Friday, May 29, 2009

Ah, experts! And our Dear Leaders too (of course!)

How many of you watch the news, hands clasped to your swiftly beating hearts, as our betters — the captains of our fate — explain so clearly how their plans will save us? We're going through it all with swine flu at the moment. Experts are interviewed and of course they know something which they're happy to share with us. The Tamiflu factory is chugging out millions of doses to make us all safe at home and at work. A ship full of anxious tourists is sailing up and down the coast while our experts try to determine whether it represents a threat or menace to the health of us all, or to its own passengers, or both.

What is this all about? Why does it matter who says what? Does someone need to be blamed for the situation? Who is busy doing the saving? Why do we care?

We care if we believe that if we do the right thing, everything will turn out fine. And doing the right thing for many of us consists in some simple or perhaps not so simple, abstract, narrowly focused task that someone we have never known has decreed should be done and we must do. Every week day.

We may have only the sketchiest idea of how the whole system which supports us works, but we are sure it should. After all, it always has! We may have a fair understanding of what it is we do, but no idea of what our neighbour does. But we may believe that most of our our neighbours are busy like we are, keeping the Show on the Road. And although we have no real understanding of how the system actually works (although we may think we do!), we are sure there are special creatures far above us who do understand, who with knitted brows and stern expressions, steer the ship of State with its nervous passengers safely through the Storms of Life.

But what if they really don't know? What happens when they can't keep the ship off the rocks? We've invested rather heavily in this game: what if it turns out to be a dud? How many of us can build a new world and then survive and prosper should the need arise?

So many of us are fenced in by narrow specialities, abilities, desires, prior investments. We are fragile.

Don't lean on something for support which you don't really understand. Food comes from the supermarket, and fuel from the service station on the corner — for the moment. But no-one can tell you if it will continue. It's all too complex, fragile and unsustainable to go on much longer uninterrupted. No-one controls it or understands it. No expert, no leader.

So watch the news as though you're seeing Martians, not fellow humans. Get out of debt, grow a garden, learn to fix your own stuff, enjoy your friends and family, help your neighbours and keep clear of trouble as much as you can. Because in the end it's your life and you've got to take control of it.

If you leave it to the experts (and our dear leaders) you'll most likely be toast.

Thursday, May 21, 2009

New times, new games

We will get caught up in trying to save the unsaveable. The more we have invested in some arrangement, no matter how ill-fitting it may be, the harder we'll fight to preserve it. Of course our society is full of change and we've made a virtue of it for years, but the changes which kill off inappropriate small businesses are one thing (the individuals involved are generally too powerless to fight reality for long): those threatening powerful interests are another. So the battle will be drawn out, ridiculously, as everything the powerful can lay their hands on is thrown at the task of propping up the dead arrangements to which the powerful owe their place. The wars in Afghanistan and Iraq, the car industry, the big banks, the building industry, airlines, newspapers. We'll all be told that life simply won't be worth living if these things shrink or disappear.

But of course a new generation will be born who have no knowledge of any of this stuff. They will take the world as they find it and invent new meanings and purposes for themselves. This will happen no matter what anyone now tries to do. The question then becomes, what will the values of a post-cheap energy world be? Who will champion these values? Who will fight against them?

The world is never a simple place. Almost everything that has ever been continues to exist at some level, but some trends and types rise to dominate and some formerly dominant fade. The dominance of our now inappropriate industrial living arrangements, the very complete dependence upon them by the majority of the population in countries like Australia and the huge mental and physical cost of building and maintaining them will create great conflict within society and between nations, and within the individuals charged with maintaining the system. Something too complex to fully understand, so all-powerful and so impressive will command the loyalties of millions even as it destroys them. Many of those who understand the folly of trying to maintain the system will see no alternative but to support it in some more limited form — perhaps limited to themselves and those closest to them.

The new thinking will come from those who feel they have little stake in the system as it is, even if they are deluded in these views. Groups or individuals who are marginalised always find it easier to break with the past or with widely accepted beliefs which have lost their utility. The uneducated, unemployed underclass will be the breeding ground for the new world, and so will a small fraction of the middle-class. It will be another cycle of the conflict which has characterised our world for the past few hundred years, one in which I was caught up in the 1970's where I suddenly saw the emptiness of what I'd formerly believed (Heroic Materialism) and I dropped out into the Counter-Culture, as we then called it. We thought we were the new hope for the World, but we had quite a few things wrong, not the least being the timing!

The Counter-Culture has been largely absorbed back into the society which gave it birth. It has changed some things. There is now a clear consciousness of the environmental price we pay for our way of life amongst a significant minority of the population in a country like Australia. But overall the cheap energy party has continued, as it was bound to do until the energy got too expensive. That's where we are now.

Amongst those who think a lot on these matters there tends to be a view that if only we could communicate the urgency of the situation to the larger world, then we could start to get the situation under control. I don't think so myself. I think only a small percentage of citizens, even in a well-educated country like Australia, will ever understand what's going on (and that's not to say they would then know what to do about it!). And even if the majority understood, action to deal with the problems is another matter.

