The economy is shrinking.  And everything that depends on it.  Including the population.

Lately, I have been listening to Nate Hagen’s weekly podcast, The Great Simplification.

 He explains that his podcast explores the systems science underpinning the human predicament. Conversation topics span human behaviour, monetary/economic systems, energy, ecology, geopolitics and the environment.  The goal of the show is to inform more humans about the path ahead and inspire people to play a role in our collective future. Guests will be from a wide range of scientists, leaders, activists, thinkers, and doers.

We have spent the last century harnessing enormous amounts of fossil energy to build a world of complexity like nothing seen before. In the coming century, humanity will experience A Great Simplification, beginning with the onset of financial and economic turbulence, followed by contraction. The ensuing simplification will be among the most significant events ever experienced by our species. 

Those who look through a systems lens can serve as early visionaries of a simpler life with new ways of relating to technology, to consumption, to each other and to Earth’s ecosystems. 

Our system –  and the components, processes and interactions that comprise it  – is incredibly complex. On this podcast we will try to ‘simplify’ the ‘great’ issues of our time to expand the number of people making sense of our reality.

To see the wide range of experts who have been involved and listen to what they had to say you should spend time browsing and listening to them on the web.

As a result of my browsing, I conclude that there are two outstanding questions.  They have been summarized by Nate:

  1.  What does a more sustainable future look like?
    and
  2. How to get there from here?

The answers depend on your view of the future of the economy  Is it growing or shrinking?

I believe that the UK economy is shrinking.  But it is seen to be growing.  Because Government borrowing is used to prop up the economy

However, the national mindset is oriented toward growth.  Which it is assumed will be resumed sooner or later.

So the UK is now flummoxed.  “Everyone” – from the grassroots to the establishment – is behaving in a state of fuddle.  The plethora of unemployment, strikes, inflation, arbitration, cost of living, et al, previously held together by an underlying belief in growth, is no longer working.  A state which will get worse.  Heading towards some kind of revolution.  Hopefully non-violent.

In the end.  The sooner the better.  The light will dawn.  The growth which knitted everything together no longer works.  Which will put a different slant on pay negotiations.

Maybe the Government understands that this is how things are.   That would explain the current stalemate.

So, what will a more sustainable future look like?

It will be an evolutionary process.

The continuation of the process that has been underway for the past 20 years or so.  Albeit not recognised as such.

A process of endless shrinkage of the economy and everything which depends on it.   Including the population.

It is an evolutionary dismantling process of delayering and shrinkage.

It is already happening.  The NHS and the public transport systems are dismantling.

The underlying driving force is the declining use of fossil fuels.

Does this mean that a day will come when the global future will look less threatening?  Because emissions will come down naturally.  Is this a sustainable future?

If so, maybe the focus should be on trying to minimise the dreadfulness of  a shrinking world population.  A more humane approach than spending money on renewables.

The natural evolution of things will save the world. But not the population.

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Going back to firewood

Our heat pump reached the end of its life last year.  25 years old, which is better than expected.  It will cost £15,000 to replace.  At our age, in our 80s, not worth doing.

So, we are using electric radiators in the kitchen and bedroom and an open fire (Baxi) in the lounge, at weekends.

We are burning dried wood and are pleased with the result.  We had forgotten the homeliness and warmth of an open fire.

We can feel the flaming radiant heat of the fire 15ft away.

It reminds me of my childhood in the 1940s.  When we sat around an open fire in a cold drafty room with single glazed ill-fitting windows.  And were comfortable.

We have forgotten firewood as an alternative to gas and electricity.  May be the only source of domestic heating eventually.

The opening chapters of Thomas Hardy’s novel The Woodlanders provide an insight into a 19th century wood based local economy.

It now makes sense to heat ourselves instead of our homes.  And it is better for the planet.

The peaksurfer blog makes the point that:

Going back to firewood for heating and cooking may seem like the wrong direction, but it is sustainable into the indefinite future in ways that energy-intensive steel, aluminium and rare earth devices are not. Managed as mixed-age, mixed-species ecologies at a village scale, forests are full employment industries. They make their own replacement parts and clean up their own waste. They sequester carbon deep in their root zones over millennial time periods. Perhaps most importantly, they make sunlight reflective aerosol clouds.

 Thank goodness we have two chimneys.   We nearly didn’t because, when the house was designed 25 years ago, our energy consultant tried to persuade us not to have them.  Chimneys were then infra dig.  And still are.

If I had to brief an architect now.  To design a house to last 25 years.  Goodness knows what I would ask for.

Probably best to live in rented accommodation for the time being.

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Forgotten Clothing: Hip Scarves

I am becoming less convinced about conventional thinking about keeping ourselves warm.

