The Future Is Unemployment

[ParticleMan]

Any particular reason for this obfusticatory verbiage? It comes across an nothing but crass pseudo-intellectualism, and whilst such unlettered gibberish may impress the proletariat down the local boozer, it won't cut much ice here.

When I realised how insane this species is I left off trying to explain myself.

Follow along if you choose - or not.

[Boom Boom]

When I realised how insane this species is I left off trying to explain myself.

Follow along if you choose - or not.

Given that you are part of the 'this species' (however nominally) any judgement you make as to its collective sanity is invalid.

[ParticleMan]

Given that you are part of the 'this species' (however nominally) any judgement you make as to its collective sanity is invalid.

You've come at it in a roundabout way, my path was simpler - "The next guy over is no more sane than I".

A minute's introspection well spent, I thought at the time.

[Charlie The Tramp Returns]

The Future Is Unemployment

The only way the Bosses both Political and those who control the wealth can control the Peasants.

Poor old SamCam will not move into No 10 unless she gets a Notting Hill Kitchen like her present home. How much does a Notting Hill kitchen cost, I would hazard a guess of £30-£40k.

[ParticleMan]

thus the name of the game becomes a competition to lose the least money

Or to make the other guy risk more of it.

Or to make the other guy sell assets for something they believe to be oil-money, and isn't.

Texas hold-em.

But some of the chips on the table might be fake.

And there's a possibility the players and table itself might be too.

[Injin]

Or to make the other guy risk more of it.

Or to make the other guy sell assets for something they believe to be oil-money, and isn't.

Texas hold-em.

But some of the chips on the table might be fake.

And there's a possibility the players and table itself might be too.

Which might explain wny some of the freedom loving hoi polloi are becoming increasingly spcialised in saying what does and doesn't exist......

[aa3]

There won't be reform until the number of unemployed or the number of severely downgraded in income.. grow in sufficient size that they represent a revolutionary force. Or this is outright economic collapse

Right now even if 20% are unemployed and growing by a few percent a year.. that still means 80% are employed. Even if 2% more lose their jobs this next year, it still means 78% employed. Those 78% are sticking with their slogans that the unemployed are all lazy, scroungers, they only change their tune when they themselves become unemployed.

A further problem is the far above average IQ, ambitious people are succeeding hugely in this society. They can get through the hoops to become doctors, vets, accountants, lawyers, engineers etc.. So the revolutionary leaders which are always upper middle class people who want wealth and power, they are largely pacified. They can make £100k a year in this society easily.

With only stupid people you can't really organize anything. In fact they cannot even understand the problems, let alone conceive of solutions.

[aa3]

A prediction I made is that for babies born today, 50% will never have a job or steady income outside of welfare. Someone with 85iq is about as useful to modern production as a horse is. At one time we needed horses for their muscle power, for transport but machines replaced them.

Same thing is happening on the IQ bell curve now.

[CokeSnortingTory]

from the above:

"As the industrial age winds down, in turn, human muscle will again be abundant. Will it be cheap? Almost certainly, yes – and that means that real wages for most people in the industrial world will continue their current slide toward Third World levels. I wish I could say otherwise, not least because my chances of taking part in that slide are tolerably high. Still, part of what has made the last three centuries so atypical is the extent to which ordinary people in the industrial world have been able to rise out of the hand-to-mouth existence typical of most of humanity for most of history, and partake of a degree of comfort and security that monarchs of past ages have often sought in vain. That state of affairs could never have been permanent, because it was made possible only by using up fantastic amounts of fossil sunlight at a pace so extravagant that the quest to figure out what to do with all that energy has been a major driver of economic change for more than a century now; it’s simply our bad luck to live at a time when the bill for all that extravagance is coming due."

While I find the archidruid normally a passable read with some good points to make, I didn't think much of this piece. Its a rather sophomoric analysis of what is actually a very complex homestatic system, and it makes the mistake of simplifying the definition of that system in ordet to arrive at the destination the author wanted too.

