Vivak Shori on “Deflation”
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Having watched the (excellent) video of Adam Buick’s talk at the recent Cardiff Zeitgeist day event I went on to watch this video… http://www.youtube.com/watch?v=AsShYZBK5ao&feature=channel which I must say had me a bit alarmed at the end. I don’t think this guy has as much faith in workers or even in the Zeitgeist Movement although he professes to be a member. Would Adam or Howard Moss or Brian tell me what the SPGB’s position would be in response to the terrifying prospects laid out by this guy?
I challenged him to put his money where his mouth was and to bet that massive deflation (falling prices, yet higher unemployment, food and other shortages, debtors prisons, etc) would happen within the 2-5 years he predicted against my bet that it wouldn’t. Some of the ZMers in the audience were shocked as, after all, Jacque Fresco and Peter Joseph argue that technologically we could have a world of abundance now. I’ve since emailed the organisers offering to debate him at next year’s Z-Day in Cardiff on “Why the economic system will not collapse” and in 5 years time on “Why the economic system did not collapse”.He was mixing up two things: so-called peak oil and the economic collapse of capitalism through some flaw in its monetary and banking side. The second is not going to happen because the supposed flaw doesn’t exist. As to peak oil, if this is the case, as it becomes more and more difficult to extract oil then its price will rise. This will have two consequences. It will make it profitable to exploit previously unprofitable sources including tar sands, shale and deposits under the North Pole. And it will accelerate the search for substitutes such as renewable energies and nuclear power. He claimed this wouldn’t work because it would cost more energy to use these than the energy they would produce (I’m not competent to comment on this but maybe there’s an engineer in the house?), but he himself admitted that there was enough coal to last for centuries.So, don’t be alarmed. It’s not going to happen (even if nothing is going to go smoothly and without undesirable side effects as long as we have capitalism). No need to stock up tins of food or convert your savings into gold.
Hmm, you might be right, but I don’t know on what basis you can be quite so confident or blasé. It took a world war to get us out of the last depression. Will the human race survive another world war? Is the survival of the ecosystem compatible with the continuation of the profit system, even if on a ‘greener’ footing? I’m not stocking up on tins of food, but I won’t be making any bets either.
ALB wrote:I challenged him to put his money where his mouth was and to bet that massive deflation (falling prices, yet higher unemployment, food and other shortages, debtors prisons, etc) would happen within the 2-5 years he predicted against my bet that it wouldn't. ….. I've since emailed the organisers offering to debate him … in 5 years time on "Why the economic system did not collapse".As the 5 years are now up and capitalism is still here I'm trying to contact him to arrange this debate.
https://www.pri.org/stories/2012-11-02/energy-costs-oil-production "Within the field, this calculation is called: Energy Return on Investment, or EROI."Back in the 1920's, oil was paying off at 100-to-1," said Zencey. "It took one barrel of oil to extract, process, refine, ship and deliver 100 barrels of oil. That's a phenomenal rate of return. If you work out the percentage, that's a 10,000 percent rate of return."But that's not the rate of return today. Now, conventional oil production worldwide pays off at about a 20-to-1 ratio. And in Canada, where the oil comes from tar sands, it's closer to 5-to-1."Renewable energy sources are paying off at higher rates, 12-to-1, 15-to-1, 17-to-1. That tells you right there, hmmmm, the age of oil should be over."A few problems with that though… Calculating these figures is complicated and estimates fluctuate. One researcher I spoke with, Carey King at the Center for International Energy and Environmental Policy at the University of Texas at Austin, said he can look at the same wind farm and calculate a payoff of 20-to-1 or 4-to-1. He can also make the numbers dance for oil too, by the way. It depends on if he factors in things like salaries, taxes, or subsidies. Or, how the energy is actually delivered to the source where it's used, or rather, the calculation for that.Even if oil is getting relatively more expensive, weaning ourselves off of it is not a matter of simply flipping a switch — the modern world runs on oil and gas. And there are powerful interests that would like to keep it that way.But we can't keep going like this much longer, said Nicolas Kosoy, an ecological economist at McGill University in Montreal.Eventually, our oil supplies will run dry. And as we dig up more fossil fuels, we emit more greenhouse gasses and add to the problem of climate change. Kosoy emphasizes we need to get serious about limiting our use of fossil fuels."Either we do it now, and we do it systematically and organized, in an organized fashion. Or we will hit a hard boundary, and we will all have to reduce consumption, but as a must."
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