Man vs God

[NotR]

Does modern government contradict with God's will for people? Most people, such as me, would call today's system inhumane in a tolerative sense. The "American Dream" of "equality capitalism" is disturbed from birth, as people are born into different layers of society. Nothing against America itself, but it seems that American government is very picky about inflicting this rule on other countries.

[Alamanach]

thanks...

You sure? Read it again.

I've always thought we ought to have an awareness-raising campaign to let the Africans know not to eat at places like McDonald's... Any outsider... who's going to tell them to eat this, or not eat that, needs to be thrown out on his ear.

Apologies if my sarcasm was too sneaky, but I tend to chafe at any suggestion that people can't make their own decisions. If Africans (or anybody else) didn't want McDonald's, then they wouldn't eat there and that would be the end of it.

Free market capitalism is own of the best things that mankind has ever come up with. Its ability to create and distribute wealth is unparalleled. When it goes wrong, it's usually because some basic tenent of its operation was violated. For example, the abuses of the gilded age resulted largely from the inability of the lower classes to unionize-- a wholly unwarranted restriction on their personal liberties. More recently, Enron and similar accounting fraud cases involved deception of shareholders and the public; information wasn't being transmitted as it was supposed to be, and as a result stock prices no longer represented their actual market worth. But when done properly, capitalism works great.

[MagusYanam]

Free market capitalism is own of the best things that mankind has ever come up with. Its ability to create and distribute wealth is unparalleled. When it goes wrong, it's usually because some basic tenent of its operation was violated... But when done properly, capitalism works great.

Sure... great up until the resources run out.

The way capitalism works now is quite frankly untenable, and the Prometheans are slowly but surely going extinct as Malthusian ideas take on rather tangible new connotations. We live in a world where there is such a thing as a worldwide market, where Americans import Danish sugar cookies and Danes import American sugar cookies, where refrigerated iceberg lettuce can be shipped overseas and consumed - and it's all running on a cheap energy source that is quickly running out. We will either hit peak oil within the next twenty years, or we've hit it already and are already on the 'plateau' phase.

What's needed in the developed countries is a greater awareness of community goods and community markets, and that means we'll have to revise one of the basic tenets of capitalism (at least as we practise it today). Unless you're living in a condition of poverty, more is not necessarily better. High-input industrial farming may be cheaper in terms of money, but it isn't necessarily better than low-input small-scale independent farming, especially when one factors in sustainability.

So I put forward that global free-market capitalism (at least as we practise it today) cannot work in a world post peak-oil. African countries will be forced to learn market sufficiency and adopt tenable, locally-based agricultural schemes sooner or later. It's what happened to Cuba after the Soviet Union collapsed - after the Soviet Union collapsed, the trade embargoes with major agricultural powers (notably the US) turned them practically overnight into a malnourished third-world country. Since then, they adapted a community-based, low-input agro-economic policy (without the sanction of the still-Communist Cuban government) that has put the average Cuban diet back on par with the United States. But I think we're going to have to face facts: we're not going to be able to import McDonald's forever. So it comes back down to the old maxim: give a man a fish and he eats for a day; teach a man to fish and he eats for life.

[Alamanach]

Magus, let me see if I'm understanding you correctly. You're saying that large industrial endeavors eat up resources quickly, and because many of these resources are finite, we will eventually run out of them.

If we switch to smaller operations we will deplete these resources more slowly because-- actually, this is where you start to lose me. I can see where we would save oil by not shipping identical products to each other. But as oil becomes scarce, shipping prices will rise, and soon local sugar cookies will be more attractive than cookies from far away.

(In fact, I have to conclude that the Danish cookies and American cookies must have differences between them that explain the need for shipping in the first place. If, say, the Danish cookies are expensive and of high quality, and the American cookies very cheap, then they could conceivably compete in each other's markets. Danish cookies in America (and in Denmark) would be bought by discriminating buyers, and the American cookies may be cheap enough that they can be shipped to Denmark and still sell at a low price. Without some difference between the products, the local one will always be more attractive because it can be delivered at a lower price.)

