Consciousness of Sheep

Not so good news. Tim Watkins. Apr. 1, 2019.

Protesters today intend bringing central London to a standstill by blockading several major arterial roads into the capital. For once, this has nothing to do with Brexit. Instead, it concerns the increasingly urgent call for government to “do something” about climate change. Exactly what that “something” is that must be done is a little less clear, since current environmental concerns are almost always pared down to concern about the carbon dioxide emitted by cars and power stations. Although how exactly this relates to the mass die-off of species resulting from industrial agriculture and deforestation, or growing oceanic dead zones and plastic islands, is far from clear.

Protesting environmental concerns involves a high degree of denial and self-deception; as it is based on two gross errors. The first is the irrational belief that governments have the means to respond to the predicament we find ourselves in. As a corrective to this, just look at the dog’s breakfast that the current British government has managed to make out of what is a simple (by comparison) trade negotiation. Anyone who seriously thinks these clowns are going to do anything positive (save for by accident) for the environment is displaying almost clinical levels of delusion. The second error is in believing the often unspoken conspiracy theory that insists that the only thing standing between us and the promised zero-carbon future is corrupt politicians and their corporate backers, who insist on putting the needs of the fossil fuel industry ahead of life on planet earth.
To maintain these deceits, a large volume of propaganda must be put out in order to prove that the zero-carbon future is possible if only the politicians would act in the way the people want. So it is that we are treated to a barrage of media stories claiming that this town, city, country or industry runs entirely on “green” energy (don’t mention carbon offsetting). Indeed, left to their own devices, we are told, the green energy industry is already well on the way to building the zero-carbon future we asked for; we just need the politicians to pull their fingers out and we could easily get there in just a few years’ time. For example, Joshua S Hill at Green Technica tells us that:

“Renewable energy sources now account for around a third of all global power capacity, according to new figures published this week by the International Renewable Energy Agency, which revealed 171 gigawatts (GW) of new renewable capacity was installed in 2018… 

“This brings total renewable energy generation capacity up to a whopping 2,351 GW as of the end of 2018, accounting for around a third of the globe’s total installed electricity capacity. Hydropower remains the largest renewable energy source based on installed capacity, with 1,172 GW, followed by wind energy with 564 GW and solar power with 480 GW.”

Stories like these play into the fantasy that we are well on our way to reversing climate change, and that all we need now is some “green new deal” mobilisation to replace the final two-thirds of our energy capacity with non-renewable renewable energy-harvesting technologies to finish the job. If only it was that simple.

Notice the apparently innocuous word “capacity.” This is perhaps the least important information about electricity. Far more important is the amount that is actually generated. The US Energy Information Administration explains the difference:

“Electricity generation capacity is the maximum electric output an electricity generator can produce under specific conditions. Nameplate generator capacity is determined by the generator’s manufacturer and indicates the maximum output of electricity a generator can produce without exceeding design thermal limits…. 

“Electricity generation is the amount of electricity a generator produces over a specific period of time. For example, a generator with 1 megawatt (MW) capacity that operates at that capacity consistently for one hour will produce 1 megawatthour (MWh) of electricity. If the generator operates at only half that capacity for one hour, it will produce 0.5 MWh of electricity… 

“Capacity factor of electricity generation is a measure (expressed as a percent) of how often an electricity generator operates during a specific period of time using a ratio of the actual output to the maximum possible output during that time period.”

In terms of understanding where we are and where we are heading, “electricity generation” is far more important than “capacity”; which only tells us how wind, wave, tide and solar technologies would perform if it were possible (it isn’t) for them to generate electricity all day (and night) every day. Put simply, if you cannot turn on your lights, operate your business or recharge your electric car, because there is no electricity, it is little comfort to learn that on a good day the grid is capable of supplying more electricity than you might need. From a planning point of view, knowing the capacity factor for various generating technologies matters because it gives an insight into how efficient they are. A nuclear or fossil fuel power plant that runs more or less continuously for more than 60 years is likely to require far fewer inputs and far less land area than, say, vast solar farms (which have to be replaced every 10-20 years) that can only generate electricity when the sun is shining.

