Why A Finite World Is A Problem
The world is running short on resources, DU'ers. I personally believe that this "dark monster of reality" is behind nearly all of the total dysfunctionality and war and financial and economic absurdity that we have seen and had to endure these last 30-or-so years. And it is only going to get worse.
4. A finite world means that globalization will prove to be a major problem, because it added proportionately far more humans to world demand than it added undeveloped resources to world supply. China was added to the World Trade Organization in December 2001. Its use of fuels of all types skyrocketed quickly soon afterward (Figure 3, below). As noted in Item 3 above, the turning point for prices of fuels and metals was in 2002. In my view, this was not a coincidenceit was connected with rising demand from China, as well as the fact that we had extracted a considerable share of the cheap to extract fuels earlier.
5. In a finite world, wages dont rise as much as fuel and metal extraction costs rise, because the extra extraction costs add no real benefit to societythey simply remove resources that could have been put to work elsewhere in the economy. We are, in effect, becoming less and less efficient at producing energy products and metals. This happens because we are producing fuels that are located in harder to reach places and that have more pollutants mixed in. Metal ores have similar problemsthey are deeper and of lower concentration. All of the extra human effort and extra resource expenditure does not produce more end product. Instead, we are left with less human effort and less resources to invest in the rest of the economy. As a result, total production of goods and services for the economy tends to stagnate.
In such an economy, workers find that their inflation-adjusted wages tend to lag. (This happens because the total economy produces less, so each workers share of what is produced is less.) Companies producing energy and metal products are also likely to find it harder to make a profit, because with lagging wages, consumers cannot afford to buy very much product at the higher prices. In fact, there is likely to be the danger of an abrupt drop in production, because prices remain too low to justify the high cost of additional investment.
6. When workers can afford less and less (see Item 5 above), we end up with multiple problems:
a. If workers can afford less, they cut back in discretionary spending. This tends to slow or eventually stop economic growth. Lack of economic growth eventually affects stock market prices, since stock prices assume that sale of their products will continue to grow indefinitely.
b. If workers can afford less, one item that is increasingly out of reach is a more expensive home. As result, housing prices tend to stagnate or fall with stagnating wages and rising fuel and metals prices. The government can somewhat fix the problem through low interest rates and more commercial salesthat is why the problem is mostly gone now.
c. If workers find their wages lagging, and some are laid off, they increasingly fall back on government services. This leaves governments with a need to pay out more in benefits, without being able to collect sufficient taxes. Thus, governments ultimately end up with financial problems, if extraction costs for fuels and metals rise faster than can be offset by innovation, as they have been since 2002.
7. A finite world means that the need for debt keeps increasing, at the same time the ability to repay debt starts to fall. Workers find that goods, such as cars, are increasingly out of their ability to pay for them, because car prices are affected by the rising cost of metals and fuels. As a result, debt levels need to rise to buy these cars. Governments find that they need more debt to pay for all of the services promised to increasingly impoverished workers. Even energy companies find a need for more debt. For example, according to todays Wall Street Journal,
Last year, 80 big energy companies in North America spent a combined $50.6 billion more than they brought in from their operations, according to data from S&P Capital IQ. That deficit was twice as high as in 2011, and four times as high as in 2010.
At the same time that the need for debt is increasing, the ability to pay it back is falling. Discretionary income of workers is lagging, because of todays high prices of fuels and metals. Governments find it difficult to raise taxes. Fuel and metal companies find it hard to raise prices enough to finance operations out of cash flow. Ultimately, (which may not be too in the future) this situation has to come to an unhappy end.
Governments can cover up this problem for a while, with super low interest rates. But if interest rates ever rise again, the increase in interest rates is likely to lead to huge debt defaults, and major financial failures internationally. This happens because higher interest rates lead to a need for higher taxes, and because higher interest rates mean purchases such as homes, cars, and new factories become less affordable. Rising interest rates also mean that the selling price of existing bonds falls, potentially creating financial problems for banks and insurance companies.
http://ourfiniteworld.com/2014/01/02/why-a-finite-world-is-a-problem/
hunter
(38,310 posts)I think this universe is hostile toward exponentially growing foolish species, especially supposedly "intelligent" species like ours, and this is a good thing.
Wise civilizations survive, foolish civilizations collapse before they leave their planetary nurseries.
A galaxy full of insane monkeys flying around faster-than-light and "consuming" everything in their paths is not a pleasant vision. Worse, imagine individual humans capable of doing much more damage than a drunk oil supertanker captain, or a suicidal religious freak flying an airliner into a skyscraper...
This civilization seems to be at the "Dude, hold my beer and watch this!" stage, or the "fourteen year old gangster with a gun" stage, very well on it's way to a Darwin Award.
Whether of not we survive; if we end up as a wise race among the stars, or as a dead confusing layer of toxic trash in the geologic record, evolution is still a wonderful process.
Jessy169
(602 posts)Aliens monitoring the broadcasts emanating from planet earth are very likely to conclude that we are a primitive, hostile and absurd species that must be avoided.
Nobody can accurately predict what future lies in store for humanity. But I envision a future world where intense pressures brought on by our own greed and stupidity lead to a much smaller population where Darwin's Law hangs over every human life like a razor-sharp blade, ready to strike at any display of unsuitability. Eventually, I like to think that the survivors become much more intelligent, much more in tune with nature and with a religion of sustainability and worship of nature. Perhaps in a million years, we will have evolved into a much more advanced species.
There was a movie with Keanu Reeves -- The Day the Earth Stood Still -- where an alien came to earth with the intent to destroy all humanity in order to protect and preserve Planet Earth. In the end, he determined that humans have a saving grace, and that we are AT that juncture of history where we either reform ourselves based on our best traits, or we perish. He determined to let humanity have a chance to prove itself worthy of survival.
We are AT that point in history. The outcome is uncertain. The judgment day is probably not very far in the future.
AverageJoe90
(10,745 posts)Honestly, even if we may fuck up from time to time, there are probably species out there that could, or perhaps already have, done far worse than us.....and perhaps even survived as well. (Or maybe not)
4dsc
(5,787 posts)and we are seeing the results on a daily basis. So the question should be when will you believe and when will you change your habits.