Here is a example from the No Tech Magazine:

Forgotten Clothing: Hip Scarves

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Prog Gnosis – By Single Helix

This is the first advert on this website.  Of a production by one of our subscribers.

https://6391fc2164405.site123.me/

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A notable milestone was passed in 2022 when, for the first time, more than 80,000 different people from around the world – to be exact, from 154 countries – visited Tim Morgan’s Surplus Energy Economics website

So, the pieces written by Tim Morgan and the hundreds of responses to each one are reaching around the world.  But not being talked about in polite places, such as this think tank.

The Overton Window provides a nice explanation of why a shrinking economy is politically unacceptable at present.

The public is not yet aware that it is how things are.  So, the idea is unthinkable.

It has been suggested that there are  six degrees of acceptance of public ideas:

  1. Unthinkable
  2. Radical
  3. Acceptable
  4. Sensible
  5. Popular
  6. Policy

Global warming began to be seen as radical when The Kyoto Protocol became international law in 2005.  Now, in 2022, it is being half-hardheartedly included in UK policies.

A shrinking economy, with no more growth, is unthinkable to most people whose jobs and prosperity have a vested interest in growth.

No government would dare mention it publicly, or even talk about it behind the scenes, for fear of leakage into the public domain.  Just like the word ‘cancer’ was never uttered in polite society in my young days.

Economic shrinkage will eventually be seen to be  how things are.

A big jump from the old ways, bearing in mind all the hurdles involved.  Including abandoning the mindset of consumerism when the rising costs of essentials make discretionary spending unaffordable.  And the end of classical economics.

Sooner or later, economic shrinkage will fill the window of what the general public will regard as the way things are.  For this to happen it must be seen as inevitable.  How things will be.

It isn’t a left or right-wing fad or a quirky idea dreamed up by a counter-cultural no-growth movement.  It is reality.

It is now seen by an increasing number of thinking people to be inevitable.

In the meantime, if you want to know what is being written, but not yet being said out loud, you should read Tim Morgan’s latest piece.

 

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It’s ceasing to be possible for households to use cheap debt to live beyond their means

This comment by Tim Morgan, on his Surplus Energy Economics blog is interesting.

The link is to the piece where this comment appears, which will be of particular interest to investors.

I think my general point is about affordability compression. It’s ceasing to be possible for households to use cheap debt to live beyond their means – though that’s another issue that we need to think about* – whilst the costs of necessities are on a continuing up-trend. This means that discretionary consumption will fall, and businesses in discretionary sectors will shrink and, in many cases, fail. These businesses, in particular, will cut their ad spending, though businesses in most sectors are likely to see this as a comparatively easy way to cut costs. For households, it’s easier to cancel your news, entertainment or sport contracts than to reduce other outgoings.

Investors have noticed this where both mainstream and social media are concerned. Streaming seems not to be living up to expectations, and I’ve read that unit advertising prices are falling. The markets haven’t yet joined up all the dots on this for Big Tech, though no doubt they will. Ad-supported and subscription-based business models are extremely exposed to downside. Sports finance is particularly exposed – broadcasters often have multi-year, multi-billion rights deals which are only viable if revenues from ads and subscriptions keep growing or, at least, don’t shrink.

The overall credit picture, meanwhile, is worrying, and the declining proportionate role of conventional, regulated banks – ‘deposit-taking institutions’, in the jargon – is significant.

Fixed-rate mortgages are not retained by banks, but packaged and sold to investors – in the US, part of this is underwritten by the government. This reduces risk to banks, but transfers it to investors, important where the latter are leveraged. Meanwhile, various forms of consumer credit are now provided by NBFIs, known colloquially as “shadow banks”. If you buy something and pay for it in instalments, it’s likely that the credit provided by the supplier comes not from a bank but from an NBFI. Banks themselves seem to have sizeable exposures beyond their orthodox (regulated) lending-books. The data on non-bank (or should I say non-regulated banking) loans is incomplete, and delayed, and this sector, though partially monitored, is NOT regulated on a consistent basis (and I question how effectively it is regulated even within individual nations’ borders).

In short, there is enormous scope for financial failures outside of the conventional banking system, together, of course, with huge transmission risk. We do know something about proportional national risk where, if we ignore specialist financial centres like the Caymans and so on, the exposure league-table is headed by Ireland, the Netherlands and the UK.

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The silent threat lurking in British homes

Increasing energy bills have created the perfect conditions for mould

Blistering energy prices have created the perfect conditions for the rise of a particular blight across the country. Surveyors have reported a tenfold increase in calls from worried landlords and homeowners who have discovered damp and mould hiding in their ­properties – and threatening to cause chaos.

Older houses, from Victorian and Edwardian homes all the way up to those built in the 1920s, are most at risk, but mid-20th century builds also prove fertile ground for a problem that can have terrible effects on our homes and our health.

