This Is What the End of Empire Looks Like: The Role of the New Economy

This is the second in a Monday series on the decline of U.S. hegemony.

Last Monday I began this series by connecting the demise of the Catholic Church with that of U.S. Empire. This week’s posting turns to economy. Just as changes in the way people store, access, and communicate information has affected religion, so has it affected the market.

Though that observation may appear axiomatic, even business people have been slow to grasp its implications. For example, the music industry didn’t see file sharing coming; whole companies went under as a result. Encyclopedia Britannica was similarly blindsided by Wikipedia. Newspapers didn’t understand the enormous importance of the blogosphere; consequently, they’re failing at unprecedented rates. Skype threatens huge telephone companies. The computer gives free access to the sports events, movies, and programming cable companies are still trying to peddle.  Colleges and Universities continue to invest in huge unsustainable physical plants even as online courses steal their students. (And why not: distance learning, as J.W. Smith points out, enables students to sit at the feet of the world’s best professors for a fraction of the cost required to maintain those buildings soon to become white elephants.)  

But it doesn’t stop there – not nearly. In The  Empathic Civilization Jeremy Rifkin  argues that a dispersed, decentralized digital revolution together with dispersed, decentralized energy provision equals an entirely new economic era – a third industrial revolution as he calls it. The first industrial revolution, of course, connected the information revolution spawned by the printing press with coal and steam power. Huge factories, the high speed printing necessary for their organization, the eventual emergence of worldwide proletariat, and a previously unimaginable scale of production resulted. 

The second industrial revolution united energy provided by oil with intensified product and information exchange facilitated by telephone, radio, television, cinema, automobile and air travel. Oil was at the heart of it all. An entire civilization was built on Jurassic Age deposits which eventually became the basis of food production, and the manufacture of buildings, clothing, and virtually every product one might care to name. If it wasn’t made from a fossil fuel base, it was packaged and delivered by it. The second industrial revolution gave birth to the consumer society and corporate globalization.

The third industrial revolution is currently emerging from a combination of new information technology coupled with new forms of energy production. The new form of energy production is necessitated by the phenomenon of “Peak Oil Per Capita” as well as by the “carbon-entropy bill” resulting from a global economy relying on oil to support the productive cycle that has emerged over the last 200 years.

Peak oil per capita is different, Rifkin reminds us, from “Peak Oil,” which is controversial. Peak oil per capita is not. It refers to the maximum amount of oil equitably distributed to every human being on earth. It reached its zenith in 1979. Since then though more oil has been discovered, population growth has outrun those discoveries. As a result, less and less oil has been available per capita ever since. Moreover, the relatively recent industrial aspirations of China and India (representing fully 1/3 of humankind) have further lowered the per capita availability of non-renewable Jurassic Age resources. On a per capita scale, we will never have more oil than we do now.

As Rifkin explains, the results of such pressures were seen In July of 2008, when petroleum reached the level of $147 per barrel.  Worldwide economic chaos resulted. Prices of everything skyrocketed. There were food riots in 40 countries. In Rifkin’s terms, that was an economic earthquake. The financial meltdown which occurred 60 days later was the after-shock from which the world has still not recovered. In other words, $147 dollars per barrel seems to be the wall beyond which the current form of corporate globalization cannot pass. We’ve reached “peak globalization.”

And that’s not all. Besides the diminished per capital availability of oil, there’s the “carbon-entropy bill” that must be paid for 200 years’ profligate consumption of fossil fuels. “Carbon-entropy” refers to the negative feedback loop associated with burning oil and gas.   Here’s where global warming comes in. 

However, even those politicians who are not in climate change denial cannot bring themselves to address the problem that threatens the very extinction of human life as we know it.  Rifkin speculates that outdated Enlightenment concepts of human nature formulated by Locke, Smith, Bentham, Darwin, and Freud prevent them from doing so.  Enlightenment and late 19th century thinkers imbedded the mistaken notions that humans are basically individualistic, competitive, utilitarian, materialistic and pleasure-driven. Rifkin suggests instead that humans are instead “empathic.” (But that’s another story.) The point here is that business cannot continue as usual without inevitable economic chaos and threatening the extinction of the human species. The problem is not abstract; we’re talking about a threat our grandchildren will experience as immediate within their lifetimes.

What can be done about it all? Rifkin answers: copy the Europeans. They’ve taken his warnings seriously and have decided to exploit the confluence of the new distributed informational technology and new distributed energy sources to begin shaping an entirely new post-carbon economy. More specifically, they’re betting that the currently available combination of distributed technology and distributed energy can supply 20% of the E.U.’s energy needs by 2020. That’s the goal the E.U. has actually adopted. 

By way of definition, Rifkin contrasts “distributed energy sources” with their “elite” counterparts. Elite energy sources are those found exclusively in “privileged” parts of the world like the Mid-East. They are necessarily centralized, call for long lines of transportation, and must be protected by enormous military expenditures. Distributed technologies are those available to everyone everywhere on earth. They are supplied by the sun, wind, and the earth’s molten core. They include energy available from ocean tides and biomass supplied by so-called “waste products.”

But aren’t these sources precisely too dispersed – not concentrated enough – to satisfy the energy needs of a third industrial revolution worthy of the name? Not so – at least not when coupled with a technology that mimics the model provided by the information revolution that has taken those quantum leaps over the last 15 years. There we’ve found that individual PCs distributed among two billion users are vastly more powerful and adaptable than centralized mainframes. In the digital world 1 + 1 comes out to far more than 2.

The same is true, Rifkin suggests, in the world of distributed energy. If every building in Europe or the United States is turned into a power plant taking advantage of the wind, solar, and geothermal energy sources around it, those mini- power plants end up generating much more than the sum of their individual contributions. The energy can then be stored in hydrogen depots and transmitted to an “inter-grid” modeled on the internet. From there it can be shared freely across continents just as information is currently shared among two billion internet users. Put otherwise, when many small energy producers pool their production a multiplier effect kicks in that far surpasses the capabilities of the single individual.

“Impossible,” you say? Again, Rifkin responds “not so.” In fact, it’s already being done. There are currently office complexes in Spain that produce more energy than they use. To repeat, Europeans have bought into this concept and intend to derive 20% of their energy from its implementation less than 10 years from now.

Think of what all of this means for the topic at hand – the collapse of the corporately globalized economy now unfolding before our eyes. The combination of new informational technologies and new energy sources will affect every facet of life now touched by fossil fuel consumption – i.e. every facet of life, period. It will change the way we eat, travel, house and clothe ourselves. It will affect our cost of living and how and where we work and live. It promises to drastically reduce the size of military budgets that so deplete national treasuries – that is, if the transition can be made before the effects of global climate change take their fatal toll. And that in turn is largely dependent on thwarting the short term planning of the corporatists and their (largely U.S.) political enablers whose criminal strategies of denial and misinformation threaten the very survival of the human race.

This is where Julian Assange and Wikileaks come in. They will be the focus of next week’s posting.

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Mike Rivage-Seul's Blog

Emeritus professor of Peace & Social Justice Studies. Liberation theologian. Activist. Former R.C. priest. Married for 40 years. Three grown children. Four grandchildren.

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