Paul Krugman (NYT): The Good News

[Dudley_DUright]

I've heard it said that I should try, just once, to write something upbeat. Honestly, on the domestic front it's hard. Yes, the business cycle is looking up — but with the budget out of control, pork-stuffed legislation making its way through Congress and the extractive industries making environmental policy, we seem to have lost the ability to govern ourselves. Did I mention civil liberties?

But if I take the global long view, there's still a lot to cheer about.

When I went to graduate school, almost 30 years ago, I initially thought about specializing in development. After all, there is no more important topic in economics than how to raise the standard of living of the world's poor.

But in the mid-1970's, development economics was just too depressing to pursue. Indeed, it might as well have been called non-development economics. No third world nation had made the transition to advanced-country status since 19th-century Japan. Circa 1975 it seemed that the club of nations with decent living standards was no longer accepting new members.

Now we know that the club isn't that exclusive, after all. South Korea and several smaller Asian economies have made a full transition to modernity. China is still a poor country, but it has made astonishing progress. And there are signs of an economic takeoff in at least parts of India. I'm not talking about arid economic statistics; what we've seen over the past generation is an enormous, unexpected improvement in the human condition.

more...

http://www.nytimes.com/2003/11/28/opinion/28KRUG.html?hp

[papau]

1. Not doing what the World bank/IMF/ and US "free trade" pays off!

Seems that our US Corporate types forcing other countries to allow their corp's subs to run the other country's economy is not only being resisted - but is resulting in some good economies developing in the countries that do resist!

Could our corps and the US gov they now own be motivated by "greed" more than by any desire to improve human life?

What a thought!

[JohnyCanuck]

2. So what Mr. Krugman?

But none of this cancels the fact that over the past 25 years more people have seen greater material progress than ever before in history. That's something to celebrate.


With the rest of the world becoming Western type consumers, it's all quite likely to come to a grinding halt in a few years anyway when the cheap oil starts to run out.

The civilization we live in today is based entirely on hydrocarbons (by which term I mean both oil and natural gas). The energy which runs our technology is derived from hydrocarbons. The energy which does our work is derived from hydrocarbons. The energy which powers our homes, our transportation and which generates our electricity is all largely derived from hydrocarbons. All of the plastics which surround us with consumer goods are derived from hydrocarbons. Our produce is fed with hydrocarbon-based fertilizers and sprayed with hydrocarbon-based pesticides. Every person in the US has the energy equivalent of a dozen slaves working for him or her.

Why this dependency on oil? Simply put, there is no other energy source which holds as much energy per unit. The only exception to this is uranium, which is dangerous, difficult to work with, and far too rare an element to ever provide for more than a small percentage of our energy needs. 1 Even the highest grade of coal only holds about 50% as much energy as an equivalent quantity of hydrocarbons. 2 Renewable energy resources can provide nowhere near enough energy to meet our current needs.3 Fusion remains, as ever, just beyond our grasp. The highly touted hydrogen fuel cells are not an energy source but a form of energy storage; the energy contained in the fuel cell must be generated from another source. 4

<snip>

Global production curves have also been in existence since the 1960s. They have been refined as data on oil resources is revised; yet the timing and length of the peak have varied little through the years. Global oil production peaked sometime in this past year and will begin to decline within another five years. Production will peak at a maximum of 90 million barrels per day; however, demand stands at 75 million barrels per day currently and will rise by 2.5 % per year to 100 million barrels per day by 2010. 6

This is the composite global picture. To better understand what is happening, we have to compare various oil producing regions. In doing this we see that, except for the Middle East and the Caspian Sea Basin, the rest of the world has already peaked, and most oil producing regions are now in decline. The Middle East and Caspian Sea regions are not expected to peak for at least several years to come. With the passage of time, all countries will vie with each other for the oil of these regions, vying for the survival of their civilization. And whoever controls the oil production of the Middle East and Caspian Sea regions will control the world. 7


The Background is Oil by Geologist Dale Allen Pfeiffer

As oil and natural gas production decline, so will the economy and our technological civilization. Without oil and natural gas modern agriculture will fail, and people will starve. Without oil and natural gas, industry will grind to a halt, transportation will be grounded, and people in northern climes will freeze in the winter.

Scientist Richard Duncan has created a model that has so far gone unrefuted. His model states that technological civilization cannot outlast its resource base, particularly its energy resource base. Once this resource base is exhausted, technological civilization will be forever beyond the grasp of life on a particular planet. Duncan makes his model readily available to anyone who wishes to test it in the hope that someone will be able to successfully refute the model. To date, no one has done so. (See "The Peak of World Oil Production and the Road to Olduvai Gorge" http://dieoff.com/page224.htm)

You see, there is a lot more at stake here than just a continuation of the Cold War or U.S. imperialistic greed. There is enough energy remaining in the world right now for us -- the people -- to take control and ease ourselves into a democratic, egalitarian, stable-state society. Or there is enough energy for the elite to build a feudalistic, fascist, police state with themselves at the top. This is the choice facing us right now, and this is what is truly at stake.

IS THE EMPIRE ABOUT OIL? by Dale Allen Pfeiffer



Over the weekend of February 22-23, the U.S. price of natural gas doubled, from $6 to $12. West Texas Intermediate crude oil jumped from $20 per barrel a year ago to $37 on February 24. Even without a war in Iraq, there is now a major problem with the world energy supply.

World oil production may have peaked in the year 2000. Production in 2001 and 2002 was lower, and 2003 is not off to a great start. The problem is production capacity, not reserves or resources or potential. I can't say at the gas station, "Fill her up with reserves." World oil production is around 67 million barrels per day and the current unused capacity is around 2 million barrels per day, mostly in Saudi Arabia. Because of declining production in the rest of the world, opening all the valves wide open in Saudi Arabia after 2004 probably would not bring the world total back up to match the record year of 2000.

The precedent is a prediction in 1956 by M. King Hubbert that U.S. oil production would peak in the mid 1970s. Production did peak in the 1970s and Hubbert became something of a folk hero. The curve of oil production with time became known as "Hubbert's pimple." Several different petroleum geologists are now using Hubbert's methods to analyze world oil production. One oddity may be repeating itself: the center of the best-fitting smooth curve to U.S. production falls around 1974, but the single year of greatest production was 1970. Similarly, the smoothed mathematical peak of world production will probably be in 2004, but 2000 may stand as the highest single year.

Historians some years from now are going to get the giggles because my 2001 book (Hubbert's Peak: The Impending World Oil Shortage) failed to identify the year 2000 peak, even after it happened. My book attracted some criticism because it was too gloomy; turns out I wasn't gloomy enough. Back when I expected the peak to arrive around 2004, the thought of life in the post-peak years was frightening. So what has happened since the peak year 2000? More than a million jobs lost in the U.S.A., many retirement funds wiped out, government budget surplus reduced to deficit, interest rates near zero unable to jumpstart the economy. Even the loss of the World Trade Center was a Middle East byproduct. It exceeds my worst fears.


Hubbert's Peak, The Impending World Oil Shortage by K.S.Deffeyes

[durutti]

3. More material progress...

Yes, but for whom? Standards of living in the U.S. and in the Third World have declined over the last 30 years. Wealth inequality is greater than at any point since the 1920s.