This is poor futurology.

The system in question certainly takes natural energy as one of its primary inputs, but I'd argue that there are other inputs of equal importance in determining the response of that system. The other inputs are the psyche and culture of the people in it.

Secondly, the demand levels that justify the employment of the rivetter in the first place are part of a closed dynamic feedback loop that involves the culture and energy inputs, making the actual response of the system uncomputable.

Finally the point that industrial wages will slide to third world levels is an irrelevance since if all humaity is subsisting on a grossly lowered standard of living, that says nothing about labour costs, since labour costs are relative to everything else. There is no reason to suppose that the scenario painted by the druid above would not result in demand for energy falling faster than its depletion. For example, if labour is so very cheap, there comes a point at which it is simply not offered and peolpe look after themselves by combining their own labour with their own cpaital and land.

The line about cheap labour and low wage levels exposes that fact that despite trhe druids pretensions for dispassionate analysis of the future he seems to have made the assumption that capitalism or some system of voluntary society-wide labour organising scheme would still be operative.

I can't see anything that you've said here that actually conflicts with what The Archdruid is saying. He does mention the culture and psyche of the people in that they will continue along the tried-and-tested path of ever-greater complexity until they can't.

After that, they will homeostatically step down to lower levels of complexity. He's not advocating the overnight abandonment of technology, just the gradual re-adoption of older technologies where appropriate, and greater use of human labour where energy-driven machinery is no longer economical.

You can argue that he's completely wrong because of potential new energy sources and new technologies such as biotech etc. (which means believing the claims of research scientists in their ever more precarious search for investment capital), but I think his analysis of devolution is pretty sound.

[wonderpup]

With only stupid people you can't really organize anything. In fact they cannot even understand the problems, let alone conceive of solutions.

But they will follow a single charismatic who tells them what they want to hear. - as the future president Palin will demonstrate.

It is all about critical mass at the end of the day I agree- but maybe energy is a factor here too- if that 20% without a job are mostly young and mostly male,the momentum they create could become self fulfilling to some degree.

[Snugglybear]

Right now even if 20% are unemployed and growing by a few percent a year.. that still means 80% are employed. Even if 2% more lose their jobs this next year, it still means 78% employed. Those 78% are sticking with their slogans that the unemployed are all lazy, scroungers, they only change their tune when they themselves become unemployed.

In fact in the first part of 2010 there were:

2.51 million unemployed (of whom 1.52 million were claiming JSA) - that's unemployed, mind you - economically inactive is another 8.17 million.

1.07 million working part-time because they can't get full-time work

That's a total of 11.75 million. The estimated working age population is 38,068,000.

So the real percentage of people employed is actually far lower than 80%.

Add the number of people losing their jobs from the public sector shortly and you get some very interesting figures.

[scepticus]

Or to make the other guy risk more of it.

Or to make the other guy sell assets for something they believe to be oil-money, and isn't.

Texas hold-em.

well that just covers the financial markets. I was more referring to the issue for a company like, say, intel: you know, one the actually makes stuff.

Assuming Intel have secured a given amount of claims on oil-money, and their forecasts tell them there will be less oil-energy-money in 10 years time, what to do now with their funds? The obvious answer would be either to sit on them and do nothing (they will be worth a good deal more in 10 years than they are now), or possibly, invest in a scheme to produce energy-money. There would be no other sensible investment.

[lets get it right]

Hello salaries that are 1/10th of current western salaries but with unchanged infrastructure costs.

Complete contradiction in terms.

[scepticus]

I can't see anything that you've said here that actually conflicts with what The Archdruid is saying. He does mention the culture and psyche of the people in that they will continue along the tried-and-tested path of ever-greater complexity until they can't.

my real problem was where he said wages in industrial nations would get to third world levels. This is a nonsense, because we only have third world wage levels because we have 1st world wage levels with which to compare them.

so, where does he think the 1st world wage levels will be?

also, don't forget that when more human labour and less machines is used, then this actually places power into the hands of the labourers and out of the hands of the machine makers, which is the opposite of recent trends. That says to me there will be more self employed and that therefore wages (return to labour versus return to capital), will rise.

and then there is the business of increasing dependency ratios, and if de-complexification is on the cards, then it means there is a massive overhang of industrial and financial capital. This all speaks to rising returns for labour.