Other than possibly some lower shipping costs, I don't see what great advantage comes from smaller operations. You mention sustainability, but what makes a small operation any more sustainable than a large one? We still have the same number of customers to serve, and we will need a lot of small producers to replace every large one we eliminate. We end up using resources at the same rate.

So I put forward that global free-market capitalism (at least as we practise it today) cannot work in a world post peak-oil.

Is there some other system that could work? Socialism, for all its wonders , can't conjure up gasoline out of thin air. Capitalism is the best system we have, peak oil or no. (You fellows aren't confusing capitalism with industrialization, are you?)

[MagusYanam]

This isn't an argument between socialism and capitalism, but between Promethean economic theory and Malthusian economic theory. Look them up.

Socialism can result in more equitable distribution of wealth, but when the engines of growth creating that wealth run out of fuel, it ends up with the same problems capitalism has. The Marxists were perhaps even more Promethean than the capitalists of the age, given how they squelched Ma Yinchu in China for (supposed) 'reactionary' Malthusian ideas. The problem is, capitalism (at least as we practise it today) assumes that more is better, an assumption that has to go out the nearest window if we want to build a sustainable economy.

But here's where perhaps I lost you. Once oil runs out, 'prices on sugar cookies will rise' is something of a coy understatement, because the farmers who use the green-revolution technology to grow their wheat and sugar crops suddenly won't be able to afford the fuel for farming machinery or (petrol-based) fertilisers and pesticides needed to sustain the demand. High-input industrial farming will experience shortfalls and not be able to keep up with world food demand. Small-scale low-input farming, however, will be able to cope without, since most small, independent farms don't use anywhere near as much petrol per tonne of food-product. And this will result in an abrupt paradigm shift in which the mottoes of capitalism, 'more is better' and 'bigger is better' will become obsolescences in the industrialised world.

Markets don't need to go, but they do need to face limitations other than supply and demand (such as resource consumption rate), not kept 'free' by artificially lowering the price of petrol. Ideally, you'd be able to have your plastic soda bottle, but you'd be paying two more dollars for it than you would if you bought a glass one.

[Alamanach]

This isn't an argument between socialism and capitalism, but between Promethean economic theory and Malthusian economic theory. Look them up.

I'm looking, but mostly I'm finding a lot of oblique references. I think I see what these ideas are, but I don't want to misinterpret something. Could you direct me to a specific webpage or something?

...(M)ost small, independent farms don't use anywhere near as much petrol per tonne of food-product...

It is not at all obvious to me why this would be. Please explain.

Markets don't need to go, but they do need to face limitations other than supply and demand (such as resource consumption rate), not kept 'free' by artificially lowering the price of petrol. Ideally, you'd be able to have your plastic soda bottle, but you'd be paying two more dollars for it than you would if you bought a glass one.

Where does this increased price come from? Is it arbitrarily imposed? By who? And when I spend those extra two dollars, where does that money go?


Edited to add:

Found stuff on Malthusian theory:
http://en.wikipedia.org/wiki/Malthusian_catastrophe
Still looking for Promethean economic theory.

[MagusYanam]

I'm looking, but mostly I'm finding a lot of oblique references. I think I see what these ideas are, but I don't want to misinterpret something. Could you direct me to a specific webpage or something?

Hm. Thanks for pointing that out, Alamanach. I couldn't find anything on Prometheanism either, which is odd - that's the term we used in our environmental seminar to describe the ideas of Julian Simon, but the term Wikipedia wants to use for such ideas is cornucopian.

But books by Lester R. Brown (like Who Will Feed China?) and Judith Shapiro (like Mao's War Against Nature) would be useful for looking at Marxist cornucopianism, while Bill McKibben's book Deep Economy would be more useful for looking at capitalist cornucopianism.

Also, I think Lester Brown has a book called Plan B 2.0 (which I've only read excerpts from, but it looks interesting all the same) detailing the changes we need to make in order to make our economy more sustainable. Lester Brown is also involved with the Earth Policy Institute.

Bill McKibben also has a website. I'm currently in the process of reading Deep Economy, but so far it's a good read.

It is not at all obvious to me why this would be. Please explain.

