Colin's Cornucopia

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The State of the world 2008

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It is perhaps appropriate to be writing this exactly ninety years after the end of the Great War. It did not form in my mind as an examination of the last century of human endeavour but that is probably what it will finish up as.

Last night I co-hosted a meeting of our local civic society where an officer of the Prince’s Foundation came to tell us about the trust’s work in attempting to put in place a set of rules to guide the development of future living and working environments for mankind. It is encouraging, and, I suspect, extremely important that one of our senior leaders is funding and supporting such an endeavour.

There is a redundancy in the last paragraph as working cannot be honestly separated from living. Work is the means by which mans survives. An eagle has wings and a huge beak; a lion has huge claws and great muscle power while the giraffe has long legs to help keep him out of trouble – and a long neck to reach food others cannot. These are their means of survival. Civilised man survives by means of his brain. And to use it amongst other men he must use it to create what we call wealth. He can use it in other ways but we call that crime.

The only source of wealth is the things available to us on the planet. The vast majority of the countless billions of life forms live by hunting. Man has outgrown his ability to hunt. He must farm or mine the materials of the earth and transform the products into wealth. Man can now even farm the hydro and wind power on the earth – although I suspect that those activities are not without significant hidden costs.

There are a million ways in which a man can contribute towards the creation of wealth. The terms “job”, “work” and “boss” generally describe the productive systems mankind has developed in the last two hundred years to enable the production of wealth.

The Limited Company was one of the most important inventions as it allowed groups of people to join together in taking risks and sharing both the risk and the rewards. The first requirement of a company is financing and to this end a huge financial market has grown up. The first function of this market was to oil the wheels of farming and mining and their consequent activities such as distribution and manufacturing.

At the end of the 20th century we have reached the stage that most manufacturing activities, which tend to be labour intensive, have moved from the west to the developing world. The functions left at home are not actually capable of self-sustenance. The wealth is now being created on foreign shores and our control of it is ever decreasing. The system has worked within sovereign states because each operates with a single political and social system. A worker knows and can trust the rules, whether a billionaire magnate or a street sweeper.

Such a common set of rules does not exist world wide. Each country still enjoys a widely different set of rules. The development of the European Union is an attempt to address this problem and has made some progress, if at the cost of much bureaucracy. It should be noted that Europe still has sixteen prime ministers, sixteen finance ministers, sixteen foreign ministers and so on while economies of similar size such as the USA and China have one of each of these ministers.

The game has now changed fundamentally. National production is almost irrelevant in comparison to the huge funds invested – and potential profits – to be made from the garnering of international assets and the piping of capital assets around the world. There are huge profits to be made from mining a huge range of materials, but these require huge investments that often take a long time to repay. It has come to the attention of a relatively small number of men that they can skim huge amounts of money by playing the markets rather than investing. This has always been possible but never on a world wide scale before.

The wall Street crash of 1928 came as a direct result of lots of men borrowing cheap money and levering it up to buy shares on margin. The banking crash of 2008 has come about as a result of lots of men borrowing cheap money and levering it up to buy property on margin. They have also involved lots of other people whom they should not have done. The punters in the savings and loan societies, or building societies, or banks in which we have misplaced our savings and our trust. The punters have been given loans and mortgages that they have no chance of repaying so that they lose their homes and their savings and their trust in society.

The de-regulated bankers have sold the family silver of many of their clients. They have adopted a series of short-term annual strategies designed only to enhance the bottom line of the Annual Report. They had previously negotiated themselves very handsome rewards based on this bottom line and stuffed their pockets full of gains that now show up to have been very ill gotten. Bottom Line management has all but destroyed most of our financial institutions and a huge number of once productive companies. The correct name for this is Asset Stripping. I prefer to call it theft.

I would personally like to see some of these people hung on a ladder and have their guts cut open and their intestines removed and the void filled with burning coal. Then you chop off their arms and legs one at a very long time. But the real criminals, surely, are those who encouraged and allowed the deregulation of our financial system. Checks and balances that had worked successfully for many years were dismantled for no other reason than the managers of the banks blackmailed the politicians by threatening to take their skills abroad. So bad is this syndrome that in the middle of the worst revelations, our prime minister went on television to say - and I quote “we need the skills of these men”. We need them like we need a hole in the head.

The simple fact is that short-term affordable debt can be an excellent means of financing wealth creation. Long term debt is death. This has been well known for at least 3000 years and it has not changed and it never will. The laws of the world should reflect this fact. We have allowed international competition to lead us into unwise ways. If those other nations that foster this kind of competition will not join us in making sensible arrangements to protect us all, they should be excluded from international commerce. Honest men cannot compete with criminals, protected within their own fortresses, but allowed to compete with us on a level playing field. This is a game of catch as catch can - with handcuffs for those of us with principles.

