Posted Jan 4, 2009 by Richard Heinberg
Remember the wall that environmentalists (like the 1972 "Limits to Growth" authors) have long been saying that industrial society would eventually hit? Permit me to make the formal introduction: Industrial society, meet wall; wall, meet industrial society.
It's understandably taking a while for the recognition to seep in. We are not accustomed to seeing every indicator of economic well-being, in virtually every country in the world, slam into reverse over the course of a few short months. I still have random conversations with businesspeople and bankers who say we've hit bottom and recovery is at hand; in their view, this is just another business cycle. I see things a bit differently: to my eyes the world situation looks like a slow-motion film of a train wreck, and the sheet metal at the front of the locomotive has only just begun to crumple.
Everything we thought we knew about the economy is suddenly wrong. Regarding China, we are accustomed to hearing of a new power plant being constructed each week, of energy consumption growing at a rate of 10 percent per year or more, of hordes of farmers from the western provinces rushing to the coastal cities to get manufacturing jobs so they can buy refrigerators and cars. The current reality: Chinese factories are now closing by the thousands, workers are rioting and leaving the coastal cities to return to their farms, energy consumption is actually declining.
In the US, vehicle miles traveled (VMT) are falling dramatically for the first time since records have been kept. During past recessions or gas price spikes, people bought smaller cars or drove slower; now they're just not driving. Explanation? The use of public transit is up, but so is unemployment: people without jobs don't commute to work. And deliveries of raw materials and finished goods are way down, so trucks are driving less, too. Gasoline and diesel consumption is down. Nobody's buying cars—large OR small—and as a result GM, Ford, and Chrysler are on deathwatch (even the Japanese automakers are reeling). Retail businesses are closing so fast that it's tough to keep track of who's still open and who isn't.
Globalization was the one trend we could all count on in perpetuity (the world is flat, remember?), but now every metric of global trade is plummeting, and national leaders are worrying much less about lowering trade barriers than they are about how to protect their domestic economies from the cross-border plagues of currency collapse and banking failure.
Within a year or two we may even begin to see world population growth go into reverse—though not because of policy shifts.
We are in a new era. Welcome to the conclusion and consequences of the industrial growth bubble.
It's not the end of the world—yet. There is still opportunity to manage economic collapse in such a way as to lay the groundwork for a recovery to low-flow sustainability. But not if we concentrate our efforts on denial, blame, or the propping up of old institutions and industries that have no chance of survival—all of which are the obsessions of our current leadership.
A new economic world requires new institutions and new thinking. These will take a while to emerge. We can lay the conceptual groundwork now (as the ecological economists and localists have been doing for some time), but implementation will require cool heads and collective effort.
Meanwhile, individuals will need to protect themselves as best they can by developing social and practical coping skills: know your neighbors, garden, repair, make, and make do.
It would be nice to be able to offer a cheerier New Year's message, but here we are. It's more important to have a realistic view of our situation and prospects. It is nevertheless possible to hope for the best within those constraints, and I certainly do: 2009 is going to be a challenging year, but may you weather it well!