"History's Has-been"

Columnist Robert J. Samuelson picks up on the graying-of-Europe meme: "Europe as we know it," he writes, "is slowly going out of business."

Samuelson's theme is that "It's hard to be a great power if your population is shriveling." Europe's economy is faltering, European majorities don't want to reduce the social benefits that are straining their economies, and now an increasing number of European societies want to reduce immigration as well.

"All this is bad for Europe -- and the United States," he writes. "A weak European economy is one reason that the world economy is shaky and so dependent on American growth. Preoccupied with divisions at home, Europe is history's has-been."

Comments

Thomas Paine's Goiter | June 15, 2005, 11:38am | #

A great many political hack have entire belief structures that are "proven" by the success of europe.

fyodor | June 15, 2005, 11:46am | #

"It's hard to be a great power if your population is shriveling."

Samuelson doesn't back this statement in any way that I can recognize. He does make the case that a graying population AND a significant welfare state make for a bad combination. Maybe we'll see our own Social Security problems play out there first.

drf | June 15, 2005, 11:48am | #

This type of article is/was common from Euro sources when describing 1990s usa. Whether it was crime, obesiety, health care, education (costs or quality), or what have you, it's possible to go back through the pages of vaunted European tomes to read their almost-gleeful predictions of america's demise.

Now we see it the other way. 9/11 changed america. We now act with the same knee-jerk petty nationalism that moves Europeans. We preceive the EU as a threat, we know little about it, but it collides with our worldview, and we resent it for that. It now goes both ways.

I also disagree with him that the EU const would have been merely symbolic.

Go back to the late 1970s and see how the demise of the US was predicted by people who later worked in the clinton administration (can't think of his name offhand). These gloom-and-doom "analyses" reflect poor journalism, jingoism, and probably the need to create more pages in the section (which makes better kitty litter lining).

cheers,
drf

joe | June 15, 2005, 11:51am | #

A little too close to the "Japan's going down the tubes" prognostications from the early 1990s.

For the record, Japan continues to lead the United States in most measures of economic well being.

Tim Cavanaugh | June 15, 2005, 11:53am | #

Not to be confused with the "Japan's going to overpower us with their yen and take over our country" prognostications of the even earlier 90s (and late 80s).

Ruthless | June 15, 2005, 11:55am | #

Samuelson is right, but what can be done?

Brian | June 15, 2005, 11:59am | #

You can probably select a set of data on any country or region you'd like to prove that it's in decline. How deep in debt are EU countries compared to the US?

At least they gave up on the ruinously expensive habit of Empire, which we're just starting on. Although we don't seem to be very good at it.

Ironchef | June 15, 2005, 12:06pm | #

Never heard too much of that, joe.

So does that mean in 25 years columnists will claim "What's wrong with India?"

drf | June 15, 2005, 12:06pm | #

"For the record, Japan continues to lead the United States in most measures of economic well being."

Joe: what measures do you mean? the main measure of well being, GDP per capita, "y", tells a different story. Savings is higher in japan, but that's hardly a measure of well being.

thanks,
drf

E. Steven | June 15, 2005, 12:08pm | #

So, if Paris empties out will I get a sweet deal on an pied-a-terre?

Some Guy In Rock-Paper-Chinaville | June 15, 2005, 12:09pm | #

I'm thinking next month starts off the "China's in Decline" wave.

joe | June 15, 2005, 12:11pm | #

"Not to be confused with the "Japan's going to overpower us with their yen and take over our country" prognostications of the even earlier 90s (and late 80s)."

Exactly, Tim. These things are far more illustrative of the authors' political leanings than of the prospects of the country/region that is the apparent topic of the article.

I couldn't agree more.

Ruthless | June 15, 2005, 12:12pm | #

Why degenerate into meaningless relative comparisons? Why not focus on what makes for a bright future for a nation, and see if we can agree on anything?
I'll start:
More freedom
Population growth
Open borders

joe | June 15, 2005, 12:14pm | #

drf,

Lifespan. Poverty rates. Unemployment rates (which supporters of the "Sick Man Europe" thesis always point to as their strongest piece of evidence).

FWIW, I'm not putting forth a position on a "Who would win a fight, Superman or Batman?" contest featuring Japan and the US.

Jennifer | June 15, 2005, 12:16pm | #

Ruthless-
I'm with you on freedom, and maybe open borders, but why do you think a stable society needs population "growth?" Couldn't population "stability" work just as well, if not better in some ways?

Not that Europe has either one.

drf | June 15, 2005, 12:17pm | #

Ruthless:

while we all would like the "more freedom", that has different meanings for different groups.

freedom for the left wing SF party member i know in denmark = "poor people should be 'free' to vacation at mauna kea"
for the christian conservative i know = "you're free to live your life so it doesn't bother me"
for the pot-head i know = (see hippies)
for the neocons = "world empire where america controls all. domestically not much different. just don't insult policy"
for the libertarians = (ask ten, get twelve opinions)

:)

joe - i'm lost on what you're saying. of course these types of articles show political slant. but what economic indicators do you mean?

thanks,
drf

drf | June 15, 2005, 12:20pm | #

joe:

sorry for the back-to-back posts.

while unemployment is often used, i would disagree that those three metrics are the biggies.

i just strongly disagree with your characterization of "most measures of economic well being". I'll ask our development dude at the institute, but the biggie is "y".

Ruthless | June 15, 2005, 12:22pm | #

Jennifer,
Both Adam Smith and Julian Simon saw the correlation between economic and population growth.

fyodor | June 15, 2005, 12:23pm | #

Jennifer,

I agree with you. The freedom to make your own decsisions on procreation without coercive pressures is what's important, not what the final result turns out to be.

fyodor | June 15, 2005, 12:26pm | #

BTW, I was just watching Pink Floyd's Pompeii movie last night, a friend (and bandmate) had just gotten it on DVD. At one point Roger Waters says that the coming "economic collapse" will hit everyone at all levels. Chuckle, sigh. Shut up and bang your gong!!

Jennifer | June 15, 2005, 12:32pm | #

Ruthless-
I haven't read the Adam Smith/Julian Simon population growth stuff, but I'm still having a problem with it. Assuming we're stuck on this planet and not going to colonize new ones, the population can't keep growing forever. Also, Adam Smith is pre-Industrial Revolution, isn't he? Maybe you needed population growth for economic growth when pretty much all work was done by hand, but now that we have machines that can do the work of hundreds of people, I don't see why population growth HAS to accompany economic growth.

Don't mean to be morbid, but the Black Plague and its aftereffects on the European economy suggests that a sudden population DECREASE can actually be good for the economy, provided there's no destruction of infrastructure involved.

joe | June 15, 2005, 12:32pm | #

drf,

I listed three above.

Per capitan GDP is an important measure to be sure. But outcomes are important, too.

I guess the term "most" depends on what you consider to be a relevant measure of economic well-being. I'm sure many people reading this don't consider our higher poverty rates to be an indication of an economic problem, and quite a few consider them to demonstrate evidence that our economy is functioning as it should.

(I'll now await the outraged "libertarians don't like to see people in poverty, you slanderous bastard!" post, and hope that it appears, as has happened in the past, immediately after the "poor people are poor because they're inferior, and that's the genius of the market, you stupid liberal" post that also inevitably appears when I mention poverty rates.)

Eric II | June 15, 2005, 12:33pm | #

Samuelson's mostly right about Europe, but I have trouble seeing how he gets off pointing to America as an exemplar of socioeconomic well-being by comparison. Between our:

1. Massive deficits
2. Increasingly substandard communications and transportation infrastructures
3. Acute shortage of native-born scientists and engineers
4. Less-than-favorable tax and regulatory climate for businesses
5. Upcoming entitlement crisis spawned by the retirement of the Baby Boomers
6. Dependency on low interest rates maintained by massive treasury bond purchases by Asian central banks

We're got our hands full as well. Europe and Japan might nonetheless be in worse long-term shape for the reasons that Samuelson noted, but it also might turn out to be just a matter of degrees.

Ruthless | June 15, 2005, 12:34pm | #

drf,
Agree that an understanding of "property" may be a prerequisite to understanding freedom.

M1EK | June 15, 2005, 12:37pm | #

My own crackpot diagnosis is that Europe and Japan are much better suited for the upcoming era of Even More Expensive Oil than we are, and thus, our competitive advantage to the only other high-value services and manufacuting producers in the world is about to evaporate.

Of course, Really Expensive Oil will hurt China and India a lot too.

Jennifer | June 15, 2005, 12:39pm | #

M1EK-
Are you a fellow believer of Peak Oil?

ChrisO | June 15, 2005, 12:56pm | #

In theory, zero pop. growth would be good for a Europe that is already fairly crowded. Problem is, unless all the oldsters are going to work until they drop, I say there won't be enough productive citizens to keep their economies going, regardless of whether they slash their welfare structures. Maybe they need to pull a Logan's Run... :)

Of course, unstated is the accompanying problem that many Euro countries have had to import Muslim labor in order to keep high productivity--Muslim labor that refuses to assimilate and some of which appears to have dreams of overtaking the host population. Not that such is necessarily possible or even representative of the majority view in said immigrant population. Whatever the case, Europe seems to be a negative case study in the wisdom of libertarianism. And we're headed that way....

cdunlea | June 15, 2005, 1:02pm | #

Both Adam Smith and Julian Simon saw the correlation between economic and population growth.

As has been stated elsewhere, that was in a time when economic growth = number of manual laborers, since the French Physiocrat school of Smith's day redefined national wealth to mean national production. In the information/robotic age that correllation no longer exists.

And regarding the Black Death: the Fourteenth century was a period of prosperity for the (surviving) laborers, so much so that in the countries it hit, the workers' shortage meant they were able to demand higher wages for their work, a migrant labor pool was created and serfdom, the result of an abundance of labor, began to die out. So it goes to follow that so long as the jobs themselves are not eliminated, a smaller working population means better living standards (see FLORIDA; ARIZONA; other retiree states).

Dave | June 15, 2005, 1:02pm | #

So by the author's line of reasoning earth is going to be a pretty lousy place to live when the world population levels out in another 50-60 years???

Rhywun | June 15, 2005, 1:03pm | #

M1EK,

That is my crackpot belief too. If there's any truth in Peak Oil, America is basically fucked. Hence, the Bush administration's determination to force coastal states to build dangerous natural gas ports.

drf | June 15, 2005, 1:04pm | #

Hi Joe.

I did notice you mentioned three. Unemployment i cited because, I agree with you here: that it's misused by those who want to use it as the end-all. I wasn't glossing over the other two; still, that's hardly "most". none of the growth or other models i've seen use those three metrics you cite in them. this isn't my area, so i won't say they don't exist. i just never saw them.

I still disagree with you about the others. I'm totally agree that poverty is a difficult, painful problem (and would be very pissed if you lumped me in with those others, whom we both could name). I live in Chicago where we see poverty with every El trip north from the city (Cabrini Green). life expectency isn't a good measure - my grandma lived far longer than expected, with terrible quality of life. that one is a politicized metric with dubious value, IMO.

as i said, i'll ask our growth person (my area is micro/econometrics) about this.

how about this: japanese have less leisure time than americans. they work more hours per year. that is about as useful.

i don't think most liberal solutions solve poverty. hell, here, they made problems worse. of course, most of today's conservative policies do the same, as well (to hell with the woman policies on reproduction, for example)

and FWIW, i duck and cringe when the so-called libertarians spout that bullshit about "fuck the poor" too. and i hate it when "libertarians" use the alleged free market as a tool to justify bullying. (many of them, as you've undoubtedly recognized, are in favor of torture and brutality, too)

respectfully,
drf

Ruthless | June 15, 2005, 1:11pm | #

Okay, do we have any agreement, or are we just getting further apart?

fyodor | June 15, 2005, 1:20pm | #

drf,

FWIW, saying "fuck the poor" isn't bullying, it's just flippant and mean-spirited talk. It may offend you (and it may offend me), but it's just talk.

BTW, is there really a way to measure poverty objectively?

And Dave, good point. Current predictions are for population to level off and start declining everywhere, Europe's just ahead of the curve.

bill b | June 15, 2005, 1:21pm | #

M1EK,I don't know what you would consider REALLY expensive oil,but the world is awash in oil.Oil shale and oil sands deposits await only a higher price or improved extraction technology to end supply anxiety.My crackpot diagnosis is that there is a moderate cap on how much higher prices can go.

Jennifer | June 15, 2005, 1:21pm | #

Ruthless-
Uh, what were we talking about again? Something about the overpopulation of Europe causing Peak Oil to open the border with japan?

M1EK | June 15, 2005, 1:22pm | #

Jennifer,

I'm not an "immediate peak oiler" although some of my acquaintances are, but I think it's coming soon enough that we should at least be THINKING about it. The only rational reason to continue our current subsidization of suburban sprawl would be cheaper oil in the future for a long period of time, which is awfully hard to figure.

M1EK | June 15, 2005, 1:24pm | #

bill b,

Credible geologists (I don't qualify and I assume you don't either) don't believe much will happen from those marginal sources of oil.

Thomas Paine's Goiter | June 15, 2005, 1:41pm | #

That is my crackpot belief too. If there's any truth in Peak Oil, America is basically fucked. Hence, the Bush administration's determination to force coastal states to build dangerous natural gas ports.

As long as oil maintains a $50/barrel level, other alternatives become available. Namely, the tar sands in Canada become cheap enough to harvest, as long as the CA government allows a Nuke to come online to help with the sand boiling. At that point, Canada becomes the world's largest holder of oil reserves, 2x Saudi Arabia's current reserves.

If the price of oil goes higher and maintains that level, it then becomes cost effective to harvest shale oil, and guess who is sitting on the world's largest reserves of shale oil? :)

Also, with oil maintaining it's current levels, deep water exploration becomes feasible, meaning the asian and indian pacific will begin to see exploration.

Peak oil is a long ways off as long as tar sands and shale oil are made cost efficient by higher oil prices.

Ayn_Randian | June 15, 2005, 1:42pm | #

I have to say something here...In 1939, the Department of the Interior said something to the effect that we're all "screwed" because America only had 13 years of oil left to use on this earth...nearly 65 years later, we're at three times the production amount of that given year.