So where do non-renewable renewable energy-harvesting technologies stand when it comes to electricity generation? According to the latest BP Statistical Review of World Energy, in 2017 human civilisation generated 25551.3 Terawatt hours (TW/h) of electricity. Of this:

• Non-renewable renewable energy-harvesting technologies provided 2151.5 TW/h (8.4%)
• Nuclear provided 2635.6 TW/h (10.3%)
• Hydroelectric dams provided 4059.9 TW/h (15.9%)
• Fossil fuels provided 16521.7 TW/h (64.7%).

What this tells us is that far more non-renewable renewable energy-harvesting capacity has to be installed than the electricity that it can actually generate – it has a low capacity factor. Indeed, Hill’s “around a third” figure includes the much larger capacity of hydroelectric dams (which have environmental issues of their own) for which there is little scope for further installation. Only by adding in nuclear power can we get to a third of electricity generation from low-carbon sources.

Even this, however, misleads us when it comes to environmental impacts. The implicit assumption is that non-renewable renewable energy-harvesting technologies are still valuable despite their inefficiency because they are replacing fossil fuels. But this is not why countries like the UK, Saudi Arabia and (for insane reasons) Germany have been deploying them. In the first two cases, the deployment of non-renewable renewable energy-harvesting technologies is primarily to maximise the amount of fossil fuels available for export. In Germany’s case, renewables that might otherwise have weaned the economy off coal were deployed instead as a replacement for nuclear; leaving the economy overly-dependent upon often dirty (lignite) brown coal; and forcing them to turn to Russian gas as a future substitute for coal. These states are not, however, where most of the world’s largely fossil fuelled industrial processes take place. Asia accounts for the majority of global industry, and Asian economies use non-renewable renewable energy-harvesting technologies to supplement fossil fuels rather than to replace them; although Hill does not clarify this when he tells us that:

“Specifically, solar energy dominated in 2018, installing an impressive 94 GW… Asia continued to lead the way with 64 GW — accounting for around 70% of the global expansion last year — thanks to dominant performances from China, India, Japan, and South Korea.”

While, of course, electricity generated from wind, wave, sunlight and tide is energy that might otherwise have come from fossil fuels, the impact should not be exaggerated. According to the 2019 edition of the BP Energy Outlook, in 2017:

• Non-renewable renewable energy-harvesting technologies provided 4 percent of global primary energy
• Nuclear provided 4 percent
• Hydroelectric 7 percent
• Gas 23 percent
• Coal 28 percent
• Oil 34 percent.

Just our additional energy demand since 2015 has been sufficient to account for all of the non-renewable renewable energy-harvesting technologies deployed to date. That is, if we had simply accepted 2015 levels of consumption, we need not have deployed these technologies at all. And, of course, if we had stabilized our energy consumption a couple of decades ago we could have left the bulk of the fossil fuels we now consume in the ground:Source: Global carbon emissions 2007-17

What is really at issue here is that – to quote the late George H.W. Bush – “The American way of life is not up for negotiation.” That is, we can have any energy transformation we like, so long as it does not involve any limitation on our continued exploitation and consumption of the planet we live on. The too-big-too-fail banks must have permanent economic growth and that, in turn, means that we have no choice other than to keep growing our energy consumption.

The trouble is that infinite growth on a finite planet is impossible. Worse still, as the energy return on investment (aka Net Energy) declines, the increased energy and monetary cost of energy production causes the energy and monetary value available to the wider (non-energy) economy to decline. In the first two decades of the century, this has caused an intractable financial crisis coupled to a massive decline in prosperity across the developed economy (resulting in the collapse in consumption of the “retail apocalypse”) which is beginning to generate political instability. In the 2020s the crisis is set to worsen as the energy cost of producing a whole range of mineral resources raises their market price above that which can be sustained in the developed states (where most of the consumption occurs). The result – whether we like it or not – is that we face a more or less sharp drop in consumption in the next couple of decades.

This raises questions about the purpose to which we deploy non-renewable renewable-energy harvesting technologies. For several decades, people in the green movement have engaged in private arguments about whether they should spell out the likely localised and de-materialised economies that giving up or running out of accessible fossil fuels necessarily entails. Since this would be politically toxic, most have chosen to promote the lie that humanity can simply replace coal, gas and oil with some combination of wind, wave, tide and sunlight without economic growth even needing to pause for breath. This, in turn, has allowed our young people to believe that intransigence is the only thing preventing our political leaders from de-carbonising our economies.

