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The difference between “can” and “can”

Image: Reinhard Link

According to the green energy enthusiasts, we are well on the way to a world powered by renewables energy and an end to concerns about climate change.  Unfortunately, a more sober examination of the data produced by the International Energy Agency tells us that, in fact, new renewables (solar, wind, tidal and wave) account for less than two percent of total global energy consumption – and even to reach this figure has entailed billions of dollars, euros and pounds of investment and a herculean industrial effort.  Climate change and carbon emissions, meanwhile, continue unabated on their upward trajectory.

We “can” – we are told – power the world with new renewables (i.e. not wood and dung burning which, together with hydroelectric, account for ninety percent of renewable energy today).  A single (or possibly three) relatively small square(s) of photovoltaic solar panels strategically placed in the Sahara (and perhaps the Arizona and Gobi) Desert(s) are all we need to provide the world with enough energy to phase out fossil fuels and nuclear power, and continue to grow the economy.  Alternatively (or perhaps simultaneously) the deployment of the latest generation of wind turbines in strategic locations around the planet “can” also provide us with sufficient energy to power the global economy.

It goes without saying, of course, that we are not going to build massive square solar energy farms in the desert (at least not on anything but a fraction of the scale suggested).  Nor are we going to replace the eighty percent of our energy that comes from fossil fuels with oceans full of wind and wave turbines.  One reason for this concerns that seemingly innocuous word “can.”

Allow me to illustrate this by highlighting two leading technological endeavours that we both can and cannot do.  First, consider manned space flight outside of earth’s orbit.  We can do this.  We know that we can because between 1968 and 1972, twenty-one US astronauts on the Apollo programme did indeed travel beyond earth’s orbit – twelve of them also landed on the moon.  Three – the ill-fated and incredibly lucky-to-be-alive crew of Apollo 13 – still hold the record for the furthest distance humans have travelled into space.

In one meaning of the word “can,” then, we can do manned space flight outside earth’s orbit.  However, in a far more important sense, we cannot do manned space flight beyond earth’s orbit.  In 1973, the cost of landing people on the moon was reported as $25.4bn (Almost $150bn in today’s dollars).  The only reason the Apollo programme was possible at all is that it came at the very apex of the greatest expansion of production and trade that the world has ever witnessed.  To quote from historian Paul Kennedy:

“The accumulated world industrial output between 1953 and 1973 was comparable in volume to that of the entire century and a half which separated 1953 from 1800.  The recovery of war-damaged economies, the development of new technologies, the continued shift from agriculture to industry, the harnessing of national resources within ‘planned economies,’ and the spread of industrialization to the Third World all helped to effect this dramatic change.  In an even more emphatic way, and for much the same reasons, the volume of world trade also grew spectacularly after 1945…”

That economic upswing began to unravel even before the last spaceman has returned from his golfing trip to the moon.  The USA’s abuse of its reserve currency status to deficit-finance the Cold War and the hot war in Vietnam created inflation in the European economies that were obliged to trade in dollars.  When France and Germany demanded payment in gold instead, American couldn’t pay its bills.  In 1971, Nixon was forced to take the dollar off the gold standard.  Two years’ later, and partly in response to US weakness, the OPEC cartel helped create an oil shortage that left an oil-dependent USA in particular, reeling economically.  Japan and the European economies also felt the pinch as Middle Eastern oil rose in price (although the higher prices did allow the Alaskan North Slope and the North Sea to be developed).  By the end of the 1970s, unemployment and inflation were increasing, profits were falling and interest rates were in double-digits.  Only borrowing on an unprecedented scale in the 1980s,  1990s and early 2000s kept the economy afloat.  In such circumstances, no politician of any stripe was about to authorise $150bn in public funds to send people back to the moon; still less to Mars or even less plausibly to mine asteroids in the vast space between Mars and Jupiter.

Of course, space travel within earth’s orbit went on, as military budget-holders continued to fund spy satellites and GPS networks.  Space agency coffers were also fattened with the additional income that came from launching commercial communications satellites into a geostationary orbit.  Nevertheless, in 2011 the last of the USA’s space shuttles touched down for the final time.  For now, America, Europe and Japan depend upon the Russians to launch astronauts to the International Space Station; they can no longer do it themselves.  And despite the promises of private companies (which are currently limited to launching satellites into orbit) the tightening economic situation may soon render even Russian manned space flight beyond us.

