I had a mild epiphany the other day: it’s not President Bush who’s
living in a fantasy world, it’s most of his critics who are. I’m
no apologist for Bush - I neither like nor dislike him. He’s no more significant
to me than a fly buzzing around outside my window. So permit me to explain my
People look at Bush’s invasion of Iraq and see a miserable failure. But
a failure to do what? Democratize Iraq? Eliminate Iraq’s WMD arsenal?
Reduce global terrorism? If those were, in fact, the reasons for invading Iraq,
then the invasion would have to be classified as a failure. But what if the
real reason was to secure Iraq’s oil supplies, perhaps not for immediate
use, and perhaps not even for use by the United States? Then the invasion of
Iraq would have to be judged a success, a “mission accomplished,”
so to speak.
Or take Bush’s seemingly irresponsible handling of the domestic economy.
How can any sane person fail to understand that cutting revenue while increasing
spending will produce deficits, and that those deficits cannot increase in perpetuity?
Sooner or later that accumulated debt has got to have consequences. Bush appears
to be acting as if there were no tomorrow. But what if there really were no
tomorrow, financially speaking? In that case, the reckless economic policies
of today would not only be irrelevant, but might actually be shrewd. I mean,
if one knows that he is not going to have to pay back his debts tomorrow, then
why not borrow money like crazy today? In fact, if civilization is coming to
an end, then why not use all that borrowed money to stock up on guns and vital
resources, such as oil?
Now, I’m just one person. And I’ve been closely studying economic,
environmental, and energy issues for only a few years. And I’m no expert.
Yet I’ve come to the conclusion - and I don’t want to be a “Chicken
Little” here - that civilization as we have known it for the last century
is doomed. Our wasteful manner of living - heck, the sheer size of our human
population - is unsustainable. Everywhere you look you can see signs of strain
on the Earth, from spreading pollution of the air, water, and land, to disappearance
of life in the seas, to depletion of natural resources. Something’s got
to give. Things simply cannot continue as they have.
If I can see this, I would guess the United States Government, what with its
thousands of full time experts, probably can too. Now, if you are the government
(and I don’t mean Tom “I am the federal government” DeLay),
and your experts tell you that civilization as we know it is doomed, what do
you do? Well, for starters, you do not tell your population of sheeple. That
would precipitate panic and result in premature doom, which would consume the
government along with everything else. Above all, government seeks to survive,
so you would maintain the facade of normalcy for the benefit of your population
while you use what time you have left to prepare, as quietly as possible, for
the inescapable future.
What will matter in this future? Commodities, principally energy, food, and
water. Everything else is secondary. Money is far down the list in importance.
So how would you, the government, prepare for a future world in which commodities
are king? By securing today as many of those commodities as possible. Hence,
the U.S. government’s binge of military base building throughout the commodity-rich
regions of the world. What would you not worry about? Money. The only concern
you might have for money is to prevent its premature demise. Hence, the smoke
and mirrors used to paint a pretty but false portrait of the economy. Some will
argue that the government needs more than just energy, food, and water to survive.
True, but by controlling the bulk of the world’s key commodities, everything
else can be procured, including human labor and loyalty.
In preparing for the future demise of civilization you would also seek to increase
the government’s power as much and as rapidly as possible. Why? To maintain
control over those increasingly precious resources, and equally important, to
control people - especially your own people - by force, if necessary. Viewed
in this light, the government’s aggressive pursuit of power during the
last five years makes perfect sense. Ironically, President Bush got it right
when he reportedly referred to the now totally eviscerated United States Constitution
as a “god damned piece of paper.” That’s really all it is
So what fantasy world are Bush’s critics living in? The fantasy world
in which civilization can continue as it has in the past. That we can continue
to improve the standard of living of everyone in the world if we just return
to a more sharing and egalitarian way of life, like that which we enjoyed between
World War II and the mid 1970s. This is a fantasy. The Earth has finite limits.
