Monday, April 9, 2012

Peak Wealth

The suicide of a Greek pensioner who claimed he could not afford to live with new austerity measures has sparked a new round of protests in Greece. People are essentially questioning why they are being forced to suffer for a crisis that isn't their own making. Depending on your own view of things, you might sympathize with this viewpoint, or you might point out that people have fed at the trough long enough to be part of the problem, whether or not they meant to be. However, as usual in the modern narrative, the issue is that the underlying problem is not really being explored.

Enough has been written about Peak Oil over the years to where discussing it in the absence of any new revelation on the topic is probably a waste of time, but I think there is a corollary to it which really hasn't been discussed much yet, something that would probably accurately be called "Peak Wealth." By this, I mean the tipping point where the actual economic worth and soundness of the average individual and the overall begins to decline, where our options become increasingly limited, shifting from a luxury-seeking preference to a subsistence-seeking one.

If we use an analogy of Peak Oil to examine Peak Wealth, consider it in these terms. As Europe emerged from the Dark Ages, it began an evolving process of using trade (and sometimes conquest) to build wealth. This wealth began to be accumulated in a banking system (initiated by the Knights Templar, perfected by the Medicis) which was used to power economic and technological expansion for centuries to come. Then, came the rise of modern consumerism. Just like sheep being turned loose on verdant Achaean hillsides, spendthrift politicians and credit-addicted consumers have sheared the accumulated wealth of civilization lean over the past couple of centuries, leaving us with little in the way of actual resources.

This is maybe a harder thing to define in real terms than it is to capture as an concept. Per capita income, which is sometimes kicked around, is a misleading figure. If wages are adjusted for inflation, we'll see incomes raise, even though the prices of commodities may rise even faster than what people can afford with their new-found "wealth."  Purchasing power calculators may offer more of an accurate glimpse, but this may require matching price to commodity. Things like consumer confidence and unemployment are even more misleading, both figures being so politically volatile that they are more "cooked" than a Fukushima hot dog.

I plan to do a little digging and follow up this blog post with something which has some meaningful number crunching, but consider a few things here. Real wages have not risen in America since 1970, yet the pressure put on commodities has increased by an expanding population. Some commodities (such as oil) have been available only because of a technological race between depletion and the science used to extract or process them. People have to work two or three jobs to cover just basic household expanses. The labor pool has increased, but the value of labor has dropped because there is no corresponding increase in actual wealth.

On a national level, it means we can't fix the roads or bridges, or figure out how to come up with a real, workable solution to resources depletion, or balance the budget, and so on. On a personal level, it means we have to do much more with much less, and can no longer really look to other parties to even minimally ensure our economic futures. Greece is the tip of the iceberg, but the rest of the world is going to eventually follow. What is also telling here is that this wealth was carefully built through the exploitation of natural resources, trade, scientific innovation, conquest, etc. These things are no longer possible now, especially since we have decided as a species to remain on earth and to choose luxury over progress. Our heroes are sports stars and singers, not scientists or inventors.

The question then comes to mind of what this actually means with regard to the possibility of collapse? The answer simply is that this is the collapse itself, when we're no longer able to realistically maintain the economic systems we've built. Just like depletion of oil resources would mean an end to the labor multiplier that every person has enjoyed for the last few generations, the depletion of wealth resources, and the inability to rebuild them, will mean an end to the independent economic existence that most people have enjoyed for the past few centuries.


  1. You are slowly coming to a conclusion that i can to a while back - economics is not a means for basing a society. The cost of living should be zero - babies have no money when they are born. Dogs and Cats have no money. We are happy to spend money on all of them, to show we care. This is all absurd.

    Come over to the zone and see if we can come up with an image of a society that works. We can start with as little of the present system as possible. We have to dig hard to find the basic false assumptions that keep us going.

    Way back in the 70's - i decided to become a scientist rather than a sports executive because i thought it would be a better thing to do. Who knew that sports and science were changing places in the pecking order. Thyme now to get rid of the pecking order and do something different.

    1. False assumptions, in deed, delusions if you will. We might do well to start by questioning all of these false values we have bought for ages. We have gotten ourselves pretty much upside down. I believe during this process, we would come up with a socioeconomic system based on real needs. A gift economy like as a family that cares for one another. Very little competition, and the little that is employed not taken seriously (goodbye to cutthroat competition). Humanity would celebrate cooperation, collaboration, high democracy, and gradual elimination of waste and stress--the opposite of what is done now. A system where having less is considered honorable, and having more is embarrassing. A world in which there is a place for everyone and everything. Where just enough is the goal and contentment is the fruit.

    2. I want to live in that world.

      When do we start?

  2. great post. I shared this on my Facebook.

  3. Dear performs:

    Just a quick note to say how much I enjoyed your turn of phrase at your comments' end: "Where just enough is the goal and contentment is the fruit." Well said.


    - Stoosh

  4. Great post. Check this out blog out:

    The comment filter there is more restrictive than here, so I have no idea how to leave (positive) comments on the other blog, but this blogger is saying pretty much the same things you are.

    Essentially, peak oil awareness is awareness that the produced gallons of light sweet crude oil will decline each year, and therefore usually will go up in price this years. Which means awareness that everyone will get poorer in one way or another.

  5. Nice post!

    Ed, thanks for pointing out the comment filter was playing up on my site - it is fixed now.