I think it is going to be very messy. That is, I don't think we are going to have a situation of mutual understanding. I think we're going to have a Tower of Babel instead. But new and lasting arrangements will emerge eventually, when all the shouting and fighting has wound down. Don't be holding your breath waiting for it though. Look how long Rome took to fall.

The new successful games will emerge at the margins. States will hollow out quite quickly. All kinds of sub-groups will jostle for space inside the hollowed out State. Most will fail. But the successful ones will spread as the monastic movement spread through Europe after the collapse of Rome.

Wednesday, May 20, 2009

Living the life

Bad-tempered blasts against stupidity at the top are easy and fun. The hard thing is to grind out a new way of doing things that's right for now. What am I doing?

A number of things which are interlinked but which in themselves seem like platitudes.

First we are out of debt. We sold our house and paid everyone we owed money to. We bought a block of land thinking we'll build again, but we didn't go for broke, getting something reasonably cheap. We've stalled on starting a new house though until we get the earning side of the picture right.

We have a retail plant nursery in town which we've been building up over five years. It seems to have reached a limit at the moment, due partly to the restricted size of our market and partly because people are nervous about spending. We've added a florist business to the nursery because there was a demand for it and that is growing rapidly, but it's all fairly insecure as no-one has to buy plants or flowers. But we're thinking about how to keep it all working.

We also have a factory which we rent at the bottom of the town. There we have a workshop and storage for nursery stock. One of our sons and I are setting up some fish-breeding tanks in it. Our son has a friend in the aquarium business in Melbourne who is advising him on how we can run it profitably and it's a fairly low-risk business because we already had a lot of the gear we needed plus the premises.

My wife and I live in a very modest rented house which we've been sharing with one of our other sons and his partner. Renting is much cheaper than buying. This has kept our living costs low. We have two four wheeled vehicles but we don't drive much because all our commutes are less than a kilometre. Also I have a Cargo Cycle, for which I'm an agent and which I use a lot instead of driving. I've got an ex-postie Honda motorbike too but haven't used it much.

This is the toughest time of the year financially with the nursery and we've got to get through to August when the Spring break kicks in and sales double overnight.

I had a business for years designing and building educational exhibits but that has been quiet, so I'm thinking about other opportunities for my workshop which might come along. Unfortunately a lot of the imported cheap stuff is currently impossible to compete against, but I'm convinced that will change over the next few years.

The big thing is to avoid entanglements and obligations which may become impossible to service. No debt! Or at least the shortest term debt we can manage when we need it. We don't have an overdraft or line of credit. We are in the black even with the trade accounts for the nursery, although only just at the moment.

How we'll go longer term is difficult to say. At an individual level I used to be quite confident in my abilities but I know now how much we depend on people and events beyond our control. That's why it's important to live the right way in the right place! Also we are becoming a bit more vulnerable health-wise, being in our late fifties. There are limits to how much you can take on. But I think we are not too badly off in an overall sense, although below the radar financially.

I'm spending a fair bit of time trying to get things right at a community level. There are lots of reasons why that can work here. We're not dominated by powerful outside interests, we have good relationships within our local area, there are plenty of talented people living here, we have a diverse local economy. It's not perfect but it could be a lot worse. And it suits me too.

The Great Bifurcation

A headline from today's ABC News online: RBA subscribes to 'green shoots' theory. Have we ever been in such a time where the most august of experts, heirs of the great Western intellectual tradition, have seemed so utterly threadbare? And what are these guys basing their optimistic forecasts on? The Great Savior of us all, China! After all we got through the financial crisis of the late nineties didn't we? China saved us then!

But what do these people really know about China? What do the Chinese know about themselves? We can pretty quickly disappear into a hall of mirrors here. So let's just step back from this for a moment and look at this graph of World Oil Production to 2100…(you can click on this graph after you've read my bit to go to a very important article at The Oil Drum)
Now see the vertical dotted line roughly in the middle of the graph? And see the little halo at the top? That's where we are now. And the slope down to the right is where the World as a whole is headed as far as oil availability is concerned. And how does Australia rate in the vulnerability to oil supply shocks stakes? According to this article in "The Washington Times" Australia is less secure than the United Kingdom for vulnerability due to dependence on imported oil. And what does our economy completely depend on to maintain our accustomed prosperity? Yes my dears, it begins with the letter "O"…

Now it may be that the Reserve Bank of Australia is run by a bunch of swashbuckling risk-takers who habitually play double-or-nothing with the country's cash. Or it may be run by a crew of slippery-pole-climbers who have no ability to see beyond the very narrow slice of reality which they learned about all those years ago at Uni.

Does it make any difference if it's one or the other? I don't think so in the long run. But either way, the RBA certainly doesn't seem to be run by people I have much faith in. Somehow I don't think they have any idea of our dependency on oil imports and our rapidly increasing vulnerability in that regard. And I think their view of the world doesn't extend much more than a few months into the future. That's probably fine if you're managing the exchequer of a nomadic tribe in some primeval desert, but doesn't crack it for me when you're talking about managing a complex industrial nation in a rapidly changing environment.

