2010: The Next Leg Down
Before I go off on my transatlantic sailing trip next week I thought I’d make some forecasts for 2010: The next leg down.
Oil and Globalization: First thing is our reaction to the arrival of triple digit oil prices. Right now oil is at $80. I’m not expecting a miraculous recovery in demand, but a political crisis could easily drive prices into triple digits. If so, whether or not you actually believed the news tripe about recovery, oil over $100/barrel will begin the next leg of the post peak oil crisis. Right on schedule. The same process will be broadly applicable to most of Western Europe, the US and the rest of the developed world, but my immediate concern is Britain. This is the year when transport begins to trump labour arbitrage and the global part of globalization starts to look shaky.
On the face of it, this is disastrous. The OECD industries have come to rely on almost completely on foreign manufacturing sources, obviously for the most part China. But in fact it’s a tremendous opportunity, because except for bankers and entertainers, globalization has been a disaster for wage earners. The myth of the service economy has run its course. It was largely an artefact of cheap oil. It brought cheap goods, but the side effects have been an ecological horror. According to a recent report in the Guardian, major companies caused $2 trillion worth of environmental damage just in 2008.
Sir Richard, my new best friend: Probably the most important signal for Britain is Sir Richard Branson’s discovery of peak oil. Dollar short and a day late, but he may be the person to make it mainstream in Britain. He’ll be our Al Gore. It’s a pity that Matt Simmons, Colin Campbell, Jean Laherrere, and all the rest of the ASPO folk couldn’t get any traction for the last decade. Never mind, now that Sir Richard has noticed and the Industry Taskforce on Peak Oil and Energy Security has been formed at the Royal Society finally we’ll see some righteous panic.
Re-Industrialization: I’m expecting to see talk of the rapid re-industrialization of Britain. The flag wavers for the service economy will be ushered off the stage. Despite being the economic darlings of the last decade or two, suddenly they’ll be seen as hopelessly out of touch. Start watching for some new clever marketing speak. Right now in glass walled offices with aluminium furniture, there are eager young marketing drones with perfect complexions, dreaming up the sound bites for the new new clean energy renaissance: Social enterprise resourcing , Clean Tech revolution, Cloudsourced inventory control, AgroUrbanOrganic complex …it’ll be some such jabber. Especially watch for UrbanFoodCommunities.com and “Liveability.” And yes, I have trademarked all these buzzwords, so don’t even think about it, nasty little marketing children.
What it means is that if the bloody Chinese are too far away to make all our stuff we’ll have to remember how to do it ourselves.
Does that mean I’ll have to get mud on my Vivien Westwood?
Yes darling, I’m afraid it does.
Nukes: I’m expecting some real surprises around nuclear energy. I remember talking to Kjell Aleklett in 2003 about the nuclear renaissance. This is one of those issues that gets normally polite ecology people at each other’s throats. Whether or not nuclear energy has an EROEI to make it worth building is one thing, but the politics will be interesting. The current British Government is talking about going from 19% to 40% electricity from nukes in 20 years. I stand in awe of the nuclear energy PR machine that has completely turned the government’s opinion round from 2003 to 2006. Now watch for the demonstrations.
Immigration is going to hit the big time: 2010 will be a tipping point in the collapse of Africa and the mass migration into Europe. For the last 4 decades, more or less since the independence of the last colonies, there’s been a tragic failure of Africa to adapt. As William Easterly puts it, “Spending $2.3 trillion (measured in today’s dollars) in aid over the past five decades has left the most aid-intensive regions, like Africa, wallowing in continued stagnation; it’s fair to say this approach has not been a great success.” A mixture of tribal identity, corruption, over population, infrastructure and ecological collapse combined with increasingly severe climate effects have initiated the collapse of sub Saharan Africa. The collapse seems to be propagating rapidly out of the Horn, and accelerating. The Africans are doing what populations always do in the face of collapse. They die or leave. In this case the death toll will make the term “Biblical” obsolete, by an order of magnitude.
It’s the leaving that’s the problem for Europe. The population of sub Saharan Africa and Europe are roughly the same; something over 800 million. Europe is already far past carrying capacity, probably by a factor of two, like Britain. The transport and agricultural infrastructure, health systems, education systems and societies of Europe cannot successfully cope with such an influx and remain viable.
I’m not suggesting for a moment that Africa is the sole source of illegal migration into Europe. If only. But Africa seems to me to be in the worst shape. Add in the populations of failing countries in the Middle East, Eastern Europe and the Indian subcontinent from which migrants will flood into Europe and the total is well over a 1.5 billion.
The cracks are beginning to show. In Italy last month there was a riot in Rosarno in which illegal immigrants from set fire to cars and shops. Italy’s demographic is changing very rapidly. At least 7% of the population, not counting illegal immigrants is now non-Italian. 1 in 6 babies is born to a non-Italian. Italians are about to wake up to the permanent changes in their country. I expect some desperate headlines as we head into summer. Naturally the cry of ‘racism’ will be the sure sign of backlash.
In 1997, the number of foreigners living in Spain was 500,000. In 2008 it was 5.3 million. That is an order of magnitude difference. In Catalonia 15% of the population is foreign born. The Spanish are now beginning to realize the full effects of such high levels of immigration on its school system.
In Greece, which is already close to financial meltdown, has a non-Greek population of 10%. Until recently most of that influx came from Balkan states, but as Africa’s situation deteriorates more of the illegal immigrants will come from Africa. Aside from street riots in Greece over the economy, expect a backlash over immigration.