The point is, you have no idea what technologies and price incentives will do to oil production, and I am rather appalled that so many smart people are ascribing to "Peak Oil", which means making a Malthusian-sized error by assuming that current usage and technologies will remain the same and we'll will all go to hell in a little rowboat in 50 years (or 100, or whatever).

Furthermore, as to the additionally Malthusian assumption that a declining population is a good thing because of the "Black Plague example" is like comparing babies and couches. In feudal Europe, economics was a zero-sum game: if the king gave someone more, you naturally had less, and someone dying increased your bargaining power (because of the increase to labor value) to the lord. But in capitalism (not a zero-sum game) a Black Plague-esque event or negative population growth means less ideas, less people to work and innovate and grow food, and less people to add to the growth of the economy. After all, in feudal Europe, you couldn’t just walk away from your plow and start Microsoft, like you can in modern-day America, and less people means less overall well-being.

Jennifer | June 15, 2005, 1:55pm | #

Guys, just because it'll be profitable for companies to extract shale oil doesn't mean it'll be cheap enough to save our economy, dependent as it is on cheap oil for transportation and many manufactured goods.

Let's say (and I'm making these numbers up since I don't feel like researching them) that it costs one hundred dollars to extract and process one barrel of shale oil. So companies won't bother doing it until the price of oil gets so high that it's profitable for them to do so.

Okay, the price of a barrel of regular Saudi oil is now $150. So now it's profitable for Exxon or whoever to get the shale oil. Good for them, they're making fifty dollars a barrel in profit, but that doesn't change the fact that for the consumer, oil is $150 a barrel, with all the corresponding economic problems.

By the way, Peak Oil doesn't say we'll be running out in our lifetimes; it just says that soon, demand will exceed supply, which will drive prices up so high that our economy, dependent on cheap oil, will be in big trouble.

Mike H. | June 15, 2005, 2:01pm | #

joe,

Poor people tend to live in clusters.

M1EK | June 15, 2005, 2:06pm | #

For the "growth is always good" people, especially the Randroid, I'd be curious to understand how, exactly, economics can trump physics. At my current 'job, we occasionally butt into the desire of management that unpaid overtime trump physics (if you guys would just work harder, you could write software that can send 2GBps through a 1 GBps pipe), so I completely understand the mindset, but I wonder if YOU do.

And Jennifer got it, completely. Peak Oil doesn't say "we'll run out"; it says "permanently higher plateau for prices", which means big trouble for economies like ours. It won't be cheap to rebuild suburbia.

Thomas Paine's Goiter | June 15, 2005, 2:09pm | #

Guys, just because it'll be profitable for companies to extract shale oil doesn't mean it'll be cheap enough to save our economy, dependent as it is on cheap oil for transportation and many manufactured goods.

You're assuming that technology will remain stagnant. Technology will evolve to compensate.

By the way, Peak Oil doesn't say we'll be running out in our lifetimes; it just says that soon, demand will exceed supply, which will drive prices up so high that our economy, dependent on cheap oil, will be in big trouble.

And I'm telling you that if oil remains at $50 a barrel there are 2.4 trillion barrels of oil laying in central canada. Demand won't outstrip supply because at specific oil pricing points, 3 significant sources of addition supply come on line. We may reach peak oil for conventional land-based and shallow water drilling, but peak oil for the planet is a long way off.

Peak oil is a rallying cry for environmentalists and scaremongers.

Jennifer | June 15, 2005, 2:13pm | #

Tom-
If oil remains at $50 dollars a barrel it's not economically feasible to get the shale oil, unless you're talking about some hard-core subsidies.

Rhywun | June 15, 2005, 2:16pm | #

Jennifer has a point. Who cares how much oil there is if the middle class can't afford it anymore? The American Way of Life is totally dependent on cheap oil. Further, I don't remember the exact figure, but the second- and third-hand material I've read indicates that tar sands and shale oil are not feasible at anything like $50 a barrel, but rather at much higher costs.

I am rather appalled that so many smart people are ascribing to "Peak Oil", which means making a Malthusian-sized error by assuming that current usage and technologies will remain the same

I am rather appalled that so many people dismiss valid concerns with a wave of the hand. And I doubt current usage will remain the same; rather, it will skyrocket as it has been doing for decades. Current technology will improve, but will it improve fast enough?

M1EK | June 15, 2005, 2:16pm | #

And oil sands are a rallying cry for head-in-the-ground deniers.

http://www.thebulletin.org/article.php?art_ofn=mj05cavallo

2.4 trillion barrels of oil? Maybe if we get efficiency up to 100%. Oh, and if we don't consider how much more energy it takes to get those barrels of oil out of the ground compared to what we do today.

TECHNOLOGY CAN'T BEAT ENTROPY.

bill b | June 15, 2005, 2:20pm | #

Oil has tripled in price in the last 4 years with limited damage to our economy.Technology will continue to be our saviour.

Jennifer | June 15, 2005, 2:22pm | #

And I want to repeat: Peak Oil is not the belief that we're running out of oil; we are simply approaching the end of the time when oil is CHEAP. I don't believe we'll end up in a Mad Max society, but our standard of living is going to drop like a brick. And, while I believe that eventually some genius will come along and find a better source of nice, cheap energy, it probably won't be soon enough for US to enjoy it, though our grandchildren might do okay.

Thomas Paine's Goiter | June 15, 2005, 2:25pm | #

And Jennifer got it, completely. Peak Oil doesn't say "we'll run out"; it says "permanently higher plateau for prices", which means big trouble for economies like ours. It won't be cheap to rebuild suburbia.

And you're assuming stagnant technology. If oil goes to $150 a barrel (which it won't), people won't be driving trucks and SUV's that get 9 mpg. They'll all be driving cars getting 45 MPG. You're assuming that electric, fuel cell or alcohol power won't greatly increase (which they will because the return on R & D is actually realized at higher oil price levels.

I'll still live in suburbia, I'll just drive a hybrid that gets 100 mpg.

Jennifer | June 15, 2005, 2:27pm | #

Tom-
And retooling our society to replace all the SUVs with hybrids won't cause any economic disruptions?

drf | June 15, 2005, 2:29pm | #

Hi Fyodor:

Right. I was thinking of the "fuck the poor" in the sense that we can have employers grab their asses or stuff like that because, "well, the employers own the company, and those poor devils can just get work elsewhere or dammit, start their own businesses!"

that line of "reasoning"...

TPG: right on!

bill b | June 15, 2005, 2:30pm | #

No Jennifer it will cause economic growth.

Thomas Paine's Goiter | June 15, 2005, 2:31pm | #

Tom-
If oil remains at $50 dollars a barrel it's not economically feasible to get the shale oil, unless you're talking about some hard-core subsidies.

Please don't put words in my mouth. Reread my post of 1:41. I didn't say shale oil was feasible at $50. But the tar sands most certainly are as the biggest hold up right now is power. However, the profits at $50/barrel are enough that it makes sense to bring a nuke online to power the harvesting of tar sands. When the price starts to move above $50, now shale oil and pacific ocean exploration come online.

Jennifer | June 15, 2005, 2:34pm | #

Bill B-
The car companies will enjoy economic growth; the poor suckers who have to buy hybrids while they're still paying off their SUVs will be a different matter.

drf | June 15, 2005, 2:40pm | #

Jennifer and Bill B:

that sounds like the "broken window fallacy"

Thomas Paine's Goiter | June 15, 2005, 2:42pm | #

Jennifer has a point. Who cares how much oil there is if the middle class can't afford it anymore? The American Way of Life is totally dependent on cheap oil.


The middle class can afford $50/barrel, it just seems that vehicles with low gas mileage must go by the wayside, unless the middle class is too stupid to do so. Hey - if they want to continue to spend hundreds a week on gas, let 'em. And again - you are discounting hybrids, electrics, and fuel cells. Technology always catches up.


Further, I don't remember the exact figure, but the second- and third-hand material I've read indicates that tar sands and shale oil are not feasible at anything like $50 a barrel, but rather at much higher costs.

Not true at all. Tar Sands are already harvested. They are responsible for a significant portion of central canada's oil production (approx. 35% or 500,000 barrels per day). However, for large-scale harvesting, they need a nuke. They've got an estimated 300-400 billion barrels of recoverable oil using current technology. The total reserve level is estimated at a minimum of 1.6 trillion barrels, with 1.2 trillion not currently retrievable because of technological constraints.

Thomas Paine's Goiter | June 15, 2005, 2:48pm | #

Oh, and if we don't consider how much more energy it takes to get those barrels of oil out of the ground compared to what we do today.

Like I've said in ALL of my previous posts, it's all dependent on WTO, COS-UN, and PGH convincing the Canadian government to bring a nuke online in central canada.

Jennifer | June 15, 2005, 2:49pm | #

DRF-
Broken windows? Huh?

For the others, thinking that hybrids will save us forgets that gasoline isn't the only thing oil is used for. Think of its important role in manufacturing. Think of the way modern agriculture is dependent on petrochemical fertilizers and whatnot.

And just to repeat myself: I am NOT syaing that society will utterly collapse (too many Peak OIlers do, which I think is one reason why it's not taken as seriously as it should be), I'm just saying that we're all going to be a lot less wealthy for awhile.

Eric the .5b | June 15, 2005, 2:52pm | #

Gawd, first 9/11 conspirators, now Peak Oil people.

Anvilwyrm | June 15, 2005, 2:53pm | #

I don't understand how the end of cheap oil (if it happens) would doom suburbs.

I would expect that prices would increase in a gradual fashion, (not $50 today $150 tomorrow) and adjustments would be made to accommodate. People would start buying smaller cars (see: 1970s oil crises) telecommuting would become more prevalent, etc.

Additionally, the higher prices would cause huge amounts of innovation, not only in oil, but in other energy sources, more efficient technologies, etc. At some point Bio-diesel becomes cost effective, etc.....

If gas did go from $2 to $10/gallon in a week yes, we would be fucked. But if it goes up $1 a year? Things will change, but I am not all that worried about it.

Thomas Paine's Goiter | June 15, 2005, 2:53pm | #

Tom-
And retooling our society to replace all the SUVs with hybrids won't cause any economic disruptions?

"retooling"? Actually, millions of people buy new cars every year without economic disruption. In fact, just recently, I purchased a car for my family and my biggest concern was MPG. I was able to find a car with >35 mpg that wasn't a mini-compact and a comfotable ride. Unfortunately/fortunately, I didn't disrupt the nation's economic machine.

No, it won't be a disruption, it would actually cause a growth spurt in the economy. If gas becomes expensive enough for a wholesale swap to higher MPG cars/hybrids/fuel cells, then the auto industry will take off, as will service providers to the auto industry, and secondary suppliers to the industry will take off, as will service providers to the secondary suppliers. Auto dealerships will be packed. Jobs will abound. And, interestingly enough, demand for oil will drop.

Amazing, that.

drf | June 15, 2005, 2:57pm | #

Hi Jennifer.

en.wikipedia.org/wiki/Parable_of_the_broken_window

TPG: that's a good keynesian analysis. well stated.

cheers,
drf

Jennifer | June 15, 2005, 3:01pm | #

Okay, DRF, I read it, but I am not sure how it relates to this. Also, Bill and I were arguing opposite points; which of us has the broken-window fallacy? Or are we somehow both doing it?

Ruthless | June 15, 2005, 3:04pm | #

Now we're trying to define "disruption," then estimate how flexible we can be in recovering from disruption.
I vote for great flexibility and rapid recovery.
You would expect that of a peaceful anarchist who likes "disruption," eh? The recovery will take us to a "better" place.

gaius marius | June 15, 2005, 3:15pm | #

i think the peak oil case has some merit -- easy-to-get oil hasn't been discovered much in the last couple decades -- but the transition to higher priced oil (in real terms) will probably be so gradual as to offer very little disruption as the technology changes underneath it.

what disruption there is will come at the margins -- people who truly can't afford new-tech cars and can't afford $5/gal gas. this is not something to pooh-pooh -- if future expectations do change suddenly (as they are wont to in markets) and millions of proletarians are left in the lurch, civil unrest could be the price.

Thomas Paine's Goiter | June 15, 2005, 3:22pm | #

Two additional points:

Most peak-oilers are using price points of $20-$30 a barrel to define "affordable oil". Obviously, with oil at $50 a barrel and a hardly discerrnable economic effect, this is a poor attempt at definition. The NYT, one of the leaders in the MSM when it comes to peak oil stories, is most guilty. Both economic markets writers for the NYT were bashing the oil stock sectors as they were confidently predicting a return to $25/ barrel oil up until 5-7 months ago!

Until this year, most oil companies continued to perform R&D budgeting using price of oil = $25. Now, with the additional opportunities that $50 oil brings to the table, R&D moves in directions that peak-oilers never thought was possible. Tar sands, oil shale, deep ocean exploration, increased recovery techniques, increased recycling techniques....all of these combine to push peak oil even farther away. Yes, maybe peak oil for existing methodologies and technologies is approaching, but global peak oil is not. Besides, wait until we drill Antarctica :)

drf | June 15, 2005, 3:24pm | #

Jennifer: he was.

gaius marius | June 15, 2005, 3:24pm | #

"All this is bad for Europe -- and the United States," he writes. "A weak European economy is one reason that the world economy is shaky and so dependent on American growth. Preoccupied with divisions at home, Europe is history's has-been."

fwiw, this is secular-bull speak which started to show up a decade or so ago. mr cavanaugh's citiation is the perfectly relevant one:

"Japan's going to overpower us with their yen and take over our country"

one of the fallacies that has erupted in recent years is europe's economic "weakness". no one addresses why the euro zone is underperforming the us.

and millions scream "regulation" -- but that doesn't make the difference some ideologues imagine. the primary, indeed overwhelmingly important difference is an colossal intermediate-term debt binge -- americans simply have seen fit to borrow themselves into oblivion, whereas european attitudes about both lending and borrowing are decidedly more skeptical.

don't judge european economic performance vis-a-vis the united states until our savings rates have equilibrated with theirs.

Thomas Paine's Goiter | June 15, 2005, 3:25pm | #

Anvilwyrm,

At some point Bio-diesel becomes cost effective, etc.....I,/i>

Good point. Bio-diesel plants are already producing in CA. And Waste Oil plants are not far away:

http://www.changingworldtech.com/

rod | June 15, 2005, 3:26pm | #

I fear peak oil. Remember peak copper, peak tin and peak rubber? God help us. God help us all.