After that, they will homeostatically step down to lower levels of complexity. He's not advocating the overnight abandonment of technology, just the gradual re-adoption of older technologies where appropriate, and greater use of human labour where energy-driven machinery is no longer economical.

once again, lower complexity can mean many things. lower complexity may mean less choice, less competition, while at the same time various industries are scaled up, not down in terms of their overall tech level and scale. With energy resources scarce, employing lots of chimney mounted wind turbines and per-house heat pumps may not be the best way of being energy efficient. A much more efficient scheme is for tesco to buy up land and grow produce locally but using hi tech techniques, build a power station of whatever stripe alongside, and then for everyone to cluster round in the tesco village and watch tesco TV.

Tesco doesn't need to compete, workers collaborate on growing veg locally rather than going it alone, physical travel is minimised and the olds are looked after by a few workers and a cloud of IP cameras and mesh networked sensors. Meanwhile, electronic communications and entertainment continue to get more advanced to try and make up for the collapse of complexity in peoples lives.

I never see the druid considering such scenarios. Why is that?

[CokeSnortingTory]

my real problem was where he said wages in industrial nations would get to third world levels. This is a nonsense, because we only have third world wage levels because we have 1st world wage levels with which to compare them.

so, where does he think the 1st world wage levels will be?

I think this is simply a semantic point, as he means that current "1st world" wages will decline to 3rd world levels, so there will be an evening out - not that there will still be a 1st and 3rd world that can be compared.

also, don't forget that when more human labour and less machines is used, then this actually places power into the hands of the labourers and out of the hands of the machine makers, which is the opposite of recent trends. That says to me there will be more self employed and that therefore wages (return to labour versus return to capital), will rise.

and then there is the business of increasing dependency ratios, and if de-complexification is on the cards, then it means there is a massive overhang of industrial and financial capital. This all speaks to rising returns for labour.

It depends on how many labourers there are compared to land/resources. Also a great many trades will simply disappear - much less finance, consumer services etc. Historically the labour power of workers waxes and wanes. Plagues tend to be very positive in this regard.

once again, lower complexity can mean many things. lower complexity may mean less choice, less competition, while at the same time various industries are scaled up, not down in terms of their overall tech level and scale. With energy resources scarce, employing lots of chimney mounted wind turbines and per-house heat pumps may not be the best way of being energy efficient. A much more efficient scheme is for tesco to buy up land and grow produce locally but using hi tech techniques, build a power station of whatever stripe alongside, and then for everyone to cluster round in the tesco village and watch tesco TV.

Tesco doesn't need to compete, workers collaborate on growing veg locally rather than going it alone, physical travel is minimised and the olds are looked after by a few workers and a cloud of IP cameras and mesh networked sensors. Meanwhile, electronic communications and entertainment continue to get more advanced to try and make up for the collapse of complexity in peoples lives.

I never see the druid considering such scenarios. Why is that?

I don't understand what the shareholder value would be in Tesco's doing any of this.

[scepticus]

I think this is simply a semantic point, as he means that current "1st world" wages will decline to 3rd world levels, so there will be an evening out - not that there will still be a 1st and 3rd world that can be compared.

which means that if most everyone has 3rd world wages, and I have 2nd world wages, I'll be a rich man. People don't measure their wealth in absolute terms, they measure it relative to their peers. It is relative wealth that confers a sense of well-being and comfort.

So if one posits a drastic decline in energy usage, then deriving from that a drop in everyones wage level as measured in 20th century energy-equivalents is a tautology and is therefore rather pointless.

