13 August 2012
Norman Pagett writes:
The 2008 crude oil price, $147 per barrel, shattered the global economy. The “invisible hand” of economics became the invisible fist, pounding down world economic growth to match the limitations of crude oil production.
—Kenneth Deffeyes (petroleum geologist)
Our political leaders still refuse to acknowledge that the oilparty is over, and look back to previous recessions for ‘solutions’ that can be used to cure our current ills. Referring to the stimulus programs of the 30s as a model for our own times ignores a fundamental problem: we are locked into a system that demands infinite growth using finite resources, burning fossil fuel to sustain employment. Unfortunately we no longer have access to cheap energy to do that.
Governments want to ‘create jobs’, and our leaders push for stimulus and growth, abstract concepts that we are assured can be made reality through legislation. The colossal municipal programs of the 30s created jobs, but only because Roosevelt had access to unlimited cheap energy to fuel machinery. You cannot build a Hoover dam or a thousand miles of highway using picks and shovels. It was floundering by 1939 and only saved by WW2, which was the biggest job creation scheme of all time. It gave the developed world an impetus in consumption and employment that rolled on for a generation, but it stayed on track only while cheap oil production constantly increased, and while the USA was the dominant oil producer and could control world prices.
The economy of the developed world really is that simple, we can only create employment by consuming energy at a constantly increasing rate. We deluded ourselves that oilburning was GDP, and the faster we burned it, the more growth we had. Sorry to disillusion everyone, but your job (pension, social security etc) depends on someone somewhere burning fuel, probably oil, to support it. we thought it would last forever.
The era of cheap energy and jobs is over, but the ‘world economy’ was an oil fuelled illusion; that scary truth is something our leaders daren’t utter.