Will there be an abrupt collapse?

(and if so then why, when, and how?)

Robin P Clarke

A printable pdf of the following is available at http://www.energyark.net/collapse.pdf

Among those who recognise a peaking of oil supply at about the present, there are some who confidently assume that there will be some abrupt cessation of the industrial/economic system on which we depend—an abrupt collapse. And there are others who confidently assume there will not be such a collapse, but instead a relatively gradual decline (which is what some others have in mind when they use the collapse word).

And yet there has been little or no systematic analysis or argument presented to justify these assumptions.

A most useful conclusion would be if we could state with confidence that major collapse would have negligible probability within the next few years. That is because such a conclusion would enable us to make relatively coherent life-plans over the coming years. A rational person will see that the only way such a conclusion should be reached with maximal confidence is via seeking as diligently as possible to undermine it. And for that reason, my modus operandi in the following will be mainly to try to undermine my (already low) confidence in that convenient wished-for conclusion, by confronting it with all the plausible collapse horror-theories I can muster; and to operate a sort of precautionary principle, whereby any particular collapse-theory retains its credibility unless the case against it is significantly clear.

For the purposes of this article the following things will be assumed as being true [1] (notwithstanding that they may be disputed by some readers and writers).

1. Oil supply ceased its longstanding growth in about 2005 and is now starting a relentless decline of several percent per year.

2. There are no alternative fuels for transportation which are sufficiently scaleable to offset this decline within the next few years (for either technical or social/political/economic reasons).

3. Over the next 1-5 years there will be a decline of oil and other energy supply of several percent due to shortsighted under-investment, creating an energy crunch and an oil crunch.

4. The design of the global financial/economic/corporate system of the past century is such that its functioning depends on continuing growth of key resources, especially cheap easily-produced oil. And cannot continue for long once that growth ceases.

Others have assumed that the essence of collapse is reduction of complexity. But when a building collapses due to earthquake or explosion, the complexity is increased rather than decreased. This is proven by the fact that the adequate description of a collapsed building needs far more words (or a larger jpeg image) than that for the uncollapsed building, unless one resorts to the false simplification that it is “just a disordered pile of debris”.

Likewise an anarchic society in which everyone functions as a unique individual is more complex than the same people organised into relatively few standard roles in a bureaucratic society.

Rather the essence of collapse is full or partial dissolution of some organised arrangement, and especially some functional arrangement. Ccomplexity reduces resilience against collapse only if it is (in approximate electrical analogy) ‘in series’ rather than ‘in parallel’: if I have two independent internet connections, that increases resilience; if in order to get to a meeting on time I need to travel by car followed by plane followed by boat, that compounds the probability of failure, reducing resilience.

Given a relentless decline of energy available for long-distance travel and communication, then some sort of reduction of global systems/organisations followed by national ones is inevitable sooner or later. But the question I am trying to address here is not whether there will be some sort of cessation of some or all of these eventually, but rather whether there is likely/certain to be some abrupt collapse within the next few years.

Civilisations

Firstly we need to clarify quite what (one or more things) it is that could be going to collapse. “Civilisation” is a rather nebulous term. Arnold Toynbee in A Study of History [2] identified it as a form of society involving the organisation of many thousands of people in contrast to the much smaller primitive societies such as nomadic or hunter-gatherers. Those who have not studied his work invariably mistake empires as being civilisations. Toynbee explains that such “universal states” are merely symptoms of civilisations which have already entered breakdown. For instance the Roman Empire was the tail-end of the Hellenic civilisation. That Hellenic civilisation was surely already in a very bad way four centuries before Christ, when the Athenians sentenced Socrates to death merely for asking reasonable questions, and launched a ridiculous grand invasion (the Sicilian Expedition) which ended in loss of the entire Athenian army and navy, and thence its democracy system.

Toynbee concluded that the cause of breakdowns was an internal failure, due to a proliferation of “mechanical mimesis”, mindless copying rather than independent judgement. I myself wrote an article in 1987 (www.energyark.net/decadenc.htm) [3], analysing this more systematically in terms of natural selection. I concluded that judicious genius mentality is a requirement for originating a viable civilisation; but it eventually solves all the key practical problems thereby making itself redundant; and so it becomes displaced by authoritarian mentality (of which “mechanical mimesis” is a major part). (I later updated and elaborated on that article within my book www.lulu.com/content/140930. [4])

I think it is important to note that we see in the here and now the various characteristics which Toynbee ascribed to a decadent civilisation, in which the founding creative minority (which commands respect with its charm) has been displaced by an incompetent dominant minority (which enforces its control by force and trickery so long as it can). ( I hardly need to point out to readers of theoildrum.com that there is no shortage of very competent people who are completely sidelined by governments which astound us only with their persistent incompetence.)

