Drinking the Automatic Earth's Kool Aid

I visit the Automatic Earth fairly regularly, though I must confess to not reading too deeply. There's just soooo much there, and much of it that I simply don't understand, nor have the time to wade through. But it's still one of my top go to sites. I especially appreciate Stoneleigh's posts for their clarity and description of the economic/political/ecological situation in terms that even I can understand.

The picture she paints ain't pretty and to fully grasp her vision of the near future is to flirt with despair and an overwhelming sense of loss. Her analysis is not for the faint of heart. But to turn away from it and insist that our current way of life can and should continue to chug along indefinitely, is to ignore a potential truth at a very great cost.

Stoneleigh's post from late last month particularly resonated with me. I haven't read all the news links, so I can't speak to them, but I think her essay on the nature of politics is essential reading.

Here are some excerpts:

"During expansionary times, larger and larger political structures -can- develop through accretion. Ancient imperiums would have done this mostly by physical force, integrating subjugated territories into the tax base by extracting surpluses of resources, wealth and labour. We have achieved much the same thing at a global level through economic means, binding additional polities into the larger structure through international monetary mechanisms such as the Bretton Woods institutions (IMF, World Bank and GATT, fore-runner of the WTO). The current economic imperium of the developed world is truly unprecedented in scale.

...one can see that the available energy, in many forms, is a key driver of how complex and wide-ranging spheres of political control can become. Ancient imperiums achieved a great deal with energy in the forms of wood, grain and slaves from their respective peripheries. Today, we have achieved a much more all-encompassing degree of global integration thanks to the energy subsidy inherent in fossil fuels.

Without this supply of energy (in fact without being able to constantly increase this supply to match population growth), the structures we have built cannot be maintained (see Joseph Tainter’s work for more on this).

However, while energy has been a key driver of global integration and complexity, the structures we have created do not depend only on energy. Because any structure with a fundamental dependence on the buy-in of new entrants, and therefore the constant need to expand, is grounded in Ponzi dynamics, these structures are inherently self-limiting.

We have reached the limit beyond which we cannot continue to expand, there being no more virgin continents to exploit in our over-crowded world. The logic of Ponzi dynamics dictates that we will now experience a dramatic contraction, and that our financial structure, which is the most complex and most vulnerable part of our hypertrophic political system, will become the key driver to the downside during that period. Part of that contraction will be of our available energy supplies and ability to distribute energy to where it is needed, both of which will fall victim to many 'above-ground factors' in the years to come.

Our horizons will have to shrink to match our reach. The inability of any individual or institution to prevent this, or even to mitigate it much through top-down action, will be a major component of political crisis. What mitigation is possible will have to come from the bottom-up. While expansions lead to political accretion -forming larger and more complex structures- contractions lead to the opposite – division into smaller polities at lower levels of complexity.

As expansion morphs into contraction, in accordance with the very exact same Ponzi logic that underlies our present financial crisis, institutions may collapse along with other higher order structures. While they are eventually to be replaced by something much simpler from the grass roots, to serve their essential functions, this does not happen overnight.

The psychology of contraction may well inhibit the formation of effective new institutions, even much simpler ones, for a long period of time. The psychology of contraction is not constructive, and leads in the direction of division and exclusion as trust evaporates. Unfortunately, trust – the glue of a functional society - takes a long time to build, but relatively little time to destroy.

Elites (top predators) will have a smaller peripheral pool from which to extract the tithes they have come to expect. No longer able to pick the pockets of the whole world, they will very likely squeeze domestic populations much harder in a vain attempt to maintain the resources of the centre at their previous level. This will be very painful for those at the bottom of the pyramid, who will be asked, told and eventually forced to increase their contributions, at the very moment their ability to do so declines sharply."