The Local
First – Everyone has to watch this video. That’s an order!
You know, it’s funny how things work. Last week I asked for a new paradigm, or at least I wanted to start thinking about how it might look, and bingo, there it was. Jeff Rubin, the former chief economist at CIBC, has outlined it – and it’s what a great many of us have been arguing about for a long time: the end of globalization and the re-localizing of the economy. The difference is that Mr. Rubin is a mainstream economist, so it’s harder to dismiss his analysis.
Perhaps the most important point he’s making is the time factor. This is not something that’s a decade out. He’s estimating triple digit oil prices about 15 months away, with luck. It is almost inconceivable that any significant changes can be made in that time, even if his analysis is believed by policy makers and the markets. As Rubin points out, if the gains of labour arbitrage are eclipsed by the costs of transport – “Distance is Money” – then the entire edifice of globalization collapses rapidly.
As I was saying in Obsolete Paradigms, we need to start acting as if the laws of physics are true, by which I meant full cost accounting (The definitions here can be confusing. I mean accounting that includes the true cost of all resources used, ecological footprint if you like) and the end of artificial externalities. Full cost accounting will force our current model of capitalism to adapt. Certainly the model we’ve used for the last quarter century is, quite literally, bankrupt. Western Europe and the US will have to re-localize at an unprecedented rate. I think he’s right, but my concern is whether or not these economies can adapt fast enough or go through a severe depression towards a new structure.
The western version of globalization, the service economy – or what he calls the barista economy – is obsolete. The entire range of skills of the blue collar world, you know, people making stuff, which most economists have written off, will have to come back. Did any of us really think we were going to run a world class economy on coffee shops and back rubs?
The problems we have with rapid re-localization was driven home to me by an article in the Evening Standard, January 21. Britain is building the world’s largest offshore wind farm, called the London Array, 20 km off the Essex coast in the Thames estuary. You would think it would be a great opportunity for British firms and engineers. Not so. The majority of the contracts to build the London Array are going overseas. Britain has neither the skills nor the manufacturing base to produce the turbines. The major contracts have gone to Dong Energy of Denmark, E.ON of Germany, and Masdar of Abu Dabhi. This is no criticism of those companies. I was in Denmark recently and what they’ve done with wind power in just a few years is extraordinary. It is, however, an appalling indictment of the government’s and British industry’s short sightedness. Britain is the windiest country in Europe and the need for alternate energy sources has been obvious for years. Now with oil prices set to rise to above $100 if Rubin is right, we find ourselves with an army of media studies graduates and baristas to build a new grid for the 21st century.
I said in Recrimination vs Innovation on Christmas day, we have a workforce, what we desperately lack is leadership. These young people need new skills, they need new opportunity, and they don’t need to be burdened with £20,000 for a degree in something they’ll never get a job doing. This is not impossible, but it’s not trivial either. Danny Stevens of the Environmental Industries Commission has called for the Government to establish a National Environmental Skills Academy. I couldn’t agree more, but I would argue it’s on too small a scale. We need to mobilize this generation on a scale that hasn’t been contemplated since WWII. Since the war, Britain has allowed its position as a world leader in science and technology to slip away, preferring to rely on wage arbitrage and cheap transport to support a version of globalization which has benefited a tiny minority, while leaving the economy as a whole in ruins. That flapping you hear is the vultures coming home to roost.
So I’d like to ask the government to immediately establish a British Environmental Engineering Corps, (being that this is Britain I wanted to make the acronym come out as BEER, but Regiment seemed a bit severe), which will train people, for free, forgive the student debts they already have, and go about building a new energy infrastructure, reconfiguring our cities so that they are sustainable and liveable, and making the transportation infrastructure as efficient as the Japanese. In 10 years. Get a move on.
Recrimination vs Innovation
Since Copenhagen I’ve been reading some of the recriminations. Naomi Klein, George Monbiot, Mark Lynas, Fred Pearce et al, have all had a go. It was Obama, it was the Chinese, it was Gordon Brown, it was batman, it was that ugly cow outside the café smoking a cigarette, it was that smug bastard banker, it was those corporate swine, it was… them. God damn it, it had to be someone! People, we don’t have time. Hoping that the powers of the status quo are going to be the ones leading the revolution is naïve, and we don’t have time for that kind of naivety either.
