Tag Archives: Economic Growth

Economic Growth as Salvation

For those of us concerned about socioeconomic trends and their consequences, Robert Gordon’s The Rise and Fall of American Growth is one of the most important books we’ll see in 2016. This blog post is the fifth (and final) in a series that touches upon the issues the book covers: inequality, economic growth, and poverty, among others. Click on links for first, second, third, and fourth posts in series.

 

Wouldn’t it be great if the American economy regained the robust growth that it once had? And wouldn’t it be grand if that economic growth could, to quote Donald Trump, “make America great again”?

According to economist Robert Gordon, it’s not going to happen. Gordon, in The Rise and Fall of American Growth, has one major message that he wants to get across: The great inventions and innovations of the late nineteenth and early twentieth centuries that created the incredible economic growth that in turn drove the standard of living higher in the United States was “a revolution that could only happen once.”

The phenomenal economic growth experienced in this country from 1920-1970 was a perfect storm event that won’t be repeated. Neither a Trump nor Clinton presidency has the power to make an economic golden age return.

According to Gordon, here are the reasons why the economic revolution could only happen once:

*Relatively cheap and available energy stores. Oil became the fossil fuel of choice at the beginning of the twentieth century, fueling incredible economic growth. Today, 75 percent of world energy consumption is yet from fossil fuels. Gasoline is cheap currently, but it’s not as cheap as it used to be, and crude oil extraction is much more difficult than ever before.

*The advantages of America, post-World War I and II. The transfer of gold reserves from Europe to the US and the general lack of territorial devastation in the US helped create conditions for an economic boom.

*Worker productivity skyrockets. New Deal pro-labor regulations (the crucial standardization of the eight-hour workday along with increases in wages), the advent of air-conditioning and improved heating in workplaces, and “continuous learning by doing” forced upon the manufacturing sector during World War II all contributed positively toward productivity. As an example, Henry Ford’s mammoth B-24 bomber plant outside of Ypsilanti, Michigan initially produced seventy-five bombers per month in February 1943. By August 1944, the plant achieved its peak rate of production of 432 bombers per month.

*The plethora of subinventions made possible by electricity and the internal combustible engine. Air-conditioning has already been mentioned; additionally the following made for increased economic growth: public transportation, elevators, and all types of electric and machine tools.

*Widespread use of the assembly line in manufacturing. The nascent American automobile industry adapted the disassembly line from nineteenth century meat packers, and Henry Ford perfected the assembly line for production of his Model T in 1913. Modern commercial manufacturing was born.

*Standardization of manufacturing parts. Already begun in the nineteenth century with gun manufacturing, the standardization of parts allowed for interchangeability and afforded easier assembly and repair of machines. The standardization of seemingly mundane nuts, bolts, and screws in the 1920s was an enormous improvement for industrial efficiency.

*Education boom creates better workers. In 1900, only 10 percent of American youth finished high school. By 1940, the graduation rate rose above 50 percent of the first time ever. Today’s rate of 75 percent has held steady since the early 1970s. The post-WW II GI Bill helped swell American college and university rolls, further creating a more capable and highly skilled workforce.

*Construction of the national highway system. Started in earnest under President Eisenhower in the 1950s, and mostly completed by 1972, the US interstate highway system afforded more versatile and efficient transport for American businesses and consumers.

These revolutionary innovations and improvements, according to Gordon, could only happen once. Current and future innovations and improvements are not ruled out; they simply don’t and won’t have the impact on the rate of economic growth as did the revolutionary ones. The rate of economic growth in the US since 1980 is about 1.5 percent. During the 1960s and ’70s, the tail end of the boom, it averaged 3 percent. It’s time we replaced the term economic growth with the more appropriate term economic development, and its accompanying emphasis of quality over quantity.

Monarchs were the guardians of salvation – a strictly earthly variety for a chosen few – in ancient days. The church and its priests succeeded monarchs as the purveyors of salvation – mostly heavenly – during medieval ages. Since the Industrial Revolution, economic growth has brought, and delivered, salvation back to earth. Economic growth has provided food, clothing, housing, goods, and purposeful employment to millions, liberating many of these from poverty. It also has created a small class of economic elites whose financial holdings are historically gargantuan.