A vitally important lesson of history is that such decadent dominant minorities are almost entirely useless at doing anything useful; the only talent they have is in short-term preservation of their own status (and they’re not even much good at that).

All the previous twenty-plus civilisations have broken down and collapsed or aborted, and the present global one shows the signs of heading towards the same.

Anyway, back to the question of quite what could be going to collapse.

A thousand years ago, the European civilisation was already flourishing as evidenced for instance by its inventions of church bells and written-down music. And now a thousand years later that civilisation has passed through the scientific, commercial, agricultural, and industrial revolutions, and encompassed nearly all of the human race to greater or lesser extent. There are key features of our present organisation that were invisible a thousand years ago:

· The concepts of money and profit have become essential to everyday life.

· There is an elaborate industrial infrastructure dependent on fossil-fuels; and of which few if any people have more than partial understanding.

· There is a whole system of corporations and international agencies and educational/brainwashing institutions and banks and crooked legal systems which were almost or entirely absent in Medieval times.

Many people would dearly love to see the collapse of these latter systems, which they may see as an imposition displacing somewhat more civilised arrangements. Toynbee reasonably labelled our civilisation as “Western Christendom”. I suggest it might be useful for us to refer to the “Original Western” civilisation becoming transformed as above into the “Advanced Western” civilisation (even though many of us are highly critical of some of the “advances” involved).

I suggest the following as some key systems with potential for collapse.

· Money (currencies).

· Credit (borrowing and lending).

· Commodity markets (especially energy and food).

· Retailing.

· Electricity supply.

· Energy supply (other).

· Transport.

· Communications.

· Food supply and water supply.

· Government operational systems.

· Trust in government and in legal, social, and informal norms.

· Trust in, and cooperation with, other persons of varying familiarity.

I suggest the following as potential candidates for causation of abrupt collapses.

· Hyperinflation

· Crossing of balance-sheet thresholds; under-recognised key roles

· Market failures (short-termism and panic-paralysis)

· “Unexpected” events in a context of corner-cutting

· Loss of confidence in various assumptions.

Inability to organise downsizing?

This would be an aggravating factor rather than a mechanism of catastrophe in itself.

Biology thrives on growth. Organisms have been natural selected for growing and proliferating. And meanwhile, those organisations which are best at growing, persistently eliminate those that are less growth-orientated, for instance hypermarkets drive corner shops out of business. Success (“=”growth) attracts more talent and more success.

But we now come to a new world in which almost everything has to shrink instead. Talented, creative, people retreat from shrinking organisations and fields. Geniuses rarely aspire to make Strad violins anymore. Highway engineering departments get no green-minded visionaries. Shrinking is rarely conducted willingly or competently. A case in point is the car industry which is not exactly shouting out that “We have now made enough cars and we have triumphantly succeeded in our task!”. Instead they demand assistance in carrying on to the bitter blinkered end.

Thus the shrinkage can be expected to result in a great multiplicity of conflicts, of psychological and social friction and rigidity punctuated by shocks. A social equivalent of the slip-stick mechanism that produces the sudden jolts of earthquakes.

In these conditions it can be expected that political leadership will become a thankless, unattractive, profession. And it will be difficult for leaders to focus rationally on how to address the key problems raised below when they have also to cope with a constantly-full agenda of angry disputes.

I will briefly add in here the additional concept that there IS going to be an involuntary downsizing of populations worldwide and in most nations during the next two or three decades. (I appreciate that some are convinced that “if only” we were to “Make Poverty History” then the world “could” easily feed even more than at present, optionally trashing the biosphere even more intensely in the process; but I find that notion entirely unrealistic.) Such a prospect of reducing populations is one which policymakers are incapable of embracing. It follows that they are incapable of formulating any policy which is actually compatible with the real world.

We can now draw some the above points together as follows. Governments of scientifically-illiterate congenital incompetents will take charge of tackling the following daunting problems in the difficult context of constant shrinkage disputes and while being incapable of admitting or planning for the reality of population overshoot anyway. That is the unpromising context in which the continuation here has to be put.

Hyperinflation?

Chris Martenson has pointed out that over a thousand currencies have ended up destroyed by excessive inflation. Governments find it difficult to resist the temptation to print money even in absence of increasing real products to give value to it. So the question arises as to whether we might see something like that of the Weimar republic or Zimbabwe. But it has been credibly argued that what devastated those two economies was not the printing of money per se, but the hostile actions of other nations, forcing the printing of unbacked money to pay off international pressures. And this would not apply on a global scale.

On the other hand, we are seeing governments printing huge amounts of money at a time when assets and production are if anything decreasing instead. Perhaps the enemy now is not foreign agencies but the undefeatable Nature that does not do bailouts. So perhaps the jury remains out as to whether deflationary pressures will indefinitely prevent hyperinflationary panics. (Hoarding of cash and defaulting on debts have a deflationary effect akin to “de-printing” of money.)

