293. "BLOOD IN THE STREETS"
Over time, we've seen a gradual shift in the rhetoric of the peak oil community. The original pessimist position was based on "hard", unavoidable numbers and realities: the human population is dependent on oil for food, and as oil declines, this must lead inevitably to mass die-off of most of the world's population. As we have seen, however, this argument is only superficially plausible, and when we dig deeper into it, we find that it is basically a bunch of B.S.
On the whole, even the doomers themselves have grudgingly accepted the refutation of die off theory, and have shifted their focus to economic cataclysm. Their rhetoric is now based on concepts like fiat money, unmanageable debt, recession, depression, inflation, deflation, stagflation, consumer credit, housing bubbles, financial overextension and imbalances etc. etc. It's kind of ironic really. The original doomer position was that economists are wholesale idiots, "flat earthers" who have no credence whatsoever. They were supposed to stay out of the peak oil debate and leave it to geologists -- because economists don't have the expertise to comment on oil depletion. Yet now, we are seeing the peak oilers crassly invading the turf of their enemies (the economists) in order to salvage their collapse scenario. I guess the bottom line on the turf question is that economists have no valid opinions on peak oil because they have no expertise, but peak oiler amateurs have valid opinions on economics because they're... well... peak oilers.
One thing is for sure, though: economic apocalypse is notoriously hard to predict.
Just to give you an example, I recently got an interesting old book from a friend when he moved and threw out all his old paperbacks. It's called "Blood in the Streets: Investment Profits in a World Gone Mad". It was written by two financial commentators/analysts (James Dale Davidson and Sir William Rees-Mogg) in 1988. Here's a quote:
The coming years will be a bad time to be ill-advised. A time fraught with snares for anyone who is unprepared. We could be on the verge of a financial upheaval when blood will, indeed, "run in the streets".The authors describe in great detail the coming upheaval due to the Latin American debt default, the imminent real estate crash, the end of American supremacy etc. etc.
It's entertaining reading because the authors were 100% wrong about everything. The U.S. didn't go down the toilet in the 1990s. Rather, the country experienced the greatest surge of technology-driven prosperity in its history.
My point is that people have been predicting the implosion of the global financial system for more than 30 years. Davidson and Rees-Mogg made an extremely convincing case for it 20 years ago. Nevertheless, nothing actually happened. In fact, anyone who actually bought into their imminent collapse theory in 1988 got burned.
The warning sign, I think, is the tone of the analysis. Davidson & Rees-Mogg were so sure of themselves, and it's eerily reminiscent of the tone in the peak oil community. Many of the quotes from their 1988 book could have easily been lifted off The Oil Drum or peakoil.com yesterday. That's the problem. The economic future is highly unpredictable and should be addressed by hedging -- not by being sure of yourself, but by questioning yourself. Seriously and toughly asking yourself: Could I be wrong? And if so how? What am I missing? That's what Davidson & Rees-Mogg didn't do and that's why they were so wrong.
-- by JD
posted by JD @ 5:38 PM
9 comments
9 Comments:
I don't have to ask myself that question. I know I'm an asshole. In fact, I'm such an asshole that I will be nuking your comments nukeengineer. Thanks for dropping by.
That was a very well-written thoughtful post. But, I suspect the doomers will just say that this time the sky is falling and we have just gotten lucky these past few years.
I suspect if the Internet had existed in 1988, the ideas of that book would have spread a lot farther and there would be a group of people with their own website panicking and preparing for the apocalypse. Look at the LEAP/EURO2020 prediction for a "systematic crisis." That got a lot of people panicking. People believe everything they read on the Internet too easily these days (myself included). At least this website prompts to at least think critically versus being told exactly what to think at LATOC, etc.
The majority of people are not able to think critically about every issue. When the LEAP guys tell us there is going to be a crisis, a percentage of us panics instead of analyzing why they are (were) wrong.
