https://thesenecaeffect.blogspot.com/2022/02/how-we-became-what-we-used-to-despise.html
https://en.wikipedia.org/wiki/Seneca_effect
The Wikipedia entry on Ugo Bardi is instructive.
https://en.wikipedia.org/wiki/Ugo_Bardi
Bardi is a researcher on materials for new energy sources, a contributor to the now-defunct website, “The Oil Drum”. He is the co-founder and former president of ASPO Italy, a member of the scientific committee of the Association for the Study of Peak Oil and Gas [it] (ASPO),[3] a member of the Club of Rome,[4] and author of several books, including The Limits to Growth Revisited.
One hopes that Bardi’s grasp of physical chemistry is better than his demonstrated ignorance of economic history
and technology.
The blog linked to has two glaring mistakes in its formulated assumptions.
The First The Russian Buns.
The collapse of the Soviet Union and subsequent collapse was largely exacerbated by the Liberalisation of the Former Soviet economies. The trivial use of the Bun Seller story serves no useful purpose. I would recommend as a starting point this article by Professor Victor Emitov from 2004
Click to access 20040506_In_Quest_of_National_Idea.pdf
““None of the manuals on Economics puts a question of how a state gets wealthy; they focus on the art of getting rich within a single corporation, a single bank, or give a piece of advice to individual wealth. Nevertheless, in real life, the corporate effect proves to be achieved at the expense of some damage done to the state and society. The Russian economy has been purposely demonetized to hit one of the bottom positions in the world rating. This ‘blood’ loss was behind the collapse of all the parts of the industrial sector, and the intentionally created ruble vacuum was designed to be filled with US dollars and other monetary substitutes. There is no need at all to talk about the banking sector” ‘development’ if we are aiming at the establishment of the financial atmosphere that would facilitate real production. Banking could ‘develop’ for the account of finance pumped out of the industry by means of the interest rate. We need to restore the functionally appropriate relation of ‘money supply to GDP’ by a ‘one-shot blood transfusion’”Etimov. prof.
Russia is extremely wealthy in natural resources and what is more its local cost of production are much more competitive
as they are not denominated in very expensive dollars and the nature of its oligarchy is not corrupted in the same way or to the same extent as that in the United States or indeed the UK or Italy. This is also true of its expenditures on military spending.
In the early 2000’s or 10 years after the Soviet collapse oil was produced in Russia for below $2 per barrel costs today still rival those of Saudi Arabia’s Ghawar field well below $10 per barrel. Analysis of marginal production costs is notoriously difficult Bardi and his ASPO peakist fanatics lack the academic detachment of more reliable commentators and researchers like Vaclav Smil.
Every microeconomics textbook explains that a business with market power can increase its profit by restricting output. In some cases, such quantity restrictions can lead to production being shifted to other firms. If those firms are relatively high-cost producers, this misallocation of production benefits the firm with market power, but means that society must spend more than it otherwise would to produce a given output.
In Market Power, Production (Mis)-Allocation, and OPEC (NBER Working Paper No. 23801), John Asker, Allan Collard-Wexler, and Jan De Loecker estimate that OPEC’s exercise of market power to hold down output of petroleum shifted substantial amounts of oil production from low-cost fields to higher-cost ones, imposing extra oil production costs of $163 billion (in 2014 USD) on the global economy from 1970 through 2014.
https://www.nber.org/digest/jan18/limits-opec-output-increase-global-oil-production-costs
US Health Care Costs.
It is well known that US health care costs are the highest in the world as they are based upon a hopelessly corrupt insurance-backed model. The US is handicapped by both a misallocation of credit and a misallocation of spending through its massively corrupted Oligarchical model of state-monopoly capitalism.
Bardi in his rush to fanatical confirmation bias demonstrates his ignorance of prime examples of misallocation of credit leading to dysfunctional distribution of available resources. Energy intensity is one measure, before we even reach those questions there is much low-hanging fruit that will yield results that are beneficial to the overall economy in the Developed economies.
Maurice Starkeys
Utilising the Quantity Theory of Credit to Understand the Causes of the 2007 Financial Crisis provides a very good basis for moving onto Werners Disaggregated theory of credit.
https://www.economicsnetwork.ac.uk/archive/starkey_banking2
“This paper applies insights from Richard Werner’s publications to consider the causes of the financial
crisis, and The Bank of England’s policy responses. It will begin by explaining some of the important
elements associated with financial deregulation, and how these changes unleashed banks power to create new credit money. I will then use the Quantity Theory of Credit to explain the causes of the 2007 financial crisis. This will be followed by a consideration of the policies adopted by The Bank of England following the 2007 financial crisis, together with Richard Werner’s criticisms of those policies.”
