oftwominds-Charles Hugh Smith

Survival+ : Chapter One

March 23, 2009

Today I begin serializing my new eBook, Survival+. Please bear with me on several fronts. The next two weeks or so my posting and email may well be hopelessly sporadic as I attend to various family projects.

As for this serialized book: you may become frustrated by the analysis sections, as in "get to the practical checklists already!" But the challenges we face cannot be tackled without an understanding of their sources, and whatever conclusions I reach will make no sense if you don't plough through the first sections.

Lastly, this book will be posted for free in its entirety when complete. I will be making Survival+ available for free because this topic is of critical importance and I don't want cost to be factor in whether people read the book or not. I consider it a contribution to the great national discussion.

Print and Kindle editions will be available for $8.88 each should you wish to read the book in either of those formats; those familiar with Chinese culture will recognize the significance of the price: 8 represents prosperity (actually, it rhymes with prosperity in Mandarin). Thank you for giving the book a try.


SURVIVAL+

Structuring Prosperity and Security for Yourself and the Nation

Chapter One

This is intended as a practical guide to structuring prosperity and security for yourself, your community and our nation. Any guide claiming to be practical must first present the contexts and causes of the present challenges we face. Without such an understanding, all planning is like a house built on shifting sand: flawed from the start.

If we are indeed entering a 15 to 25-year Great Transformation, then as prudent as it is to stockpile a few months of food and supplies, that will obviously not get us through the Transformation, either as individuals or as communities. We need a thorough understanding of the challenges before we can fashion a response that will make the Transformation a positive one. Our goal is a sustainable, productive economy and a full appreciation of the fundamental rights to life, liberty and the pursuit of happiness.

To get there, we must first understand the contexts of our situation. I know it is tempting to skip ahead to the list of proposed responses, but they won't make sense unless we ground ourselves in the contexts of our planet, era, society and economy.

There are four distinct issues to sort out:

1. The nature of the energy, financial and environmental trends/crises which are heralding the Great Transformation
2. The nature of the negative and positive feedback loops which determine the system's stability and direction
3. The responses which have a high probability of making the Transformation positive
4. The nature of future work and the skillsets best suited to prospering during the Great Transformation

If we mischaracterize the nature of the crises and fail to grasp the forces powering these trends, then we will select inappropriate responses which will not prepare us to prosper.

You may well disagree with much or perhaps most of this book; that's fine, because the primary goal of the book is to spark a reappraisal of our situation and generate practical responses. I don't claim to have "the answer," or even answers; what I hope to present is a way of thinking about the challenges which is more productive than the status quo.

You may also find some of the ideas presented here difficult to swallow. None of us like to think of ourselves as debt-serfs (yes, I have a mortgage, too), yet how can we move forward if we cannot be honest about our responsibilities and dilemmas? We are all vulnerable to groupthink, propaganda and marketing at various times; there is no shame in simply being human.

Some of you may find parts of the analysis smacking of warmed-over Marxism, while an equal number may find certain sections "right-wing." This urge to categorize any idea or analysis ideologically is part of the simulacrum of thinking we accept as "obvious"—the largely unconscious "politics of experience." That much of what we accept as "obvious" might be wrong is deeply unsettling.

Context One: Human Nature

The first context we must understand is human nature. Regardless of the era or challenge, humans remain "wired" to respond to crisis in the same basic ways. Unfortunately for us, our responses in "default mode" (our first emotional responses) and the solutions we find highly compelling in default mode (inertia/complacency, fear/panic, casting our lot with a "Big Man"/leader or fatalism/giving up) are often not constructive, and may well be highly destructive.

Even more pernicious, our default mode is extremely short-term. As small groups of hunter-gatherers, we simply walked away when we'd depleted the environment of resources; there were always other lands (or islands) available. In this fashion, ancient humans wandered the entire planet long before the first tilled crop was ever planted.

Our default ability to foresee the consequences of our actions is poor; thus time and again human societies have added population and "overhead costs" during prosperous times of ample rainfall and grain yields, only to collapse in catastrophic decline when a string of lean years inevitably came along.

In abundance, we freely spend what's "cheap" and in shortage we mourn what is now "dear" or no longer available. It's not difficult to see the same pattern repeating today.



Context Two: Cycles and Patterns of History

While every era of crisis is unique, authors such as David Fischer (The Great Wave: Price Revolutions and the Rhythm of History ), Jared Diamond ( Collapse: How Societies Choose to Fail or Succeed ) and Joseph Tainter ( The Collapse of Complex Societies) have carefully researched how cycles of price, conflict and resource depletion/exhaustion tend to repeat as human populations rise beyond the carrying capacity of their environment. I address these cycles in Food Shortages, Rising Prices, Stagnant Wages: Welcome to the 13th Century (reprinted below in Chapter Three).