The great upswing between 1953 and 1973 also saw the birth of a second example of things that we both can and cannot do.  While the USA was putting the final touches to the first moon landing, the Aérospatiale/British Air Corporation partnership carried out the first test flight of the Concorde – the world’s first and last commercial supersonic aeroplane.  It would be another seven years before the first scheduled Concorde passenger flights between London–Bahrain and Paris–Rio de Janeiro.  A year later, the USA removed restrictions to the use of US airspace by supersonic commercial aircraft (Concorde only reached supersonic speed over the Atlantic) paving the way for regular flights between London/Paris and New York.

Despite the good safety record of the Concorde fleet, a crash in Paris in 2003 led to the fleet being grounded.  Soon afterward, they were retired and commercial supersonic flight came to an end.  The reason for this had absolutely nothing to do with our understanding of the aerodynamics of supersonic flight or the physics of travel beyond the sound barrier.  Rather, it had everything to do with the fact that a round trip from London to New York cost more than 30 times the price of a seat on a standard flight – even after huge government subsidies had made the flights possible in the first place.

By the late 1990s, Concorde had become a celebrity plaything; fetching pop stars and media moguls back and forth across the Atlantic, but increasingly shunned by serious business people.  By 2003 it was politically unacceptable to continue to dole out massive public subsidies to a project that had already demonstrated that commercial supersonic flight could never be profitable.

What we see in these examples, then, are different meanings of the word “can” that include, can theoretically and can economically.  And despite many claims to the contrary, “can economically” trumps the other meanings; rendering them into their opposite.  That we seldom accept the obvious truth of this is due to a failure of both scientists and economists.

When a scientist sees an economist, he sees something akin to a high priest from some ancient civilisation; someone who, like an ancient Chinese astrologer, uses the most arcane mathematical models to make predictions (which turn out to be just as useless).  Despite its claim to being a social science, mainstream economics is simply not grounded in reality.  And even when evidence is presented to prove conclusively that the models do not work, the economists continue to cling to them for want of anything better.

It is all too tempting, therefore, for a scientist to assume that since economics is pseudo-science, the economy itself does not matter.  With this ungrounded leap of the imagination, the scientist comes to believe that just because he or she can imagine a world powered by wind turbines and solar panels; a world in which asteroids are mined for precious minerals; and a world in which Mars has been colonised; that this is sufficient to make these things happen.  In reality, of course, the meaning of this kind of can is actually “cannot.”  Because, while we may imagine that economics is only concerned with trade and money, at its heart (although you will struggle to find an economist who understands this) it is about the allocation of energy and resources.

This is where so many scientists enter fantasyland.  To give just one logical inconsistency – renewable energy is, at the same time, supposed to replace the energy we already use, in order to lower our carbon footprint, while simultaneously adding as much energy again to provide the additional resources to maintain economic growth.   Without the economic growth, of course, the debt that we need to invest in renewables could never be repaid (which is why the renewable energy industry needs subsidies that governments are increasingly reluctant to provide).  That which cannot be financed cannot be done.

Without a functioning economy, all of the things we can do turn into their opposite.  As Charles Eisenstein explained in the wake of the 2008 crash:

“Looking down from Olympian heights, the financiers called themselves ‘masters of the universe,’ channeling the power of the god they served to bring fortune or ruin upon the masses, to literally move mountains, raze forests, change the course of rivers, cause the rise and fall of nations. But money soon proved to be a capricious god…

“What we call recession, an earlier culture might have called ‘God abandoning the world.’ Money is disappearing, and with it another property of spirit: the animating force of the human realm. At this writing, all over the world machines stand idle. Factories have ground to a halt; construction equipment sits derelict in the yard; parks and libraries are closing; and millions go homeless and hungry while housing units stand vacant and food rots in the warehouses. Yet all the human and material inputs to build the houses, distribute the food, and run the factories still exist. It is rather something immaterial, that animating spirit, which has fled. What has fled is money. That is the only thing missing, so insubstantial (in the form of electrons in computers) that it can hardly be said to exist at all, yet so powerful that without it, human productivity grinds to a halt.”

There is no fantasy here.  Without the animating spirit of currency (and the real wealth – energy, resources, capital and labour – that backs it up), economies do not work.  We may state the theoretical possibility of whatever cornucopian dream we choose.  But if our increasingly fragile economy cannot sustain it, it will not happen… no matter how desirable its outcome might be.  Indeed, we may already have passed the moment where adding to the sum of human knowledge means merely adding yet more things that we know how to do in theory but have no chance of ever doing in practice.

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