I really hate how "experts" like investment banker Simmons talks about how Saudi Arabia is peaking. He is an investment banker, not a geologist. He should stick to what he knows best. Campbell, the most respected peak-oil geologist, predicts a Saudi peak in 2014 (with a world peak of 2010). His opinion means more than Simmons since he is a geologist (even though he has been wrong many times, but thats another story). My main point is that peak oilers (peakoil.com folks) should stick to what they know best, whatever that is. I don't know much about economics or geology, but I do know thermodynamics well so I can comment on that subject appropriately. If you are an economist or studied the subject extensively, comment on it, otherwise keep quiet and go work on the ecobunker, you tools.
It may be worth remembering that William Rees-Mogg is known in the UK precisely for putting his name to a whole string of wrong predictions. I think Francis Wheen of The Guardian used to keep an annual list.
It may be worth remembering that William Rees-Mogg is known in the UK precisely for putting his name to a whole string of wrong predictions. I think Francis Wheen of The Guardian used to keep an annual list.
The same can be said of C.J. Campbell. No one would put any stock in Rees-Mogg after his failed predictions, so why are people ignoring Campbell's failed predictions. Ruppert/Deffeyes and others also have a history of failed predictions as J.D. has pointed out. People like Rees-Mogg and Campbell need to stop predicting the future so they don't look life idiots.
As an optimist, I can really stop and ask myself "what if I'm wrong?"
This is an important thought. I've thought it often. It explains a lot of my approach to this subject.
I don't make predictions, so I can be sure I'm not wrong on that front. I respect the indeterminacy and unpredictability of the future, and prefer to just shut up, rather than arrogantly pose as a "prophet". You're just asking for trouble that way. In the end, prophecy is just driven by personal vanity and other base motives, IMO.
So I focus on mechanisms, not prophecies. When the peak oilers say things like, "Relocalization will occur because expensive oil will make long distance transport impossible", that's a mechanism that can be *proven* wrong. I don't have to worry about turning out wrong on that point because I refuted the mechanism with clear numerical analysis.
But the world is a freaky, capricious place. A nuclear war or an asteroid strike or some weird new plague or any other number of other catastrophes could occur, and devastate/wipe out humanity. I don't dwell on such things, but I understand them and take them seriously. Like I said, I'm not a prophet, and I don't presume to know the future.
I don't worry about it that much, though, because the absolute worst case TSHTF scenario is that I die, and that's going to happen anyway, so why waste time worrying about it? I'm here to live not fret about dying. That's one reason why I don't like survivalists. They're pussies -- too scared of death. Real studs don't worry about it.
Of course, I do sometimes say that people will lick the peak oil problem, but that isn't a prophecy. That's a statement of resolve! ;-)
I believe in cultural evolution, some people refer to this as meme theory (originated by Richard Dawkins).
Ideas are like genes, they replicate, mutate and are subject to selection. Thus if not exactly evolution, there is a strong analog.
So I see the generation of many different predictions about the future as part of the process of cultural evolution. Many ideas are created, "good" ones are replicated and if become widespread become the norm, and may be acted upon.
So there will always be people predicting imminent doom, as there will be people predicitng the opposite. We probably need both sets of people. Somewhere in the middle a consensus opinion forms, and becomes an influence on behaviour.
Of course, it is not necessarily true that the consensus always forms around the correct analysis, but in general, it provides a form of collective problem solving.
So I wouldn't worry too much about how or why these predictions occur. The thing to do is to assess them critically on the merits, which is difficult, but I think JD does pretty well, although I don't agree with all his conclusions.
What a difference 3 years make !
I always admired their two books. One is dead by now, I think.
There is a post, elsewhere, by the other, saying that what better prediction one can possibly ask for; and he is sooo right.
What a difference 3 years make ! Eh?
Sergiu
I think you all should go back and read the book again!
and read another by James Dale Davidson and Rees Mogg titled The Great Reckoning
Everything the authors predicted is coming true so wake up and for your own benefit do your homework now
The problem with all predictions is they always take longer to materialise
Martin Hopkins
I have read all 3 Davidson/Reese-Mogg books more than once and they got far more right than they did wrong. Their predictions were always couched in caution and never accompanied with a specific timetable. Their major prediction - the end of the nation state - is happening day by day. It isn't being covered in the news because it is't recognized as such. But the factors that led to the creation of the nation state no longer exist and so the way we humans organize ourselves is changing to reflect the new factors. Very interesting reading at any rate.
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