Far more interesting is what this change means for wealth distribution, nature of income flows and capital flows, and the balance of labour versus other factors, and what people chose to spend surplus income on, because these are what define the society we live in, not absolute wealth/energy level. What matters is the ability of individuals to interact with other individuals and the various interfaces presented by the various levels of state hierarchy whatever they may be, in order to derive some security and sustenance. These are the transformation that really matter. What does the druid have to say about this?

It depends on how many labourers there are compared to land/resources. Also a great many trades will simply disappear - much less finance, consumer services etc. Historically the labour power of workers waxes and wanes. Plagues tend to be very positive in this regard.

I agree about the loss of financial complexity. De globalisation is a major loss of financial complexity, such that an increase in local financial complexity can co-exist with that and still result in net reduction of complexity.

However I'd say the level of service business (and intellectual property activities) would increase since such business is cheaper energy wise than manufacturing.

I don't understand what the shareholder value would be in Tesco's doing any of this.

by ensuring that the circuit of goods and payment for goods is as local as possible, profits are maximised by minimising oil costs, mainly transport, for goods, workers and customers. However processes (the human capital, learning and skills) are more easily leveraged over the entire tesco organisation of semi-independent nodes since most of that can be sent by wire.

This all serves to increase profits. Having a local power generation activity is important because in the post peak oil scenario no non-energy asset will retain its value while energy/capita is still declining, so it make sense to invest all profits not needed to maintain existing tesco goods business into energy generation.

[CokeSnortingTory]

which means that if most everyone has 3rd world wages, and I have 2nd world wages, I'll be a rich man. People don't measure their wealth in absolute terms, they measure it relative to their peers. It is relative wealth that confers a sense of well-being and comfort.

So if one posits a drastic decline in energy usage, then deriving from that a drop in everyones wage level as measured in 20th century energy-equivalents is a tautology and is therefore rather pointless.

This only applies when everything has settled at the lower level. During the period of decline, if it is noticeable in one lifetime or shorter, then the relative difference between current 1st and 3rd world levels does matter.

Far more interesting is what this change means for wealth distribution, nature of income flows and capital flows, and the balance of labour versus other factors, and what people chose to spend surplus income on, because these are what define the society we live in, not absolute wealth/energy level. What matters is the ability of individuals to interact with other individuals and the various interfaces presented by the various levels of state hierarchy whatever they may be, in order to derive some security and sustenance. These are the transformation that really matter. What does the druid have to say about this?

Well, this is what his whole blog is about, so I'm surprised you've missed it. One example he gives is greater emphasis on the domestic economy (which only died in the mid-50's) which is something that flies under the radar of economists. Also, the re-appearance of friendly societies such as the CO-OP, Toc H, the (gulp) Freemasons etc.

I agree about the loss of financial complexity. De globalisation is a major loss of financial complexity, such that an increase in local financial complexity can co-exist with that and still result in net reduction of complexity.

However I'd say the level of service business (and intellectual property activities) would increase since such business is cheaper energy wise than manufacturing.

I dunno, there's a lot of fluff out there - tanning parlours, nail bars, travel agents, accessory shops etc. Also, if the domestic economy re-emerges, then this will also impact small businesses adversely. Should be good for cobblers and hardware stores though.

by ensuring that the circuit of goods and payment for goods is as local as possible, profits are maximised by minimising oil costs, mainly transport, for goods, workers and customers. However processes (the human capital, learning and skills) are more easily leveraged over the entire tesco organisation of semi-independent nodes since most of that can be sent by wire.

This all serves to increase profits. Having a local power generation activity is important because in the post peak oil scenario no non-energy asset will retain its value while energy/capita is still declining, so it make sense to invest all profits not needed to maintain existing tesco goods business into energy generation.

Well this scenario needs Tesco to completely transform itself as an organisation, which it may or may not do. I've mentioned their debt load before - if this kind of change affected their ability to roll over their debts even for a year it would make them vulnerable.