In 1997, the Italian economist Giorgio Nebbia observed that the negative reaction to the LTG study came from at least four sources: those who saw the book as a threat to their business or industry; professional economists, who saw LTG as an uncredentialed encroachment on their professional perquisites; the Catholic church, which bridled at the suggestion that overpopulation was one of mankind’s major problems; finally, the political left, which saw the LTG study as a scam by the elites designed to trick workers into believing that a proletarian paradise was a pipe dream.[30]
In a 2008 paper, Ugo Bardi commented that “By the 1990s LTG had become everyone’s laughing stock,” and noted that much of the criticism was based on gross misrepresentation of the actual content of the report, and claimed that “the LTG ideas are becoming again popular.”[30]
Click to access Alternatives-to-Growth_final.pdf
Hi Don,
It would seem that in the forthcoming planned Energy Transformation. Peak Oil Demand is likely going to be the driving factor and not peak oil supply or indeed a collapse of Oil Supply.
““If peak oil demand surprises consensus by occurring much later, Aramco will benefit from higher market share and more spare capacity to mitigate another unwelcome price boom,” said Bob McNally, founder of Rapidan Energy Group.
https://www.reuters.com/article/us-saudi-aramco-strategare very different measures y-insight-idUSKBN26R3PA
The Prices of Oil particularly but also Gas and Coal are not market-determined and investment decisions are also not in response to market price discovery mechanisms. Production costs and fiscal break-even costs .
This short documentary from the excellent Wendover production is well worth watching on Saudi Arabia’s Oil Problem
Stranded Carbon assets are I think a far more likely conundrum facing the collateralized money supply and the unit of currency being tied to a physical and falsifiable energy metric rather than the Abstractions that are currently dominant
The Energy transformation is not I think the greatest challenge to world commerce it is the new reserve currency measure
particularly in a multi-polar world rather than the uni polar post-Soviet collapse from 1990-2018.
I would argue that the urgency of finding a strategic soft power replacement for the fading Washington Consensus petrodollar hegemon based upon a Dollar/Special Drawing rights Carbon credit standard linked to renewable production
Russia , Saudi and China will all have rather a lot to say about the Unit of exchange for international trade and embedded carbon metrics will become increasingly important whilst calculating carbon trade balances in international trading relationships.
At this point the distinction between where we have been, where we are now and where we might be headed is what makes Tims article and its central point so interesting and important.
“In principle, the process of interpretation has to move forwards from the past to evaluate financial risk, but backwards from the present to create the preconditions for effective forecasting.”
Click to access pdf-generation-foundation-stranded-carbon-assets-v1.pdf
We should be carefully looking at where we are investing our money. (1)
(1)ED. This is the key misunderstanding, the whole basis of this analysis should look at Net Energy Surplus over cost of energy extraction, then in a real sense the Sentance, “We should be carefully looking at where we are investing our Energy ( qua, Energy )”, would have an energy-based monetary unit taking the place of the Debt-based monetary unit as a referent, the debt-based monetary unit as a referent renders the statement meaningless a per pro-energy capital allocation decisions.
#153. One for the sceptics
drtimmorgan on July 14, 2019 at 11:11 am said:
Please note:
Rather than presenting the economic case for transition to renewables as a report, I’ve decided to set it out here as an article.
It is, in my opinion, by far the most important issue on any agenda. For as long as we allow considerations of financial “cost” to limit our transition to renewables, we don’t just risk environmental disaster, but condemn the economy to impoverishment, as the ECoE cost of fossil fuels rises.
At a later date this might be turned into a downloadable report, and a stats annex might posted here too.
Meanwhile, I hope you’ll feel inclined to debate this with as many people as you can.
The Economic Superorganism: Review and criticism. Close but no Cigar.
Cornucopians can count Carbon too. #GreenHorizons #Cop26 #CarbonPrices #CovidPurpose #GreatReset
The Six Ways on Sunday, Carbon Currency end game 16 to 1 on, what are the odds of that?
The Seeds Cart before the Usury Horse. Why SEEDS ECOE Doomsday has not and may never arrive.
Putting the Peakist cart before the usury horse. The Carbon Credit crucifixion of democracy.
Unravelling Catastrophe. Seeds of Hope or Seeds of destruction.
Alex Thompson Analysis of the Dominant Faction of the Anglo American Esablishment.
“My contention is that the dominant power in the world, namely, the City of London, the financial heart of the British Empire, readied itself for that situation from roughly 1870. And that the modern world, the monopolisation of the world, the cartelisation of the world, begins in anger at that time.
“There were several revolutions by the British elite and they all revolved around containing productivity and preventing a growth of intelligence and intellectual property.”
