Consciousness of Sheep
Related Articles
The central aim of the neoliberal revolution was to crush the rampant inflation of the 1970s and 1980s. Not, in and of itself, a bad thing. But the way it sought to achieve it has turned out to be highly destructive in the longer term. In short, neoliberalism sought to remove inflation by crushing the living standards of the western working and middle classes. Various means were employed to achieve this, from the offshoring of manufacturing and the crushing of labour unions to the cynical use of equalities legislation to create exploitable reserve armies of labour. At the same time, social safety nets built during and after the Second World War were undermined to force unemployed and disabled people to settle for low-paid (and often oppressive) employment. On the other side of the equation, Free Market™ deregulation allowed a global godzillionaire class to begin hoovering up most of the world’s theoretical (i.e., financial) wealth.
On an infinite planet, there is no reason why this process should not continue until the mass of the global population is reduced to some form of digital serfdom, ruled over by a tiny minority of dystopian anti-humanists who control the keys to our new digital prisons. But – for better or worse – Planet Earth is finite. And attempts to venture beyond low Earth orbit have proved difficult, expensive, and fruitless. So that – although not considered by the originators of neoliberalism – we find ourselves in the early stages of a new Age of Shortages.
This has been covered up or misattributed by many, particularly among the elites and establishment media, with shortages blamed on such things as Brexit, the pandemic, Russia’s invasion of Ukraine, and most recently on Trump’s tariffs. Although each of these is, in fact, a reaction to shortages… even if the effect is to generate even more shortages later on. Energy – although, again, not obvious to our rulers – is at the heart of the problem, although saying this is heresy to neoclassical economists who view the world through a purely financial lens. Put simply, as the energy cost of energy has increased since the peak of conventional oil production in 2005, the remaining (surplus) energy left to power the wider economy has been falling. That makes ongoing economic activity more expensive and, perhaps less obviously, makes new economic activity impossible to generate.
The latest Statistical Review of World Energy confirms a concern that had been doing the rounds in the peak oil space for some time… that global supplies of diesel fuel – still the lifeblood of the global economy – have been shrinking for the best part of a decade. This had been obscured by the inclusion of a large volume of ultra-light oil in the overall data for world production, despite that “oil” being of little use save for producing the over-supply of polythene bags currently clogging up the planet. The loss of diesel, meanwhile, is driving up costs – and thereby adding to shortages – in the key sectors of agriculture, mining, heavy industry, and transport.
Gail Tverberg’s recent analysis of the implications of rising costs, not only of diesel, but of a raft of critical minerals, points to systemic risk for the not too distant future. As Tverberg explains:
“A major hidden issue is that prices never seem to rise high enough, for long enough, to prevent production of fossil fuels and other mineral resources from declining relative to what is needed for the world’s rising population. Reserve numbers appear plenty adequate but, because of affordability issues, we cannot actually extract the resources that seem to be available. We should expect declining production because low prices drive more and more fossil fuel and other mineral producers out of business.”
In financial terms, as the cost of energy and resources rise, so consumption – particularly discretionary consumption – falls accordingly. And so, demand falls back, causing prices to fall again. This process of see-sawing was evident in the global oil price in the years between the Crash and the Covid:
Arguably, we may be half-a-century too late even to mitigate the problems posed by a material world now past its peak. But it is equally clear that the neoliberal operating system is itself a major barrier to what mitigation might still be possible. The reason why prices cannot increase for the sustained period needed for further investment is precisely because the system was designed to crush rising prices. That is, the critical mass of consumption which used to be present in the developed and developing states, is no longer available. And so, when prices rise consumers stop consuming.
It goes without saying though, that our godzillionaire lords and masters are not about to bring an end to a system that bequeathed the riches of the Earth to them… at least not before a few serious crises have engulfed us… and much of the “wealth” turns out not to be worth the paper it’s written on.
As you made it to the end…
you might consider supporting The Consciousness of Sheep. There are seven ways in which you could help me continue my work. First – and easiest by far – please share and like this article on social media. Second follow my page on Facebook. Third follow my channel on YouTube. Fourth, sign up for my monthly e-mail digest to ensure you do not miss my posts, and to stay up to date with news about Energy, Environment and Economy more broadly. Fifth, if you enjoy reading my work and feel able, please leave a tip. Sixth, buy one or more of my publications. Seventh, support me on Patreon.