The other aspect that needs to be taken into consideration in a peak oil scenario is not just increasing oil prices but spot shortages. Even if Tesco had its own private supply, spot shortages tend to cause chaos as roads are blocked due to tailback queues to garages. It was these that caused the maximum amount of pain during the OPEC crisis in the 1970's. A country like Russia or Saudia Arabia, which is receiving constant bids for oil can switch supplies away whenever they feel like it. This is what will do for major organisations, rather than price per se.

[scepticus]

This only applies when everything has settled at the lower level. During the period of decline, if it is noticeable in one lifetime or shorter, then the relative difference between current 1st and 3rd world levels does matter.

fair point, but I would say it matters less if general inequality is decreasing during the same period. This is not a given of course, which is why the relative analysis is so important.

Well, this is what his whole blog is about, so I'm surprised you've missed it. One example he gives is greater emphasis on the domestic economy (which only died in the mid-50's) which is something that flies under the radar of economists. Also, the re-appearance of friendly societies such as the CO-OP, Toc H, the (gulp) Freemasons etc.

I don't read it religiously. Predicting a rise of localism is pretty obvious. However localism can take the kind of corporate form I outline above or it can take the form of friendly societies. Both tick the reduced complexity box, so I'm not sure how he picks the one over the other.

I dunno, there's a lot of fluff out there - tanning parlours, nail bars, travel agents, accessory shops etc.

this issue is mainly one of transport. Body decoration doesn't take much oil, but driving to the parlour does. Delivering education over the internet doesn't take much oil, but driving to school does. Which is why I would predict a greater proportion of services, but having appropriate delivery models that are more energy efficient and setup for short hop local links.

Well this scenario needs Tesco to completely transform itself as an organisation, which it may or may not do. I've mentioned their debt load before - if this kind of change affected their ability to roll over their debts even for a year it would make them vulnerable.

I use tesco only as a placeholder for any multinational grocery/logistical/supply chain conglomerate.

Even if Tesco had its own private supply, spot shortages tend to cause chaos as roads are blocked due to tailback queues to garages. It was these that caused the maximum amount of pain during the OPEC crisis in the 1970's. A country like Russia or Saudia Arabia, which is receiving constant bids for oil can switch supplies away whenever they feel like it. This is what will do for major organisations, rather than price per se.

the scenario I outlined does not have people travelling long distance by road. The whole point is they only ever need to travel between tesco, and their place of work near tesco, possibly using their own energy (i.e. with an ebike).

I agree totally there will be much chaos between here and the post peak oil future. But what I find lacking in most of the PO analysis is a dispassionate look at what structures are most likely to work based on where we are now, because that then sets the agenda and trajectory for the transition. Instead much of it seems to be an excuse to indulge in rural/fedual fantasy.

[Injin]

I agree totally there will be much chaos between here and the post peak oil future. But what I find lacking in most of the PO analysis is a dispassionate look at what structures are most likely to work based on where we are now, because that then sets the agenda and trajectory for the transition. Instead much of it seems to be an excuse to indulge in rural/fedual fantasy.

Heres a question for you.

If there is nothing coming from any centrepiece organisation, why would anyone feel inclined to send payments to?

[scepticus]

Heres a question for you.

If there is nothing coming from any centrepiece organisation, why would anyone feel inclined to send payments to?

Perhaps you mean why would anyone send payments to 'tesco' in this case? Presumably because

1) tesco pays your wages

2) you shop at tesco, live in a tesco house and consume tesco goods to the general exclusion of other options.

this just suggests that all the independant supply chains the currently supply tesco, are assimilated, and that tesco (or equivalent) now owns a larger number of smaller, local supply chains but with most of these operating using the same tesco processes regardless of which locality they happen to be in.

It translates to a major loss of complexity in choice and difference, which is used to pay for the ongoing delivery of goods and the retention of a reasonably high division of labour in the face of energy shortages.

[Zngland]

Is protectionism at all possible, it's now illegal? The VIs that benefit from offshoring are enormous and still growing.

You look at the finance regulation bill that just passed the US senate and you realise that our democracies are a complete joke. I see no chance in hell that protectionism will return.