But how much is enough? The days of exponential economic growth are over. If we’d truly like to make America great again, future greatness will be determined more so by economic development that favors many, rather than a status-quo economic system (going on thirty-five years) that favors the elite.

 

 

This blog and website are representative of the views expressed in my book Just a Little Bit More: The Culture of Excess and the Fate of the Common Good. Distributed by ACTA Publications (Chicago), JaLBM is available on Amazon as a paperback and an ebook. It’s also available on Nook and iBooks/iTunes, and at the website of Blue Ocotillo Publishing.

isbn 9780991532827

If you’re a member of a faith community – Christian, Jewish, Muslim, Buddhist, or other – consider a book study series of Just a Little Bit More. The full-length book (257 pgs.) is intended for engaged readers, whereas the Summary Version and Study Guide (52 pgs.) is intended for readers desiring a quick overview of the work. It also contains discussion questions at the end of all eight chapter summaries.

Readers of both books can join together for study, conversation, and subsequent action in support of the common good.

The Spanish version of the Summary Version and Study Guide will be available in September 2016. ¡Que Bueno!

¡El librito de JaLBM – llamado Solo un Poco Más saldrá este Septiembre de 2016!

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The Rise and Fall of American Growth

For those of us concerned about socioeconomic trends and their consequences, The Rise and Fall of American Growth is one of the most important books we’ll see in 2016. This blog post is the first in a series that will touch on the issues the book covers: inequality, economic growth, and poverty, among others.

 

Northwestern University economics professor Robert Gordon’s new book argues that the heyday of American economic growth is past and gone. The Rise and Fall of American Growth (Princeton University Press, 2016) opens with a jolt as Gordon summarizes his argument in the first five pages of the introduction, best represented by this line from page 1: “The economic revolution of 1870 to 1970 was unique in human history, unrepeatable because so many of its achievements could only happen once.” Gordon call this one-hundred year period – the Second Industrial Revolution its starting point – the “special century.” The light bulb and the harnessing of electricity, indoor plumbing, the telephone, the automobile and the assembly line, the airplane, and the plethora of appliances (washers, dryers and others) combined to give this period a rate of economic growth previously unseen in the history of the world. And, Gordon argues in the subsequent 783 pages of his tome, the economic growth of the special century will not be seen again in terms of scale and influence upon quality of life. And let us not forget that the incredible economic growth of this special century was primarily fueled by relatively cheap and readily available crude oil.

gordon bookGordon gives the reader historical context for his argument, stating that “there was virtually no economic growth for millennia until 1770, only slow growth in the transition century before 1870, remarkably rapid growth in the century ending 1970, and slower growth since then” (p. 2). China and India have experienced rapid economic growth in the last two decades, but as Gordon outlines, their rates of growth will reach their inevitable limits and begin to slow down, just as we’ve seen in the United States. As a matter of fact, the rates of economic growth in China for 2014 and 2015 (by GDP) are the two slowest of the past twenty-five years.

Yes, our smart phones can take amazing photos and help us navigate our way to a great Thai restaurant when visiting a new city, but a larger context needs to be understood. Gordon says the economic growth since the 1970s comes from a narrower sphere of human activity – entertainment, information, and communications. The advances in these three arenas in the past few years are incredible and greatly appreciated, but they pale in comparison to the advancements of the special century. Back in the day new sewing machines and first-time plumbing in households significantly increased living standards, creating values and efficiencies theretofore unknown. In our day, ditching our flip phones for smart phones is a desired advancement, but it doesn’t register as a major increase in quality of life. emoticon

We can agree with Gordon’s assessment that economic growth since 1970 has been both “dazzling and disappointing.” Smart phones, iPods, and 55 inch flat screen HD TVs rock our worlds, but current innovation and economic activity do not measure up comparably to what was accomplished in generations past. Globalization’s pull of manufacturing jobs away from the US and its accompanying suppression of wages in the US (and equalization of wages worldwide) makes for a forecast unheard of since the close of the nineteenth century: a majority of the youngest Americans now entering the work market will not better their parents in earnings and living standards.

Gordon warns that the headwinds of inequality, blowing steadily since the 1980s, have also significantly impeded the American vessel of progress. An oversized portion of the proceeds of recent American growth – unlike the case in recent past generations – has been distributed to the upper echelon. Gordon states unequivocally that any consideration of US economic growth in the future must deal with the issue and problem of inequality.

