Research into piles of sand grains showed that the timing of sudden collapses is quite unpredictable, but there is an inverse correlation between their magnitude and likelihood. As the sand piles up, "threads" of instability form, that can be triggered by the fall of a single grain in the wrong place. This is akin to the "Butterfly Effect" in catastrophe theory, I suppose.
Mauldin connects this up with a paper published last year, about uncertainty created by humans in the development of their economic structures:...the greater the number of connections within any given economic network, the greater the system is at risk.
This underscore the concerns I hinted at in an earlier post. The potential for catastrophic change is building up, and we can't predict what will be the trigger. Therefore, all the connections we are forming with each other need to be balanced by provisions for disconnecting, or for insulating one region from changes occurring in another.
To use an analogy, the supertankers that take oil around the world's oceans are internally divided into compartments. It would be cheaper, and so more profitable, not to install the internal compartments. But without them, a large wave hitting the ship could cause a movement in the liquid cargo that would shift the balance and quite possibly sink the vessel altogether.
So there is a trade-off between efficiency and survival.
Another aspect is how human behaviour changes in relation to risk perception. For example, research shows that when road junctions are widened and vision-obscuring vegetation cleared, drivers compensate for the extra security by going faster and less carefully. I understand that each of us has his/her our own preset level of risk tolerance, and when circumstances change, will seek to bring things back to that level .
But what if you don't fully understand the new circumstances? A miscalculation as to the level of security inherent in the situation could lead to your behaving more dangerously than you realise. The complexity and obscurity of CDOs, derivatives and credit default swaps are examples in the world of finance and economics, but surely this applies to other fields, too.
Perhaps conservative instincts are not just laziness, stupidity and timidity, but survival instincts. Have you noticed how those maddeningly slow drivers don't have dents in their old, lovingly-polished cars?
Maybe I'll get a hat, for driving.
9 comments:
Therefore, all the connections we are forming with each other need to be balanced by provisions for disconnecting, or for insulating one region from changes occurring in another.
Ah, clearly you haven't seen the comments on the Yorkshireurope post.
HG said something like this, re: derivatives, several months ago
(with characteristic pith and brevity)
Have you noticed that ALL hat-wearing drivers are crap, whether it be old boys or twits in baseball caps?
Good points, gents. But we now need to look at planning for a world where systems may break down for various reasons, not least the end of cheap energy.
I'm currently reading Veron Coleman's "Oil Apocalypse" and we should be looking well beyond how those with a bob or two can make extra investment profits, like Milo in Catch-22.
How do you view peak oil, Sackerson?
Okay: it's obvious that things will change. I'm reading Vernon Coleman's latest and the style is doomster - stats, political indignation and short, dramatic sentences etc - but the arguments do appear to be valid and the information disturbing.
He says that what oil remains is becoming lower quality and harder and more expensive to extract. Canadian shale oil is all that, plus ecologically damaging to get out. OPEC and Saudi Arabia in particular has been lying about its reserves in order to maintain a level of extraction that is actually damaging its oilfields. If I understand him right, then over the last few years, more energy has been expended trying to find new oilfields, than the newly-discovered oilfields are yielding.
Green alternatives don't offer an easy answer. When the total energy analysis is made, biofuels cost 50% more to make than they deliver. And corn-based ethanol production is causing food costs to rise, and also leading to tropical deforestation. I've yet to read more, but I guess he's going to say similar things about other alternatives.
In the UK we now have 60 million people in a country that used to support a small fraction of that, in the days pre cheap energy. The world's population is 6 times greater than pre oil, so he thinks that 5 out of 6 won't survive when the oil runs out. Of course, we know things know that we didn't then, so maybe we could produce more food and preserve it better than 200 years ago; but in my opinion, as to the 5 out of 6 idea, there's grounds for fearing even worse. When populations crash, they don't simply revert to a sustainable level, they go far lower. If, because of some catastrophe, we very suddenly had to return to pre-industrial methods of agriculture, it's easy to imagine the result.
I read the Ecologist's "Blueprint for Survival" (1972) many years ago, and other such, and after some years took two carrier bags of books to Birmingham Central Library, since there seemed no point in distressing myself with stuff that nobody was going to deal with. Now we're getting mainstream concern, but it may too little, too late, and possibly the wrong action anyway (as with ethanol).
A point made in Blueprint for Survival that I hadn't previously considered, is that although we must reduce the human population, it has to be a gradual reduction, otherwise you get a demographic imbalance that leads to economic ruin. We're facing a relatively very mild version of that over the next few decades.
So to avoid an apolcayptic breakdown, we have to use what energy supplies we have now, very sparingly, to create a new basis for a very carefully-planned long term future. Food will need to be locally sourced (and not just for green-conscious Waitrose shoppers); bikes and buses will have to replace the car for most people; we'll need ideas for the future of rural areas and cities - what is sustainable?
All that community-speak will have to be replaced by real communities, warts and all. There's a lot of thinking to do.
Are our politicians up to it? Can we solve these problems collectively, or must a clever and privileged few lay their survivalist plans?
Obviously any earthly resource is finite but I would just say that there is vastly more oil (of conventional quality) around than the doomsters suggest
for example, new technology that enables explorationists (this is not a made-up word BTW) to 'see' through previously impenetrable salt layers has very recently revealed there may be reserves in Brazil greater than those in Russia
my best guess is that a step-change technology will happen along well before oil gets short, let alone runs out
in the meantime, then, there will be as much oil available as we are willing (on environmental grounds) to burn, at prices that will not ruin us
AND, push comes to shove, I suspect that environmental concerns will not prevail over maintenance of (immediate) living standards - that's just human beings for you
still hatching the promised essay ...
Nick:
1. Eagerly looking forward to your essay.
2. Hope you're right, but it's not a good idea just to hope there's a trampoline down below when you jump out of the window.
3. Hope you enjoy the drinks at the Mug House - who's going to write up the report?
depends on who makes the biggest spectacle of themselves
my money is on newmania
don't hold yer breath on the essay, I may have time for some mindless drinking but the grey cells, when fucntioning, are a bit tied up with year-end matters
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