As we seek to understand long-wave cycles, we must also recognize that the crises of our era are unique even as they are manifesting within historical cycles.

A number of recent books have described the unique set of challenges we face: for instance The Long Emergency: Surviving the End of Oil, Climate Change, and Other Converging Catastrophes of the Twenty-First Century (James Howard Kunstler) and Financial Armageddon: Protecting Your Future from Four Impending Catastrophes (Michael Panzner). Other books have addressed critical environmental, energy and demographic issues: The Future of Life , Beyond Oil: The View from Hubbert's Peak , Fewer: How the New Demography of Depopulation Will Shape Our Future , The Coming Generational Storm: What You Need to Know about America's Economic Future , The Rhythm of War and The Fourth Turning .

Given this wealth of material, I hesitate to even attempt a short summary of all the interwoven structural challenges of our era. But the key context is this: financial and resource crises are not new; they are recurring features of human civilization. But many aspects of our era's crises are unique in all of human history: never before have we faced depletion of fossil fuels and the population pressures of over 6.5 billion humans to feed, house, clothe, transport, heal, care for in their old age. Never before have we as a species been so dependent on fragile supply chains and fast-depleting global resources.

Consider the overfishing of the world's oceans; what once seemed inexhaustible—the supply of fish—is now heading to near-zero.

Ironically, this cyclical nature of crisis lends itself to the emotional power of complacency: if we managed to get through those crises, then we can do it again, the power of human innovation will save us, etc. Unfortunately, there have been many times when the human populace did not "get through" the crisis; populations collapsed to mere shadows of their levels reached in the years of rising abundance.

Current structural challenges include:

1. demographics (promised retirement benefits are unaffordable)

2. global financial deleveraging (renunciation/write-off of debt)

3. high-cost advanced economies, "Planet of Slums" developing economies

4. rising interest rates (shortage of surplus capital)

5. de-scaling of large enterprises/structural job losses in advanced economies

6. scalability traps/structural job losses in all economies

7. crippling regulation and overhead burdens on small entrepreneurs

8. fossil fuel depletion (Peak Oil)

9. "head-fake" drop in energy removes incentives for alternative energy

10. political disunity (see addendum below); elites' interests diverge from those of the society as a whole

11. rising income disparity

12. depletion of fresh water, ocean and soil resources

13. climate change (weather extremes, rising sea levels, etc.)

14. increasingly drug-resistant bacteria and viruses

15. rising chemical and industrial pollution levels (air, water, soil, etc.)

16. increasing availability of bioweapons and nuclear weapons

I summarize the four primary cycles in my book Weblogs & New Media: Marketing in Crisis:

1. Peak oil, or the depletion cycle/end-game of the global economy's complete dependence on inexpensive, readily available petroleum/fossil fuels.

2. The cycle of credit expansion and contraction (approximately 60-70 years), which is now beginning the transition from unsustainable credit expansion (bubble) to renunciation of debt (credit collapse) and global depression.

3. The generational cycle (4 generations or approximately 80 years) of American history which leads to nation-changing social, political and economic upheaval. (The American Revolution: 1781 +80 years = Civil War, 1861 +80 years = 1941, World War II + 80 years = 2021)

4. The 100+ year cycle of price inflation and stagnation of wages' purchasing power which began around 1901 is now reaching the final stage of widespread turmoil, shortages, famine, war, conflict and crisis.


Without a firm understanding of the cyclical nature of human history and the unique challenges of our era, we are hard-pressed to escape the comforting illusions of complacency and fatalism.

Context Three: The Forces Which Power Trends, Reversals and History

Within each context, various forces are at work to resist and accelerate trends. These forces include feedback loops (both positive and negative), marginal returns and the illusion of incremental change.



Context Four: The Environment

It is tempting to hope that all the structural environmental challenges will "sort themselves out" or be solved by some new technology that magically scales from the lab table to global ubiquity. But the realities do not lend themselves to either benign neglect (that is, just leave everything alone and it will rebalance itself naturally) or technological "fixes."

The human population has exploded in a geological eyeblink from several hundred million to 6.5 billion. In terms of energy and resource consumption, each resident of the First World (Europe, North America, Japan) has an environmental impact up to 100 times larger than that of a Third World person. As 2 billion people in China, India and elsewhere aspire to an energy-intensive consumerist First World lifestyle, the reality that the planet does not have the resources to support 3 billion middle-class consumers is readily visible.

The list of global environmental ills is well-known. Overfishing driven by insatiable demand and politically popular subsidies of national fishing industries has driven the world's fisheries to the point of collapse. The technological "fix" is aquaculture/aqua-farming, but artificial fisheries spawn another entire host of their own problems.