According to Gordon, “economic growth is not a steady process that creates economic advance at a regular pace, century after century” (p. 2). With no guarantee that economic markers simply improve for subsequent generations ipso facto, we understand there to be a lot of work to do maintain an egalitarian society. Part of this understanding includes the following realizations: the economic pie is not infinite, but limited; economic returns need to be considered as to their bearing upon social outcomes; and, that neither energy reserves nor waste sinks are unlimited.

I’ll have more posts to come on Gordon’s excellent and timely work.

 

This blog and website are representative of the views expressed in my book Just a Little Bit More: The Culture of Excess and the Fate of the Common Good. Distributed by ACTA Publications (Chicago), JaLBM is available on Amazon as a paperback and an ebook. It’s also available on Nook and iBooks/iTunes, and at the website of Blue Ocotillo Publishing.

isbn 9780991532827

If you’re a member of a faith community – Christian, Jewish, Muslim, Buddhist, or other – consider a book study series of Just a Little Bit More. The full-length book (257 pgs.) is intended for engaged readers, whereas the Summary Version and Study Guide (52 pgs.) is intended for readers desiring a quick overview of the work. It also contains discussion questions at the end of all eight chapter summaries.

Readers of both books can join together for study, conversation, and subsequent action in support of the common good.

The Spanish version of the Summary Version and Study Guide will be available in September 2016. ¡Que Bueno!

¡El librito de JaLBM – llamado Solo un Poco Más saldrá este Septiembre de 2016!

 

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“Faith and Inequality” Presentations

In a world of fluff (supermarket tabloids) and misplaced immaturity (presidential candidates commenting on the size of certain anatomical features of an opponent), it’s good to have other options of information gathering and personal interchange. I’m grateful to have the opportunity to converse with others on important social issues such as childhood poverty, the causes of inequality, and the pros and cons of economic growth. Building on these themes and others explored throughout Just a Little Bit More: The Culture of Excess and the Fate of the Common Good, I’ll be making presentations at points near and far in the next number of weeks. Enlightening and purposeful conversations will continue in support of common good construction.

“Faith and Inequality: Seeking Common Good and Kingdom Connections” will be presented in San Antonio and Fort Worth, Texas; Fairfax, Virginia; and Gettysburg, Pennsylvania. Thanks to the church-related groups that have extended invitations to present and to many who have joined in conversation via book study groups on JaLBM themes. The “Faith and Inequality” offering covers a diverse set of related topics – faith development, American social and economic histories, poverty, the pursuit of common good, among others – in seventy-five minutes (or so!) of presentation and discussion. Join us!

Abiding Presence Lutheran Church, San Antonio, Texas  –  Wednesday, March 30, 7 pmJABLM Promo San Antonio V1

Christ Evangelical Lutheran Church, Fairfax, Virginia  –  Tuesday, April 5, 7 pm

Gettysburg Seminary, Gettysburg, Pennsylvania  –  Thursday, April 7, 7 pm

Faith Lutheran Church, Fort Worth, Texas  –  Wednesday, April 20, 7 pm

Judaism, Buddhism, Christianity, Islam, and many indigenous traditions agree: management of the natural human propensity toward greed is a main task of religious activity. Failure of a group or society to keep its appetite for greed in check contributes to its demise. Intriguingly, our various religious traditions formulated these ideas long before the proliferation of capital. While the Industrial Revolution has arguably been a great blessing to the human family, greed management is more crucial now than ever before. We live in an era that makes the case that more is always and exponentially better. I argue, to the contrary, that our traditions have a strong and united message against the spirit of more as always better.

While I’m grateful to Lutheran groups extending me (a Lutheran pastor) an invitation to speak, I’m more than ready to venture beyond. Other Christian denominations and other congregations within the broader faith community have plenty to contribute to this important conversation. The “Faith and Inequality” conversation is intended for all persons of faith, uniting various and diverse voices together in pursuit of common good in our midst.

For Christians, the possible connection between common good and what we understand as “kingdom of God” merits exploration. The Social Gospel movement at the turn of the 20th century – born during Gilded Age inequities – offers guidance. The 21st century needs to make its own response to social and economic inequalities. Join me and many others as we respond to significant inequalities social and economic with energy, smarts, and compassion.