Low-input independent farming is more labour-intensive, but as one farmer looks after fewer acres of land on an independent farm, less fuel is used for transportation and machinery, for one thing. You go up to a typical family farm in Vermont and it looks a lot different than the agricultural conglomerate that owns 5,000 acres out in Ohio. You see a lot more watering machines, pesticide-spraying aircraft, harvesting machinery, all the green-revolution stuff being used per acre on the big farms.

Also, independent farmers tend to sell locally, which cuts back drastically on transportation fuel use. Some still use oil-based pesticides and fertiliser, but in far less quantity than large-scale farmers do. Independent farmers are more capable of switching to alternate farming techniques based on the local ecosystem for increased yield without increased fuel input.

Where does this increased price come from? Is it arbitrarily imposed? By who? And when I spend those extra two dollars, where does that money go?

It would be nice to see such companies take into account sustainability and renewability of resources when fixing prices, but I think American companies in particular are too wedded to our current paradigm to seriously consider such a shift. As such, federal governments might have to impose 'natural resource taxes' to ease the paradigm shift. In Deep Economy McKibben described a Vermont economist - I forget the name - who conducted a study to determine what the price of petrol should be when factoring in environmental damage and lack of sustainability, and he came up with something like eight dollars per gallon.

See, the problem is that the price of petrol has been set artificially low, because consumers want it that way. But it isn't something that can last - the fuel crisis in the 1970's will look like a cakewalk compared with the situation of fuel in the 2050's.

[Alamanach]

I couldn't find anything on Prometheanism either, which is odd - that's the term we used in our environmental seminar to describe the ideas of Julian Simon, but the term Wikipedia wants to use for such ideas is cornucopian.

I'm just speculating, but perhaps Promethean was originally applied to the innovators who would be needed in a cornucopian scheme. Anyway...

Low-input independent farming is more labour-intensive...

Which means we will have to have more people doing it. And if someone is employed as a farmer, than that person is not available for some other job-- taxi driver, college professor, whatever. That means there are that many fewer taxi drivers to get us around, and college professors to teach us, and so on. That makes the society as a whole poorer; some genius who should be conducting a symphony may wind up stuck on an onion farm instead because he (and society) is too burdened to discover his talent. Lowering productivity is a recipe for poverty.

...but as one farmer looks after fewer acres of land on an independent farm, less fuel is used for transportation and machinery, for one thing. You go up to a typical family farm in Vermont and it looks a lot different than the agricultural conglomerate that owns 5,000 acres out in Ohio. You see a lot more watering machines, pesticide-spraying aircraft, harvesting machinery, all the green-revolution stuff being used per acre on the big farms.

Vermont's topography is very different from Ohio's, too; one is very mountainous, the other flat. You'd have a hard time finding enough arable land all in one place for running an industrial farm in Vermont, the mountains are just too close together.

That tight topography prevents things like pesticide-spraying aircraft from being used as efficiently as they might be; the patches of land are so small, the pilot spends too much time maneuvering and not enough time spraying. So it makes sense that you'de see more of that stuff per acre in Ohio than in Vermont. The acres are not equivalent.

On the other hand, there's nothing to prevent an Ohio farmer from using small-farm techniques. That they generally don't use such techniques suggests strongly that there are real advantages to be had from doing things the big, mechanized way. At least in Ohio.

Also, independent farmers tend to sell locally...

I would imagine they would have to. Given their less efficient operation, the only way for them to have an advantage over the big farms is to save on transportation costs by only selling locally. If small farms were as capable as a big one, they could sell to more far-off markets.

It would be nice to see such companies take into account sustainability and renewability of resources when fixing prices, but I think American companies in particular are too wedded to our current paradigm to seriously consider such a shift.

What would motivate them to take it into account? Pretend I'm a Vermont farmer. Let's say I sell syrup. I know how much I have to pay on the farm mortgage, labor, fuel, equipment, taxes, insurance, etc. I know roughly what other Vermont farmers are selling their syrup for, and I've got a feel for the public's perceptions of maple syrup these days. Based on all this, I negotiate my price with a grocery broker or grocery wholesaler. I know what I'd like to get from my syrup, my costs tell me what I need to get for my syrup, and the end customers, indirectly, tell me what I can get for my syrup. (Hopefully the can will be larger than the need. The like doesn't really matter.)