The scramble for industrialisation of undeveloped countries has put a huge strain on the institutions we already have. Vast amounts of ores of many types are now absorbed daily by China and they are only just starting their industrialisation process. Many other countries are eyeing the situation to make their bids.

The bottom line of all this is oil. Well, that is, the actual bottom line is Power. It is no accident that we use the same word for political manipulation and the use of energy to power our developed world. Political power is now almost meaningless without control of significant reserves of energy. Coal is an important and very useful such source but oil has displaced coal as King for at least 80 years and is likely to remain so for the next eighty.

There is much talk of alternative energy and green strategies but, as a Chartered Engineer, I professionally consider most of this to be so much hot air. In 1960 I went for an interview at Harwell for a job as junior engineer. I was shown a stainless steel Torus surrounded by much equipment. I was informed that they intended to strike up a fusion reaction in that within the next few months and sustain it for around two milliseconds – a very long time in nuclear physics. Although a vast amount of theoretical work has been done since and we know most of what we need to know to produce a fusion reactor, the reality is that commercial power from such a device is still probably at least another half century away.

Fred Hoyle, once one of Britain’s best astronomers, wrote an excellent little book around 1970 explaining the coming energy crunch in cosmological terms. One of his conclusions was that the only possible way for the human race to survive the next 100 years without catastrophe is by using nuclear energy. I have to say that, with the benefit of another 35 years experience and study I think he was probably right. The green lobby, which I have supported both in principle and with practical support, is utterly wrong to oppose nuclear energy.

The primary target of the green lobby is transport, but that only uses around 30 percent of our energy output. They are neglecting the 80/20 rule which is a foolish thing to do in any activity. Our resources of all types are limited and we must put our efforts where they are most effective. 80 percent of our energy must be applied against 80 percent of the problem. Our main energy use is squandered. Vast amounts of it go to cool buildings in hot countries. Another huge chunk goes to warm buildings in cool countries. These should be the first targets for our efforts to reduce our carbon footprints.

Another red herring is electric vehicles. It is certainly correct to use our best technical efforts to make electric vehicles but they will do nothing to reduce the carbon footprint. All they do is move the pollution elsewhere – and make the whole process less efficient on the way – so increasing the overall production of carbon dioxide. Electric vehicles will only reduce pollution if they are charged from non-polluting sources.

Hydrogen power is another very long term objective. Although hydrogen is the best form of non-nuclear energy to be found, it is also very difficult to use. Nature took billions of years to learn and use the trick of combining hydrogen with carbon to produce what we call oil – or any other find of fuel. The density of energy in hydrogen is thousands of times less per unit volume than petroleum so that hydrogen must be compressed to very high pressure to make it practical to power a mobile vehicle engine. This makes it very dangerous. The average hydrogen container is not much different to a high explosive bomb – with a detonator built in. The costs of a parallel distribution system will be enormous and we still have to produce the hydrogen and so far there are virtually no economical routes to this on the scale required and without adding, again, to the carbon footprint.

Wind power is useful but suffers acutely from the requirement for a backup system. There is no way we can deliberately design a grid system that will deliberately allow its providers to drop to zero. Wind farms may only do this occasionally – but they almost certainly will do it at some time. Are we going to sit in the dark for three days to wait for the wind to come back again? I think not. Backup is essential and backup generators are very expensive. Wind is a useful marginal activity, but that is all it will ever be. Its capital requirements are also quite high. Also, I have for long known that there are no free lunches. Removing all this energy from the weather systems must have an effect. It is impossible that it does not. You may scoff – but if I had told you in 1908 that the automobile and the fancy new power stations were going to threaten to destroy the planet you would have heard the laughter on the moon. There are no free lunches.

The sun, which provides, or provided, all the energy on the planet, is capable of sustaining us if the sunlight could be harvested – but this is extremely difficult and expensive. Even if some means could be found to harvest it there are still no free lunches and removing the energy from the surface of the earth might have consequences that we could hardly imagine at the moment. Current electrical technology to transform sunlight to energy is merely interesting. There is quite a lot of energy available in deserts where no one can live. The problems of maintenance, security and transmission of energy, while not insuperable, are difficult and expensive.

Sustainable crops is the nearest we could reasonably come to harvesting the sun. We started doing this to produce fuel only in this millennium and already, within eight years, the cracks are showing. The growing of crops for fuel is already causing difficulties in some food supply chains. The rich fuel-hungry citizens of the planet are causing hunger and probably death for the less fortunate. Such fuels are, of course, much more expensive than oil and are likely to remain so. Oil was put together for free by sunshine over billions of years. That is not going to happen again. Sustainable crops are, again, marginal. Their application on anything like the scale necessary will completely decimate a huge swathe of rainforest through South America and Africa and possibly elsewhere. Indonesia is already devastated by Palm Oil.