Exactly what our politicians are told about our predicament is a matter of conjecture. Most, I suspect, are as clueless as the population at large. Nevertheless the permanent civil services across the planet have produced a raft of reports into the full spectrum of the catastrophe facing us, from the damage we are doing to the environment to the rapidly depleting stocks of key mineral resources and productive agricultural land, and the more imminent collapse in the global financial system. And the more they become aware of this predicament, the more they realise just exactly what the word “unsustainable” actually means. One way or another, six out of every seven humans alive today is going to have to go – either by a planned de-growth or via a more or less rapid collapse of our (largely fossil-fuelled) interconnected global life support systems.

With this in mind, there is something truly immoral about perpetuating the myth that we can maintain business as usual simply by swapping non-renewable renewable-energy harvesting technologies for fossil fuels. This is because maintaining the myth results in precisely the kind of misallocation that we already witnessed in those states that are using renewable electricity to bolster fossil fuel production and consumption. The more we keep doing this, the harder the crash is going to be when one or other critical component (finance, energy or resources) is no longer widely available.

There is a place for renewable energy in our future; just not the one we were promised. As we are forced to re-localise and de-grow both our economies and our total population, the use of non-renewable renewable-energy harvesting technologies to maintain critical infrastructure such as health systems, water treatment and sewage disposal, and some key agricultural and industrial processes would make the transition less deadly. More likely, however, is that we will find the technologies we need to prevent the combination of war, famine and pestilence that otherwise awaits us will have been squandered on powering oil wells, coal mines, electric car chargers, computer datacentres and cryptocurrencies (none of which are edible by the way).

At this stage, all one can say to the climate protestors and to the “green” media that encourage them is, “be careful what you wish for… it might just come true!”

Situating the appreciation. Tim Watkins, May 16, 2019. 

Sir Angus Deaton is the latest apostolic legate of the econometric priesthood to be given the unenviable task of coming up with a cause and a cure for income inequality and its socio-political consequences without challenging the underlying disease. The motivation for appointing Deaton – a Nobel laureate economics professor at Princeton in the USA – to head up a five-year review into the impact of inequality on the democratic process, comes from the unexpected votes three years ago that resulted in Brexit in the UK and the election of Donald Trump in the USA. In the years since, political discontent with established parties and politicians has swept across the world; resulting in the rise of right wing “strongmen” like Modi in India, Bolsonaro in Brazil, Orban in Hungary and Salvini in Italy. In an interview with the Guardian, Deaton explained:

“There’s a real question about whether democratic capitalism is working, when it’s only working for part of the population.
“There are things where Britain is still doing a lot better [than the US]. What we have to do is to make sure the UK is inoculated from some of the horrors that have happened in the US.”
There is ambiguity in this. When Deaton talks about “horrors” is he talking about the mountain of human faeces building up on the streets of San Francisco, the return of Victorian diseases like typhus and the growing opiate death toll among America’s poor; or is he merely echoing privileged progressive howling over the election of Trump and the accompanying meltdown in the Democrat party? If the former, then there is little to celebrate in the UK, where work no longer pays; where slavery has returned – more of less openly – on our high streets; where millions of families depend on emergency food parcels to stave off starvation; where two homeless people a day die in shop doorways; and where the United Nations has condemned our welfare system as a crime against humanity. Only on the political front – and only by accident – the economic policies put forward by Corbyn and McDonnell in 2017 saved Britain from a majority Tory government that would have rushed headlong into a no-deal Brexit, followed by a massive assault on what remains of our rights and environmental legislation.
The Brexit vote itself owes a great deal to economic inequality. Ex-industrial areas that “ought” to have been in favour of the European Union – or at least the Social Chapter workers’ rights – voted by a large margin to leave. However, the error made by the liberal media has been to focus solely on the callous attacks on living standards perpetrated by Cameron and his Bullingdon Club public schoolboy chums between 2010 and 2016. This is to misunderstand the slow motion economic crisis that has been devouring western societies since the early 1970s.
To be clear, different governments might have adopted milder policies that might have mitigated much of what we can now witness openly on our streets. Cameron did not have to cut taxes and handout lavish corporate welfare to the already wealthy while driving the most vulnerable into penury. On the other side of the Atlantic, Obama could have jailed a few bankers and regulated the rest instead of inviting them to run his administration. But they chose not to; and thereby exacerbated a crisis that has been decades in the making.
Like most baby boomer economists, Deaton’s understanding of how the economy is meant to work is shaped by the unprecedented and never to be repeated 1953-1973 boom brought about by the post-war switch from coal- to oil-based economies. It was the massive explosion of wealth in the western economies during this period that gave rise to the period of (relative) industrial and political peace as, for the only time in modern history, the workers’ share of productivity increased. With prosperity rising, the bitter industrial battles of the 1920s and the depression and political extremism of the 1930s appeared to have been laid to rest. Unfortunately, and despite the economics textbooks, it was a blip. American deficit spending on the Vietnam War together with a slump in oil production brought about the end of the Bretton Woods monetary system and inflicted inflation upon America’s trading partners.
Neoliberalism was the western elite’s response to the crises of the 1970s. Conservative governments under Thatcher and Reagan set about dismantling the economic dimension of the post-war settlement (the series of social democratic reforms introduced to prevent a repeat of the 1929 banking crash, the 1930s depression and the rise of political extremism). Both blamed “greedy workers” for “paying themselves more than they could afford” for a crisis that, in reality, was the result of declining net energy – as more energy had to be expended on producing energy, less was available to power the much larger non-energy sectors of the economy. As the energy cost of energy continued to rise, so standards of living began to fall. The perennial question ever since has been, who will be the losers?
Neoliberalism’s first act was the creation of an underclass – what we know today as the “precariat” – a section of the population whose poverty would both crush inflation and serve to hold down the wages of the wider working class. Its second – almost unconscious – act was to embark on the financialisation of the economy by handing over control of the money supply to private banks. Instead of governments printing new currency and distributing it via public spending on pensions, benefits and public services, banks would create new currency when they made loans to those – mostly wealthy households and corporations – considered “credit worthy.”
In his interview with the BBC’s Today Programme, Deaton touches on one of the consequences of financialisation – what he refers to as “rent seeking.” Deaton gives the example of drug companies lobbying government to allow them to jack up the price of medicines. That is, no new research or production occurs; they are merely using their access to the political system to enrich themselves at everyone else’s expense. This, however, is the natural consequence of handing over the money supply to the banks… it is not a flaw, it is a design feature. The reason that businesses – and, indeed, banks themselves – used to have to be concerned with the health of the wider community and of the nation as a whole was precisely because widespread economic and social health provided the only guarantee that they could secure the additional money required to continue to grow. In a financialised system in contrast, access to new currency requires only that a new loan be taken out; while profit requires only that a business squeeze as much out of its customers, suppliers and the environment as it can to pay back the loan with interest.
This gave rise to the third act of neoliberalism. Since workforce, community and nation no longer mattered, it was far easier to profit by offshoring business activities to areas of the world that permitted child labour; paid low wages; allowed horrendous working conditions; and showed little or no concern for the environment. Free collective bargaining might have benefitted workers when they only had their fellow countrymen and women to compete against; but western workers soon found themselves having to compete with impoverished Africans and Asians if they were to keep their jobs… a futile task for many; and devastating for whole swathes of the ex-industrial regions.
As I pointed out in a recent post about Ebbw Vale in the South Wales valleys, under Thatcher in the valleys alone, tens of thousands of high-paying manual jobs were shipped overseas; devastating communities and leaving families trapped in perpetual poverty. Those who could get out – whether through education or by commuting – did so, leaving the community starved of the very knowledge and skills that might, just, have made a difference. And even the education ladder – the treasured neoliberal solution to poverty – was to be pulled up by Thatcher and her successors via the abolition of grants and the introduction of fees and student loans.
Throughout the Thatcher years (1979-1990) the Labour opposition had sought a route back to power that would reverse at least the harshest of the economic reforms. With Britain entering into the debt-based binge that ended so disastrously in 2008, however, there was little public support for policies that might plunge the country back into the crises of the 1970s. It was in this climate that the Clinton Democrats and Blair’s New Labour chose a route back to power that involved throwing the working class under the bus and adopting and building upon the economic policies of neoliberalism. As one of the architects of New Labour put it, they were “intensely relaxed about people getting filthy rich so long as they paid their taxes.” As the Dark Lord himself put it:

“Post-war Britain has seen two big changes. First, and partly as a result of reforming Labour governments, there are many more healthy, wealthy and well-educated people than before. In addition, employment has switched from traditional manufacturing industries to a more white-collar, service-based economy. The inevitable result has been that class identity has fragmented.
“Only about a third of the population now regard themselves as ‘working-class’. Of course it is possible still to analyse Britain in terms of a strict Marxist definition of class: but it is not very helpful to our understanding of how the country thinks and votes. In fact, of that third, many are likely not to be ‘working’ at all: these are the unemployed, pensioners, single parents – in other words, the poor.”

In exchange for adopting and institutionalising the economic pole of neoliberalism, Clinton and Blair imposed an enhanced version of the social reforms of the 1960s. As the author of the Flipchart Fairytales blog points out:

“Even during the Thatcher period, when economic policies shifted to the right, the liberal policies initiated during the 1960s, and the social changes that went with them, continued apace. Conservative politicians may have railed against ‘political correctness’ but they didn’t do much about it. Racist and sexist language that would have passed unremarked in 1979 was considered unacceptable by the time John Major left office. Corporal punishment in schools was abolished under Margaret Thatcher and, while there was much tough talk on immigration, her government did little to change the existing laws. The Conservatives even shied away from illiberal legislation that would have been overwhelmingly popular, such as the re-introduction of capital punishment. Voters might have thought they were voting for socially conservative policies but what they got was economic liberalism.”

If Tony Blair’s adoption of economic liberalism – symbolised by the adoption of the Private Finance Initiative which brought the private sector into the heart of government and public services – marked the point at which the right won the economic war, then it was David Cameron’s successful steering of same sex marriage onto the statute book that marked the point when the left won the social war.
The problem for neoliberalism was that it depended upon ensuring that the losers – those who need economic rather than social justice – never become the majority of the electorate. This was doable so long as the banks could keep churning out mountains of debt-based electronic currency backed by nothing more than the false promises of the bankers themselves. But when the real world imposed itself, in the shape of peak production of conventional oil in 2005, the resulting price spike which saw oil rise above $140 per barrel was sufficient to drive sub-prime mortgage borrowers into arrears. And when, in 2006, the central banks began to raise interest rates in an attempt to lower inflation, they made the banking collapse of 2007-8 inevitable. The subsequent recession, from which wages and living standards have yet to (and probably never will) recover, tipped sufficient new households into or on the edge of the precariat, that neoliberalism lost its electoral majority.
Cameron’s defeat in 2016 was a massive wake up call. As Matthew Goodwin explained in an article for Quillette:

“The referendum marked the first occasion in Britain’s history when the culturally liberal middle-class, which orbits London and the university towns, had lost. Until this point, the advocates of double liberalism—a globalized economy accompanied by a highly liberal immigration policy—had gotten all they had wanted. Business got a continuing influx of mass cheap labour that fed a consumption-driven growth model that not only removed incentives for investing in training but exacerbated divides between the high and low-skilled. The liberal middle-class got economic benefits alongside Polish cleaners and membership of the dominant value set but became increasingly detached from the ‘left behind.’”

The election of Donald Trump just five months later demonstrated that this was anything but a small setback or a local difficulty. Unfortunately, most unthinking neoliberals responded in the very worst way possible. While a few sought to understand the coalition of forces that had produced the result, most simply tried to ignore what had happened. The Brexit referendum, we were told, “was only advisory.” The Leave campaigners, they explained, “had lied.” The people, they argued, “didn’t understand what they had voted for.” In the UK, neoliberals turned to the courts in an attempt to strike down the referendum result while in the USA they turned to conspiracy theories and attempts to overturn the Constitution to evict Trump from the White House.
Only a few thinkers within the affluent class regarded Brexit and Trump as the democratic choice of the growing precariat. Some at least sought to understand the social and economic forces that had produced the result with a view to developing the green new deals, circular economies and fourth industrial revolutions that we are beginning to see emerging as the proposed means of maintaining neoliberal privilege while sending the unwashed masses back to sleep.
Writing in the Guardian, Aditya Chakrabortty sets out neoliberalism’s current predicament:

“Brexit proved our economy is broken, but our leaders still have no clue how to fix it…
“It ultimately comes down to this: decades of privatisation, hammering unions and chucking billions at the housing market while stripping the welfare state has effectively ended any semblance of a national, redistributive economy in which a child born in Sunderland can expect to have similar life chances to one born in Surrey. Yet politicians remain fixated on mechanisms that no longer work adequately for those who actually depend on the economy. They obsess over GDP growth when the benefits of that are unequally shared between classes and regions. They boast about job creation when wages are still on the floor.
“Most of all, they brag about London, the one undoubted gleaming success of the British economic model. ‘A pound spent in Croydon is of far more value to the country than a pound spent in Strathclyde,’ to quote Boris Johnson, the Conservative party’s last surviving greyback. But that is to ignore how London itself is rapidly becoming unlivable for many Londoners.”

Chakrabortty sees the symptoms, but neither understands the disease nor offers a cure. This, very likely, is where Deaton comes in. A safe pair of hands to give the masses the impression that something is being done (whether anyone can afford to wait the five years of the investigation is a moot point) while most likely turning to failed neoliberal prescriptions for increased access to university courses that have already outlived their worth, and for minimum wages set so high that they help drive people into the faux self-employment of an exploitative gig economy.
It is highly unlikely, however, that Deaton will prove capable of escaping his academic silo long enough to understand the growing net energy crisis that has rendered further business as usual unsustainable. There isn’t going to be a “fourth industrial revolution” because there is not enough of planet earth left for neoliberal capitalism to rape. Green new deals based on even more debt-based currency spirited into existence from the ether will fail for much the same reason. Rather like the more short-lived quantitative easing and below-inflation interest rate policy, neoliberalism itself was a response to the net energy crisis. And just like those policies, it could only ever be a temporary fix because as soon as the Asian and African people it sought to exploit began to engage in western-style consumption, they would accelerate the crisis.
The economy is failing precisely because it is unsustainable. Growth was only ever a product of rising energy per capita; and since the 1970s, western per capita energy has been in decline. Debt and developing world exploitation kept the game going for a couple of decades – but only at the expense of destroying the living standards of the western working class. In these circumstances, huge blinkers are required in order to fail to see why Cameron telling people that leaving the EU would be bad for the economy, or Clinton telling voters that “America is already great” was bound to end in tears.
In asking Deaton to inquire as to why “capitalist democracy” is failing, the Institute of Fiscal Studies is effectively situating its own appreciation of the crisis. The appreciation is false simply because there is nothing wrong with capitalist democracy… it is doing precisely what we would expect it to do in the face of financialisation and shrinking net energy: it is concentrating wealth in the hands of a tiny elite while impoverishing an ever larger section of the western population (whose continued spending it depends upon to remain solvent). By 2016 the process had reached the point where sufficient numbers were either in or teetering on the edge of the precariat that the electoral balance shifted in favour of anyone regarded as an “outsider” and deemed to be opposed to the prevailing system.
Initially, socially conservative parties of the right have been the beneficiaries of the backlash. However, the growth in support for Britain’s Labour opposition together with recent electoral victories for the left in Spain demonstrate that the rise of the right is not a done deal. Policies such as nationalising transport and utilities, limiting and taxing the income and wealth of the rich, setting higher minimum wages, and limiting the pay of corporate CEOs are at least as popular as socially conservative policies to tighten immigration controls and to impose tougher sentences on criminals.
We can only wait for Deaton to report in 2024 – assuming (and this is far from certain) that we still have a functioning economy by then – to see whether he proves capable of correctly diagnosing the underlying net energy disease or whether, like some wild west snake oil salesman, he trots out the same worn neoliberal prescription for more student loans to fund more useless university courses that – in true cargo cult fashion – continue to fail to generate the high-skilled/high-paid jobs that three decades of centre right politicians promised.

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