Jennifer | June 15, 2005, 3:27pm | #

Gotcha, drf. I agree.


Most peak-oilers are using price points of $20-$30 a barrel to define "affordable oil"

Which peak oilers would these be?

Jennifer | June 15, 2005, 3:28pm | #

Hmm. Tom's quote was supposed to be in italics. I don't know what I did wrong.

Ramon | June 15, 2005, 3:34pm | #

There's a story at washingtonpost.com today about the boom in oil sands extraction in Alberta. The analysts cuted in the story say, with tech advances, that oil sands are (right now) profitable at $20/barrell.

Thomas Paine's Goiter | June 15, 2005, 3:35pm | #

Which peak oilers would these be?

Did you just stop reading my post after the quotation mark?

joe | June 15, 2005, 3:38pm | #

If a dramatic increase in fuel costs can so seamlessly, painlessly be assimilated into the American economy as TPG, Anvilwyrm, and others suggest, why not raise the gas tax to $3.00/gallon and eliminate the national debt?

The auto manufacturers will just develop 100 mpg hybrids for suburbanite to drive. Heck, it will increase economic growth!

Thomas Paine's Goiter | June 15, 2005, 3:40pm | #

There's a story at washingtonpost.com today about the boom in oil sands extraction in Alberta. The analysts cuted in the story say, with tech advances, that oil sands are (right now) profitable at $20/barrell.

Once the process is is refined in Canada, they'll get to use it in Venezuela as well.

Mmmmmmmmmmmm tar sand.

Jennifer | June 15, 2005, 3:41pm | #

Tom-
From what I've read, neither the New York Times nor anybody else in the MSM seems to really believe in Peak Oil; they think they're breaking bold new journalistic ground to say something like "Well, there's a possibility that maybe not all of the Peak Oilers are total lunatics. . ."

Thomas Paine's Goiter | June 15, 2005, 3:43pm | #

If a dramatic increase in fuel costs can so seamlessly, painlessly be assimilated into the American economy as TPG, Anvilwyrm, and others suggest, why not raise the gas tax to $3.00/gallon and eliminate the national debt?

Because, as is obvious to everyone, inclding yourself (actually, it might not be obvious to you, based on your debate history), the dramatic increase in fuel costs is meted out over time.

gaius marius | June 15, 2005, 3:48pm | #

Now, with the additional opportunities that $50 oil brings to the table, R&D moves in directions that peak-oilers never thought was possible.

which is fine, mr goiter -- but you must admit that this is a statement of faith. you assume that techne will solve your oil problems in the future because it has in the past. that isn't necessarily so. it is possible that no reasonably cost-effective technique will be devised to make shale oil saleable. the problems facing kerogen are much different than simply discovering reserves or finding a cracking catalyst.

beyond the high-cost energy-intensive recovery process, shale oil (kerogen) has different chemical properties from crude oil -- it isn't oil at all, in fact. the 'oil' that results from processing is a low-grade hydrocarbon (ie high tar/low shortchain content), very high viscosity and high contaminant -- meaning that much of the pipeline and refinery structure in existence will not handle it. it requires *huge* amounts of hydrogen gas to even be processed into this oil-like liquid. kerogen is only handled now in small quantities by refining it as a very small proportion of a crude-shale feed. it is not obvious that there will be cost-effective solutions to these transport and processing problems.

Rhywun | June 15, 2005, 3:49pm | #

with tech advances, that oil sands are (right now) profitable at $20/barrell

Uh... then they're not exactly "profitable" right now, are they? If the technology doesn't exist yet?

Well, we can all argue this until we're blue in the face. We have all read enough documentation to "prove" our side. Guess we'll just have to wait and see. I, for one, am not content to cross my fingers and place all my trust in technology that doesn't exist yet.

Jennifer | June 15, 2005, 3:54pm | #

Remember the Simpsons episode where all the teachers went on strike? The parents were going nuts having to keep their kids all day, so they had an emergency meeting where Flanders opened the envelope containing the Emergency Plan for dealing with a teacher's strike: "Hope that by then technology would have come up with teaching robots. Have them teach the kids."

I smoke, and I know it's bad for me, but at least I'm not deluding myself by saying, "Hell, by the time I need to worry about lung disease technology will have invented a way to cure that!"

gaius marius | June 15, 2005, 4:02pm | #

fwiw, profitability is only one side of this. the australian project in the stuart shale is breakeven around $20/bbl -- but produces only fuel oil and naptha. to find a way to produce gasoline out of this process adds much higher levels of expense.

fyodor | June 15, 2005, 4:02pm | #

joe,

Watch out, that seeming hypocrisy can work both ways. Speaking for "my" side, taxation is coercive and thus interferes with economic activity. That's true whatever you tax. As I think TPG addressed, a sudden and huge decrease in oil reserves is not likely. Even if it becomes harder to find new reserves, the increase in price will be gradual. Technological and lifestyle changes will ost likely have plenty of time to adapt. Back to a gas tax, true raising gas to $3 a gallon wouldn't likely cause our economy to "collapse." But since it's coercive and disruptive, why do it? Well, I'm actually in favor of taxes on mechanisms that clearly violate the rights of third parties in an unavoidable commons. It's the violation of the rights of others, and that only, that justifies the force of law.

drf,

Right. I was thinking of the "fuck the poor" in the sense that we can have employers grab their asses or stuff like that because, "well, the employers own the company, and those poor devils can just get work elsewhere or dammit, start their own businesses!" that line of "reasoning"...

I know it's off topic, but if I don't think ass grabbing should be more punishable than it would be normally because someone endured it for years because they preferred enduring it to quitting his or her job, I hardly see that as saying "fuck the poor." And unless you favor a government program that guarantees everyone a middle class job, you would be subject to the same charge by your own logic. (BTW, the one time I remember this discussion coming up, it concerned a TV producer who quite likely made far more at her job than the national average, much less was "poor")

Thomas Paine's Goiter | June 15, 2005, 4:03pm | #

which is fine, mr goiter -- but you must admit that this is a statement of faith. you assume that techne will solve your oil problems in the future because it has in the past.

Technology may not "solve" the oil problem, but it's damn sure going to postpone it for a long while. Not only that, it's going to provide alternatives to oil, some of which have been discussed in the thread, some of which we haven't discovered yet.

But in the end, I'll bet on technology and all of the options that come with it, rather than doomsdayers talking about peak oil.

Ayn_Randian | June 15, 2005, 4:07pm | #

Gaius, it's not a statement of faith when it has proven itself right time and again. I think rod said it best: a lot of people have said over history that X commodity will "run out", and that's just not the case. The case is that, despite dire predictions about oil every 5 years since, oh, 1940, we have made each drop of oil more efficient in the sense that we used to "burn off" about 70 percent of it, and now we "burn off" about 10 percent or less. There's no reason, given historical and technological trends, to think that this won't be the case.

Even if it is not the case, however, Peak Oil does deserve the same treatment, as rod so well put it, as "Peak Rubber" or "Population Bomb".

fyodor | June 15, 2005, 4:09pm | #

But Jennifer, what IS it you propose to do now about future oil shortages? Forcing conservation would be ironic since you'd merely be bringing about the harm right away that you're supposedly trying to forestall in the future, no?

