The Foxtrot Collapse

Salvador Dali's 1957 'Dance' 

There’s always a lot of discussion on peak oil forums about whether the decline of industrial civilzation will take the form of a vertiginous descent, or whether it will be something long and grinding that will be measured in decades and centuries rather than years or months. In the fast-collapse camp are the likes of Dmitry Orlov (who bases his assessment on his experience of seeing the USSR implode) and Ugo Bardi, who expects a ‘Seneca’s Cliff’ dropoff. James Kunstler, Michael Ruppert and any number of others can probably also be added to the fast-collapse camp.

By comparison, the likes of John Michael Greer reckon we are in for a drawn-out era of terminal decline punctuated by serious crises which, at the time, will seem rather severe to all involved but which will give way to plateaux of relative stability, albeit at a lower level of energy throughput. At the end of this process we will be back to something resembling the Middle Ages, with smoking nuclear power plant dead-zones. His basis for this is a study of history, and in particular the work of writers such as Arnold Toynbee, Oswald Spengler and Joseph Tainter, whose books emphasised the cyclical nature of all civilizations  These, they assert, can  be seen to go progress serially through stages of ebullient expansion, cultural dynamism, acquisition  entropy, overshoot, decay and eventual collapse. Our current industrial civilization, he argues, is but the latest in a long line of civilizations shuffling slowly towards the global compost bin.

But is it? Many would argue that scale matters and that today’s too-big-to-fail hyper-complex, bisophere changing civilization is such a different kettle of fish to its predecessors that when it enters the overshoot and collapse phase, as can be observed to be happening right now, the resulting calamity will be on a scale never before seen or experienced. All buildings fall down eventually, but would you rather be standing next to a fisherman’s cottage or a skyscraper when that happens?

In addition to these criticisms, some would point out that today’s global economy, aided and abetted by instant communications, is far more prone to cascading collapses, in which one strand in the web breaking leads to the whole web being destroyed. A bank collapse in China, for example, could lead to other banks seizing up and cause commerce to freeze as notes of credit go unwritten. By comparison, a mercantile trader in 15th century Venice would not have known that the bond guaranteeing his cargo was worthless for up to several months following the bankruptcy of a creditor, and trade would have carried on as normal in the interim. Inefficient communications, in this case, meant resilience.

Anyway, all the talk about fast collapse/slow collapse can seem a bit like fiddling while Rome burns. The simple facts of the matter are that we have exhausted all of the cheap energy options available to us, which is causing the global financial system - an entirely fabricated construct that can only run on blind optimism, greed and political largesse - to exist in a state of total crisis. Virtually every large economy in the world is facing up to its own pet crisis, although the scope and nature of each one is quite different. Europe is mired in unpayable debt, the US is addicted to pumping illusory ‘money’ via the Print button on the Fed’s keyboard and is just starting to realise there is no way back down the ladder, China’s gargantuan credit bubble is deflating, Japan is playing Russian roulette, and commodity producing countries such as Brazil and Australia are reeling from lowering demand from formerly insatiable importers. This is not just part of the business cycle as most talking heads assert.

It does seem quite likely that we are facing an uber Minsky Moment - that moment where investors realise their assets are vastly over-valued and stampede for the door. But where will they stampede to? The US dollar and world stock markets look like safeish havens for the time being to many, which would explain the Dow Jones’ and FTSE’s phenomenal head-scratching rises in recent weeks. Precious metals and land are being snapped up, especially by China which wants to simultaneously dump risky American assets and build a global network of agricultural land to feed its too-late-to-the-game middle class consumers (leaving ravaged ecosystems and raging mobs of dispossessed people in their wake). It’s a game where the stakes keep getting higher and higher with every passing week.

But the planet, of which our human economy is simply one small subset of, is a complex system to say the least, and complex systems are difficult to break all in one go. That’s why in my opinion collapse will not come about in a neatly linear fashion, but will be of a stop-start nature, like a badly-maintained fairground ride with a sadistic teenage operator. Of course, when I say the word ‘collapse’ I am mostly talking about the impacts it will have on the lives of we who live in the ‘West’ - most countries and people in the world have been living with collapse for centuries. Try telling a Malawian subsistence farmer that we may be in for a bumpy ride and see how he responds.

As has been noted before, global financial collapse is likely to be the first step, and that could happen overnight. Hot on its heels will be commercial collapse and a very sustained period of, shall we say, discomfort. Political collapse, as well as the rule of law, are next up on the Magical Mystery Collapse Tour, and we can only pray that we don’t get to social collapse too soon.