If it's politically expedient to do printy because the deflationary alternative is too horrific for politicians/ elite then logicallly

in the face of rising unemployment certain jobs/sectors will be given justification for protection

since the alternative is a vote loser.

The illegal angle is easily overcome by politicians.

[Zngland]

There won't be reform until the number of unemployed or the number of severely downgraded in income.. grow in sufficient size that they represent a revolutionary force. Or this is outright economic collapse

Right now even if 20% are unemployed and growing by a few percent a year.. that still means 80% are employed. Even if 2% more lose their jobs this next year, it still means 78% employed. Those 78% are sticking with their slogans that the unemployed are all lazy, scroungers, they only change their tune when they themselves become unemployed.

A further problem is the far above average IQ, ambitious people are succeeding hugely in this society. They can get through the hoops to become doctors, vets, accountants, lawyers, engineers etc.. So the revolutionary leaders which are always upper middle class people who want wealth and power, they are largely pacified. They can make £100k a year in this society easily.

With only stupid people you can't really organize anything. In fact they cannot even understand the problems, let alone conceive of solutions.

Also all the revolutionary ideas and resulting systems have been tried and the social democratic system is about to fail.

Leaving survival of the fittest or something very close to it , with it's inherent ugliness.

[Injin]

Perhaps you mean why would anyone send payments to 'tesco' in this case? Presumably because

1) tesco pays your wages

2) you shop at tesco, live in a tesco house and consume tesco goods to the general exclusion of other options.

Sure, but why would my local tesco be sending payments outside of my locality if it's all run locally?

i.e. lets say we are running everything locally but at the end of the day taking 20% of our profits and mailing them far away to some "shareholders" why the hell would we keep doing that, going forward?

this just suggests that all the independant supply chains the currently supply tesco, are assimilated, and that tesco (or equivalent) now owns a larger number of smaller, local supply chains but with most of these operating using the same tesco processes regardless of which locality they happen to be in.

It translates to a major loss of complexity in choice and difference, which is used to pay for the ongoing delivery of goods and the retention of a reasonably high division of labour in the face of energy shortages.

Localisation always equals diverisity, afaik. Not sure where you get the idea it's the opposite. Can you outline why you'd think that?

[erat_forte]

which means that if most everyone has 3rd world wages, and I have 2nd world wages, I'll be a rich man. People don't measure their wealth in absolute terms, they measure it relative to their peers. It is relative wealth that confers a sense of well-being and comfort.

...

Yes but you can also compare it to the past (within memory). So if our standard of living sinks but we can remember when we used to have a hot shower every day, fresh fruit all year round, and personal motorised transport, we will feel very poor

[CokeSnortingTory]

Perhaps you mean why would anyone send payments to 'tesco' in this case? Presumably because

1) tesco pays your wages

2) you shop at tesco, live in a tesco house and consume tesco goods to the general exclusion of other options.

this just suggests that all the independant supply chains the currently supply tesco, are assimilated, and that tesco (or equivalent) now owns a larger number of smaller, local supply chains but with most of these operating using the same tesco processes regardless of which locality they happen to be in.

It translates to a major loss of complexity in choice and difference, which is used to pay for the ongoing delivery of goods and the retention of a reasonably high division of labour in the face of energy shortages.

As with Injin, I don't really understand this scenario. The only organisation that I can think of that was historically like this was the Co-operative Society, which was supported by the public as much for ideological reasons as any. It wasn't (isn't) a corporate entity of the type we know now, and its role in the supply chain only went as far back as the dairy and bakery, and not the farm or the workers' cottages.

The main problem with this scenario for me is that the missing element is paternalism - what created Bournville, Saltaire, Port Sunlight etc. as well as the Co-op was as much Quakerish/Methodist ideas of moral improvement as capital. I can't see an essentially amoral corporate entity like Tesco or equivalent adopting this kind of holistic role. That said, I expect a renewed interest in religion to accompany the fragmentation following peak oil, so any corporate entity that has a religious aspect to its governance may have an advantage.