Jennifer | June 15, 2005, 4:10pm | #

But in the end, I'll bet on technology and all of the options that come with it, rather than doomsdayers talking about peak oil.

Not saying doomsday, Tom; I'm just saying a serious economic slump.

drf | June 15, 2005, 4:13pm | #

Fyodor:

there was another time something like this came up where the whole point was that "the poor have to tolerate this because they're poor and they have no choice". it was not for more or less legislation. It was about those who use the name "libertarian" to justify whatever they want in the name of some faux economic, philosophical, or political slant.

and yes, there was a "fuck the poor" attitude. i don't want to dig through when this might have been (probably summer 2004 or earlier).

yeah it's off topic. and i'm not going to get into a purity test discussion, either. you commented on that thread, as did joe and jennifer and thoreau. dan and rc were on the "abusive bosses are okay" side. if i recall.

(i have no idea why your comment just now annoyed me so much)

Thomas Paine's Goiter | June 15, 2005, 4:13pm | #

Uh... then they're not exactly "profitable" right now, are they? If the technology doesn't exist yet?

Uh, read the article. They've been producing and profitable for awhile on the surface deposits. It's the deeper deposits that will take some technology to enable large-scale production.

From the article:

"Companies here are producing increasing amounts of oil from this unconventional source -- about 1 million barrels a day. If all of that oil went to the United States, it would amount to roughly 5 percent of daily consumption. In 1995, oil derived from the sands was less than half the current amount. Alberta officials expect production to triple from today's level by 2020."

One million barrels is well beyond 2003 levels, which was the last time I was reading these production reports in detail.

Jennifer | June 15, 2005, 4:14pm | #

Fyodor-
That's the problem; I don't know HOW we can get out of this corner we've painted ourselves into, at least not without seriously expanding the power of the government and limiting individual freedom. And the government would just make matters worse, no matter how hard they attempt to do otherwise. I, personally, am taking steps to shelter me and mine from the serious economic downturn I expect in a couple of years.

It's funny, though; one anti-Peak Oil article I read basically used your question as proof that the problem doesn't exist, by saying something like "You can tell Peak Oilers are nuts because they offer only problems, no solutions." Brilliant logic--if a problem seems unsolvable then it doesn't really exist.

Ayn_Randian | June 15, 2005, 4:16pm | #

Additionally, I'd like to mention that, as a political group, libertarians as a whole are usually painted as Pollyanna types with "too much" faith in mankind and all of our wonderful inventions and productivity, but when Goiter and I make some kind of statement about how the market and humanity will take care of itself and present an optimistic face, we're smacked down faster than Tina Turner. I thought libertarians were supposed to be the skeptics about junk science like Peak Oil, not its most zealous followers.

joe | June 15, 2005, 4:17pm | #

"Because, as is obvious to everyone, inclding yourself (actually, it might not be obvious to you, based on your debate history), the dramatic increase in fuel costs is meted out over time."

So you'd predict no harm, and significant benefits, to the economy if the gas tax increase was phased in over time?

fyodor,

I wouldn't be supporting a higher gas tax - and the pain it would cause - if I didn't believe the alternatives were more painful.

Jennifer | June 15, 2005, 4:19pm | #

Ayn Randian-
Why do you say it is junk science when others claim that the demand for oil is growing faster than the supply?

cdunlea | June 15, 2005, 4:22pm | #

In feudal Europe, economics was a zero-sum game: if the king gave someone more, you naturally had less, and someone dying increased your bargaining power (because of the increase to labor value) to the lord.

Actually, economics have never been a zero-sum game; it was only perceived to be so throughout most of history because wealth was generally measured only in terms of a single commodity, gold or silver, ie. ready cash. This is why it was believed, for example, that Spain was the wealthiest and most powerful nation in Europe in the 16th century; the New World silver mines allowed Phillip II and his heirs to spend huge sums on armies, navies and other tools of empire. But Spain bought most of its wheat and other essential goods and eventually the costs outweighed the cash frow from Mexico. By 1650 Spain was a has-been.

England, on the other hand, grew its economy precisely because it was not a zero-sum game and through the cottage industries of the late Middle Ages (home spinning of woolen cloth, for example) it increased productivity. The point about Microsoft is untrue: a wool dealer setting up a network of home-based spinners to produce the more valuable cloth in the 1400's was no different from Bill Gates for his time. Raw wool was originally sent to Antwerp; by the early 1500's most English wool was being spun domestically to bring profit to the local merchants. In turn, the peasants found they had other options to plowing the fields to make money.

Isaac Bartram | June 15, 2005, 4:26pm | #

fwiw, profitability is only one side of this. the australian project in the stuart shale is breakeven around $20/bbl -- but produces only fuel oil and naptha. to find a way to produce gasoline out of this process adds much higher levels of expense.

There was a story on NPR a couple of weeks ago about the Colorado Oil Shales. Apparently one of the oil cos (BP?) has a new process for extracting the oil from shales. The said the could extract for about $20/bbl. I wondered what further inputs were required because it seemed that it would not be profitable until the world price was $55-60/bbl. They have set up a pilot plant now, but now there is a possibility of going to a commercial scale.

Your post went some way towards enlightening me as to what further costs might be involved, thanks.

Although producing only fuel oil and naptha is a good start since it means that less of "the good stuff" has to be diverted for that purpose.

Ayn_Randian | June 15, 2005, 4:26pm | #

My whole point is that environmentalists have been saying for decades that food demand would outstrip supply, right? And yet, we have higher per acre yield than could have ever been imagined with less land being used for farms every day. Why? Technological achievements made land more efficient. To me, I see no difference between land and oil, if we can make one (land) about 1000% more efficient, then there's no reason we can't have (and, in actuality, have been making)those same gains come to oil.

gaius marius | June 15, 2005, 4:28pm | #

Gaius, it's not a statement of faith when it has proven itself right time and again.

you're abstracting, mr randian. "technology" is not a universal. the specific problems of developing kerogen from rocks into 87-octane gasoline have never been tried before recently and may not have reasonable and cost-effective solutions.

"technology" advances -- obviously. but hidden in "technology" advancing are millions of dead ends, problems without solutions and failures. making gas of kerogen might be just that.

the broader question of developing energy sources for the future is something else again. i'm sure mankind isn't going to fold up and go under for a lack of oil. the transition to what-comes-next, however, may be very painful and even violent (as many such changes have been in the past). there's no point in hiding from that.

joe | June 15, 2005, 4:32pm | #

Randian, farmland actually produces the product, year after year after year. This process can be made more efficient.

Oil fields don't actually produce oil. They contain oil. They will not make any more, and no technology is going to change that. Making them more efficient isn't like making wheat plants produce more kernels; it's more like making threshers pick up the little bit of grain that gets scattered.

Jennifer | June 15, 2005, 4:32pm | #

Ayn Randian-
There's some overlap between Peak Oilers and environmentalists, but not completely; I'm the former but not much of the latter. Is there some reason for dismissing it as "junk science" other than "people have been wrong in the past, so they must be wrong now?"

And again: FUEL EFFICIENCY IS NOT THE ISSUE. The issue is that the demand for oil will be greater than the supply. And it's not just gasoline: it's plastics, it's fertilizers, it's a LOT of petroleum-based stuff.

