Friday, January 11, 2013

Op-Ed...Our "New Normal" by Chris Clugston

   Austerity--Our "New Normal"

    Our "old normal" - prosperity - was enabled by abundant and cheap NNRs. Our "new normal" - austerity - is being thrust upon us by increasingly scarce and expensive NNRs.

   Intoduction

    When I wrote "Scarcity -Humaity's Final Chapter?" in 2009/10, it was obvious that the episode of epidemic global nonrenewable natural resource (NNR) scarcity that occurred immediately prior to the Great Recession was historically unprecedented.

   Global NNR prices associated with the vast majority of NNRs had increased during the years immediately prior to the recession, in many cases dramatically, as earth's increasingly constrained - i.e., increasingly expensive, lower quality - global NNR supplies struggled to address our historically unprecedented global NNR requirements.

   It was unclear at the time, however, whether the episode of pre-recession global NNR scarcity was predominantly temporary or permanent.

   That is, in which cases would sufficient economically viable NNR supplies ultimately be brought online to completely address our continuously increasing global requirements; and in which cases would globally available, economically viable NNR supplies never again be sufficient to completely address our global requirements?'' 

   While only time will tell whether this trend will continue, the folowing analysis presents compelling evidence to support the contention that permanent global NNR scarcity is becaoming increasingly prevalent - and that ever-increasing global NNR scarcity is the underlying cause associated with our "new normal".

NNRs - the Enablers 

   Our modern industrial existence is enabled almost exclusively by enormous and ever-increasing quantities of nonrenewabble natural resources (NNRs) - the fossil fuels, metals, and nonmetallic minerals that serve as:

    * The raw material inputs to our industrialized economies.

    *  The building blocks that comprise our industrialized infrastructure and support systems and

    *  The primary energy sources that power our industrialized societies.

    As an example, NNRs comprise approximately 95% of the raw material inputs to the US economy each year.  During 2006, the year during which aggregate US NNR utilization peaked (to date), America used over 7.1 billion tons of newly mined NNRs - an almost inconceivable 180,000% increase since the year 1800 - which equated to nearly 48,000 pounds per US citizen.

   NNRs play two essential roles in enabling our industrial lifestyle paradigm:

   * NNR's enable renewable natural resources (RNRs) - water, soil, forests, and other naturally occurring biota - to be exploited in ways and at levels that are necessary to support the extraordinary population levels and material living standards associated with industrialized human societies.

   Examples include water storage/distribution systems, food production/distribution systems and energy generation/distribution systems, which would support only a fraction of today's global human population were they enabled exclusively by RNRs.

   *  NNRs enable the production and provisioning of manmade goods and infrastructure - e.g., airplaines, computers, skyscrapers, super-highways, refrigerators, light bulbs, communication networks, etc. - that differentiate industrialized societies from pre-industrial agrarian and hunter-gatherer societies; goods and infrasturcture that are inconceivable though the exclusive utilization of RNR's.

   In sum, NNR inputs to our global economy generate the economic output that enables the material living standards enjoyed by our industrialized and industrializing populations.

   NNR Inputs >>Economic Output>>Material Living Standards 

   Prosperity - Our "Old Normal"

    Since the inception of our industrial revolution over 200 years ago until approximately the end of the 20th century, there was "more"' and better yet, there was "enough".

   As a result, there was increasing "prosperity"!

    Global NNR supplies remained generally abundant during the 20th century, despite our continuously increasing utilization levels.

    " ...a rising long-term price for a commodity indicates increasing scarcity of supply relative to demand.

   This is what we should expect with minerals as depletion progresses.  However, in general, mineral prices have historically fallen in real terms. Therefore, the data show that supply has grown faster than demand (during the 20th century)."  USGS

   From the inception of our industrial revolution until approximately the end of the 20th century, mankind, especially people living in the industrialized West, experienced continuously improving material living standards, which were enabled by our ever-increasing utilization of abundant and clean NNRs.

    Throughout this period, there were typically "more" globally available, economically viable supplies of literally every NNR type - i.e., annual NNR extraction/production level trajectories and overall NNR supply level trajectories increased in nearly all cases since the dawn of industrialism.

   Although the U.S. economy generally continues its increasing consumption trend (as did other industrialized nations,) the international supply of minerals has been able to keep pace (through the end of the 20th century.) USGS

   More importantly, there were "enough" economically viable supplies of nearly every NNR type during the period - i.e, abundant NNR supplies enabled NNR price trajectories to actually decrease in the vast majority of cases.

  "In 1929, D.F. Hewett, of the United States Geological Survey (USGS), reflecting on the effects of war on metal production ...(Hewett, 1929)

   Since 1800 the trend of prices for the common metals, measured not only by monetary units but by the cost in human effort, has been almost steadily downward..."

   And "In spite of the fact that the use of mineral raw materials increased over the last (20th century,) the long-term constant dollar price of key U.S. mineral raw materials declined during the same period." USGS

   Consequently, globally available, economically viable NNR supplies were sufficient during the 19th and 20th centuries to completely address industrialized humanity's requirements, and thereby provide generally increasing prosperity - i.e., improving material living standards for broadening segments of our continuously expanding global population.

    NNR scarcity, to the extent that it existed, was a temporary phenomenon that occurred furing the "boom" phases of periodic "commodity boom/bust cycles".

   Continue reading the full report here:

   http://www/wakeupamerika.com/PDFs/Austerity-Our-New-Normal.pdf
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1 comment:

Anonymous said...

The consumer cost of resources today is based partly on whether the chairman clipped skin when trimming his toenails. A tragic global incident.