Jump to content
House Price Crash Forum
Sign in to follow this  
R K

Resource Limitations

Recommended Posts

http://www.gmo.com/websitecontent/JGLetter_ResourceLimitations2_2Q11.pdf

Capitalism does not address these very long-term issues easily or well. It seems to me that capitalism’s effectiveness moves along the spectrum of time horizons, brilliant at the short end but lost, irrelevant, and even plain dangerous at the very long end

Summary

 We humans have the brains and the means to reach real planetary sustainability. The problem is with us and our focus on short-term growth and profits, which is likely to cause suffering on a vast scale. With foresight and thoughtful planning, this suffering is completely avoidable.

 Although we will have energy problems with peak oil, this is probably an area where human ingenuity will indeed eventually triumph and in 50 years we will have muddled through well enough, despite price problems along the way.

 Shortages of metals and fresh water will each cause severe problems, but in the end we will adjust our behavior enough to be merely irritated rather than threatened, although in the case of metals, the pressure from shortages and higher prices will slowly increase forever.

 Running out completely of potassium (potash) and phosphorus (phosphates) and eroding our soils are the real long-term problems we face. Their total or nearly total depletion would make it impossible to feed the 10 billion people expected 50 years from now.

 Potassium and phosphorus are necessary for all life; they cannot be manufactured and cannot be substituted for. We depend on finite mined resources that are very unevenly scattered around the world.

 Globally, soil is eroding at a rate that is several times that of the natural replacement rate. It is probable, although not certain, that the U.S. is still losing ground. The world as a whole certainly is.

 The one piece of unequivocal good news can be found in the growth of no-till farming. In no-till, the residue of the previous crop is left on the ground and new seeds are planted without plowing. This technique reduces erosion by around 80%, reduces fertilizer run-off, preserves moisture, improves the soil (and, quite possibly, the quality of the food), and reduces the emissions of heat trapping gasses.

 The growth of no-till has been very rapid in South America, rapid in the U.S. (which is now at 35%), and moderate in many other developed countries. But it is used on only about 5% of farms globally.

 Overall, the best farms will have no erosion problems but, on average, soil will continue to be lost across the globe. Together with increased weather extremes and higher input prices (perhaps much higher), there will be increasing problems in feeding the world’s growing population.

 In particular, a signifi cant number of poor countries found mostly in Africa and Asia will almost certainly suffer from increasing malnutrition and starvation. The possibility of foreign assistance on the scale required seems remote.

 The many stresses on agriculture will be exacerbated at least slightly by increasing temperatures, and severely by increased weather instability, especially more frequent and severe droughts and fl oods.

 These types of slow-burning problems that creep up on us over decades and are surrounded by a lack of scientific precision hit both our capitalist system and our human nature where it hurts.

 Capitalism, despite its magnificent virtues in the short term – above all, its ability to adjust to changing conditions– has several weaknesses that affect this issue.

o It cannot deal with the tragedy of the commons, e.g., overfishing, collective soil erosion, and air contamination.

o The finiteness of natural resources is simply ignored, and pricing is based entirely on short-term supply and demand.

o More generally, because of the use of very high discount rates, modern capitalism attributes no material cost to damage that occurs far into the future. Our grandchildren and the problems they will face because of a warming planet with increasing weather instability and, particularly, with resource shortages, have, to the standard capitalist approach, no material present value. 4

Very good read, as usual.

For an arch (and highly successful) capitalist his insights into why capitalism ain't the model we need to resolve these problems is worthy of attention. There's a particularly good example of short term price signals causing dangerous long term outcomes for finite resources and a consideration of the likely outcomes for the most important natural resources. Sensible people already know this of course!

3. Agriculture

The trouble really begins with agriculture. This is the factor that I believe almost guarantees that we end up with a world population between 1.5 and 5 billion. The only question for me is whether we get there in a genteel, planned manner with mild, phased-in restraints, or whether we run head down and at considerable speed into a brick wall. There are three particular aspects of agriculture where the shoe pinches the most: water, fertilizer, and soil. All three

must be seen in the context of a rapidly growing population. To set the scene, Exhibit 1 shows arable land per person. Unlike us, suitable land for agriculture has not increased since farming started some 10,000 years ago. In fact, with our help it has declined considerably, perhaps by as much as half or more!

Anyway, puts 'house prices' into perspective. Have a read.................

Share this post


Link to post
Share on other sites

Whoop-de-******ing-do. More Malthusian predictions of a Fund Manager, whose entire life is probably one big derivative of productive, innovative, creative reality.

The best cure for high prices is high prices. Now global warming has proved to be a complete crock of shit, I wonder what the next ruse for greater centralization and control will be. It's clearly going to be the 'resource' crisis.

The only question for me is whether we get there in a genteel, planned manner with mild, phased-in restraints

And away we go...

Share this post


Link to post
Share on other sites

I also want to know what the actual goal of resource scaremongers is, because I can't figure it out. It seems to amount to more state power, but very little else.

Running out completely of potassium (potash) and phosphorus (phosphates) and eroding our soils are the real long-term problems we face.

So, we can logically infer that if consumption of these resources is the problem, then the solution is to either consume them at a slower rate or hoard them. I presume this is what Grantham means by "phased in restraints".