 

Special thanks to the congregation I serve, St. John’s/San Juan Lutheran Church, Austin, TX for the opportunity to go to Washington, DC where I’ll participate in continuing education events. I’ve never been to the nation’s capital and am looking forward to networking with leaders in the movement for social and economic justice.

And thanks to my publicist extraordinaire daughter, Alexandra Anderson, for her work on the above promo image!

 

I’m planning to do similar “Faith and Inequality” presentations this fall in Austin and Houston – and open to invitations elsewhere!

 

This blog and website are representative of the views expressed in my book Just a Little Bit More: The Culture of Excess and the Fate of the Common Good. Distributed by ACTA Publications (Chicago), JaLBM is available on Amazon as a paperback and an ebook. It’s also available on Nook and iBooks/iTunes, and at the website of Blue Ocotillo Publishing.

isbn 9780991532827

If you’re a member of a faith community – Christian, Jewish, Muslim, Buddhist, or other – consider a book study series of Just a Little Bit More. The full-length book (257 pgs.) is intended for engaged readers, whereas the Summary Version and Study Guide (52 pgs.) is intended for readers desiring a quick overview of the work. It also contains discussion questions at the end of all eight chapter summaries.

Readers of both books can join together for study, conversation, and subsequent action in support of the common good.

The Spanish version of the Summary Version and Study Guide will be available in September 2016. ¡Que Bueno!

¡El librito de JaLBM – llamado Solo un Poco Más saldrá este Septiembre de 2016!

 

 

 

 

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Connecting the Dots Between Extreme Weather and Economic Growth

bwca1

Boundary Waters Trip – 2013

Three generations of my family have been to Minnesota’s Boundary Waters Canoe Area (BWCA), which lies north of Lake Superior and borders Canada within US National Forest territory. The BWCA consists of close to one million acres of lakes, streams, ponds, woods, and portage trails; inhabitants include moose, black bears, loons, eagles, walleye and northern pike. The BWCA’s surface area, incredibly, comprises 20 percent water. No motorboats, no roads, no cars, no cabins, no phones. Your canoe, paddles, map, and compass team up to transport you and your travel companions to and from campsite destinations; your tent, gear, and food – ensconced in backpacks – glide gracefully over the water. These necessities jangle weightily upon your back, however, when you portage them over land. No worries – your canoe comes equipped with shoulder rests. When you turn it upside down and carry it to the end of the portage trail you engage in a workout not replicable on any exercise machine at Gold’s Gym. It’s a great feeling when you throw down your canoe at the end of the trail and simultaneously feel the spray of water upon your legs and hear the boom of the canoe as it bottoms upon flat water.

bwca2

Boundary Waters Trip – 2006

My most recent trip to the BWCA, in 2013, was with a high school youth group from the church I serve in Austin, Texas. It was a great trip full of challenges and rewards. At the end of our trip, we came across a US Forest Service worker. Forest Service employees in the BWCA tend to myriad tasks, including trail maintenance. I asked him how long he had been working for the Forest Service – twenty-five years. I then asked him what were the biggest changes he’d seen in that time – extreme weather.

“The storms in the past years have become stronger and greater in intensity.”

Climate change. It’s happening everywhere. Travel writer Rick Steves sees its effects in Europe. Author Charles Fishman writes about the crippling droughts affecting Australia. Haboobs – an Arabic word we now know because of climate change, meaning intense dust storms – hover from the Middle East and North Africa to Arizona and Texas. Straight-line winds in excess of ninety miles an hour hit the BWCA in July 1999 felling an estimated 25 million trees; one person was killed and sixty were injured. Called a derecho (“straight” in Spanish), it was the largest northernmost storm of its type in recorded history to hit the North American continent.

Climate change is now an accepted reality, yet, people still bicker back and forth as to its cause – or whether it’s simply part of the climate variation that has always existed. Will the effects of historically excessive amounts of carbon dioxide (now at 400 parts per million) in the atmosphere doom the planet?

In Just a Little Bit More, I describe the culture of excess that has been prominent since 1980. Three tenets undergird the culture of excess: bigger and more is always better (from restaurant serving portions to silicone breast implants), economic growth is the panacea for all problems (politicians Republican and Democrat agree), and wealth is the highest societal value. (Is anyone ready for a new Rushmore of Rockefeller, Carnegie, Mellon, and Trump?)