At what point am I supposed to factor in environmental sustainability? How do I calculate its worth in dollars? What can I do to minimize environmental sustainability costs so that my competition doesn't use it to wipe me out? And supposing I can factor it into the cost and somehow get the end customers to agree to it, what am I supposed to do with that money?

As such, federal governments might have to impose 'natural resource taxes' to ease the paradigm shift.

That would take care of the problem of getting the end customer to agree with it, but all the other questions are unanswered.

In Deep Economy McKibben described a Vermont economist - I forget the name - who conducted a study to determine what the price of petrol should be when factoring in environmental damage and lack of sustainability, and he came up with something like eight dollars per gallon.

I once calculated how much I actually ought to be paid, and came up with $31,000 a day. If you find out who this economist is, let him know I have a maple syrup farm to sell him.

See, the problem is that the price of petrol has been set artificially low, because consumers want it that way.

I can't figure out what you mean by this. Prices are set by the market. And keep in mind, the price for a product or service has no connection to its cost. A thing is worth what you can get for it; what you put into it is irrelevant. Sometimes new entrepreneurs try to figure their prices by looking at their costs and then adding some set percentage. That doesn't work very well, because the customer doesn't care what you had to pay, he only cares about what he's going to have to pay.

So, I can't understand what you're saying about petrol prices.

[MagusYanam]

Low-input independent farming is more labour-intensive...

Which means we will have to have more people doing it. And if someone is employed as a farmer, than that person is not available for some other job-- taxi driver, college professor, whatever. That means there are that many fewer taxi drivers to get us around, and college professors to teach us, and so on. That makes the society as a whole poorer; some genius who should be conducting a symphony may wind up stuck on an onion farm instead because he (and society) is too burdened to discover his talent. Lowering productivity is a recipe for poverty.

Is this even an argument? We are running out of petroleum. Once we run out, either way we will have to divert a greater percentage of our human resources to the production of food. That can happen one of two ways: either we run out of fuel and we still have all of our high-input green-revolution farming equipment sitting around and doing nothing, and thus end up with famine which cuts down on our population, or we can put more economic incentive into low-input agricultural schemes which require more hands (but far less oil) to produce the same amount of food.

Vermont's topography is very different from Ohio's, too; one is very mountainous, the other flat. You'd have a hard time finding enough arable land all in one place for running an industrial farm in Vermont, the mountains are just too close together.

That tight topography prevents things like pesticide-spraying aircraft from being used as efficiently as they might be; the patches of land are so small, the pilot spends too much time maneuvering and not enough time spraying. So it makes sense that you'de see more of that stuff per acre in Ohio than in Vermont. The acres are not equivalent.

On the other hand, there's nothing to prevent an Ohio farmer from using small-farm techniques. That they generally don't use such techniques suggests strongly that there are real advantages to be had from doing things the big, mechanized way. At least in Ohio.

To the first, thank you for the observation, Captain Obvious! But as you can imagine, being the grandson of an independent Vermont maple-farmer and a frequent visitor to the Green Mountains, I might have some anecdotal insight into the situation of Vermont's independent farming.

But the fact of the matter is, there are fewer small farmers in Ohio because small farmers have been forced out of the competition by green-revolution technology, hostile takeovers by large ag firms, and active political pressure to (in the words of Ezra Benson) 'get big or get out', which is a more viable possibility, as you say, in Ohio than in Vermont. So the high-input phasing of Ohio's agriculture is not solely the result of market forces, as you seem to claim. If you've done some research into the subject as I have, you might come to a similar conclusion.

At what point am I supposed to factor in environmental sustainability? How do I calculate its worth in dollars? What can I do to minimize environmental sustainability costs so that my competition doesn't use it to wipe me out? And supposing I can factor it into the cost and somehow get the end customers to agree to it, what am I supposed to do with that money?

I once calculated how much I actually ought to be paid, and came up with $31,000 a day. If you find out who this economist is, let him know I have a maple syrup farm to sell him.