We are finally starting to grasp that fact with respect to oil. But oil depletion
is merely the first in a series of coming crises ensuing from the finite confines
of our planet. The fundamental problem - and I’m not a Malthusian - is
that there are simply too many people for the Earth to sustain. This is why
fish are disappearing from the oceans, why the supply of oil is unable to keep
up with demand, why the globe is being deforested, why animal and plant species
are going extinct, why water wars are in the offing. Perhaps if people were
wiser and more willing to share, and implicitly, less greedy, we could sustain
the more than six billion people on Earth, but, alas, such idealism does not
describe human beings.
The one thing that has enabled the human population to grow to the immense
dimensions we see today is oil, the resource facing the greatest challenge from
depletion. As the oil supply diminishes, in the absence of herculean efforts
to use oil more efficiently and fairly, large numbers of human beings will die
off. Before then, soaring prices for oil will probably destroy the economies
of the countries most dependent on the stuff, if not the entire intricately
linked world economy. This is what I mean by the end of civilization. Of course
life will go on. But it won’t be anything like what we’ve been accustomed
to. Life will be more like that of the Middle Ages, in which a few wealthy lords
controlled all the resources and possessed all the power, and the rest of the
people - the lucky ones, anyway - were veritable slaves under these lords. In
many ways that state of affairs exists today, but it’s unseen by all but
the most observant individuals. The future I’m talking about, though,
is considerably more spartan than what the worker bees enjoy today.
I believe that what we’re witnessing today is the inception of a titanic
and protracted competition for survival: between countries, between civilizations,
between governments and their people. Moreover, I believe the Bush administration
is the first to recognize this competitive future, which explains its fundamentally
different - seemingly feckless - behavior compared to past administrations.
Bush’s favored courtiers, which include corporations, are profiting today
and will become the new nobility in the coming New Middle Ages.
Truth and Distractions
The governments of the world, and the U.S. Government in particular,
don’t want their people to know the truth. Governments usually end up
seeing themselves as entities distinct from their people, and usually end up
competing against them. That is true of almost every government on Earth today,
and is especially true of the U.S. Government. Keeping the truth from people
helps a government achieve its goals, for if the people knew the truth they
might demand that the government start actually serving them.
One way to keep the truth from people, aside from today’s favored approach
of simply suppressing it, is to feed them a steady diet of compelling distractions.
Elections are one such distraction. Elections arouse peoples’ passions
and keep them entertained for weeks or months. Elections even give people the
illusion of participation, when, in fact, elections mean absolutely nothing
in a country like the United States, which is run by money. Of course, elections
are run by, and legitimized by governments.
Sex is another good distraction, both sex scandals and sex-related social issues.
Look at how much mileage the media got out of the Catholic Church sex abuse
scandals. By comparison, sexual abuses by the government’s own schoolteachers
outnumber those by the church, but we hear nary a word about them because they
reflect negatively on the government, and the media cooperates in keeping this
quiet. Sex between consenting adults, which ought to be nobody’s business
except the participants’, also consumes our attention. Look at how much
attention people pay to homosexuality. Why is that anybody else’s business?
It’s not, obviously, but it’s a great distraction from important
things, such as the government’s reverse-Robin Hood economic policies.
The same with abortion. Abortion is a personal matter for the people involved.
It’s none of society’s business. But government stokes the flames
of debate about abortion and it consumes peoples’ attention. Sexually
transmitted diseases - diseases in general - are also good distractions and
have the added benefit of instilling fear in the population.
Crime is a perennial distraction. Even when the crime rate is falling, the
government seems to hype the crime statistics, making it seem as if you’re
putting your life at risk by merely setting foot outside your front door. Of
course, “crime” breeds prisons, and prisons empower the government.
Given the benefits of crime to the government, it comes as no surprise that
the government creates crime by criminalizing harmless behavior such as using
drugs or hiring a prostitute.
Religion is also a distraction. Domestically, the fashionable debate today
revolves around the separation of church and state. There really ought not be
any debate. The United States Constitution is unequivocal: the United States
Government shall not recognize any particular religion. End of story. It does
not say how states may address religion, but it does say that all powers not
prohibited to the states belong to the states. In my opinion, then, if a state
wants to recognize a religion, it may do so.
The “clash of civilizations” is perhaps the newest distraction,
and a completely contrived one at that. The Muslim-Christian antipathy that
exists today is both a religious and a cultural distraction. Decades ago, when
we were affluent, we were taught to celebrate cultural diversity on our planet.
