Property Insurance: One of the first to go

Insurance companies are heavily dependent upon continued growth in the value of financial assets; they take customers money (premiums), invest it in financial assets and use the proceeds to pay out future insurance claims. If those financial assets do not increase in value as predicted then the insurance company will not have enough funds to pay for those future claims. It will have to significantly increase insurance premiums, restrict the scale and scope of coverage, and perhaps even refuse to insure certain properties, in an effort to maintain solvency. If the economy stops growing for more than just a year or two, due to geologic or self-imposed (to limit carbon emissions) energy constraints, the resulting fall in financial asset prices will thus severely impact the property insurance industry. The availability of property insurance would become increasingly constrained, and more expensive where still available. Continue reading

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Euro crisis or Argentina/Iceland/Malaysia: Which will be the model for future crises?

Any country that joined the single European currency immediately gives up control of its monetary policy and its exchange rate. With exchange rate risk seemingly removed, interest rates in many of the countries deemed previously to be of higher risk such as Portugal, Italy, Ireland, Greece, and Spain (PIIGS), fell significantly and foreign investment inflows increased substantially. With much lower interest rates and large incoming flows of foreign investment these countries experienced rapid economic growth. Without the ability to devalue their currencies against those countries reducing unit costs faster than themselves, such as Germany, their trade deficits widened. The net result of the Euro was to make Germany more competitive, as the Euro traded lower than the Deutschmark previously did, but higher than the previous PIIGS currencies. Without the Euro, and the large investment flows into these countries, such a widening trade deficit would have forced a crisis much earlier.   Continue reading

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The Creation of Society’s Shared Hallucinations

 This is another of my draft chapters from the book, “Schizophrenic Society”, that I am working on. Please feel free to provide editorial feedback.

Since the advent of the printing press and general literacy, media organizations have constructed parallel realities for the general populace. Radio and silent films, followed by “talking pictures” and television went further by creating artificial worlds that can be seen and heard in the same way that the real world is perceived. The human mind  evolved in an environment with no access to such artificial worlds and thus even though a person may know that these worlds are not real their brain will in many ways treat such worlds as if they were. For example, a 1938 radio program in the United States depicting an alien invasion lead many to believe that there really was such an invasion taking place1. Continue reading

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From Nature as the Nurturing Mother to Nature as the Thing to be Controlled

For the vast majority of humanity’s time on this earth, individuals have lived within small groups of hunter gatherers. These groups truly lived within nature and although they could use such things as fire and selective plant removal to alter nature’s path, they   mostly reacted to and fitted within whatever it provided. Other sentient creatures were viewed as either “wild animals” or simple food factories, but as non-human persons that deserved respect and could make things difficult for humans if they were not treated well. In many cases common ancestry with humans, or the ability for individuals to switch between human and animal forms, was believed in. Continue reading

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The United Kingdom: Bad Circumstances and Bad Policy

For the past couple of weeks I have been in the United Kingdom (U.K), where two months of nearly continuous rain storms in many areas have produced extensive flooding. Such flooding has become somewhat of a fixture with every year or so at least one part of the country being flooded through more intense and longer-lasting rain events together with changes to storm tracks. As the world starts its journey from one stable climate equilibrium to another, the U.K. is being shown that it will be impacted. Continue reading

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Keeping Local Communities Alive For When We Will Most Need Them

As energy becomes harder and more expensive to produce, societies will increasingly become unable to afford its usage. The cheap energy upon which modern societies were built will become a thing if the past and only the highest return, and most essential, uses will be able to consume the increasingly expensive energy. In addition, as climate change becomes impossible to ignore, legislative controls may become a major factor in limiting the usage of fossil fuels. Given the significant reductions required in greenhouse gas emissions to have a chance of limiting climate change, more than 5% per year even if started immediately, such controls may have major impacts on our fossil-fuel dependent societies. Continue reading

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The Financial System as an Impediment to Significant Emissions Reductions

The global financial system displays the same bounded resilience that many complex systems in nature display. Within certain limits the system maintains its integrity but when those limits are broken positive feedback loops can rapidly move the system to a very different state. We refer to such events in the financial markets as “crashes”. Given that the financial system is central to the allocation of capital and liquidity, such crashes rapidly impact the “real” economy. This was the case in the 1930′s, and a repeat was only averted in 2009 through unprecedented measures taken by central banks and governments. Continue reading

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Muddling Through and Unsung Heroes

             I wake up in the morning ensconced in a duvet and sheets made with materials from many different places around the world, together with artificial fibres and dyes which are to a large part made from oil. Then I reach out to switch off my alarm clock, which has been constructed from pieces emanating from many locales, and transported to me all the way from the Far East. My feet touch the floor made from timber quite possibly harvested in Canada, but then shipped abroad for manufacturing just to be shipped back as the finished product. I reach out and turn the light on, with no consciousness of where the electricity came from; a coal-fired power station many miles away, a nuclear plant, a hydro-electric dam, a windmill? Continue reading

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The indigenous and modern relationship between people and animals

Indigenous groups hold a fundamentally different view of their relationship to animals than do modern industrialized societies. The latter tend toward the view put forward by Descartes (1641) that non-human animals are simply automata, with no ability to reason or have an ability for self-awareness. There are exceptions for animals used as pets, and perhaps those living in zoos, but the general treatment of the vast majority of animals which reside within the agricultural, fishing and pharmaceutical industries belie a disregard for animals as sentient creatures. Even pets and zoo animals are still considered to be items of property without independent legal status.  Opponents of these views, such as the People for the Ethical Treatment of Animals (PETA) and the Animal Defence League (ADL), are highly marginalized. Some religions also promote vegetarianism, such as Jainism where it is mandatory and Hinduism where it predominates, but the majority of people in the advanced industrial nations are meat and fish eaters. Indigenous hunter-gatherer societies treat other animals as fully sentient beings which have equal status to humans, and must be shown respect even when they are hunted. Many of their spiritual beliefs and myths involve the movement between human and non-human forms, and even the development of humans from non-human forms, somewhat paralleling the theory of evolution. In this paper I will cover examples of the treatment of animals by indigenous peoples and show how this reflects their worldview of being within nature rather than the enlightenment separation between humanity and nature. I will also raise the question of which is closer to the truth, the indigenous or the modern industrial society practices and beliefs. Continue reading

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The Schizophrenic Society

My first book, “Energy & Finance” is being published at the end of February and I am now researching a second one. This is the draft introduction to the book I am thinking of writing about society’s inability to act on the systemic threats that it faces. Proposed improvements and comments would be much appreciated.   

    Lost in a make believe world while we destroy the real one.

Human civilization stands at a crossroads, either it continues its current path of “business as usual” and faces escalating crises on its journey to destruction, or it fundamentally reassesses its relationship with its environment and accepts limits upon how much it can safely take from the earth each year. The underlying crisis that it faces is not climate change, peak cheap energy, or ecological destruction, as these are just symptoms of the underlying problem. All of these challenges stem from the continued exponential growth in human numbers and the demands that each of those humans, especially in the industrialized countries, make of the earth and its ecology. It is estimated that humanity currently takes from the earth at a rate that is 50% faster than the earth can replenish(1), and will require two earths worth within about two decades(2). Continue reading

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