Thursday, January 26, 2012

The Struggle to See the Crises

It is interesting that a piece that illustrates how hard it was to predict the coming economic crises in Europe in 1931 was posted on Pearl Harbor Day.

Expect the unexpected 
R.A., The Economist, 7 December 2011

LOTS of people are currently trying very hard to figure out what's going to happen within the global economy over the next 1, 2, 5, and 10 years. It seems like the sort of thing one ought to be able to manage if one tries hard enough. It is, however, an impossible task ...

The article than goes on to note a number of quotes from the period which indicate just how unaware people were of the looming disaster ahead.  Both the of the worldwide extension of the Great Depression through the collapse of the Austrian economy with the  Credit-Anstalt bank.

Our opening editorial in the first edition of 1931 was a rumination on the trials of the 1920s, in which we wish our readers a "Happy New Decade":
We do not despair. We believe the world to be saner, both politically and economically, than ten years ago...The tasks before us are as formidable as at any time in our history. But our capacity to perform them is undiminished, if we will only use it. Our national advantages remain; the character of our people has not changed; the march of science is playing into our hands...Believing this, it is with good heart and confidence that we wish our readers a "happy new decade."
In a note in the issue of February 21, The Economist comments on the failure of a coalition of radical parties to take control of the Reichstag through parliamentary procedure:
The withdrawal of the National Socialists from the Reichstag is patently a sign of weakness...The gesture of withdrawal would only have had point if it could have been followed up by direct revolutionary action, but there is not the remotest question of that. What Herr Hitler failed to do in 1923 cannot even be attempted now...

All this does not mean that the tide of National Socialism has subsided...Everything, of course, will depend upon the course of business, which seems recently to have shown some signs of improvement.
It is often impossible to recognise the moments on which history hinges when they arrive. Tucked inside the issue of May 16th, in a note titled simply, "The Credit-Anstalt", The Economist writes:
Fortunately, it is already clear that the difficulties of the Credit-Anstalt are already being taken successfully in hand, and the very frank and reassuring statement issued this week should go a long way to dispel doubts...
The Credit-Anstalt situation has a lot of similarities to the current problems that Europe is having with the potential sovereign debt defaults.

This brings us to our current situation, and an interesting post by John Michael Greer:

What Peak Oil Looks Like
John Michael Greer, Arch Druid Report, 7 December 2011.

There are times when the unraveling of a civilization stands out in sharp relief, but more often that process makes itself seen only in the sort of scattered facts and figures that take a sharp eye to notice and assemble into a meaningful picture. How often, I wonder, did the prefects of imperial Rome look up from the daily business of mustering legions and collecting tribute to notice the crumbling of the foundations on which their whole society rested?

Nowadays, certainly, that broader vision is hard to find. It’s symptomatic that in the last few weeks I’ve fielded a fair number of emails insisting that the peak oil theory—of course it’s not a theory at all; it’s a hard fact that the extraction of a finite oil supply in the ground will sooner or later reach a peak and begin to decline—has been rendered obsolete by the latest flurry of enthusiastic claims about shale oil and the like. Enthusiastic claims about the latest hot new oil prospect are hardly new, and indeed they’ve been central to cornucopian rhetoric since M. King Hubbert’s time. A decade ago, it was the Caspian Sea oilfields that were being invoked as supposedly conclusive evidence that a peak in global conventional petroleum production wouldn’t arrive in our lifetimes. Compare the grand claims made for the Caspian fields back then, and the trickle of production that actually resulted from those fields, and you get a useful reality check on the equally sweeping claims now being made for the Bakken shale, but that’s not a comparison many people want to make just now.
On the other side of the energy spectrum, those who insist that we can power some equivalent of our present industrial system on sun, wind, and other diffuse renewable sources have been equally vocal, and those of us who raise reasonable doubts about that insistence can count on being castigated as “doomers.”
I have posted on numerous occasions about a variety of relatively unknown empires, civilizations, and cultures that were at one time of considerable (at least regional) importance.  Some of them are so obscure know that we do not even know their name.  In one case (which I have not posted on yet) the only record that I know for the demise of one large European farming community is pollen records (weeds replace agricultural pollens).

Unless they occur through conquest (analogous today to a major nuclear war) the greater collapse periods that we have a record for took some time.  There was often complaints about the good old days, but generally people did not seem think the whole show was going to fall apart.  The Western Roman Empire held on forever.  It was not until the Vandals took their African grain producing areas  439 AD that they finally gave up the ghost completely.  Even then there was enough of Rome left for it to be worth the Vandals time to sack the city 16 years later in 455.

The pattern seems to be for their to be periodic big stair steps down with people adjusting to the new level before they hit the next step.  To the extent that we may need to take some readjustments down the road we can only hope for such a gradual outcome. 

It is fairly obvious that the speed of history has increased drastically since the industrial revolution, and the world has never had anything like the current wide spread possession of nuclear weapons that faces us today.

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