But all of these will take time. There will be grey areas and stages that overlap one another. Some locations will be worse off than others that might be just down the road, and some regions and countries might get lucky and find they are suddenly in a far better position than they were previously. Indeed, the whole thing will bloom like a fractal - or should I say is blooming like a fractal because we are already several years into this adventure. Individuals, communities, families, governments, militaries, religious groups and organised crime syndicates will all have their roles to play as the game changes, and only those most able to adapt to the ever-changing circumstances, or just the downright lucky, will be in a position to see the next stage of collapse.

Some stages are likely to be faster than others. The collapse of credit availability, insurance and investor confidence will be more or less instanteous once the first big domino falls, but national currencies, cooperative arrangements and various forms of trade will no doubt linger on for some time. Commerce is complex, with some supply chains being more fragile than others, so we’re likely to see the availability of most high tech items severely curtailed, while more basic items that don’t have to be shipped halfway across the globe and rely on several hundred individual suppliers, will be available for longer. Rationing will prolong the agony and the black market will step in as people get used to the idea that things are not as they used to be. 

So, for most of us I expect to see collapse happening at different rates. Sometimes they will be fast and brutal, and other times they will be slow and unnoticeable to those concerned until viewed in the rear view mirror of history. It’ll be a case of slow-slow-quick-quick-slow - which we might as well call a foxtrot collapse, after the ballroom dance with the same moves. 

I’m sure that, when all is said and done, nearly all of those in the reality-based community who regularly write about peak oil, civilizational decline and environmental crisis (with the exception of the Near Term Human Extincion folks) would agree that collapse occurrs by stages and it is merely our own standpoints which determine how direcly we are affected and when. After all, a credit meltdown could seem like Armageddon to a Hong Kong banker, but would barely even register as news to someone living a sustainable life on an island in Greece. Conversely freaky weather caused by climate change could destroy the Greek islander’s livelihood, but the banker, unaware of the natural elements outside his air-conditioned trading floor, would not even notice.

Becoming aware of the proximity of the stages of collapse should be a priority for individuals and governments alike, but for a multitude of human reasons this is not the case. Nevertheless, if you’re reading this then you’re probably also one of ‘the choir’ and are acutely aware of all the mounting problems that we face. It’s a catch 22 situation, aided and abetted by most media, which are desperately blinkered when it comes to nebulous predicamants, and keen to focus on blaming individual people for their follies. Oh, and it doesn't help shift advertising space.

So for the time being we have blogs to use as communication tools, although when they are gone one day we might be back to the days of printed mailing lists and subscriber magazines and journals. In fact, I think I’ve already come up with one ...The Entropy Times - your daily dose of doom. 

You heard about it here first.

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By the way - this is my 100th post. I can't believe I have actually got this far with this blog, and further can't believe that there are some 10,000 page views a month (although probably at least half are robots/government spies/friends checking that I am still batty). I'm thinking about actually trying to earn a few pennies from my endeavours and writing a book, making it available to buy from this site. It already has a working title - Mind the Vortex - How to Survive the 21st Century - but I'd be interested to hear if anyone thinks this is a good idea or a bad one. With all the work I am doing over at Fox Wood (this week I dug a humungous hole by hand and cleared half an acre of brambles with a sickle) I could do with a project that doesn't involve getting covered in mud and coming home with bleeding forearms and blistered hands. 

Thanks for reading 22 Billion Energy Slaves!

Collapse: Sudden or Slow?

Like everyone who is painfully aware of our perilous predicament questions arise in my mind with unwelcome regularity regarding what form a collapse will take. Will it be a gentle, flower-scented revolution in which humankind realises the error of its ways and converts to a solar powered economy as former Greenpeace director Paul Gilding reckons? Or will it be an all-out frenzy of looting and starvation that will lessen the footprint of humankind in short order and fling us back into the dark ages?

If it’s possible to hazard a guess at this stage it seems that neither of these two extremes is likely. In any case, what is a collapse and how do you realise that you are in one? Most definitions of collapse have it as sudden or gradual loss of complexity in a particular civilization. The Mayans would know about it, as would the Romans and the dynastic Chinese. To use a none-too technical definition, it’s when the wheels come off your civilization.

Just to be clear, the civilization we’re talking about and the one we belong to is the industrial civilization. Most of us belong to it these days, although a small fraction of humanity still manages to cling on against the odds to their own (although to my dismay I found out this week that Maasai tribesmen in Kenya  are now hooked on Facebook, which they access through their smart phones). Given that industrial civilization depends for its very survival on easy access to cheap concentrated energy, vast mineral resources and an ever expanding economy, it would seem to be common sense that it is hardwired to fail and contains the seeds of its own destruction. Yet this very obvious observation is itself contentious, with so-called cornucopians arguing that the resources available to us are so vast as to be well-nigh infinite.

