at worst) returns in stocks and bonds. Pensions and 401(k)s will fail to deliver the future that many have been counting on. Paper wealth will lose value to the degree that it bore unrealistic assumptions about growth at its core, as well as the degree to which it is overcreated by governments and central banks during the transitionary period.
2. The recent great trends in manufacturing and globalization will reverse; the pendulum will swing the other way. Economies that had previously shifted to become 80 percent service-oriented will need to shift back to being more manufacturing- and production-oriented. Where products were shipped and reshipped in various states of assembly to the lowest-cost production centers regardless of their global location, supply chains will have to be significantly shortened and production relocalized.
3. The proportion of personal income devoted to food and energy, which reached all-time lows in the late 2000s, will steadily increase. This will leave correspondingly less income for other discretionary expenditures.
4. Monetary magic—the application of stimulus and thin-air