The cultural, religious and ethnic divides in the new Europe have been ignored by a generation of politicians. There is even a rumour in Britain that the Labour party secretly decided to allow unlimited immigration to Britain during its tenure since they thought immigrants would be more likely to vote Labour in future. For the past decade it’s been almost impossible to talk about immigration without being silenced by cries of racism. I’d expect this debate to get a lot more difficult in 2010. For better or worse, Europe is now a fundamentally different place demographically than it was 10 years ago. How it fares in the 21st century with this starting population is anyone’s guess, but if history is any guide balkanization is a lot more likely than peaceful integration. I wish there was something vaguely humorous about this whole thing, but I can’t see it.
Fighting in the street: Whole areas of Britain, Europe and the US have fallen into decay. Along with it communities have been destroyed, and we are left with a vast underclass living on benefits. Add to that the tensions in the middle classes as the last of the savings dribble away. People can generally last about 3 years if they’ve got some savings, but now it’s down to the dregs. Living on the kid’s education money and worrying about losing the house. The last shops in the high street boarded up. No room at university for the kids anyway – and nowhere for them to go. 50% unemployment in the under 25s. The austerity measures announced from the balcony of some grand old palace by some unelected Brussels apparatchik with a bad comb over. The human mind can only stand so much. It’s impossible to predict the spark, but if it’s an el Nino hot summer, look for trouble in the streets.
Weather: I know that economists are the only profession with a worse record than weather forecasters, nonetheless I’m going to chance my arm. The la Nina conditions of the last couple of years have given way to a new el Nino. If it persists into summer 2010, as looks likely, we may be getting some exciting weather. As I said above, if it results in a very hot summer look out. Angry unemployed people and 40°c are a bad combination.
War: Rule number 1. Do not under any circumstances allow yourself to be drawn into an endless campaign in Asia. You are not that rich. No empire ever was, nor ever will be. You are thinking in years. They are thinking in centuries. From Babylon, with love, Alex@Macedon.
Anyone got a film crew they’re not using, I’ve got the oil film script re-done. Now I’m going to cross an ocean under sail for the first time. Wish me luck.
No Country for Old Men
What shall we do about the demographics in Britain – on the one hand Harriet Harman is telling us that people in their 60s and 70s should continue working to help the country recover from recession. On the other, Martin Amis is telling us to kill ourselves in street corner euthanasia booths because the “silver tsunami” will destroy the country. I assume he is planning on recycling all those wonderful red public telephone boxes we no longer use into euthanasia booths. It’ll be like the Matrix; you stagger down to the telephone box on your Zimmer frame, go in and pick up the fashionably retro receiver and you’re sucked out of existence. Of course Harriet’s version is even more sci-fi. Has no one thought to tell her that the unemployment levels for those over 50 are hilarious and that the corporate world hasn’t hired anyone over 35 since records began? So which is it, work until you die and save the country from a fate worse than death or go and kill yourself as rapidly as possible? For obvious reasons you can’t have it both ways.
Let’s go with Harriet’s version because one of the things Martin’s forgotten is that some old people remember how to do all kinds of things and when they go that knowledge goes with them. We don’t know which skills, or what knowledge our kids will need, so it’s probably best to get as much of it passed on as we can manage. You know how it is, the one thing you didn’t think was interesting, and the last woman who remembers how to do it goes to the euthanasia booth and bam, it turns out to be the thing that would have saved the species. How annoying would that be for the last three people alive? Right now I know for a fact there’s a guy called Terry Davis who lives in a little village in Shropshire. Terry is the last man in Britain who knows how to make a horse collar. Terry is 60 and he works alone. Do we really want to bet that we will never need to plough with horses again? Ever? Really?
Yeah I know, horse collars. I’ve got to be kidding. Of course I am, don’t be daft, this is the modern world. I’m kidding like the survey this week that told us that more than a quarter of British kids think oats grow on trees and bacon comes from sheep. Hell, 17% of kids and adults thought eggs were a big part of a bread recipe. Uh oh, hold that euthanasia booth. Grandma, don’t go! We don’t know how to bake a loaf of bread.
Enough of all this nostalgia nonsense. We get enough of that on the BBC with those same half-dozen famous old white guys wandering over hill and dale in their swishy north face anoraks saying ‘isn’t it lovely’ to every abandoned Victorian engineering marvel. No one under 30’s got any idea what they’re on about. What about modern? Like wind turbines, that’s modern; virtually avant-garde. We don’t make any. The skills shortage is so severe after 20 years of a service economy that all the turbines for the new offshore farms will be made in Denmark or Germany. Isambard Kingdom Brunel is spinning in his grave like a bloody turbine.
Vernacular education. That’s what I’ve got in mind. Before some of these folks go to the euthanasia booth, it might be a good idea to see if they’d pass some knowledge on. The way they would have if there were still communities built round common human interests, rather than your facebook friends or the kind of logos you wear. I’d hate to think of a whole range of skills disappearing, like biodiversity loss, it’s a kind of extinction. It may be a rough century and we need to send the kids off with more than an iphone and plastic lunch box.
Or to put it another way:
“A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects.”
— Robert Heinlein
So who’s going to tell em?
According to the news, no one. The universities – you know the places we train the next generation to push into the future –are now having their funding slashed. And you know who’s making the cuts? Boomers. The very people who benefited from grammar schools and FREE university education. Now they’ve got the big house and the cool job at the think tank, it’s time to screw the kids.
Maybe Martin’s right after all.
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