Now, an end to cheap manufactured goods and super-cheap food isn't going to mean Armageddon; it's just going to mean a considerably lower standard of living than the one which Americans have come to view as our birthright. So when I say Peak Oil is coming, THAT is what I'm talking about. Please don't confuse me with the "sky-is-falling" Peak Oilers who I've already said are doing the subject more harm than good by basically predicting the end of industrial civilization.

Ayn_Randian | June 15, 2005, 4:35pm | #

Jennifer-

I suppose it would be more accurately termed "junk economics" because, while demand and supply can vary in the short-run, long term supply and demand equal each other. Always.

Whether this transition will be painful, I have my doubts. As it was said, oil prices are not going to jump 5$ a gallon tomorrow...they will gradually rise (assuming, of course, we continue with both present consumption AND present technological abilities) and will eventually be phased out as some daring entrepreneur develops a cheaper way to grab a larger market share. If oil becomes too pricey, just like if a certain type of food or computer software might, then consumers will switch brands and upstarts will give "Big Oil" some serious competition. That's how markets work, that great term of "creative destruction".

Thomas Paine's Goiter | June 15, 2005, 4:36pm | #

So you'd predict no harm, and significant benefits, to the economy if the gas tax increase was phased in over time?

Of course. Tax increases are a negative sum game in the economy. However a lengthened time period reduced and draws out the impact. Oil price increases that lead to energy intelligence or diversification, while initially bearing some R&D costs, will be a long term positive sum game to the economy.

Jennifer | June 15, 2005, 4:38pm | #

But Ayn, when you're talking about switching food or computers, you're talking about manufactured (or at least grown) products. How can you switch "brands" of oil? "Shit, ExxonMobil's running low; I'd better go to Shell?"

Also what do you mean "long-tern supply and demand are equal?"

gaius marius | June 15, 2005, 4:40pm | #

they will gradually rise (assuming, of course, we continue with both present consumption AND present technological abilities)

this can be assumed, mr randian, if you choose. but commodity prices need not move smoothly, even on longer-term averages. a radical change in future expectations can cause a paradigm shift in pricing without the physical supply and physical demand suddenly shifting.

Ayn_Randian | June 15, 2005, 4:43pm | #

I think, actually, Jennifer, the problem comes in that you are assuming that after millennia after millennia of rising living standards for people all across the globe, you are now (like it or not) Chicken Littling the idea that, all of the sudden, (or gradually), our living standards will decrease sharply. It isn't God's gift in the form of oil that gives us our great living standards, it's the free market and the innovation of mankind. The only reason now we use oil so heavily is because it's the easiest thing. When it ceases to be so, we will use something else to not only maintain but continue to raise our standard of living.

And yes, I do tend to think that when a group can only provide problems with no viable solutions, there (historically) has proven not to be that much of a problem. Isn't this "constant crises" and "all the world is going to hell" kind of thinking that Reasonistas are supposed to be against?

gaius marius | June 15, 2005, 4:43pm | #

"long-tern supply and demand are equal?"

he means you're right, in a way, ms jennifer -- global economic activity would crash to nil, along with oil demand, if oil supply was suddenly and largely removed.

Anvilwyrm | June 15, 2005, 4:44pm | #

If a dramatic increase in fuel costs can so seamlessly, painlessly be assimilated into the American economy as TPG, Anvilwyrm, and others suggest, why not raise the gas tax to $3.00/gallon and eliminate the national debt?

Actually, from an user side innovation standpoint I expect the increasing the taxes on gas would have very much the same effect as the costs going up due to scarcity. As the price goes up people will find methods to use less/more efficiently. I bought a Prius because it will save me money at $2/gallon. At $.5 a gallon why would I pay the extra cost?

The problem is that a tax would have no effect, indeed probably a negative effect, on supply innovation. Consider: if oil is $100 a barrel due to production costs I can make lots of money if I figure out how to get oil (or an oil substitute) for $75. But if the production cost is $50 and there is a $50 tax the consumer still sees $100/barrel, but I can't make any money with my $75/barrel technology.

As an added problem, you now have the government *requiring* people to use lots of oil to make ends meet. Just like governments which *need* cigarette taxes and traffic fines. Great strategy. If everyone stopped smoking and speeding tomorrow, Maryland would be SCREWED!

Also, please point out where I said seamlessly or painlessly. I think there would be pain, but the pain is what would MOTIVATE the changes required! I would LOVE to stop using oil, but until it is too expensive, or something else is cheaper, it just ain't happening.

If prices go up, things will change. Some people will do better, some worse. Major disruptions are unlikely unless things change FAST.

joe | June 15, 2005, 4:45pm | #

TPG, I agree entirely with your last post. Which is sort of odd.

Ayn_Randian | June 15, 2005, 4:47pm | #

Jennifer, what I mean by that is simple economic fact: the amount of goods demanded in an economy equal supply, in the long run. Radical price changes (i.e. a "going out of business sale"), a sudden spike in supply etc. can all affect supply or demand in the short term, but the first rule of economics (other than there is no such thing as a free lunch) is that Supply = Demand in the long run. This is why total GDP will always equal the amount the United States spent on goods and services (minus savings, but even then it can be argued that those savings are used as loans to purchase goods or invest in capital).

Thomas Paine's Goiter | June 15, 2005, 4:48pm | #

But Ayn, when you're talking about switching food or computers, you're talking about manufactured (or at least grown) products. How can you switch "brands" of oil? "Shit, ExxonMobil's running low; I'd better go to Shell?"

Think of Oil as Campbell's soup. Think of sealed cans as Tar Sands.

Think of Bio diesel as Chunky Soup. Think of Waste Oil as ramen noodles. Think of electric cars as mom's homemade. Think of fuel cells as takeout won ton from the chinese place down the street. Think of hybrids as Progresso.

When Campbell's gets too expesnive, you're switching foods.

But, in the mean time, those sealed cans are making campbell's last longer.

Jennifer | June 15, 2005, 4:49pm | #

Ayn Randian-
By that logic, people sholdn't have talked about the population decimation of the Black Plague; keep pointing out the problem of people dropping dead without offering even one plan to stop it.
And to say "millenia of rising living standards" isn't quite accurate; living standards in the ROman Empire were in many ways higher than in the same parts of the world after the Empire fell and the dark ages took hold.

But the main point is that oil is different. How? There is nothing currently known that can provide the huge amount of energy as oil (compared to the energy it takes to produce it); nor is there anything as cheap which can be used to produce so many things. Sure, there ARE plenty of alternatives for oil; they'll just be a hell of a lot more expensive.

And seriously, to insist that a decline of American living standards is an impossibility seems to me like the junkiest economic theory of all.

gaius marius | June 15, 2005, 4:53pm | #

Chicken Littling the idea that, all of the sudden, (or gradually), our living standards will decrease sharply. It isn't God's gift in the form of oil that gives us our great living standards, it's the free market and the innovation of mankind.

except that that isn't just "chicken littling". western civilization has been spectacularly successful -- but so were the persian and roman and mayan once. our fate lies with theirs, unless you believe we're divinely ordained and "special".

the issue is one of timeframes. in a long view, the west has done remarkably well. in a longer view, it will inevitably collapse and stagnate. in a yet longer view, humanity has by a series of civilizational cycles managed to progress from primitive nomadism to where it is. in a yet longer view, that need not continue -- the impulse to civilization is not necessarily irreversible. in the longest view, humanity will someday go extinct.

can anyone say what progress is in that context?

