Richard Heinberg
In the era when I was born, commentators used to liken the global economy to a casino. A few folks were making trillions of dollars, euros, and yen trading in currencies, companies, and commodity futures. None of these people were actually doing anything useful; they were just laying down their bets and, in many cases, raking in colossal winnings. If you followed the economic chain, you’d see that all of that money was coming out of ordinary people’s pockets . . . but that’s another story. Anyway: all of that economic activity depended on energy, on global transportation and communication, and on faith in the currencies. Early in the twenty-first century, the global casino went bankrupt. Gradually, a new metaphor became operational. We went from global casino to village flea market.
With less energy available each year, and with unstable currencies plaguing transactions, manufacturing and transportation shrank in scale. It didn’t matter how little Nike paid its workers in Indonesia: once shipping became prohibitively expensive, profits from the globalization of its operations vanished. But Nike couldn’t just start up factories back in the States again; all of those factories had been closed two decades earlier. The same with all the other clothing manufacturers, electronics manufacturers, and so on. All of that local manufacturing infrastructure had been destroyed to make way for globalization, for cheaper goods, for bigger corporate profits. And now, to recreate that infrastructure would require a huge financial and energy investment - just when money and energy were in ever shorter supply.
Stores were empty. People were out of work. How were they to survive? The only way they could do so was by endlessly recycling all the used stuff that had been manufactured before the energy crisis. At first, after the initial economic shock waves, people were selling their stuff on internet auctions - when there was electricity. Then, when it became clear that lack of reliable transportation made delivery of the goods problematic, people started selling stuff on street corners so they could pay their rents and mortgages and buy food. But, after the currency collapse, that didn’t make sense either, so people began just trading stuff, refurbishing it, using it however they could in order to get by. The cruel irony was that most of their stuff consisted of cars and electronic gadgets that nobody could afford to operate anymore. Worthless! Anybody who had human-powered hand tools and knew how to use them was wealthy indeed. And still is. More
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