This leads to more questions like, what are we stockpiling or conserving them for? Who decides who receives the phosphorus and potash and at what rate? Does the generation 50 years hence have a greater moral claim to these resources than us? What do we do when the resources eventually and inevitably run out? Does this resource-repression process help or hinder the development of replacements?

Resources are only resources if they're exploited. There's a real piety about those who argue they're something more - something sacred. The implication is that resources are wasted on those who have the wherewithal to exploit them.

Share this post


Link to post
Share on other sites

I also want to know what the actual goal of resource scaremongers is, because I can't figure it out. It seems to amount to more state power, but very little else.

So, we can logically infer that if consumption of these resources is the problem, then the solution is to either consume them at a slower rate or hoard them. I presume this is what Grantham means by "phased in restraints".

This leads to more questions like, what are we stockpiling or conserving them for? Who decides who receives the phosphorus and potash and at what rate? Does the generation 50 years hence have a greater moral claim to these resources than us? What do we do when the resources eventually and inevitably run out? Does this resource-repression process help or hinder the development of replacements?

Resources are only resources if they're exploited. There's a real piety about those who argue they're something more - something sacred. The implication is that resources are wasted on those who have the wherewithal to exploit them.

Your use of the word 'scaremongers' implies you think the resources he's referring to are infinite. Do you?

If not then there are implications flowing from that.

As far as I can tell, all he's doing is pointing out the realities of that and considering what alternatives might be available.

Clearly the exploitation you refer to doesn't account for or consider limits on consumption. It would thus appear sensible to consider whether it's the right model then wouldn't it?

The only piety comes in those who deny these limits exist. As it appears you do.

Edit: I have to assume you'd read the article before I posted it, 'cause you couldn't have read it in the time before you posted, which suggests you didn't consider it.

Edited by Red Karma

Share this post


Link to post
Share on other sites

The only question for me is whether we get there in a genteel, planned manner with mild, phased-in restraints

Starting with Mr. Grantham and his friends/family etc, I presume?

Share this post


Link to post
Share on other sites

The only question for me is whether we get there in a genteel, planned manner with mild, phased-in restraints

Starting with Mr. Grantham and his friends/family etc, I presume?

It will (already has) started with the very poorest Errol, but I'm sure your gold hoard will be safe.

What is your solution?

Share this post


Link to post
Share on other sites

Your use of the word 'scaremongers' implies you think the resources he's referring to are infinite. Do you?

If not then there are implications flowing from that.

As far as I can tell, all he's doing is pointing out the realities of that and considering what alternatives might be available.

Clearly the exploitation you refer to doesn't account for or consider limits on consumption. It would thus appear sensible to consider whether it's the right model then wouldn't it?

The only piety comes in those who deny these limits exist. As it appears you do.

Edit: I have to assume you'd read the article before I posted it, 'cause you couldn't have read it in the time before you posted, which suggests you didn't consider it.

I find his work interesting and will read this one tomorrow, so I appreciate that you posted it. Of course I've not read the piece yet, but you've summarised your key points and drew your own conclusions, which I thought were interesting in themselves.

I don't believe resources are infinite and I didn't suggest they are. I simply don't accept the premise that resource scarcity is a problem, when it is simply an inevitable reality. It's the nature of life on earth. That's why I think neo-Malthusians need to answer the more philosophical questions I posed:

what are we stockpiling or conserving them for? Who decides who receives the phosphorus and potash and at what rate? Does the generation 50 years hence have a greater moral claim to these resources than us? What do we do when the resources eventually and inevitably run out? Does this resource-repression process help or hinder the development of replacements?

I don't accept that 'capitalism' (by this I assume he means men operating free from the threat of collective violence) is inherently incapable of solving these problems and that only the enlightened state can deliver us from our resource-consuming sins.

Finally, you give him way too much credit as an arch-Capitalist. He's a bloody fund manager! He's got as much authority in my book as a socialist who trades derivatives.

Share this post


Link to post
Share on other sites

It will (already has) started with the very poorest Errol, but I'm sure your gold hoard will be safe.

What is your solution?

Money free from the manipulation of social engineers might be a good start.

Other than that, human beings will be the solution. Government solutions tend to involve large bodycounts.

Share this post


Link to post
Share on other sites

Money free from the manipulation of social engineers might be a good start.

Other than that, human beings will be the solution. Government solutions tend to involve large bodycounts.

Perhaps you didn't read the Devil and the Farmer example of why the free market creates price signals which ignore resource limits which is rather the point he's making.

Having read that you still think 'free markets' (whatever that means) is the answer?

I'm surprised but supposed I ought not to be.

Edit: Apols, didn't see your reply above.

The current free marketeers don't appear to be considering (or have ever considered, it's not in the model) resource constraints and associated costs. I'm thankful that at least some people are, whatever their background might be.

Finally, you give him way too much credit as an arch-Capitalist. He's a bloody fund manager! He's got as much authority in my book as a socialist who trades derivatives.

Ok, he invests sizeable funds in the capital markets. As such his primary concern is return on capital for his clients. You may argue that doesn't make him a capitalist himself. But it's his day job.

Edited by Red Karma

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.