Ayn_Randian | June 15, 2005, 4:55pm | #

I think, Jennifer, we are talking about two different things. For the time being , living standards in terms of take home pay could be raised greatly through all kinds of economic protectionism, but technology and society, while wealthier in the relative sense, objectively suffer as a whole by missing out on "what could have been". I think, therefore, that when I discuss a raise in the standard of living as a certainty, I mean it in the sense that progress cannot be stopped, and we have no choice but to better off than our parents and grandparents. Whether or not we're better off relative to other countries because of our heavier usage of oil than they, that's a different story.

Jennifer | June 15, 2005, 4:56pm | #

Well, I guess the Supply=Demand thing is true, then. If some monster weather anomaly killed all the world's crops this year, the demand for food would start off greater than the supply, but once a bunch of people starved to death everything would leve off.

gaius marius | June 15, 2005, 4:57pm | #

I mean it in the sense that progress cannot be stopped, and we have no choice but to better off than our parents and grandparents.

this is a myopic fallacy, mr randian. you extrapolate the recent past into the future. if you had asked most people at the bottom of the depression, they'd have told you that capitalism was doomed to anarchy and destruction; because you sit at the end of a long winning streak, you think everything must get consistently better even on a generational timescale.

it isn't so.

Jennifer | June 15, 2005, 4:58pm | #

My last post ws written before some of those preceding it, so it appears out of place in this thread.

Ayn, maybe progress cannot be stopped, but there's quite a possibility that we'll be forced to define "progress" as "figuring out clever ways to make do with less."

Anvilwyrm | June 15, 2005, 5:00pm | #

Oil fields don't actually produce oil. They contain oil. They will not make any more, and no technology is going to change that. Making them more efficient isn't like making wheat plants produce more kernels; it's more like making threshers pick up the little bit of grain that gets scattered.

*sigh* Joe you can do better than this.

1) There are sources of oil and oil substitutes we are not using much at all. Tar sands, bio diesel, etc. These can be used to "produce more oil." This is the equivalent of finding ways of growing grain in deserts.

2) People require about the same calories/day as they did in the past and will in the future. *Demand* is constant per person, or increases. Technology cannot do much about this. With oil it is possible, and common even, to come up with ways of reducing the demand per person. Cars can potentially be made 10x more efficient. People do poorly on 200 calories/day.

Last party I went to had 5 priuses (priui?) in the yard.

3) Just about oil products have no-oil based substitutes. Read about the cornstarch based plastics? They become viable as oil prices increase.

fyodor | June 15, 2005, 5:03pm | #

joe,

I wouldn't be supporting a higher gas tax - and the pain it would cause - if I didn't believe the alternatives were more painful.

First, "pain" is a rather vague term. It pains me to know that my former associate in weird, underground music is now trying to croon like a second-rate Bing Crosby. But...HE'S GOT THAT RIGHT. That's why we libbers talk in terms of violations of rights rather than nebulous and subjective "pain," and why I would restrict punitive taxation to violations of rights in an inevitable commons.

Next, as I said to Jennifer, it's rather ironic to cause with certainty now the "pain" one is ostensibly trying to forestall in one hypothetical version of the future.

David | June 15, 2005, 5:34pm | #

gaius,

How would you compare the periods of innovation with those of little innovation? Would you say the innovative periods were marked by more individuality, or less?

gaius marius | June 15, 2005, 5:34pm | #

on this last point -- i'm unsurprised that many here would feel progress is mandatory. it's part of the cult of the new and the young; as an article of faith, for one to believe that the past isn't worth learning about, listening to or living by, one must think that the future is inevitably better.

one cannot emphasize how new (in historical terms) this opinion is in the west. very few espoused it previously to the 18th c, and it only became popular opinion in the 20th. before that, the new was viewed skeptically and cynically by the vast majority -- which, whatever else it may be, is a viewpoint very good for a stable society of laws.

such a view is predicated on a society that has experienced massive technological advancement in its recent past, as ours has. similarly, the greeks and romans had made such spectacular advances in technology over their times that the view became endemic to classical society as well -- corresponding directly with the breakdown of law and order that characterized the rise of the roman universal state and ultimately the collapse of hellenic civilization. after a violent period of total anarchy, stability became fashionable again and advances in techne nearly universally rejected as dangerous -- "devil's work", in the parlance of the times.

i'd bet the same fate awaits us in a few centuries time, along with the destruction of the cult of the new and the arresting (for an age) of widepread technological development.

gaius marius | June 15, 2005, 5:43pm | #

Would you say the innovative periods were marked by more individuality, or less?

transitional, imo. progress is not willy-nilly -- it takes a healthy respect for systemization, criticism and rigor to spark such advances, and those are not the hallmarks of self-indulgent revolutionism alone. but obviously, the artist/scientist must have room to work and explore, and that takes a degree of freedom within the law.

i think the ages past -- 15th-17th c -- were actually the peak of rapid scientific principles in development in the west. techne has advanced since at pace, i know, but consider the revolutionary nature of the laws and principles discovered between bacon and newton.

Thomas Paine's Goiter | June 15, 2005, 5:54pm | #

I've thought of something else to add to this on my drive home. A fuel-efficient car like a Honda Civic gets double and a bit more mpg than a monster like an Excursion or a Suburban.

The higher gas prices go, the more pain that those giant jackasses driving those SUV's feel. GO GAS PRICES!

Dave | June 15, 2005, 6:10pm | #

I wouldn't be supporting a higher gas tax - and the pain it would cause - if I didn't believe the alternatives were more painful.

Joe you might get by fine with whatever it is you drive with high gas taxes. But don't forget pretty much everything you own was delivered to you or a store where you bought it from by truck. You know trucks run on gas. Airplanes they run on gas too. Not to mention all the other things that require oil to produce. On top of all that the government might be LESS LIKELY to fund or allow alternative energy, it would destory their revenues.

Whats more painful than having to pay a lot more for just about everything????

grylliade | June 15, 2005, 6:42pm | #

living standards in the ROman Empire were in many ways higher than in the same parts of the world after the Empire fell and the dark ages took hold.

I'm not sure how true that is. For a couple centuries after the fall of the Western Empire, sure, but overall? No. The Eastern Empire continued on, and until the Fourth Crusade in 1204 (when the crusaders sacked Constantinople) was better off than the old Roman Empire had been. And even in the West, standards of living for the average person had probably gotten back up to Roman standards by the time of Charlemagne. The fall of the Roman Empire was mainly the death of high culture and a wealthy upper class, which looks from this distance like a collapse. But mostly technology continued to advance (except in certain fields like architecture), and standards of living continued to rise. Again, the aristocracy in medieval Europe wasn't as well off as the upper class in the Empire had been, but the peasantry was probably better off.

our fate lies with theirs, unless you believe we're divinely ordained and "special".

I don't think you need to think that Western civilization is divinely ordained or special to think that it's going to last for a long, long time. Yeah, it's going to collapse at some point. The question is, when? I think that there are a good many centuries left in us yet. For a historical parallel, if I had to draw one, I would say that we're at the point classical civilation was at near the beginning of the Chris