Extreme weather events – and accompanying manifestations, like wildfires – have ravaged the planet for a very long time. Yet, the intriguing connections between recent extreme weather and the current reign of the culture of excess beg investigative thought and reflection.

Economic growth, unequivocally, is the maker and driver of the world we call modern. Before the industrial era (when carbon dioxide levels were at 280 parts per million), poverty and life expectancy rates were – by today’s standards – dismal. The changes and capabilities wrought in the last 250 years simply astound. But how far and how long can economic growth continue as is?

In the bodily progression from childhood to adulthood, limitations eventually halt human physical growth. Human development – in wisdom and maturity – continue on (we trust) as an adult ages. Similarly, I argue that now is the time for greater emphasis on economic development – smart, efficient, and purposeful – as opposed to unabated economic growth.

With religious-type zeal, those who oppose limits on economic growth (see George Will’s recent article on Pope Francis) thunder as if to say whosoever shall stand in the way of the divine right to make as much money as possible be damned! Do not mess with the combination of the three tenets of the culture of excess! Yes, people need jobs – the main mode by which to physically survive on this modern planet. But we must steward the resources of the planet, responsibly and wisely, in the process of working, living, and surviving – together.

When you don’t get enough sleep, your body tells you via symptoms that you need more sleep. If these messages are ignored, breakdown is certain. The recent extreme weather events of heat, cold, floods, snow, drought, and wind could very well be symptoms of a planet that is being transformed by an elevated carbon footprint. As the phrase proclaims – life will go on. But whether or not human life is part of the planet’s future is an open question. Theologian Matthew Fox says that we are the only species on Earth that has the power to control our own destiny; but even so, we’ve yet to decide what to do – whether to live or to die.

The next time you wander out in the darkness – maybe on a canoe trip – and look up and see “the stars pinned on a shimmering curtain of light,” think about Matthew Fox’s statement.*

 

This blog and website are representative of the views expressed in my book Just a Little Bit More: The Culture of Excess and the Fate of the Common Good. JaLBM, distributed by ACTA Publications (Chicago), is available on Amazon as a paperback and an ebook. It’s also available on Nook and iBooks/iTunes, and at the website of Blue Ocotillo Publishing.

If you’re a member of a faith community – Christian, Jewish, Muslim, Buddhist, or other – consider a book study series of Just a Little Bit More. The full-length book (257 pgs) is intended for engaged readers, whereas the Summary Version and Study Guide (52 pgs) is intended for readers desiring a quick overview of the work. Readers of both books can join together for study, conversation, and subsequent action in support of the common good.

*Quotation from Bruce Cockburn, “Northern Lights,” Dancing in the Dragon’s Jaws (1979, True North).

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Bursting the Bubble of Excessive Economic Growth

Did you catch Boyhood? Watching Ellar Coltrane’s character, Mason, grow up is pretty cool – except when he gets his long locks trimmed at the insistence of an abusive step-dad. To simply see the physical growth and changes in Mason happen before your eyes (even at a lengthy two hours, forty-five minutes) is almost worth the price of admission. Toward the end of the movie, as Mason reaches young adulthood, we anticipate other changes in his person – not so much physical, but emotional and even spiritual.

A girl or a boy grows for 15-20 years and then reaches a state of physical maturity. In the adult years, physical growth ceases and the continued development of one’s character, spirit, and psyche prevails. Borrowing inspiration from the teacher of Ecclesiastes, there is a time for growth and a time to refrain from growth. In a finite world growth is necessarily limited. Development, defined as elaboration or maturation, deals with internal structuring and happens within the bounds of external physical limits. In my book, Just a Little Bit More, I critique the culture of excess that chooses the value of fast growth over slow and continued development much more often than not.