Today that same diversity is touted as the explanation for the “clash
of civilizations.” Granted, different cultures are, well, different. But
that doesn’t mean that conflict must ensue, and for decades there was
no conflict. Clearly, the flames of cultural conflict are being stoked. By whom?
The governments of the world and the media. For example, just look at how European
media companies and European governments colluded recently to provoke Muslims
with those silly cartoons. Cultural conflict not only distracts the masses,
but it provides governments with a credible justification to increase their
power, for instance, to regulate headgear worn in schools and restrict immigration.
Of course, “terrorism” is ancillary to this clash of civilizations
and serves to intensify anxiety in the population. How many acts of terrorism
are actually perpetrated by governments? It’s impossible to say, but it’s
definitely more than zero, a lot more. So why does a government perpetrate an
act of terrorism? To create a distraction, to increase its power, or both.
One thing all of these distractions have in common is collusion - intentional
or incidental - between the government and the media. The government seems to
be involved in all of these distractions to varying degrees, ranging from merely
exaggerating the importance of some distractions to actively orchestrating others.
And none of these distractions could successfully distract the public without
the zealous participation of, and amplification by, the media. One might argue
that the media is naturally drawn to report sensational news, as a moth is drawn
to light, and most of these distractions qualify as sensational. But I don’t
think it’s purely coincidental that the media relishes these stories when
there is so much overlap between the agendas of the government and the corporations
that comprise the “media.”
Both entities seek to dominate, exploit, and control the “little people.”
And the little people, being xenophobic, uneducated, and fearful, are easily
manipulated in a formulaic manner to help undermine their own welfare. Simply
look at their support for Bush, a leader who has systematically attacked their
standard of living, not to mention their liberties. All Bush had to do was push
a few buttons labeled “religion,” “sex,” and “culture”
to get them to react like Pavlovian dogs. And all this button pushing was, of
course, happily assisted by the media.
We humans like to think of ourselves as so much more sophisticated than “lower”
animals. In affluent times and places we can afford to worry about silly things
like what movies will win Oscar awards, whether our body looks good at the gym,
or where we will take our next family vacation.
But our existence still depends on this fundamental equation: survival = food
+ water + shelter.
In leaner times, like those we’re heading into, the above equation becomes
Food production today is highly dependent on oil. Oil powers our farm implements,
oil and natural gas are ingredients in commercial pesticides and fertilizers,
and oil transports food to market. Today food travels as far as 10,000 miles
from where it’s produced to where it’s consumed, which would be
impossible without oil. Oil vastly increases agricultural productivity. So it’s
because of our largess of oil that the human population has been able to grow
as large as it has. One might say that humans eat oil. We can, of course, produce
food without oil - barring such evil manifestations as crops that are genetically
engineered to require the use of petroleum-based pesticides - but without oil
food production will be much lower.
Water is a resource we take for granted. We act as though there is no limit
to the supplies of water, and that there are no repercussions to our profligate
consumption of it. We’re building cities in places without adequate water
supplies - Phoenix and Las Vegas come to mind - and we’re using up vast
reservoirs of non-replenishable “fossil” water, such as the Ogallala
Aquifer in the American Midwest. Just as we’re failing to plan for economic
“rainy days,” we’re failing to regulate our water usage to
prepare for a literal lack of rainy days. We seem to think that the replenishable
water supply patterns will remain unchanged, an especially optimistic expectation
if the Earth’s climate is truly in the midst of major change. But the
water situation is even worse in some other places than in America. Water delivery
is partly dependent on energy, just as food production is. It takes energy to
pump water from the ground, to transport it to where it’s consumed, and
even to treat it. Of course, food production is vitally dependent on water.