He's not an economist, looks here like he's a professor of economics (which is nearly the same thing) named Bob Costanza, and he did come up with algorithms for determining the economic value of 'ecosystem services' that are normally thought of as free (climate stabilisation, carbon dioxide control, biodiversity, pollination, decomposition etc.). It got him in trouble with the radical left-wing of environmentalism that he did this, but he came up with the (conservative) estimate that the cost of the globe's 'ecosystem services' was $33 trillion (that's 3.3*10^13 dollars) a year - as McKibben puts it, 'larger than the human economy taken all together'. You can find an article on Costanza's work on Grist.org. And actually, it wasn't he who came up with the $8/gallon estimate for the resource-adjusted price of petrol (at least, McKibben didn't mention him by name), but apparently someone adapted his algorithms for putting a price tag on economic services for just such a purpose.

The point is, the factoring is not as arbitrary as I made it sound earlier. If you can prove to me why you deserve to make $31,000 a day, using algorithms similar to Costanza's, I'll take that maple sugar farm off your hands.

I can't figure out what you mean by this. Prices are set by the market. And keep in mind, the price for a product or service has no connection to its cost. A thing is worth what you can get for it; what you put into it is irrelevant. Sometimes new entrepreneurs try to figure their prices by looking at their costs and then adding some set percentage. That doesn't work very well, because the customer doesn't care what you had to pay, he only cares about what he's going to have to pay.

So, I can't understand what you're saying about petrol prices.

And what, according to standard capitalist theory, determines prices in the market? Supply and demand, correct? Currently, supply (in the long term) is not factored into the equation by our standard economic practise. Once the supply is gone, consideration of demand becomes a vain irrelevance.

[Alamanach]

We are running out of petroleum. Once we run out, either way we will have to divert a greater percentage of our human resources to the production of food. That can happen one of two ways: either we run out of fuel and we still have all of our high-input green-revolution farming equipment sitting around and doing nothing, and thus end up with famine which cuts down on our population, or we can put more economic incentive into low-input agricultural schemes which require more hands (but far less oil) to produce the same amount of food.

Forgive me for sounding like a textbook cornucopian, but as oil supplies drop and prices increase, wouldn't this spur development of things like hydrogen fuel cells and nuclear power? We won't convert all our equipment overnight, but the oil won't disappear overnight, either; there is time and incentive to make a more-or-less smooth transition.

To the first, thank you for the observation, Captain Obvious! But as you can imagine, being the grandson of an independent Vermont maple-farmer and a frequent visitor to the Green Mountains, I might have some anecdotal insight into the situation of Vermont's independent farming.

I visited the state once myself. Beautiful place.

But the fact of the matter is, there are fewer small farmers in Ohio because small farmers have been forced out of the competition by green-revolution technology, hostile takeovers by large ag firms, and active political pressure to (in the words of Ezra Benson) 'get big or get out', which is a more viable possibility, as you say, in Ohio than in Vermont. So the high-input phasing of Ohio's agriculture is not solely the result of market forces, as you seem to claim. If you've done some research into the subject as I have, you might come to a similar conclusion.

Except for the political pressure (and you'll have to fill me in on that one, I'm not familiar with it) what else are you describing other than market forces? What squeezed out these small farmers if not their inability to compete against more efficient big farms? I'm sorry to see the small places go too, I'm as nostalgic as the next guy, but come on; big farming can feed more mouths.

If you can prove to me why you deserve to make $31,000 a day, using algorithms similar to Costanza's, I'll take that maple sugar farm off your hands.

I was kidding to make a point, but let me take you up on that:

Currently, supply (in the long term) is not factored into the equation by our standard economic practise.

If you understand how and why this is true, then you, personally, stand to make a killing trading sweet crude futures. If you can utilize this same knowledge in other futures markets, then you'll clean up there, as well. My fee for pointing this out to you is $31,000 a day, which is chicken scratch compared to the kind of money you'll soon be making.

[MagusYanam]

I was kidding to make a point, but let me take you up on that:

Currently, supply (in the long term) is not factored into the equation by our standard economic practise.

If you understand how and why this is true, then you, personally, stand to make a killing trading sweet crude futures. If you can utilize this same knowledge in other futures markets, then you'll clean up there, as well. My fee for pointing this out to you is $31,000 a day, which is chicken scratch compared to the kind of money you'll soon be making.

I'll keep that in mind. When Cooper Sol Enterprises takes off, you'll have a front-row seat in the boardroom.