Economically, the long-term growth beginning at the dawn of the industrial era (early 1800s) and the short-term growth since the post-World War II era have significantly blessed millions of the world’s inhabitants, lifting them from poverty to prosperity. The ingenuity, sweat equity, and persistence of inventors, entrepreneurs, and millions of workers have made this beneficial economic growth possible. None of these, however, played the primary role as have the fossil fuels coal and oil, the cheap energy sources powering the geniuses and the grunts. As I stated in a previous post on this topic, gasoline boasts the energy equivalent of four hundred person hours of work. Yes, we’ll still have plenty of oil for some time and it will accomplish many things at the behest of human creators and doers. But, it is a non-renewable energy source and its externalities of pollution and carbon emission are unsustainable in a finite world. Beyond that, its ubiquity (and new lower price!) lures us into a false sense of security: we feel the economic growth we are so accustomed must continue on ad infinitum. For it not to continue as we’ve known it would be cultural and societal ruination, or so we think.

steady state 3

Other options do exist. A steady-state economy is one such option. It’s not socialism or Marxism or a forced recession, but economic sustainability. A steady-state economy at its core is an economy of stable resource usage and consumption. Enough is Enough by Rob Dietz and Dan O’Neill (Berrett & Koehler, 2013) is an excellent resource for understanding the issues of a steady-state economy. The 19th century is over; we can no longer operate with a mentality that assumes an endless frontier of untapped resources exists solely for our economic exploitation. Dietz and O’Neill claim that, in our current day, technological optimism – the belief in the power of technology to overcome limits to growth – gives us a false sense of separation from the environment. The economy and our way of life are not somehow unconnected from the natural world; we need to adopt an economy that suits the needs and limits of the planet. Sixteen percent of the world’s population – those living in developed nations – accounts for 78% of the world’s consumption expenditure, while 2.7 billion people, 40% of the world’s population, live on $2/day or less. If we think “economic growth” is going to lift a majority of these 40% out of grinding poverty, we’ll have to pick up a few more planets on eBay or Amazon, because this current one won’t be enough neither in terms of resources nor waste-holding capacity!

A stable population is a necessity for those who advocate a steady-state economy. World population: today, 7 billion / 2050 estimate, 9.3 billion. US population: today, 316 million / 2050 estimate, 400 million. The US population continues to increase even as the US fertility replacement rate is 1.8, below the rate of 2.1 needed for a developed nation to maintain its population. Because of immigration, US population continues to grow. Even so, conversation on the feasibility of a steady-state option is a necessity especially as world population continues to increase. Smart economic development and sustainability must increase and the acceptance of growth at all costs must decrease.

Did you catch President Obama taking credit for the recent economic growth in his 2015 State of the Union address? The very next day Senate majority leader Mitch McConnell was counteracting the president, claiming the credit for his own political party. While members of both parties childishly bicker as to the generation of economic growth, and blindly tout its merits (it helps them to get elected), the world and our place in it desperately need a leadership they are not offering. The truth is that our society is thoroughly wedded to economic growth as a way of life and being – and it’s creating an increasingly complex dilemma:

             We rely on economic growth to generate jobs, yet continuous economic growth undermines the very life-giving and life-supporting systems of the planet. What in the world are we going to do about it?

 

My book, Just a Little Bit More: The Culture of Excess and the Fate of the Common Good, is available at http://www.blueocotillo.com and wherever books and ebooks are sold, including Amazon.

 

 

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Economic Growth: The Good, the Bad, and the Ugly

In this current day when congressional Republicans and Democrats don’t agree on much of anything, there is one thing that creates a rare kum bay ya moment of unity for the two groups: economic growth. Don’t get me wrong – healthy economic growth provides jobs, creates necessary goods, and keeps the majority of us fed, clothed, and sheltered. Healthy economic growth is a many-splendored thing! However, for reasons I will explain below, we tend to become fixated with economic growth to the point where we proclaim it our societal salvation: the elixir to ameliorate all social problems from unemployment to social program funding deficits. To the contrary, I propose that the unexamined pursuit of economic growth in a finite world only makes our problems worse and hinders us from seeking and implementing actual solutions.

Let’s cut to the chase. As the Depression eventually gave way to post-World War II, vibrant economic growth in America lifted many out of poverty and pretax incomes between the richest and poorest Americans narrowed. Economic growth (annual GDP) hummed along at 4% and 5% yearly rates.  The US government published the first national poverty rate – 22.4% – in 1959, a significant improvement over the poverty rate estimates of 40-60% during the Depression. One of the main factors contributing to this strong growth was cheap and plentiful oil. As US production of oil was not able to keep up with demand, reliance upon cheap and plentiful foreign oil increased in the 1960s. The OPEC oil embargo of 1973 changed all that. Economic growth decreased to 3% during the 1970s and ’80s, and for the fifteen years of the new century it has hovered around 2%. One of the main factors for the decrease of the growth rate is the increasing price of energy due to the difficult and costly process of extracting energy sources.