I hardly need mention the importance of oil except to say that for the first
time in history, the demand curve is passing the supply curve. Moreover, the
supply curve will soon be heading downward and we’ll find ourselves perpetually
chasing this ever dwindling supply downhill. When demand merely exceeds supply
the price of oil will increase. But when demand exceeds supply and the supply
starts to diminish, then prices will really go up, enough to destroy economies
or render impractical the transportation of food and water to some places. But
the gap between supply and demand means more than just higher prices. It also
means shortages. Those who can afford to buy oil will usually have their needs
satisfied, albeit at higher cost. But those who cannot pay the price will do
without. Occasionally, even those who can afford to buy oil will be forced to
do without because from time to time there simply won’t be any oil to
buy on the global market, at any price. Imagine going to your local gas station
and seeing a sign out front reading “Sorry, no gas.” Imagine going
to your local grocery store and seeing empty shelves because the trucks that
deliver goods to the store had no diesel fuel. Imagine having to bundle up in
two layers of sweaters inside your house because you have to make half your
normal allotment of home heating oil last the entire winter. These hypothetical
scenarios will become reality and will occur with increasing frequency as time
What’s going to happen when people have to vigorously compete for food,
water, and energy in order to survive? I think it’s going to get vicious.
My opinion of humanity holds that in the face of such adversity, it will be
every man for himself. Countries will compete against countries. States will
compete against states. Cities will compete against cities. Governments will
even compete against their citizens. Civilization, in the sense of the word
“civility,” will be no more. Perhaps genetically engineered terminator
seeds, depleted uranium, and exotic diseases are secretly intended to reduce
the human population to alleviate resource competition.
Clearly, the U.S. invasion of Iraq is one of the opening salvos in the coming
resource wars. And the U.S.’s belligerence toward Iran is undoubtedly
due to Iran’s possession of vast oil and natural gas resources. Bear in
mind that a country need not seek control of vital resources with the intention
of consuming them. The country that controls resources can use those resources
either as a lever to compel other countries to behave a certain way, or to buy
other resources or finished goods, such as weapons and integrated circuit chips.
The End of Money
The 1970s was the apotheosis of the “American Dream.” Wedged between
the preceding decade of civil unrest and the subsequent decade of recessions,
rapidly rising homelessness, and mass layoffs, the 1970s was a comparatively
idyllic decade. It certainly had its problems - stagflation, for instance -
but even while living during that time I felt it was a special decade. Life
was good; people were happy, friendly, and mellow; TV shows and movies were
cheerful; civil liberties were at their peak; government power was at its lowest
ebb; the country was affluent and at its peak of industrial prowess. It’s
not a coincidence that the tallest buildings in America were built during the
1970s. Those buildings were icons of American industry and power. Although the
Vietnam War raged during the first half of the 1970s, it was in the process
of winding down and came to an end by the middle of that decade. The cessation
of the Vietnam War was as much a reflection of the peoples’ desire to
“live and let live” as it was a military defeat. Military conscription
also ended in that decade, and even the cold war cooled off because of détente.
Unfortunately, what we didn’t realize at the time was that we would never
again have it so good. The 1970s represented a “tipping point,”
to use the popular vernacular, for the American Dream. That was when globalization
really started to take off and when the serious decline of American industry
began, the steel and auto industries being among the first casualties. Interestingly,
the 1970s was also the decade of peak oil production in the United States, after
which point we became increasingly reliant on imported oil, which greased our
downward slide. What I didn’t realize until writing this was how crucial
a role President Nixon played in creating this tipping point. Nixon opened the
door to trade with China, a major player in today’s globalized economy.
Nixon disassociated the U.S. dollar from gold, facilitating the destruction
of wealth through unrelenting devaluation of the dollar. Nixon launched the
war on drugs, a precursor to today’s war on terror (or is it the war of
terror, I can’t tell?). Both the drug war and war on/of terror consume
wealth in order to serve the imperial ambitions of the U.S. Government, but
contribute nothing to the country’s production of wealth.
The 1980s was a decade in which previously accumulated wealth was systematically
extracted, mainly through the mechanism of “Merger Mania.” The 1980s
was a decade of marked industrial and economic decline, which was masked to
a large extent by releasing into the economy some of the wealth squeezed out
of these mergers, as well as by the massive accumulation of debt. The transformations
of 1980s also introduced a new component: the injection of foreign wealth into
the country. Many of the assets sold in the 1980s were purchased by foreigners,
especially the Japanese, a trend which accelerated toward the latter half of
the decade, highlighting America’s economic decline. The 1980s also marked
the inception of the mythical “service economy” theory to justify
the profitable exporting of American jobs. The economy is like a pyramid. Forming
the foundation of this pyramid is the one true source of wealth: natural resources
- the free wealth given to us by the Earth and the Sun. Mining for minerals
and energy, agriculture, fishing, and forestry are the source of all other wealth.
