"Let it Fail"

What can we do about peak oil? How can we wake up the public and our political leaders to the impending collapse of our economic system? My suggestion is to "let it fail."

I want to talk a bit about failure and what it means, what success would probably look like, and why we need to go through failure in order to get to success, and deal effectively with the problem of peak oil.

What Failure Looks Like

This is what failure looks like:

This sort of failure is happening now, and it will be greatly magnified by a collapse of the economic system.  All of these failures are connected to a single problem: an economy focused on endless growth. 

Peak oil is hardly the only problem that this economy has created. It is simply the first insurmountable problem. Without peak oil, we’d have global warming, world hunger, a deadly avian flu pandemic, the death of the oceans, biodiversity collapse, or some other waiting disaster as the crisis du jour. 

How do we get our leaders, our political system, and the general public, to do something about peak oil? Oil production may have peaked, but we still have huge reserves of denial out there — the latest is Michael Lynch’s opinion piece in The New York Times saying that the peak oil hypothesis is a waste of time.

What Would Success Look Like?

Let’s back up a moment and ask if there is a way out of this at all. Let’s put aside such thoughts as "no viable approach to peak oil will ever work" or "the public will never buy anything truly effective" and just ask if, given universal understanding — something like the Vulcan mind-meld on the entire population of our country — we could find a solution.

It is clear that we could. We would start with something like Herman Daly’s proposals for a steady-state economy as outlined on TheOilDrum.com for May 5, 2008. Describing this in detail would be a book in itself, but I would summarize, condense, and revise these points down to three basic policy principles. People may disagree with this or that aspect of this very high-level summary, but it illustrates the magnitude of the changes needed.

1. Limit by governmental regulation the physical scale of our use of natural resources to adjust for peak oil, global warming, soil erosion, and similar problems. Set upper limits on consumption of fossil fuels, limit human use of the land and sea, and limit human numbers by nonviolent birth control.

2. Economic reforms to stop economic growth and encourage "simple living." Greater flexibility in the work week should be promoted, allowing greater option for leisure time or personal work; banking reform, and a 100% reserve requirement for banks, should restrict the right to create money solely to the government.

3. Drastically reduce gross income inequality. This means an upper limit on incomes and a steep progressive income tax.

Without a drastic reorientation of economic policy, it's doubtful that we would really have dealt with peak oil. But this reorientation would essentially force the collapse of our current growth-oriented economy. The United States has over $50 trillion in debt right now — and most of it is not government debt, but credit cards, mortgages, business loans, personal loans, and so forth.

How is this debt, several times greater than the U. S. GDP, going to be repaid? There’s no way that everyone can repay all their debt without a lot more GDP than we’re currently seeing — without a growing economy and a lot more oil. Slamming the brakes on the economy, which is what is environmentally necessary, would force massive defaults and another Great Depression. That’s the underlying reason why no one has any serious economic proposals on the table for dealing with peak oil: anything serious would precipitate a collapse of the growth-oriented economy.

Dealing with Failure

Our actions should not be directed towards trying to prevent an economic collapse, but rather towards dealing with a collapse.  It doesn’t matter whether this failure is brought about by a tough but realistic environmental policy, or through a spontaneous collapse akin to what almost happened in the fall of 2008. Suppose we've got a situation like the Great Depression? How could we restore confidence and prevent people from starving to death, while also effectively dealing with the problem of peak oil?

I would suggest two immediate measures in addition to the points previously proposed:

1. A guaranteed annual income which would insure that every American would have access to food and shelter;

2. A national service (non-military) draft for everyone, 18 to 65, to insure that the government would have the means to provide Americans with food and shelter if necessary.  

I do not put these forward as necessarily the ideal, but simply as the minimum necessary. In such a dire situation, the government would need both to guarantee sustenance to all citizens, and to have the means to do so. The free market would certainly be the most efficient means of allocating economic resources, but the government needs to regulate the economy to make sure that the size of the economy does not destroy nature, and the distribution of resources does not lead to a total distortion of the economy in favor of the rich.

How Do We Get There?

We need to move towards an economy of being content with less, and staying there; an economy of simple living. We are so far from such a realization that it is hard to know where to start.

I’ve left out a lot of necessary details in my adaptation of Daly's plan to convey my basic point: massive changes are required to deal with peak oil. I challenge anyone who thinks we can avoid massive change to come up with a better plan.

To get a consensus for such drastic action, we’d need a manifest and catastrophic failure of the current system.  Everyone expects the current recession or depression to end, and the growth economy and "business as usual" to resume.

The easiest way to promote recognition of this catastrophic failure is to let the current economic system fail. This is not to say we shouldn't try to educate the public, just that such efforts would likely be unpersuasive, and that we should prepare for the likelihood of failure.

I applaud efforts to fund libraries, keep text-messaging drivers off the road, and stop the endless wars in Asia. But these cannot be part of a series of incremental changes designed to keep the current economic system on its feet and resume "business as usual." They can only be justified if they further decisive action at the time when catastrophic failure can no longer be denied.

Keith Akers
October 10, 2009

UPDATE October 29, 2009: here's a quote I got from today's "Peak Oil Notes" (from ASPO-USA.  It demonstrates my point exactly: the awareness of peak oil would cause an economic crash.  The good news is that apparently our political leaders aren't as clueless they seem. 

"(Steven Chu, US Secretary of Energy) was my boss. He knows all about peak oil, but he can't talk about it. If the government announced that peak oil was threatening our economy, Wall Street would crash. He just can't say anything about it."