Have you ever heard of the term EROEI? It’s an acronym for energy returns on energy invested. Back in the days of Rockefeller and the early American oil boom, EROEI was 100:1, meaning the energy equivalent of one barrel of oil input produced one-hundred barrels output. The area surrounding Titusville, Pennsylvania attracted oil drillers in the 1860s because of the ubiquity of oil springs – little creeks of oil! Those were, as they say, the good old days. Today EROEI for oil is about 15:1. Extracting petroleum from the bottom of the North Atlantic, for example, can be classified as an engineering miracle – albeit an expensive and extremely complex one. As the Keystone XL pipeline continues to be a point of contention in US Congress and American society, check if the sites from which you source information actually report on the EROEI of the Canadian tar sands. I’ve yet to hear a mainstream news organization mention EROEI. Some of the tar sands have a ratio as low as 3:2. Joseph Tainter and Tad Patzek, in their excellent treatise on our current energy dilemma, Drilling Down (Springer, 2012), tell us that to power a complex modern society a net energy ratio of at least 5:1 is required. Yes, the completion and implementation of the pipeline will create jobs – but at what cost? I’ve not even mentioned the accompanying pollution and strains on water supplies that the production of these energy sources entails, and the additional release of carbon into the atmosphere upon their eventual consumption and use . . .

To complicate matters, the Saudis are flooding the market with – just like the good old days – cheap oil. As I write this post in January 2015, gasoline prices in America are hitting long-time lows as the price of oil crashes the $50/barrel barrier for the first time since 2005. And, on cue, economic growth is up. Some are hoping (reports come out at the end of January) for a 5% growth rate – just like the good old days – for the fourth quarter of 2014. Will it last? Has the American economy made its long-awaited comeback to 1950s’ era growth? We’d be foolish to expect a return to what used to be. Cheap, high quality energy – coal powering the industrial era before oil became dominant at the turn of the 20th century – provides strong economic growth and is the essential foundation of the highly advanced society of which we are accustomed. A gallon of gasoline has the energy equivalent of four hundred person hours of work. Giddy up and then some!

So, YES, economic growth is a good thing. BUT, the good and strong growth we’ve experienced has been based principally on a cheap energy source. The fossil fuels coal and petroleum, essentially millions of years of chemically stored sunlight, have made possible a 200-year run of high-phase energy gain. Social commentator Richard Hienberg says we’ve gotten accustomed to a “perpetual growth machine.” For those who think the next high-yield energy source – methane hydrate is currently being touted – will pick up the slack when fossil fuels run their inevitable course of completion, I ask: Is it not narcissistic and irresponsible to think we have to continue on the same trajectory of consumption we’ve been on for the past 200 years? Financial advisor and writer Paul Kedrosky wisely opines: “I want to believe in innovation and its possibilities, but I am more thoroughly convinced of entropy.” In other words, the unlimited growth machine can’t and won’t last forever.

Australian economist Clive Hamilton calls our commitment to unlimited growth above all other things a fetish, “an object worshipped for its magical powers.” Unlimited growth is known by another name: cancer. The defining characteristic of a cancer cell is its inability to self-regulate. Healthy cells follow an established cycle of division, multiplication, and then, inevitably, death. Cancer cells are interested in only one thing: unlimited growth. Similarly, over-commitment to economic growth makes us susceptible to bubbles – the 1990s’ dot.com and the 2000s’ housing bubbles being the most recent examples. Economic bubbles are like cancer cells – they don’t know when to stop and they damage the common good.

What I’d really like to hear from a politician – a president, no less – is talk about a steady state economy. In this day and age, an elected leader – Republican, Democrat, or independent – tempts political death if he or she were to speak common sense and encourage steady state economics. That’s why it’s left up to authors and bloggers like me to do it.

My next blog post will cover steady state economy. Until then –

T. Carlos Anderson

And, in case you’re wondering, the EROEI of wind and solar energies are 20:1 and 13:2, respectively.

 

My book, Just a Little Bit More: The Culture of Excess and the Fate of the Common Good, is available at http://www.blueocotillo.com and wherever books and ebooks are sold, including Amazon.

 

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