John Quiggin's failure to grasp the resources shortage crisis

The following was originally -85242">posted as a response to an article by Social Democratic economist Professor John Quiggin on his blog site on 5 June 2006. In the article he stated “Most natural resources have actually become cheaper, but even in cases where prices have risen, such as that of oil, the economic impact has been marginal, relative to the long-run trend of increasing income”. Professor Quiggin places himself somewhere between the extreme of 'deep brown' (i.e. for full steam ahead with economic growth) and the other supposed extreme of 'deep green'. However, the practical implications of his approach have been shown to have been disastrously short of what was, and is, required.


-85242" title="">November 6th, 2006 at 8:17 am

John Quiggin :

“we can’t protect the environment unless we are willing to accept a radical reduction in our standard of living”.

Sorry, but I cannot accept this statement. If you define a high standard of living as ‘owning stuff’, then you are simply wrong. If our standard of living is so great, why is it we have to spend so much money repairing people? Why is there so much depression?

Our modern lifestyle is crap! I know, because on the whole I have divorced it. I have never been happier than since I quit working (for a wage of course, at the age of 46!) June next year, I will ditch my car, and I can’t wait! Finally organised so I no longer need it.

I grow much of my own food (spent $50 shopping in the last 2 weeks), am totally water and energy self sufficient (apart from the 60L of petrol I still use a fortnight), and I’m debt free. Free of the economy. I need so little money to live on, it’s AMAZING! I’m also so healthy now, I haven’t even so much as had a cold in over two years (I’m 54 now). Once I’ll have ditched the car, my footprint will be sustainable. Totally. And my living standard is the BEST it’s ever been. I do what I want, when I want, well almost. Just give me six more months.

JQ then goes on to :

“On the one hand, claims that we are bound to run out of resources, made most vigorously by the Club of Rome in the 1970s, have repeatedly been refuted by experience. Most natural resources have actually become cheaper, but even in cases where prices have risen, such as that of oil, the economic impact has been marginal, relative to the long-run trend of increasing income. The recent increase in the price of oil, for example, might, if sustained, reduce income by about 1 per cent, or around 4 months of economic growth.”

Really JQ? We’re not running out of resources? So they fall out of the sky to replenish do they? I don’t know where you’ve heard commodity prices have been falling. They’re all UP! Copper wire has doubled in price just this year (I know, I’m still building my house). Gold, silver, zinc, lead, nickel, all up, all past their peak of production most likely. Supply can no longer meet demand, just as the Club of Rome predicted! Why is it they are ALWAYS mis-quoted? They tried about six different models of growing resource use, and every model predicted a collapse of civilisation within 100 years of their report, 1970. We are now 35% of the way into this period, and they are BANG ON!

But of course, you’re an economist JQ, and you measure everything with dollars! I’m an energy man, and I measure everything in MegaJoules (MJ). So when you say the increase in the price of oil will reduce income by about 1%, I say so what? What if you can’t drive to work because of shortages, how much will your income be reduced then?

By ABARE’s very own figures, unless a shitload of oil is found very very soon, Australia could be totally out of the stuff within SIX YEARS. It will then be all imported, just as everybody else in the world wants a piece of the action.

Worse, as we ‘run out’ and slide down the backside of Hubbert’s Peak, the quality of the oil worsens (thicker, sourer) and the depths at which it needs to be extracted from get deeper and deeper, such that more and more energy has to be wasted to distil it to the standard we have all become accustomed to. The same applies to ALL resources. The easiest and best resources get used first, known as the low hanging fruit syndrome.

Furthermore, food volumes produced on this planet have been in decline for five years straight. Of course, the number of people keeps going up at about 4 Australias per annum. So less food is available, and the price goes up. But she’ll be right JQ, market forces will ensure that we with the most money will always be able to get our lot…. Hang everyone else.

Your precious economy is on the brink of collapse. Right now. Yes, the end is nigh. Inflation and interest rates rises will see lots of people going bankrupt as they can no longer fuel their 4WD’s, and nobody wants to take them off their hands.

Your statements on air quality are also fanciful. All we’ve really done is export the pollution to where all our ’stuff’ is now made, namely China.

Do yourself a favour JQ, buy a copy of “Limits to Growth”, and read it again (you have read it, right?).

Mike Stasse

Wayburn contra Hanson

Peak Oil, Overshoot, Crash, and Dieoff No one has done more or better work than Jay Hanson to acquaint interested persons with Hubbert’s concept of Peak Oil. On his website{1}, Jay has described Overshoot, Crash, and Dieoff well enough for all of us. This work does not need to be repeated. However, there is another side to Jay: Authoritarianism and Intolerance It seems that, corresponding to egalitarian tastes and authoritarian tastes, there has been a right and left wing of every political movement: Nazis, Communists, and, now, Peakers. Apparently, Mr. Hanson is almost completely self-taught. I cannot find any reference to a university background of any type. Like many such people Jay made money in the computer business and, probably, considers himself a self-made man. Regrettably, some people of that description are given to right-wing tendencies. Presumably, they imagine that, since they “made it”, everyone can make it; and, it’s their own fault if they don’t. Jay belongs to the right wing of the Peak Oil movement whereas I belong to the left wing. From time to time, Jay has provided a list of background subjects and associated reading material, not for our personal study as he claims, but to mark out territory throughout which he pretends to have complete intellectual mastery. He claims to be willing to answer our questions, but only if we are willing to sit at his feet. Nor does he tolerate dissent. Although the subject matter is science, scientific doubt and fallibility are completely foreign to his nature, which is anything but scientific. Moreover, he has very little math. Thus, he is vulnerable to the most egregious errors in the interpretation of scientific and numerical data from which he has no chance to recover. In the remainder of this note I discuss the inconsistencies in Jay Hanson’s versions of the Sloth Economy and War Socialism. The Sloth Economy and War Socialism Both Wayburn and Hanson have observed that market economies are efficient in one respect only. They transfer wealth from the poor to the rich with the minimum effort by the rich at a catastrophic cost to the energy efficiency associated with earning a living by those who serve the rich. In the United States, the market economy itself consumes between 50% and 90% of the total energy budget without producing one single thing we need to live{2}. Thus, both Hanson and Wayburn recognize that the only chance to mitigate the worst effects of Peak Oil is to effect fundamental political change. Wayburn’s Natural Economy{3} replaces the market economy with a consumer-planned economy in such a way that the energy budget can be met by Maximum Renewables{4} only, provided that population growth can be checked. Hanson’s War Socialism attempts to reduce the energy budget with rationing. This is too little too late, as we shall see, despite the somewhat misleading title War Socialism Is a Step toward a Natural Economy{5}. The following entries to The Dematerialist’s Journal will be useful to see the important differences: June 16, 2007. Jay Hanson’s War Socialism is a point on the path to the Dematerialist’s Natural Economy{6} supplemented by Hanson's Last Stand{7}, which is a slight modification of the journal entry for July 9th, and July 27, 2007. Communism and Some Idle Thoughts on the Excesses of Capitalism{8}, which is a useful rebuttal to opponents of communism and defenders of Marxism. Thus, Jay Hanson’s scientism fails Popper’s fallibility criterion and his alternative to the free market is inconsistent with sustainability. Tom Wayburn Houston, Texas September 27, 2007 References 1. 2. 3. 4. 5. 6. 7. 8. This paper: