We’ve lived so long under the spell of hierarchy—from god-kings to feudal lords to party bosses—that only recently have we awakened to see not only that “regular” citizens have the capacity for self-governance, but that without their engagement our huge global crises cannot be addressed. The changes needed for human society simply to survive, let alone thrive, are so profound that the only way we will move toward them is if we ourselves, regular citizens, feel meaningful ownership of solutions through direct engagement. Our problems are too big, interrelated, and pervasive to yield to directives from on high.
—Frances Moore Lappé, excerpt from Time for Progressives to Grow Up

Wednesday, August 31, 2011

Complete English Translation Of German Military Analysis Of Peak Oil Now Available

Click here to access article by Rick Munroe from Energy Bulletin.

A review of this report (in German) was made earlier in June by Munroe, but in this brief article he gives us a link to the full translation in English. (In case you're wondering, they average out the estimates of peak oil to happen before 2020.)

The following section of the Bundeswehr report that I have copied below should serve as a key summary of what we have to look forward to if we continue to be ruled by capitalists. The system, as indicated under the "medium term" effects, is going to collapse anyway; so why why don't we hurry it along so that we can greatly reduce the effects of the other catastrophes listed below? Furthermore, the elimination of capitalism could free up humanity's creative energies to construct societies of social justice, real democracy, and societies that would be capable of living in peace with each other and in harmony with nature. The alternative?

In the short term, the global economy would respond proportionally to the
decline in oil supply.

1. Increasing oil prices would reduce consumption and economic output. This would
lead to recessions.
2. The increase in transportation costs would cause the prices of all traded goods to
rise. Trade volumes would decrease. For some actors, this would only mean losing
sources of income, whereas others would no longer be able to afford essential food
3. National budgets would be under extreme pressure. Expenditure for securing food
supplies (increasing food import costs) or social spending (increasing unemployment
rate) would compete with the necessary investments in oil substitutes and green tech.
Revenues would decrease considerably as a result of recession and necessary tax
In the medium term, the global economic system and all market-oriented economies would collapse. [my emphasis]

1. Economic entities would realise the prolonged contraction and would have to act on
the assumption that the global economy would continue to shrink for a long time.
2. Tipping point: In an economy shrinking over an indefinite period, savings would
not be invested because companies would not be making any profit. For an
indefinite period, companies would no longer be in a position to pay borrowing costs
or to distribute profits to investors. The banking system, stock exchanges and
financial markets could collapse altogether.
3. Financial markets are the backbone of global economy and an integral component of modern societies. All other subsystems have developed hand in hand with the
economic system. A disintegration can therefore not be analysed based on today’s
system. A completely new system state would materialise.
         Nevertheless, for illustration purposes here is an outline of some theoretically 
         plausible consequences:     
  • Banks left with no commercial basis. Banks would not be able to pay
    interest on deposits as they would not be able to find creditworthy companies, institutions or individuals. As a result, they would lose the basis for their business.
  • Loss of confidence in currencies. Belief in the value-preserving function of money would dwindle. This would initially result in hyperinflation and black markets, followed by a barter economy at the local level.
  • Collapse of value chains. The division of labour and its processes are based on the possibility of trade in intermediate products. It would be extremely difficult to conclude the necessary transactions lacking a monetary system.
  • Collapse of unpegged currency systems. If currencies lose their value in their country of origin, they can no longer be exchanged for foreign currencies. International value-added chains would collapse as well.
  • Mass unemployment. Modern societies are organised on a division of labour basis and have become increasingly differentiated in the course of their histories. Many professions are solely concerned with managing this high level of complexity and no longer have anything to do with the immediate production of consumer goods. The reduction in the complexity of economies that is implied here would result in a dramatic increase in unemployment in all modern societies.
  • National bankruptcies. In the situation described, state revenues would evaporate. (New) debt options would be very limited, and the next step would be national bankruptcies.
  • Collapse of critical infrastructures. Neither material nor financial
    resources would suffice to maintain existing infrastructures. Infrastructure interdependences, both internal and external with regard to other subsystems, would worsen the situation.
  • Famines. Ultimately, production and distribution of food in sufficient quantities would become challenging.