There was no government program to invent anything that revolutionized the 20th century. Not for internal combustion, electricity generation, radio, jet engines, penicillin, TV, computers, internet, you name it. It was people with creative imaginations, and it’s people with imagination that are igniting the next revolution. But we have a fantastic advantage over the people at the turn of the last century: nearly instant global communication. Ideas can propagate faster than at any other time. Which means that we can see technological and social change on a scale and at a speed we’ve never seen before, which considering the way things look is just as well. We need to think fast, act fast and communicate.
I was lucky enough to see an advance copy of The Road, today. You want the answer to continuing business as usual? Go see it, that’s the answer. And if that looks like a good way to live, stay on that sofa and don’t do a thing. If on the other hand it makes you weep, as it did me, then time to get cooking.
First of all read Lester Brown’s Plan B. It’s a good place to start, and that’s the point, starting. It’s free online for crying out loud, how much better deal do you need? And quit whinging about how it’s all over and how on the downside of peak oil we may as well just kill ourselves because it’s a rollercoaster ride back to the stone age and there’ll only be 10 of us left at the bottom. And the world will turn into a burning desert by the time they bring dessert. Because it isn’t going to happen. Because we’re going to change the way it all works. Starting now, because business as usual is over.
Why would we want business as usual? We’ve produced one of the ugliest civilizations ever, the kids are so bored they’re knifing each other in the streets, we’ve killed nearly all the trees on the planet, the only alternative to war is shopping, everyone’s closet is so full of cheap Chinese crap there’s barely room to move, we’re pregnant at 12, divorced at 13, and permanently unemployed by corporations that thought what the world needed was a parking lot the size of Russia full of cars no one wants to buy. What? It’s the perfect operation of a free market and we’re just ironing out the kinks? So that a miniscule percentage of the world’s population can sit on superyachts in Monaco with illiterate topshop models dressed up like Moldavian prostitutes? The worst part is that even the people on the superyachts are miserable. All this affluenza advertorial mumbo jumbo has got everyone suicidal. Dear turbo capitalist, buzz off, you’re fired.
But we’re not going to get anywhere with this Green Puritanism business either. We can do without the endless cries of mea culpa from the guilt ridden of the rich world, and the fire and brimstone rhetoric from the climate preachers. First of all, half the population has been bamboozled by the oil companies’ disinformation campaign into thinking climate change is some dopey evil scientist’s conspiracy. So they’re not taking it seriously no matter what you say. Second, to get anywhere you have to have something more interesting than the drumbeat of doom. It’s no good droning on about running out of oil and expecting people to get all perky. You want to know about oil, ask a Saudi.
In this case Sheik Ahmed Zaki Yamani, Saudi oil minister in the 1970′s. His famous saying, ‘the stone age didn’t end because they ran out of stones’, is dead right. We’re not going to quit using oil because we’ve used it all, or all that we can get out of the ground economically. We’re going to quit using it because it’s a primitive way to get energy. Once upon a time it was the best we could do, fair enough. It had some unforeseen side effects, like bling bankers in lambos thinking they were cool and other lapses of taste. That and the carbon and the ugliness and the unliveable cities and the cancer and permanent war in the middle east. It’s okay, we’re over it, like big hair and shoulder pads. Oil is so last century. We are going to get our energy from Sun and Wind, and we’re going to use it intelligently. We’re going to do it in ten years and have a blast doing it.
First wind. I live more or less between London and Berkeley and I don’t spend a lot of time in Kansas, but I know three things about Kansas: it’s huge and it’s windy and not many people live there. Ditto other parts of the Midwest and Texas. We’re going to put up wind farms the size of Kansas and ship those electrons to the places people actually live on High Voltage Direct Current lines. HVDC is the business, or as they say in England, the dog’s bollocks. To be frank, why the English use the testicular architecture of the canine species as a metaphor for quality is a mystery to me. But that won’t stop Kansas being the Saudi Arabia of Wind Energy in 10 years. Or Texas. Or South Dakota. Or half a dozen other states.
And up north in Europe we can stop moaning about wind farms buggering up the scenery and get on with it. Put em out at sea. I know it’s already happening, but we need to get a move on here. There are still really inane problems with HVDC circuit breakers and network issues as well as some political problems with building a Europe wide intelligent grid so we can use electricity like grown ups. Well I’m prepared to bet that if we gave some people like say, the Claverton Group, one percent of the money Alistair Darling just gave the banks as a reward for bankrupting earth, we’d have the technical problems solved in a jiffy. As for the political arguments, let me put it this way: All you poli-sci econ majors shuffling round Brussels being important, if civilization collapses no one will care about the Norwegian national electricity pricing policy, will they?
