Thursday, April 28, 2005
This is the single most “radical” piece of writing I have done, and for that reason I would certainly enjoy your feedback—my intent is not to provoke or alarm, but rather to follow a line of reasoning to what appears (to me) to be the logical conclusion. What follows may eventually grow into a Chapter 10 of A Theory of Power.
This whole thing starts off very simply, with as close as one can get to a “Law” of economics: When you’re hungry, you first pick the low-hanging fruit. Put another way, when faced with an ongoing problem to which there are multiple solutions, you pick the easiest solutions first. First you pick the low-hanging fruit. When hunger returns, you drag out the ladder and start picking ever more difficult to reach fruit. Simple.
In economics, this phenomenon is known as the law of diminishing marginal return. Here’s a graph from Tainter:
Initial solutions to a problem provide a high marginal return (marginal meaning the amount of extra benefit that each extra amount of investment provides). When you’re picking the low-hanging fruit, the effort required to get a single fruit is low—so the marginal return on your investment is relatively high. As depicted in the graph, the effort required for each additional fruit gets a bit greater each time—the slope of the marginal return decreases. Eventually, after you’ve taken out your ladder, and removed all the easy-to-find fruit from all the trees in the entire orchard, the amount of effort required to find one more fruit will eventually equal the reward of finding that fruit (say calories invested for calories returned). This is point B2-C2 in the graph. Marginal return is now zero. Any further effort in searching for fruit is actually costing you more than it returns—a negative marginal return.
Stepping back from our orchard for a moment, we can view social organization as an investment in complexity (structure, stratification, specialization, exchange, administration, etc.) that provides a return to the investors by meeting their needs (along Maslow’s hierarchy, perhaps). The return on investment follows the same marginal return curve as in our orchard example above. Initial investments in complexity return quite well, while later investments provide minimal—or even negative—marginal return. How much benefit (compared to cost) do 100 extra government bureaucrats provide?? In modern society, diminishing marginal returns are evident in education, agriculture, energy and resource extraction, technology R&D and other critical areas. I won’t go in to all the detail here, but Tainter provides an excellent analysis of the diminishing marginal returns for societal investments in both ancient incidents of collapse (Roman, Mayan, Chacoan, etc.) as well as the modern societal investments mentioned.
But despite the declining marginal returns, society is not capable of reducing expenditure, or even reducing the growth in expenditure. I discuss this at length in A Theory of Power, but the basic fact is that society is—at its very root—an evolutionary development that uses a continual increase in complexity to address social needs—and to ensure its own survival. So, as societies continue to invest more and more in social complexity at lower and lower marginal rates of return, they become more and more inefficient until eventually they are no longer capable of withstanding even commonplace stresses. They collapse.
This may seem too deterministic—after all, it suggests that all societies will eventually collapse. While that may cause our inherent sense of hubris to perk up for a moment, we should remember that this equation fits our data quite well—every civilization that has ever existed has, in fact, collapsed. Our present global civilization is, or course, the sole exception. A look back at the contemporary chroniclers of history shows that every “great” civilization thinks that they are somehow different, that history will not repeat with them—and their hubris is shared with gusto by members of the present global civilization.
Of course, as discrete empires and societies grow ever more cumbersome they do not always collapse in the spectacular fashion of the Western Roman Empire. If they exist in a “peer-polity” situation—that is, they are surrounded by competitors of similar levels of complexity—then they will tend to be conquered and absorbed. It is only in the case of a power vacuum—like the Chacoans or Western Romans—that we witness such a spectacular loss of complexity. In the “modern” world, we have not witnessed such a collapse as we exist in a global peer-polity continuum. When the Spanish empire grew too cumbersome the British were there to take over, and the mantel has since passed on to America, with the EU, China and others waiting eagerly in the wings. In the modern world there can no longer be an isolated collapse—our next experience with this will be global.
In fact, the modern civilization continuum has existed for so long without a global collapse because we have managed to tap new energy sources—coal, then oil—each with a higher energy surplus than the last. This has buoyed the marginal return curve temporarily with each discovery, but has not changed the fundamental dynamics of collapse.
Perhaps we should take a step back and look at collapse in general. Our psychological investment in the “goodness” of “high-civilization” leads to the commonly held conclusion that collapse is bad—and that to advocate it would be irrational. But from a purely economic point of view, collapse actually increases the overall benefit that social complexity provides to society for their level of investment. It makes economic sense. In the graph above, C3-B1 and C1-B1 provide the same benefit to society—but for dramatically different support burdens required to maintain their respective levels of complexity. C1-B1 is a much more desirable location for a society than C3-B1, so collapse from C3-B1 to C1-B1 is actually a good thing. With the growing burden of today’s global society, the global inequality and injustice that seems to grow daily, collapse is beginning to make economic sense. In fact, an entire philosophical movement, Primitivism, has sprung up dedicated to convincing the world that a “C1-B1”, hamlet society is in fact a far better place.
Despite the growing logic of collapse, in today’s peer-polity world that option does not exist except on a global scale. Today we have 3 options:
1. Continue business as usual, accepting declining marginal returns on investments in complexity (and very soon declining overall returns) until an eventual, inevitable collapse occurs globally. Continuation of present patterns will continue the escalating environmental damage, and will continue to grow the human population, with population levels in increasing excess of the support capacity of a post-collapse Earth (i.e. more people will die in the collapse).
2. Locate a new, more efficient energy source to subsidize marginal returns on our investments in complexity. This does not mean discover more oil or invent better clean coal technology—these, along with solar or wind power still provide lower marginal returns than oil in the heyday of cheap Saudi oil. Only the development of super-efficient fusion power seems to provide the ability to delay the decline of marginal returns any appreciable amount, and this will still serve to only delay and exacerbate the eventual return to option #1.
3. Precipitate a global collapse now in order to reap the economic benefits of this action while minimizing the costs of the collapse that will continue to increase with the complexity and population of our global civilization. When combined with a strategy to replace hierarchy with rhizome, as outlined in A Theory of Power, Chapter 9, this may even represent a long-term sustainable strategy.
Whoa. Am I seriously suggesting the triggering of a global collapse? For the moment I’m just suggesting that we explore the idea. If, after deliberation, we accept the totality of the three options as outlined above, then triggering collapse stands as the only responsible choice. It is—admittedly—a choice that is so far outside the realm of consideration of most people (who are strongly invested in the Myth of the West) that they will never take it seriously. But critically, it does not necessarily require their consent…
These may seem like the ramblings of a madman. But in the late Western Roman Empire, there is a fact that is simply not taught today because it is too far outside our tolerance for things that run counter to the Myth of the West: The citizens of Rome wanted to end the Empire, to dissolve its cumbersome structure, but could not reverse its pre-programmed course. Many—perhaps most—welcomed the invading barbarians with open arms.
So should collapse be triggered now, or should we wait as long as possible? If we accept the inevitability of collapse, then it should be triggered as soon as possible, as the cost of implementing a collapse strategy is continually growing…
Throughout history, when collapse has occurred, it has been a blessing. The mainstream continues to cling to the beliefs that collapse will be a terrible loss, and that it is not inevitable. Even with all of our cultural brain-washing, do we really have so much hubris as to hold on to the tired mantra that “this time, in our civilization, things will be different”?
Friday, April 22, 2005
Oil refineries process crude oil--and they process at a very constant rate all year long. That's why they have all those tank farms to store their excess from off-season production of refined products to sell in the high-season (Summer travel and Winter heating). So Refinery production does not fluctuate in response to gasoline demand, or seasonal temperatures or low gasoline stockpiles. In fact, this is economics 101: if refinery production decreases, and the supply of crude oil being pumped out of the ground remains steady (as it has for the past several months), then price should actually DROP.
Clearly, with crude oil prices over double their 2004 average at the moment, the price hasn't been dropping. So... if refinery capacity is holding steady, and the price is risinig, what is the cause? Easy: supply is dropping. Less crude is being pumped out of the ground, despite OPEC raising or eliminating all production quotas, and the existence of a huge profit-motive (with the high prices) for oil producers to pump as much as humanly possible.
It's Econ101. Maybe we should send our journalists back to school.
Question of the year: Is April 22, 2005 the date of the Global Oil Peak?
Ghawar field, the world's largest "Super-Field", producing roughly 5 million barrels of light, sweet crude every day, and key to the Saudi's plan to raise production from 10 MB/D to 12.5 MB/D by 2009. Or so the Saudis would have us believe. I'm guessing their rapidly growing, largely impovershed population would not continue to tolerate the House of Saud if they found out that their oil-financed handouts were smoke & mirros...
Monday, April 18, 2005
Stratfor is a private intelligence service, and has proven themselves to be the most reliable source of RUMINT, accurately predicting most major world events of the past decade.
Specifically, Azerbaijan holds the former-Soviet airbases of Kurdamir, Nasosnyy and Gyulakh. These were forward deployment locations for the USSR's IL-76 'Candid' transports and TU-22M 'Backfire' bomber, and therefore will have at least the skeleton of the infrastructure required for a major US deployment and airlift operations. STRATFOR forecasts the creation of "lily pad" bases, from which US forces will be able to stage men and materiel for an invasion of Iran. Access to Azerbaijan opens the critical Caspian route to Tehran, reducing the arduous march over mountainous terrain that would be required to reach the capital from Iraq.
As the situation in Iraq promises to be stabilizing--even if stabilizing at a significant level of violence--US planners may well be looking to the next step in their grand strategy. And Azerbaijan is a wise next step (from their perspective)... access to Tehran, and an excuse to garrison troops in the oil-rich Baku region to boot!
Thursday, April 14, 2005
The Kachin are a favorite of anthropologists... they seem to cycle through three distinct forms of organization: Gumlao (egalitarian) to Gumsa (stratified), then on to Shan (feudal), and eventually back to Gumlao again. What causes the critical transition from Gumlao (egalitarian) to Gumsa (stratified)? Well, due to the mechanics of inheritance, the egalitarian nature of Gumlao organization cannot be maintained for long, and local groups eventually slide into a stratifed society. From there, the institutionalization and intensification of stratification and concentration of wealth accelerates, transitioning next to a feudal society. At this point, everyone gets so fed up with the state of their local group that they dissolve back into the woods and begin again at Gumlao (egalitarian)--but only because they have the option of dissolving back into the woods!
Mechanisms of hierarchy and stratification--especially when they become institutionalized--are a swift kick down the slippery slope of slavery. Talk about a legislative aliteration! So... what were we talking about? Ah yes... the estate tax.
See "Political Systems of Highland Burma", by Edmund R. Leach for more on the Kachin peoples.
Tuesday, April 12, 2005
Hakim Bey (www.hermetic.com/bey/) discusses the phenomenon of "the closing of the map"—that point at which the sensory apparatus of the market-state (see James C. Scott’s “Seeing Like A State”) becomes so pervasive that it effectively eliminates all spaces not under the purview of the market-state. It eliminates the Shangri-La, the Alamut, the Temporary Autonomous Zone—that place that one can exist outside the long reach of hierarchy.
Recently, a certain buzz has developed about Google Maps (maps.google.com)… I think that it is time to look at this for what it really is: the closing of the map.
The technical capability of such satellite imagery is not what is remarkable, or frightening (People with a background in military imaging will find it humorous that Google acquired Keyhole, Inc. in order to facilitate their new satellite imagery capability. See http://www.fas.org/spp/military/program/imint/kh-12.htm ). What is alarming—or at least noteworthy—is the ease with which the public now has access to this kind of information. Commercial satellite imagery has been an exploding field for the past decade, and today there are numerous vendors for timely, high-resolution, unclassified satellite imagery. QuickBird even provides full color imagery with a resolution of 0.6 meters! The real advancement (and future leaps) in commercial imagery is in the ability to provide timely, tailored imagery. It has been possible to get old, archived imagery and aerial photos for a long time. But over the next few years the capability will emerge (or be refined, based on Google’s recent venture) to obtain Near Real-Time (NRT) imagery of anywhere, in high resolution, and in hyper-spectral format.
Like many things (remember that new-fangled world-wide-web?), this will start slowly. The new blog “Google Sightseeing” ( http://www.shreddies.org/gmaps/ ) is little more than a travelogue based on Google imagery. The blog ‘Defective Yeti’ has already produced a parody of the potential dangers: http://www.defectiveyeti.com/archives/001238.html . But this will grow. Police departments are already deploying Unmanned Aerial Vehicles (UAVs) to provide real-time video feeds. How will the ready availability of NRT imagery impact the next iteration of the ATF raid on the Branch Davidians at Waco? Law enforcement is already toying with using multi-spectral imagery to auto-identify marijuana growth from other foliage via satellite imagery.