Above this foundation are industries that utilize its products. These second
level industries consist primarily of manufacturers that take raw materials
and produce something of greater value. Above the manufacturers are companies
that serve them, including law firms, advertising agencies, shipping companies,
airlines, hotels, restaurants, and even entertainment. As wealth moves up this
pyramid a little wealth, constituting salaries and savings, is retained by each
level in the pyramid. The myth of the service economy, the darling theory of
the 1980s, is that a country could retain the top of the pyramid and outsource
the base of it. During the last three decades we have transfered much of the
base of this economic pyramid to countries such as China and India and indeed,
initially, the money kept flowing to the top of the pyramid which remained in
the United States. But after a while, a new top of the pyramid began to form
in those countries where we had shipped the base of the pyramid. Witness today
not only the exodus of high tech jobs to China and India, but that in those
countries pure service companies, such as advertising agencies, are also starting
The 1990s was a period of greatly accelerating globalization and economic decline
for the United States, aided and abetted by such treaties as NAFTA, GATT, and
the WTO. Again, this massive decline was masked by the illusion of wealth that
persisted during the huge stock market bubble of the latter half of the 1990s.
Like merger mania before it, the stock market bubble attracted a lot of foreign
wealth. A bit more previously accumulated wealth was extracted from rising human
productivity here in the United States during the 1990s.
Finally, the 2000s so far represent an era massively dependent on inflows of
foreign wealth. With our previously accumulated wealth now exhausted and little
means left for fundamental wealth production, about the only thing keeping the
U.S. economy afloat these days is consumer spending and deficit spending by
the government, both of which are financed by growing mountains of debt, which
is owed to foreigners. The United States has largely been reduced to a nation
of people that sell each other hamburgers, with foreigners paying the checks.
Asset sales to foreigners continue as well, the failed Chinese bid for Unocal
and the not-so-failed Dubai bid to run some of our seaports being prominent
During the last thirty years in America two persistent trends are clear: the
steady depletion of existing wealth and decline in the means to produce new
wealth; and the steady rise of an imperial U.S. Government.
Today, the economic imbalances in the United States economy are so vast that
I cannot see how they can be corrected gracefully. Even more astonishing to
me is that people keep buying financial instruments like U.S. Treasury bills.
Do these investors really believe they’re ever going to get their money
back? The national debt is so large that paying it down is nearly impossible,
especially since there is no political will to either increase taxes or reduce
spending. Obviously, the U.S. Government knows it cannot pay down the national
debt, which is why it covertly relies on dollar devaluation to reduce the value
of the national debt.
It’s only a matter of time before the majority of investors in dollar-denominated
financial instruments open their eyes and stop buying those assets. When that
happens the dollar is doomed. The government’s only recourse when it cannot
borrow money will be to print dollars, which will only accelerate the dollar’s
demise, possibly even inducing hyperinflation along the way.
If oil prices skyrocket because of the global supply and demand relationship
and harm the U.S. economy, that could accelerate the dollar’s demise as
well. I personally don’t see how the dollar can avoid substantial devaluation,
either slowly or rapidly. I hope the decline is gradual.
All of the world’s government-issued currencies are in similar straits.
None are firmly backed by finite, physical resources, such as gold. Consequently,
all currencies have the potential to suffer from devaluation, even more so since
the economies of the world’s countries are so intricately linked together.
If one currency abruptly collapses, especially an important one like the dollar,
they could all come crashing down.
Additionally, faith in the world’s currencies depends in part on globalization.
The willingness of an investor in Japan to buy American dollars depends in part
on the investor’s expectation of a continuing economic relationship between
Japan and America. But in an era where global trade is increasingly challenged
by oil shortages, faith in other countries’ currencies will diminish too.
Countries will increasingly prefer to conduct international trade using universal
mediums like gold instead of currency.
If currencies such as the dollar become worthless, even local trade may be
conducted using gold or other precious metals. Such trade may, in fact, have
to be conducted in black markets, since financially distressed governments will
probably seek to confiscate all gold and precious metals from their citizens.