It might be argued that history shows that hyperinflation would not destroy a society anyway. But (while not understating the great hardships of the Weimar experience) one may reasonably wonder what fate would have eventually come upon Germany if it had not been “rescued” (from hyperinflation at least) by the Nazi’s monetary policy of “One Mark for one Mark’s work”.

More crucially, our societies are now far more commercialised and far more dependent on the commercialised systems and corner-cutting therein. While it is not something I can readily demonstrate, I personally reckon that hyperinflation would rapidly lead to the total collapse of the globalised-corporatised capitalist system on which we depend for most of our life-support requirements. This would be a die-off scenario. But then it depends on whether hyperinflation occurs anyway. Could it perhaps result from a sort of money-printing “arms-race” between nations? (My dental-amalgam-drugged brain isn’t up to answering that at present.) Perhaps the strongest argument against hyperinflation causing early collapse is that the deleveraging/defaulting process must first run its course, which will either take some years, or if it somehow happens faster could then make an abrupt collapse anyway.

Critical Thresholds?

Many future-predictors proceed by projecting existing trends onward into the future. A higher level of sophistication involves anticipating when trends are going to be disrupted by discontinuities.

I suggest that a major class of discontinuities is that indicated in Charles Dickens’ famous words: "Annual income twenty pounds, annual expenditure nineteen pounds, nineteen shillings and sixpence, result happiness. Annual income twenty pounds, annual expenditure twenty pounds and sixpence, result misery."

Some people argue that there is so much luxury and wasteful consumption in developed countries that there is nothing to worry about because we can simply cut out that waste and indulgence. The problem they overlook is that one man’s luxury spending is another man’s life-supporting earnings.

There is on the web a lecture by Elizabeth Warren titled “The coming collapse of the middle classes” in which she shows that many middle-class households in the US are already struggling to balance their books, even though nowadays both parents are employed. Already many are failing and being forced into traumatic bankruptcy.

As costs of necessities rise relative to available income, then an increasing proportion of households, of professions, and of organisations, are going to find that their income is no longer sufficient to meet those costs.

The households will then become dysfunctional, with homelessness, hunger or other problems, and ultimately death if not aided by charity or social security payments. The members of these households will then be unable to properly undertake their roles in employment and education. The professions, businesses, and other organisations will become unviable, making their workers unemployed and their clients unprovided with services.

There will then be secondary consequences of decreased efficiencies and increasing crime and distrust. Burdens on government services will increase at a time when their funding is being cut. In their own defence, governments will increase taxes on small businesses to the extent that they drive them out of business and thereby create deadly enemies for themselves (besides losing the tax income too).

At first it will be only relatively optional services such as those of cosmeticians or artists which fall off the edge. But as the relative costs continue to rise, an increasing range of occupations and professions will cease. Two further discontinuity effects can then be expected.

Firstly, there are likely to be some key critical services which are underappreciated by others until they have already collapsed, and consequently are not defended against such collapse. Possible candidates for this fate could be sewer maintenance workers, safety consultants, or oil production operatives and consultants. And once these services have collapsed, they bring down all the rest that depends on them. And thereby at least a partial collapse scenario. It does not depend on these key people dying or being sacked from their jobs; merely the fact that their lives no longer add up financially is enough to render them unable to fulfill their employment roles properly.

It might be tempting to think that priority would be given to such key workers. But I suggest that the usual shortsightedness would apply, so all too often resources would be commandeered by those with most political muscle (politicians, judges, military, wealthy ) rather than those modest and despised people most crucial to system functioning.

Secondly, as increasing numbers of persons find their balance-sheets are no longer balanceable, there comes a point at which there accrues a critical mass of such failed persons. The discrepancy between the costs to the government and the tax income becomes intolerable. The concept of government as a provider of solutions becomes outbalanced by a concept of government as parasitic cause of the problems.

And the ranks of the disaffected threaten to become more powerful than the authorities they are disaffected by. Not least because so many of them are skilled organisers (but relatively dispensible professions) such as lawyers, managers and teachers.

At this point, one can envisage a revolution such as those of France and Russia. But in this case there will be the complication that the problem cannot be solved merely by a change of regime. That being because it is Nature (physics, biology, geology, chemistry) which is the cause of the hardship, and Nature will not do bailouts however many revolutionary activists may be demanding them.

It is not clear how a government can continue to provide any useful social functions for much longer once such a situation develops. So it seems that this could thus cause a collapse of government authority, and therefrom a collapse of the legal and commercial systems, and the entire globalised-corporatised-industrialised-oilised system would promptly fail, at least in one country at a time. This would then produce failures of the transport systems, energy distribution systems, and food distribution systems, radically adversifying daily life. Whereupon anarchy would take over (the real horrible anarchy (Baghdad 2004 or worse) rather than the fantasy utopia of the “anarchy” theorists).