Oh, and a word about buggering up the scenery. A lovely friend of mine bought me Edward Burtynsky’s new book Oil. Buy it and spend a warm evening by the fire in your second home in the Cotswolds, with the girlfriend Tamsin, looking at the ‘scenery’ in that book. Then email me and let me know all your problems with wind farms.
The Sun: Is it worth mentioning the fact that large areas of the US southwest are desert which is sunny a lot of the time? And that some of it isn’t really overdeveloped, not counting Las Vegas and Phoenix? So if you wanted to put up acres and acres of concentrating solar arrays it wouldn’t invade anyone’s personal space. Does this technology work you ask. On February 14th 1980, when my lovely wife Pepper Black (no, seriously) called me to let me know the contractions had started and she thought she might like to go to the hospital, I was on a roof installing a concentrating solar array in the San Fernando Valley. The sun worked in 1980, I assume it still does. To the tune of about 1300 watts a square meter. So instead of using all that metal to build cars and coal fired power plants and private planes and the rest of the left over 20th century rubbish we can build amazing solar arrays in the desert.
When we’re done in the US we’re going on holiday to the Mediterranean. Because it’s sunny there, just like California. So we’re going to build solar arrays there too. And, you got it, ship the electrons across Europe on HVDC. By the time we’ve done Spain, Italy, Greece, Morocco, Algeria, Libya, Tunisia, Egypt and what’s left of the Levant if they can leave off killing each other for 5 minutes, we’ll have all we need for a while.
How will we afford all the resources we need now that the western world is broke? Lucky break, we have tons and tons of steel cunningly hidden as cars in those Russia sized parking lots. Time to recycle. And the workforce? What about we use some of those so-called ‘unemployed’ people who aren’t busy wasting their time in mindless office jobs and making those cars nobody wanted. And some of those kids who just laid out £20,000 for a degree with a street value of a cup of coffee. Right now they are all sitting at home on benefits looking at daytime TV which a)leads to brain damage and b) is a waste of valuable resources, namely talent and enthusiasm.
Dear Government People: pay them to do it. Hell, you’re already paying them to watch TV. Pay them a living wage and get them out there all over the US and Europe building and installing wind farms and solar arrays. Knock off £5000 of student loans for every year for the kids. Find out what they’re good at, what they want to learn, and set em to it. You’ll be amazed. Ship them all over the place, have them build new energy infrastructure, and they’ll have a great time.
Everyone seems mystified why the kids on the estates are killing one another. It’s because they’re bored, isolated, alienated, there’s nothing to do and nowhere to go and they’ve never met an adult who wasn’t a crack addict or a cop. Half of them have never seen the sea. How about we send them off to Spain, or the North Sea, or Kansas and have them work on real stuff, get some life skills that don’t involve murder, and maybe meet some adults who aren’t totally dysfunctional. Just an idea.
I said earlier that it wasn’t government programs that lead to inventions in the 20th century, and it’s true. It really is the imagination of creative people. But there is a place for government in here and it’s the ability to take on those new ideas and when circumstances require it mobilize millions of people and vast resources. And through the tax code give things a nudge in the right direction. Quit subsidizing carbon industries and start subsidizing wind and solar. I know all the free market people are howling. Excuse me, where do you think all those highways came from, private industry? No, it was a gigantic government subsidy for the car manufacturers in the 1950s. We did it for General Motors, we can do it for our kids.
Okay, now I’ve got a zillion tons of steel and a workforce of 7 million. No problem. We need about 2 million 2MW turbines and a billion square meters of solar arrays, (those are real numbers, except for the zillion) so get cracking. We need to do this over the next decade, which I know sounds like a rush, but hey we manage to make 65 million cars a year. You’ve heard of swords into ploughshares, well this is cars into windmills.
Pretty much the same set of ideas apply to pretty much the rest of the world. How hard is this? There are some technical issues, but nothing beyond the wit of man. We need some organization to get it all done properly. There are some political issues, and that’s the point – we need to stop thinking of narrow national interests here, because if our civilization goes tits up, there won’t be any national interests. There’ll be Viggo Mortensen and his shopping cart and you don’t want that.
Happy Christmas.
leave a comment