The bottom line is that government-issued currency will be a thing of the past.
So how will the government continue to exist?
Acquisition of Resources
Without money or credit, government can only continue to exist through force.
The United States government is particularly well endowed in this regard and
has demonstrated its willingness to use force to acquire resources, and not
as a last resort either.
Iraq’s oil is the first such resource to be acquired by military force.
Iran’s oil and natural gas may well be the next. In the long run, the
energy-rich regions of central Asia will also attract the hungry gaze of the
U.S. Empire. Of course, other powerful, populous, and hungry countries, such
as China and India, will also have designs on these energy-rich regions, which
will probably result in significant wars. Oil from the Middle East will probably
become so valuable that countries will have to provide a military escort for
every tanker carrying oil across the ocean.
Domestically, energy will be controlled by the government. It will satisfy
its needs first, corporations will have their needs satisfied second, and the
populace will be forced to ration whatever is left.
Food is also critical to the government, comprised, as it is, of people. So
it’s logical to assume that the government will at some point take control
of food production. As with energy, the government will satisfy its own food
requirements first, and the populace will be left to ration whatever is left.
If water becomes a scarce or unreliable resource, then we can assume that the
government will take control of that as well.
In a future where money has no value, the only way a government can retain
people is by providing them with food, water, and shelter. In fact, in a future
world where resource competition is the order of the day, people will probably
covet a government job - as a bureaucrat, a laborer, or a soldier - simply because
it will mean three square meals a day and a roof over their head.
Of course, government needs more than just food, water, and shelter. Government
needs weapons, vehicles, computers, communications gear, and myriad other manufactured
items. Some of these things are manufactured wholly in other countries, or depend
in part on components from other countries. Without money the government cannot
buy these things. But it can trade precious resources, such as oil, water, and
food, for them. Some critical factories, such as domestic weapons plants, may
be taken over wholesale by the government for security reasons.
Government cannot operate on resources and material alone. It also needs labor.
Some of that labor can be “purchased” in exchange for resources.
But in order for the government to operate “profitably” it will
have to employ slave labor, that is, labor it doesn’t have to pay so richly
We already have such a precedent. Many of the two million people already incarcerated
in this country are veritable slave laborers. They “earn” anywhere
from twenty-five cents to one dollar per hour, often working for major American
corporations. But in some cases these poor prisoners are then charged room and
board for being in prison, thus wiping out their minuscule income. In effect,
since they are being forced to work without making any net income, they are
slaves. It does not challenge the imagination to envision future slave laborers
working in factories manufacturing everything from machine guns to computers,
or working on farms to produce food, returning each night to sleep in their
The United States military is currently exploring ways to utilize civilian
prisoners to satisfy the military’s labor needs. It’s only a matter
of time before they come up with a justification for doing so.
Once the framework for utilizing slave laborers - all nice and legal, of course
- is established, it’s quite easy to increase the pool of potential laborers,
if necessary. The government merely has to criminalize more behaviors. Caught
driving your car on the “wrong” day? Three months in prison loading
ammunition cartridges. Caught possessing gold coins? Six months in prison assembling
computers. Caught saying “subversive” things over the telephone
to your aunt? Five years on a prison farm - for the both of you - tending crops.
Of course, prison sentences will likely be accompanied by asset forfeiture,
that is, if you have anything the government wants. There is already a precedent
today for asset forfeiture too, even for minor offenses such as hiring a prostitute
or having a marijuana cigarette in your car. Heck, simply walking through an
airport today with “too much” cash on your person might result in
it being confiscated. Conclusion
Although this essay has mainly been a description of the United States and
its future, much of it is applicable to the world as a whole. Some other countries
may well face worse times ahead because they lack the natural resources and/or
military might that the United States possesses.
The goal of this essay is not to propose solutions to the many problems facing
us, although there are solutions, but to explain the seemingly irrational behavior
we see around the world. Viewing the world today in light of the foregoing essay,
Bush’s actions are understandable, even though I don’t endorse them:
the competitive pursuit of resources, the rolling back of civil liberties, the
carefree handling of the economy.