The other fatal flaw in industrial civilization is the very thing that its most ardent proponents shout most loudly about; its interconnectedness. In a globalised economy all the things we have come to rely on in everyday life seem to end up, as if by magic, right in front of us and ready for consumption. Food is a good example, with the components of the average meal travelling several thousand miles along multiple supply chains before they reach your mouth.  Tracing the supply chains along which they travel is becoming an ever more complicated issue, with the net result being that you simply don’t know where your food is coming from.

I had an unpleasant reminder of this last year when dozens of my work colleagues and I all came down with the same condition a couple of days after eating the company Christmas meal. We all experienced a terribly bitter metallic taste in our mouths every time we ate or drank anything. Believe me, it was maddening. After consulting one another we realized that only those who had eaten the pine nuts that came with the starter were affected. Some further research revealed that we had probably been poisoned by the ‘cheap’ Chinese pine nuts which some suppliers in Europe had been cutting their stocks with. The nuts in question were said to have come from a species of pine that is different to the one the nuts are usually gathered from, and contained a form of poison. Gatherers, who were either unscrupulous or just ignorant, picked these nuts and once they had got into the supply chain there was nothing anyone could do about it. However they got there, they literally left a bitter taste in the mouth for weeks and I now avoid them at all costs.

This was a lesson in the relative powerlessness we have as consumers when considering supply chains and our ultra-complex system, but what if it’s petrol we’re considering and not pine nuts? When fuel delivery drivers threatened to go on strike in the UK earlier this year over pay and conditions, people got a gentle reminder of how reliant we all are on oil. Panic buying at the pumps ensued, as did hoarding, and one person even died as a result of syphoning off fuel over the kitchen sink. The strike was averted at the last minute, but the government later admitted that it had caused some panic among ministers and the troops were put on standby. For a brief moment, the fragility of our fuel supply was exposed, although, predictably enough when the crisis was averted everyone forgot about it in short order.

But this is all small beer when you consider what might happen should several systems collapse simultaneously or, more likely, as a chain reaction. This is what is at the essence of the report entitled Trade Off, written by risk management specialist David Korowicz. Subtitled Financial System Supply-Chain Cross-Contagion: a study in Global System Collapse, it’s not going to knock 50 Shades of Grey off the bestseller list anytime soon. But for sheer terror value it is unsurpassed and could possibly be renamed 77 Pages of Terror.

I downloaded the full report and spent a day absorbing it. It’s very hard to summarise such a lengthy and technical report into a few bullet points, but I’ll try:

•          Our world has become so complex and interconnected that a single ‘ripping’ event could cause cascading systems collapses.
•           Parts of the system (say, individual countries) might in the past have been able to get away with failing but such a failure now runs the risk of bringing down the entire edifice.
•          A reverse economies of scale can be applied to critical infrastructure and it can be assumed that any collapse will be dealt with in the exact wrong way i.e. by adding further levels of complexity.
•          Peak oil and environmental overshoot means we have little room for manoeuvre when the collapse comes.
•          In the past there has been tolerance with regard to shocks to the system, but the system is now so brittle that a single shocking event could shatter it.
•          People fail to appreciate the vast complexity of the system we live in and are only able to focus on the small bit of it they are familiar with but are not able to see the overall system. This, combined with decades of relative stability, has given us a false sense of safety with the belief that ‘business as usual’ can and will continue forever.

That’s a gross over-simplification of some of the main points I picked up, and for a better analysis of it read what Dmitry Orlov wrote.

So let’s imagine an event – the event – which could deliver the fatal spleen-busting kick in the balls to our frail industrial civilization. Korowitz himself seems to think that one of the Euro countries defaulting should do it, but there are plenty of other scenarios, such as the US falling off its fiscal cliff this November, an Israeli strike on Iran, a large terrorist attack, a huge drought that sends food prices sky high – you get the idea.  In the default scenario, contagion would spread to other countries in a matter of hours as foreign banks self-imploded. Panicky leaders would do everything they could to limit the damage but in a very short amount of time the credit system would freeze up. With a frozen credit system you get a frozen world trade situation. People are unwilling to deliver their goods long-distance if they suspect they will not be paid (and most world trade is uninsured).