The only truly practical option within the next 100 years is nuclear power. Even this has problems. The current opposition is largely based on a few disasters and is extrapolated to make every scrap of nuclear contamination into a bogey. The vast majority of radiation from nuclear waste is less than that to be experienced from a walk on a granite hillside. Its disposal in suitable repositories is by no means impossible or economically unattractive. Certainly it is expensive – but no more so than the alternatives: and it is much more reliable than any other offering.

The bottom line is not even power. The power problem is important but also insoluble. The more we solve the problem the more people we will encourage to industrialise and the more energy will be consumed. We are in a positive feedback loop and those who know about control systems will know this means instability and ultimately disaster. There are signs that the world’s population growth is tending to slow – but the rate of industrialisation is currently increasing. Malthus was predicting disaster in 1800 and the industrial revolution rendered his dire predictions meaningless. But now we have had the industrial revolution and a couple more besides. We were predicting “peak oil” by 1980 and it has not happened yet, but then we did not know that we had started to change the composition of the atmosphere and melt the ice caps and blow holes in the ozone layer.

We are now predicting “peak oil” in 2015 and, I suspect, “critical carbon” about the same time. After this the changes to the world will be irreversible. Indeed, the world has been changing throughout the eight billion years of its existence and will no doubt continue to change. There are a lot of very clever and capable people with a huge amount of technology and brainpower working on these problems but I think it not unreasonable to say that not a single one of them can accurately predict the future of the atmosphere as a result of the carbon injection. The atmosphere contains dozens, and perhaps hundred or even thousands of chemical reactions and interactions with a huge range of functions and time scales. Few know the details of what is happening in any one reaction and the whole system is probably far too complicated to replicate on a computer. Some reactions occur on a minute by minute basis and some take billions of years.

The carbon experiment we have already conducted may have consequences for centuries or millennia – or a Red Tide might remove all the excess carbon dioxide within months - and destroy the oceans at the same time. My examples are deliberately exaggerated – but does anyone honestly dare to say they are definitely wrong? We are conducting a massive chemical experiment and do not have the faintest idea what is in the test tube or what the consequences may be.

One thing we can be fairly certain of. As long as life remains on this planet its prime activators will be the chemicals adenine, cytosine , guanine and thymine. All life forms above the level of viruses are constructed with these four genes. They are ubiquitous and have been around as long as anyone can determine and they have no competition. They are us. But they do not care whether we survive or not. If we threaten them they will find some way to get rid of us – even if all they have to do is sit and wait for another 50,000 years. We will respect their world in which we live or we will have to leave it. We are simply short term guests. We cannot change that.

Since I first wrote this article the international financial system, which was showing cracks, has suffered a total meltdown. I have written about that elsewhere but do not believe that there is no connection between the financial meltdown and the carbon crisis. If nothing else, the two are intimately connected through oil - one of our main sources of wealth on the one hand and one of the main problems of pollution on the other. But the political hardening we see throughout the world since the USA and Russia ceased to be the only mighty superpowers is intimately concerned with both of these problems also.

The present crisis truly started when man’s technological ability reached the point that it overcame the natural restrictions on his survival. Until around 1800 our technology was still so simple that plagues, viruses, poverty, hunger, drought, harvest failures, medical ignorance and war continually ravaged the population. It was a miracle anyone survived. Indeed even at that time some people thought the species could possibly disappear. The human race began its earnest expansion after the invention of the simple bog pipe and sewage works removed much dirt and disease from the environment. Many other inventions then multiplied the effect.

Then Man played his master strokes. The industrial revolution multiplied his efforts by the enslavement of the power in coal and oil and gas. Keynes then was one of the major players in a social revolution that changed men’s ways of working and cooperating. He invented the financial system that required constant growth to maintain it. After that it was inevitable that Man would expand until he filled the world. Malthus had predicted this in 1800 but had not foreseen the multiplication factors we now take for granted. Industrial man became supreme – or so he thought.

Now it is clear that Man has reached the limit of his population level on this planet. His industrial prowess has even more pushed the ability of the planet to provide resources and absorb detritus. We will curtail this combination now or there will be a disaster. It might be drastic social change, a rabid rampage of disease, a vicious war, drastic environmental change or a combination of all these. But we simply cannot continue to fit our continual expansion into a finite planet. There seem to be plenty of people who think we can. They are stupid, mad or evil.

11 November 2008.doc

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