Credit collapse?

The failing growth-based system is heavily dependent on giving credit to enable the funding of needed projects. The credit has been available to be loaned only because there was a reasonable expectation that the future would be larger than the present. But now the world’s oil supply has ceased its long-term growth, and population growth has also slowed particularly in the wealthy countries.

There has already been a conspicuous credit crisis, and yet the grand global economic system is continuing to function anyway, it seems. This may be entirely due to the widely-promoted myth that this is just another business cycle recession, just a burst housing bubble that will correct in the next year or three.

It is to be expected that some people will still be believing that myth in three or four years time (assuming there has not already been a collapse by then). But as the “recession” drags on with every “recovery” failing and no real recovery in sight, and with increasing awareness of the energy descent concept within investing circles, a point can be envisaged where credit-granting confidence collapses with sufficient depth and duration that the entire system is indeed unable to continue functioning—a collapse scenario of the most radical kind.

Market failures?

There has already occurred some spectacular market malfunctioning in the energy sector. That is the currently low energy prices failing to take account of the future reduced availability and the need for more investment now to compensate for it.

That is a manifestation of the more general rule of human psychology, that people tend to seek cures rather than preventions. So long as a crisis has not yet started, most people are complacent; they fail to keep prudent stocks of fuel, food, water, etc. Then when the crisis comes they have no option besides panic-buying and hoarding what little they have left.

Matt Simmons in 2008 presented a particularly credible version of this concept. The US government has its Strategic Petroleum Reserve, but it is a reserve of unrefined crude rather than of finished fuel products. Simmons proposed that in the event of a shortage, it would result in everyone topping up their tanks and hoarding it, which would result in no supplies of diesel being available for transport of food. And thus within five days the nation’s local food-stores would be empty. This looks like a potential total collapse scenario. With a whole nation subjected to lack of food and lack of transportation how much longer could the systems of government and commerce continue to function? And could there be a recovery from such a crisis?

How sound are these words of Simmons? (in his Platts conference slide #28):

“This is a “lights out” occurrence. One energy shortage soon trips another. The energy system could shut down in too many places. Without energy: Everything, including food system runs dry. The world has no early warning system for the chaos: There are no fuel gauges; there are no fuse boxes; we have no in-place rationing systems; we have no “firewalls”; we have no contingency plans.”

Similar questions arise about reserves of food. One source reckons that “we now face one of the tightest margins in recent history between food reserves and global demand, with global reserves estimated to be at their lowest level in 25 years.” http://www.stwr.org/food-security-agriculture/the-importance-of-food-reserves-in-a-hungry-world.html (28 May 2009)

Governments are trying to address this problem, but there appears to be more of a would-be work-in-progress than a solution nearly imminent: “Global food reserve idea faces huge obstacles.” (7 June 2009) http://news.uk.msn.com/world/article.aspx?cp-documentid=147829146 .

And then we must put this in the context of the vulnerability of globalised monocultures to such contemporary pestilences as wheat rust fungus and potato blight. Plus the erratic extreme weather events that are accompanying the start of climate catastrophe.

Non-conclusion

I will leave off till further down this page my own reckonings of probabilities of whether, when and how there will or will not be a collapse.

Instead I shall first invite commenters to suggest what flaws there may be in the collapse-cause theories I have presented. Or what considerations make them all the more sound. Or how they would modify the theories, or evidence thereof. Or what other theories they may prefer.

Notes

1. The defectiveness of the growth-based system is best presented in Chris Martenson’s Crash Course; also some posts by Gail the Actuary on theoildrum.com. The other three assumptions have seen extensive discussion on theoildrum.com.

2. Arnold Toynbee, A Study of History, is ten very heavy volumes (there is a set at Birmingham University uk); even the 2-volume abridgement is not particularly short. I suggest to at least study the first chapter and the “Argument” and tables presented at the end of the each volume.

3. My 1987 decadence article www.energyark.net/decadenc.htm was published to my filing-cabinet because (in pre-internet days) I could not imagine how to find any audience that would be interested let alone a publisher that would be receptive to such an anti-authority analysis. Note that even Prof. Toynbee’s work itself remains rejected by professional historians, in line with this historical evidence: www.energyark.net/gen.htm.

4. My 2005 book The Future is Here! www.lulu.com/content/140930 was put on lulu.com not for publication but to print copies as the practical handbook of the RDP project. But no sooner had I got some copies than I became submerged by the harassment conspiracy crisis documented at www.2020housing.co.uk. And the RDP project has since been overtaken by oil-supply events such that it now seems likely that the system is going to collapse anyway without needing that project to push it over.

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