We are at the very edge of titanic changes in our world. Australia is still jingling along as if the nineties had never gone away. Our leadership may have glimpsed the void ahead but has decided to retreat into a kind of childhood playtime where we all play housies and don't look up at the menace rising around us on all sides.

Don't be silly buggers and play along with them. Look after yourself. Get a grip of what the real game is going to be. This is the Great Bifurcation — the decisive split from the world we've all grown up in — and those who don't see what is coming towards us will be destroyed.

Monday, May 18, 2009

The silence

I've been quiet for the last two weeks. I've been exhausted in a new way (for me): I simply haven't been able to access my mental faculties in the usual manner. It's been a self-inflicted exhaustion. A friend had written a play which I thought was good and which had a main character I felt I could become. But I also wanted to keep working and blogging through the whole thing. So I did. All went well until about a week after the show ended. I did a post on May 1st in my usual manner, and then kaboom! I stopped functioning as Lloyd. I've been able to mimic normal human behavior with those who don't normally see too much of me, but to those who spend a lot of time with me such as my wife I've been, well — subdued, a shell.

Anyway I'm slowly coming back. Maybe I needed some time out to get another perspective in any case. I've certainly had that. With no "higher" mental functioning for a couple of weeks I've been effectively living the post-industrial life. Is it good?

It's OK if you don't have too much to do.

But I've also come to realise how busy we make ourselves. I'm talking about the middle class here by the way — the ones who shoulder the burden of keeping the Civilisation Show on the road. The middle class needs to show enthusiasm and do the right thing (according to who?). The middle class needs energy and purpose in order to delay gratification, and to work those longer hours keeping the less focused up to the mark and on the job. But the Game is up even if most can't see it yet. And what will the middle class do if we can't keep going as we have?

Here in my little town we have a lot of older, burned out FMC (Former Middle Class). Some keep dreaming of one more round in the Big Time but most know we're shot. We're wandering around in a daze a lot of the time. The younger people are more energetic and less nuanced — more easily enthused and co-opted — for now. The best go off to the city looking for the bigger Game, to return for an occasional visit. But what shall we do when we can all see the Game is over?

We've mostly been able to find ourselves a place in the world in the past fifty or so years, and it's been easy enough to find reasons for the failure of those who haven't. What happens when finding a place in the bigger world becomes an exceptional struggle? Will new, local, games come into being more or less spontaneously?

It's going to be an interesting time. Try and stay tuned!

Monday, May 11, 2009

The Chinese begin their move

From PRIME-TASS via Dmitri Orlov…"It's official: The government in Beijing has announced that the Yuan can now be used in international trade."

I was thinking it would be a bit longer but the Chinese are quietly making their moves. I wonder how long before the rest of the Industrialised World catches on?

Friday, May 1, 2009

Crisis? What crisis are you talking about?

If you were facing a major financial crisis which you didn't fully understand and had little control over, and you were running the government of a small, isolated country crucially dependent on export trade for income and energy supplies, what would be your priorities? This is what Kevin Rudd is doing…
From ABC News: The Government is set to bolster Australia's military presence in the region with a huge funding increase to be outlined in tomorrow's Defence white paper.

Submarines, ships and cruise-missile firepower are all being upgraded in anticipation of a shift of power in the Asia Pacific from west to east.

As reported by the ABC in February, the white paper orders 12 new submarines be built in Adelaide in the single biggest defence project in the nation's history…

And what about our State government in Victoria? Aha! More pure genius…
The Victorian Government will build the Frankston bypass under a public private partnership (PPP), regardless of whether it receives federal funding.
The Victorian Government says almost 5,000 jobs will be created as it intervenes in five more large construction projects…The new projects to be fast tracked include an upgrade to Avalon airport…

I watched this on ABC TV news tonight, complete with Lindsay Fox (the owner of Avalon airport and a man who I would characterise as well connected) looking like the cat who'd got the cream.

It looks as if the pillagers of the system are getting down to some serious work. Peak oil rendering investments in airports and freeways useless? Are you a Commie or something? Prioritising investment to reduce our critical dependencies on foreign oil? Don't worry, technology/our great and powerful friends/God/Santa Claus will provide.

Meanwhile, over at The Oil Drum, Gail the Actuary posts the real story
At this point, it seems to me that we are in the lull before the storm. Demand has dropped, because society could not afford high priced petroleum products, but the supply has not yet declined to reflect the lower price level. Stimulus packages have been put in places, but the cost has not yet filtered through the system. People are hopeful for a rebound, and this is reflected in the stock market prices.

To me, the most vulnerable system is the international monetary system. As long as countries trust each other, trade will continue as usual. Once this starts breaking down, it seem likely that countries will need real goods to barter, rather than relying on promises to pay. A breakdown in the international monetary system could cause a major interruption to trade, and start a downward spiral. It seems like this could happen at any time.

What do you think warrants the most effort and attention?