Scenario: Monsanto creates patented seed stock with a unique Multi-Spectral Imagery fingerprint—and then uses time-sensitive imagery to identify crops that “violate their intellectual property rights”, leading quickly to a military-style Time-Sensitive Targeting Kill Chain for aerial spraying or other forms of eradication. Even if the violation is caused by nothing more than wind-blown pollen, or is the only means of sustenance for a Third World village… It isn't that far fetched, based on what Archer-Daniels Midland is already doing.
The map is closing.
What options are available? If autonomy and freedom one day become predicated on an evasion of the sensory mechanisms of the state (See Theory of Power, Chapter 9), what can be done in the face of a sensory mechanism that is advancing exponentially?
Monday, April 11, 2005
Why do the Chinese and Japanese buy US notes (like Treasury Bills)? Because, by not selling their dollars for some other currency, and instead keeping their investment in dollars, they bolster the price of the dollar (more buying, less selling = higher price). This strong dollar then aids their economy, which is based on exporting to the US (strong dollar means goods from China appear cheaper to US consumers). So why do the Saudis buy T-Bills? Well, the same logic applies, to a degree: a stronger dollar means that when they do sell dollars to purchase something, it is cheaper for them. But the bottom line is that they hold dollars because doing so keeps the American administration (regardless of what party is in control at the time) happy--the Saudis, by denominating OPEC oil in only dollars, and then spending those dollars to buy T-Bills and the like, keep our dollar artificially high (the administration likes this because it facilitates our deficit spending and balances our huge trade deficit). It should appear blatantly obvious that without some chicanery, it isn't possible to maintain a trade deficit in the hundreds of billions of dollars year in and year out ($484 Billion in 2003). The US gets several hundred billion dollars worth of other nations produce and resources for free--or more precisely, as a direct result of the Saudis denominating OPEC oil in dollars. In fact, that $484 billion fits quite well into the world economic jigsaw puzzle--it's just about the value of the OPEC oil sold (in dollars) to nations other than the US.
So... where does this leave us? Well, it leaves a few bottom-line principles:
1. The US has a very strong interest in keeping the house of Saud in power--or at least someone in power who will do their bidding and force OPEC to denominate all sales exclusively in dollars.
2. It leaves most other nations--but especially the EU core of France and Germany--with a strong desire to break up this system. Witness the recent (April '05) comments by French Industry Minister Patrick Devedjian that Europe should adopt a Euro-denominated oil market as its policy--superficially because the Euro is "a more stable currency".
3. The US actually benefits from high oil prices--even though it acts as a brake on its own economy. For every billion spent domestically on higher oil prices, other nations buy an extra 4 or 5 billion dollars of trade deficit for the US--virtually "free" goods and services.
So is the US consciously pursuing a policy of raising global oil prices? That's a difficult argument to make, as the primary driver of price increases has been growing demand from China. However, US policy has been clearly pursuing the defense of the dollar-denominated oil market. Recent actions in Iraq and threats against Iran have had the effect of blocking an Iranian based Euro-market, setting up a base from which to influence future events in the region, and stirring up the Islamist hornet's nest--thereby placing the House of Saud in an ever-more dependent position.
That said, rising oil prices aren't good for the US indefinitely. At some point, the brake on the global economy becomes too strong, and they will trigger a world-wide recession--which will destroy demand overseas for US products, as well as demand for oil. This will remove the counterweight against the domestic economic brake of high-priced oil in the US. Where does this price-line in the sand lie? Who knows, but Europe and Japan are already on the brink of (or in) recession. At some point, this becomes a game of Russian Roulette, where one small move sets off a global deflationary spiral. It may well already be out of the hands of the American administration--if Chinese demands keeps rising and oil output can't keep up (there are signs that the Ghawar field may have peaked...), then we may already be locked in to such a scenario--even if it doesn't hit for one or two years.
I've written previously on the role of the oil market in world affairs.