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EmailWhy We Must Embrace Simplicity Now
by Gregor Macdonald, contributing editor
Tuesday, January 17, 2012
Executive Summary
- What current gold demand is telling us about economic growth expectations
- The dangerous conclusion from the famous Simon-Ehrlich wager
- Simpler energy sources are becoming cost-competitive with complex ones
- Why we will move towards greater simplicity, willingly or not
- Why many of our leaders are blind to this trend and will spend the next decade futilely fighting it. Will you?
Part I: Returning to Simplicity (Whether We Want To or Not)
If you have not yet read Part I, available free to all readers, please click here to read it first.
Part II: Why We Must Embrace Simplicity Now
The English thinker Thomas Malthus argued in his famous essay on the principle of population that there was no longer sufficient land to feed the world’s rapidly growing population, threatening poverty and famine. But an agro-industrial revolution soon transformed the economies of Europe and North America, and his fears proved unfounded. More recently, conventional wisdom held that market forces would always come to the rescue. Until ten years ago, this hope was largely fulfilled. During most of the 20th century, resource prices—of food, water, energy, steel, for example—declined, despite strong growth in the world’s population and even stronger growth in GDP. Prices fell because of a combination of new low-cost sources of supply and technological innovation. But in the past ten years, demand from emerging markets, particularly in Asia, has erased all the price declines of the previous century.
- Resource Revolution, from McKinsey and Company
It’s taken ten years of relentless inflation in food and energy, with myriad data showing declines in the quality and availability of many natural resources, for it to appear that the global consultancy McKinsey finally “gets it!”
I take this as a potential sign that Kahneman’s Availability Heuristic is about to undergo a sea change with regards to the prospects of technology-driven progress. Two hundred years of history exert a powerful force over people’s outlook, but a solid ten-year reversal of those trends just might be enough to induce some folks to begin reconsidering their previously-unshakable confidence in previous trends.
Your faithful information scout,
Chris Martenson
Copyright 2012, Chris Martenson. All rights reserved.
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Comments
Gregor,
Thank you for this well thought out piece. These views from 100 miles in high orbit help me think about my future in Macro but I struggle with getting my arms around what I do about it.
We 'homestead', we homeschool, we raise 50% of our own food and are feverishly working to expand that, we are sited on a river, two creeks and a pond, have a massive solar array and are adding micro hydro and solar powered hydrogen converters (for winter use in our generator) ...
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We are currently installing a 5kv solar system in the desert southwest and without government incentives it would take 24 yrs to break even. The fed's are paying for 30% of the top and then the power company is kicking in 15%. The fed's are mandating the utilities use a minimum % of renewables which is why the utilities are giving out rebates...
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Hey thanks for the comments. This was a challenging piecs to put together, but I've been kicking the ideas around for over a year, especially since Fukushima. One approach I took was to let the reader put things together for themselves, as I restrained myself from coming to any narrow conclusions...
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I find it more than a little insightful that the best technical / numerical analysis of the capabilities of the various renewable and non-renewable alternative energy sources seems to be coming from an astrophysicist at UCSD, on his personal blog in his spare time...
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Estatesavr wrote:
Gregor,
We 'homestead', we homeschool, we raise 50% of our own food and are feverishly working to expand that, we are sited on a river, two creeks and a pond, have a massive solar array and are adding micro hydro and solar powered hydrogen converters (for winter use in our generator) ...
Enroll today to read more.
Thanks Susan
they raise chickens, cattle, garden, catch Trout, split wood, study Latin, read a classic a week, hammer rigorous mathematics, study economics (Austrian) --they can pound fence posts, perform CPR, cook an amazing dinner, shop for groceries with coupons, run our off grid electric ...
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Bob1 wrote:
We are currently installing a 5kv solar system in the desert southwest and without government incentives it would take 24 yrs to break even. The fed's are paying for 30% of the top and then the power company is kicking in 15%...
Enroll today to read more.
...to the choir with every word you print. Your style is a very nice read. Simply stated, BOB
Gregor wrote:
Perhaps I am wrong that the world will choose simplicity and is instead getting ready to make one final push towards complexity. But if I am right that diminishing returns have now triggered in our various complex systems, then eventually it will become clear that the cost to repair damages from their destructiveness is simply too great...
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Four years ago I happened apon a conversation at work where the amazing oil drilling skills were being praised. (They were in denial about Peak Oil.)
I asked "Why bother?"
"Huh?"
"If oil is abundant, why bother chasing thimblefulls at great depths and expense?"
"The great skill and expense that we lavish on drilling is a symptom of the declining availability...
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