When cargo doesn’t move we have a problem of epic proportions. Our world, these days, is designed for just-in-time delivery, meaning that it functions like clockwork, with deliveries of goods timed to coincide with when the previous goods have been depleted. It’s a super-efficient system that works perfectly when the wheels of finance are moving, but the moment they jam is the moment that things stop getting delivered and that’s when we discover that efficiency isn’t the same thing as resilience. We saw this happen when the Japanese tsunami wiped numerous car parts plants off the face of the planet – and the knock on effects are still being felt.

One of the bad things that happens when goods and parts stop being delivered is that the critical infrastructure we take for granted suddenly starts to experience parts shortages. Electricity grids and IT systems are particularly vulnerable to this because of their indescribable complexity, but plenty of smaller systems are similarly affected. Some estimates say that power grids will stop working within weeks, or months at the outside, if there is a serious credit event – and that’s even assuming that they have fuel to burn to produce the electricity in the first place (coal and oil importing countries take note). I used to work within the UK energy supply system, and I’m always amazed that the lights somehow stay on even within the normal operating parameters.

But when electricity grids do fail all bets are off. By this point people will already be in an advanced state of hunger because they will by now have learned that food doesn’t grow on supermarket shelves. Fuel for civilians will be a strictly rationed and factories and offices will likely have closed down ‘temporarily’. But when the lights go off, due to the aforementioned lack of fuel or because of some other technical fault that even the most resourceful of engineers are unable to overcome, that’s when the problems really begin. Water, for a start, will no longer flow out of taps, and our communications systems will disappear in an instant. With no food, electricity or water there is no precedent for what happens next.

Nuclear power stations will still need to be cooled to stop meltdowns and the only way to do so will be with the help of large diesel-powered generators. I’ve heard it estimated that each unit will need around a billion dollars’ worth of diesel per year, and countries which don’t have their own oil supplies will need to get down on their knees and beg other countries that do in order to get the fuel they need. Do you live near one of the 440 or so commercial or 250 research nuclear reactors in the world? Do you live downwind of them? You can have a look at this map to find out.

At this point in the breakdown we have to ask what is recoverable from the mess and whether there is a chance of getting back into something approximating normality. One factor that didn’t seem to get a mention in Trade-Off (unless I missed it) was the chance that global trade in essentials might not freeze up quite as much as anticipated following a credit event. The assumption is that because credit notes are produced electronically they could never be produced otherwise. Is it likely that a strong trading relationship that had built up over decades between, say, a coffee producer in Colombia and an importer in France would suddenly be axed because of the financial log jam which, don’t forget, is affecting everyone simultaneously? Would not the two parties not just get on the phone to each other and hammer out some form of guarantee? After all, the coffee producer stands to lose just as much as the importer if the shipment doesn’t happen.

Nevertheless, having read the report I yesterday found myself wandering around my local supermarket with a shopping trolley piled high with canned goods and pasta in a small attempt to build some inefficiency and resilience into my own family. It might not last long in an emergency but I figure three months of food should at least give us a fighting chance. I’m probably the first person in Denmark to seriously ask themselves the question of whether, after a month of meatballs, we would look forward to a can of pineapple chunks as if it was Christmas Day. As I stacked up my survival stash at home I wondered whether many other peak oil writers have done the same thing – especially those who advocate a slow collapse taking place over decades. I realise that the concept of survivalism is virtually mainstream in the US, but on this side of the Pond it is practically unheard of. We just assume that shortages could never hit us. Well, whatever, at least I have plenty of tins of food now and will not run out of spaghetti this side of my 80^th birthday – hardly the worst thing that could happen to someone. As for a water filter, which I don't possess, I considered making my own along these lines:

It should be obvious to most people by now that we are initial stages of collapse. That collapse started at 1:45am on September 15th 2008 when Lehman Brothers filed for bankruptcy. Since then we've been in a deflationary spiral and the signs that this is not just another oscillation of the business cycle are becoming clearer by the day. The fact that it hasn't yet manifested itself as a single earth shattering event is probably something of a let-down to the many people who anticipate such things, but future historians will probably identify this date as the starting gun for everything that followed.

So, Trade-Off is about as clear a warning we could hope for, even if it is couched in academic language and filled with jargon (but nevertheless remains surprisingly readable and opinionated). Whether you believe that collapse will be sudden and brutal, or whether it will be a long-drawn out affair characterised by bankruptcies and boredom, it’s impossible to read it and come away feeling complacent. And with many people’s guts telling them that some kind of downward lurch is likely before the year is out maybe it is time to start looking around at the critical systems you rely on in your area and try and figure out what you would do if all of a sudden they were taken away. I know I am.