The depletion of cheap, easy to reach oil is also well-known; less well-known is that all the alternative energy sources in the entire world—geothermal, hydro, solar, wind, tidal, etc.--make up less than 5% of global energy supply. While natural gas and coal can fill some of the gaps as oil supply falls, neither of those fuels is endless, either—and "clean coal" is yet another technology that is promising in the lab but not scalable globally without horrendous cost.

Fresh water aquifers are being drained everywhere from the American southwest to China, and there are no sustainable ways to compensate for this drawdown of irreplaceable fresh-water resources.

Schemes to desalinate vast quantities of seawater requires stupendous amounts of energy; a recent plan by Saudi Arabia would burn fully 1 million barrels of oil a day—1 million barrels that could no longer be exported to the U.S.

Regardless of what we believe the causes might be, glaciers are melting at increasing rates. Once the Himalayan and Andean glaciers vanish or recede to mere patches of ice, the rivers 2 billion people rely on for irrigation water will become seasonal.

Add in massive soil erosion in China and elsewhere, extended droughts in Australia, etc., and you get a picture of global resources stretched to the breaking point. The more you know about the technical details of supposedly miraculous technological "fixes" like desalination, tidal energy, algae-based fuels, etc. etc., the more you understand that very few if any of these emerging technologies may "scale up" to global applications.

In other words, algae-based fuels can work just fine on the rooftop of a university lab, but the hard part is scaling it up to produce 1.7 billion gallons of gasoline-equivalent liquid fuel a day—which is only half of the world's current consumption of oil. (Total global consumption of oil, 80 million barrels a day, so 40 million barrels a day X 42 gallons/barrel.)

Add these realities up and the context is a potential crash of global food and fresh water supplies, exacerbated by energy shortages. As authors such as Diamond have explained, eras of resource depletion/drought often trigger unending war/conflict between competing groups and nations.

In essence there are four interlocking crises: environmental, energy, financial and geopolitical. Excellent sources abound on these topics: The Future of Life , Beyond Oil: The View from Hubbert's Peak and The Long Emergency: Surviving the End of Oil, Climate Change, and Other Converging Catastrophes of the Twenty-First Century come to mind, though there are many other reputable texts.


Context Five: The End of Debt-Based "Prosperity"

The "prosperity" of the past two decades was based not on savings, investment and productivity, as the mainstream financial media and think-tank punditry maintain, but by extremes of speculative credit, leverage, debt and risk-taking, all enabled by a financial system based on obfuscation, deception, embezzlement, fraud, abuse of credit and grossly inflated asset valuations, a.k.a. bubbles.

This debt binge was fed by a marketing-based consumerist culture in which shopping and acquisition became recreation, therapy, self-fulfillment and status all in one profit-driven focus.

Compounding the collapse of this debt-based bogus "prosperity" are two long-term trends: the end of cheap, abundant fossil fuels which enabled inexpensive global supply chains and tourism, and the "end of work," a global contraction of paid labor.



Context Six: Squeezing the Middle Class

The intersection of various long-term political and financial trends is effectively squeezing the middle class, which the state (government) depends on to pay most of the taxes. Caught between the over-reach of both the state and its elites (known here as the Plutocracy) and the end of debt-based, cheap-oil "prosperity" which enabled it to maintain an illusion of wealth, the middle class is being squeezed to the breaking point.



Context Seven: The Nature of Prosperity and Happiness

The U.S. Declaration of Independence recognizes the inalienable rights to "life, liberty and the pursuit of happiness." Oddly enough, happiness turns out to be a slippery concept, and much of what Americans spend their lives pursuing does not actually increase their happiness. Indeed, it is self-evident that the stress levels, medication usage and miseries of the "American lifestyle" even in times of prosperity are far higher than one would expect were happiness as abundant as cheap consumer goods.

And even prosperity itself turns out to be rather more slippery than rising GDP or other metrics would suggest. It seems that much of what passes for "essential accoutrements of prosperity" such as large suburban homes, multiple vehicles and closets of clothing do not bring happiness to their owners. Rather, they are largely the mirage-like results of marketing propaganda conjured up to generate profits, not life satisfaction or happiness.

Indeed, were we to travel back in time to 1870s San Francisco, for example, we would find people feeling quite prosperous even though they lived in what we would now consider relatively primitive poverty: no electricity, no vehicles except public streetcars, (On August 2, 1873, the inventor of the San Francisco cable car, Andrew Hallidie, was the system's first passenger), trains and horse-drawn wagons, primitive healthcare, costly consumer goods, etc.

Thus the entire notions of prosperity and happiness must be examined objectively before we can even say with any reliability what the words actually mean.



Context Eight: The framework of our response

Our responses to these interwoven, reinforcing challenges of our era can be broken down into three inter-related levels:

--family

--community/networks

--nation

Each level requires different skills, resources, inputs and solutions.

What's for dinner at your house? has been updated with a new recipe: Eggplant Parmesan . This a mouthwatering photo-illustrated PDF from longtime contributor Bill Murath.

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