Gary Petrie of Kenwood Damp Proofing says dampness has been a more noticeable problem this year as people look to save money on energy bills.

“The colder weather came on quite suddenly,” he says. “We had a long warm summer and then the weather got very cold very quickly at a time when people were reluctant to use the heating. People are holding off putting the heating on as long as possible at a time when the weather has got very cold, so there is a noticeable uptick in damp problems.”

If the air inside the home gets colder it can hold less moisture, which therefore condenses on cold surfaces and causes damp. When the moisture soaks into internal surfaces, mould can suddenly start to grow.

It is perhaps natural to want to keep all the windows closed to retain heat in the house instead of turning the radiators up, particularly when household budgets are squeezed. But a lack of ventilation can make the problem worse.

Moses Jenkins of Historic Environment Scotland says: “If you reduce ventilation along with things like drying clothes in the home and reducing heat, you’re trapping a lot of moisture within the building, which leads to even more condensation.

So the worry is that we’re facing all sorts of different pressures coming to bear all at once.”

The Government’s most recent energy campaign recommends draught proofing as one of “the most effective ways to reduce your energy bills”, but some experts are concerned that this ignores the importance of ventilating the home.

“The Government’s recommendations for installing draught excluders only consider heat loss and don’t consider the vital role ventilation plays in preventing damp,” says Petrie.

“As far as mould prevention is concerned, draught proofing is only prudent if adequate ventilation is provided elsewhere, such as by suitable extractor fans. In the absence of adequate ventilation, dampness is likely to occur and preventing airflow. Blocking off chimneys, for example, can result in increased levels of dampness and mould forming.”

Opening windows for even a short period to immediately relieve humidity can help, as well as ensuring bathroom and kitchen extractor fans are functioning properly and kept on.

Low-cost air quality monitors can measure the moisture levels, which can indicate when to open the window. When drying clothes inside, a dehumidifier can also be used to control moisture.

Aside from the potentially serious adverse health effects of mould, when prolonged damp and mould penetrate the very structure of the home it can devalue your property. One surveyor based in Greater Manchester says severe structural damp can cost up to £10,000 to fix.

Brandon Wagstaffe, a surveyor for Atlas Survey & Building Services, does about five surveys a day. At the moment the majority are concerned with condensation and mould problems.

“Now I’m finding structural damp issues, such as damp penetration, rising damp or chimney salts, because salts are hygroscopic, meaning they draw moisture from the air,” he says. “So it’s affecting the price of the property as a result.”

It may seem prudent just to put a woolly jumper on and keep your hands off the thermostat, but heating the house to at least 18C and opening a window once in a while could stop mould in its tracks – as well as making the place more comfortable for everyone.

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The Renewable Energy Transition is Failing

The Renewable Energy Transition Is Failing

This reinforces my view that we should switch spending from producing renewables to preparing for global warming.

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Our busy website

Just to let you know orcop.com now has 1,086 subscribers and about 1,000 visitors to the site each week.

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Heading towards the end of our industrial economy

To put it in terms that even an economist might grasp, all energetic systems – including industrial economies – eventually burn themselves out.  Ours is no different.

That is how Tim Watkin’s latest post finishes.  Which set me thinking afresh about the future.

Maybe we should think about the end of our industrial economy.  Rather than saving the planet.

As the economy shrinks conventional unemployment will increase.

Discretionary businesses and employment will decline. To how it was in the immediate post-WW2 era.

Employment in essential markets will decline, as a result of increasing energy costs.

Total energy use will decline.  As a result of the decline, and associated emissions, the prospect of global disaster will become less threatening.

There will then be mass unemployment, declining prosperity and increasing food poverty.

The issue will then be what to do about unemployment

Eventually, the Government will become aware that the shrinking economy is unstoppable.

The time will then have come to switch the emphasis from saving the plant to saving the people.

It will be time for a paradigm change.

To what Nate Hagens has called “The Great Simplification”.

Attempts to reverse the growth-oriented industrial economy will be seen to be wasteful spending.  It is already shrinking.

Large-scale industrial agriculture will be in decline.   Related debt repayments will force landowners to sell their land.

Imagine if

  • To deal with increasing food poverty, the Government introduces policies which support small-scale farming and smallholding. Using minimal fossil fuel-based processes.
  • Redundant employees in shrinking discretionary markets switch to food growing, processing and marketing,
  • Redundant urban land is taken over by food businesses.
  • Local food economies develop, with associated support services.

A paradigm switch from the present industrial system to an agrarian system.  Taking years to evolve.  Maybe not so long?

I can imagine how employment will switch to the new paradigm.  But the rest of the paradigm is unimaginable.

With hindsight, I could not have imagined the future, back in the 1950s, when I had neither central heating,  a car, a TV nor a telephone.   It just happened.

The future will just happen.   There’s no point in thinking about it being at all like how things are now.

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