Jun 29, 2009

‘Peakonomics’ the Stone Age didn’t end because they reached ‘peak rocks.’

Doomer alert -  What do salmon dinners, SUVs, and subprime mortgages have in common?
Peakonomics' - Peak water, peak fish and the end of everything
They all depend on cheap oil, at least according to the book jacket of Jeff Rubin's bestselling new book, Why Your World is About to Get a Whole Lot Smaller.

At its essence peakonomic thought rejects the foundational economic principle of our civilization, that over the long term, increased productivity leads to ever-higher levels of prosperity, social stability, and well-being. Instead, peakniks suggest output will soon crest in any number of sectors, followed by an extended or permanent period of decline. The assumption is all historical trends in production and consumption inevitably continue along their current path, with no hope for innovation, no leaps in technological progress or improvements in institutional design.

But why should we buy this assumption?
It is weirdly ahistorical to think we're not going to get massive innovation in each of those sectors. Over the past 100 years, life in the developed world got steadily better by almost any conceivable measure. Life expectancy rose while infant mortality dropped; the air quality of our cities improved, food got cheaper and more nutritious, and the workplace became safer as wages steadily climbed. There is no reason to think this sort of across-the-board progress cannot be sustained. From global warming to food production to the current economic crisis, the odds are we're going to figure things out.

Peak oil may just be a much-needed first stop toward progress. As President Obama's new energy secretary, Steven Chu, has argued, most of our energy technology is 19th-century technology. Compared with other areas of innovation—computers, biotech, information technology—energy saw a period of almost total stagnation in the 20th century. The simple reason is, there's so much energy in oil that nothing else could compete. Oil's ridiculously low price-to-energy ratio was also a barrier to technological innovation, so high prices should eventually lead to a better solution. To put it another way, the Stone Age didn't end because they reached "peak rocks."

But that's historical amnesia for you. Peakniks are driven not just by pessimism about the economy or the environment, but a deeper distrust of the entire modern project. Call them doomers, dystopians, or neo-Malthusians, but they are at heart "declinists." And what motivates declinism is an abiding distaste for the modern world—the urban alienation, the individualism, the shallow entertainments and mindless consumerism.

For declinists, peakonomics is not a threat but a hope: once the collapse happens we'll be thrown back into a low-impact hyper-local subsistence economy—precisely the sort of lifestyle most declinists think we should be adopting regardless.

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