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« Watching the Financial System | Main | Watching the Political System (er, Circus) »

July 17, 2012


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Mark N

George it has been a great week for me data wise; you announce a series of blog posts from a complex systems science point of view on the issues I find most pressing, and I then get my hands on David Korowicz’s study.

I found the section “when you watch the economy” most helpful in your latest post. I have often thought that fraud is a natural response to peak oil per capita in a culture that has a progress myth at its core. Meaning rather than except the fact that we have peaked in wealth and energy; the cultural myth of progress demands growth by any means. Fraud is much easier than announcing, well it was a good ride folks but we are heading back to an agrarian lifestyle, sorry about the massive overpopulation.

I totally understand the reason one would use the word revert as applied to returning to the hunter-gather state. I do not feel it is a reversion myself necessarily; the hunter-gather state seems to me to be the only societal form that humans have managed to avoid the exponential population growth trap.

I daydream about a new culture, one that takes some of the great things that humans learned in the agricultural and industrial cultures; and fuses them with the great things to be learned from hunter-gather cultures of the past and present. I feel more the latter though we may find some aspects of hunter-gather societies cruel or distasteful; they would probably not have the world on the edge of manmade extinction event if they were the dominant culture.

Best of luck on the sauerkraut endeavor, I have read lately there are many health benefits to eating fermented foods.

Robin Datta

Economists may continue swimming in de Nile, but they will not escape the chomp from the crocodile of Reality.


Excellent post George! I linked to it in response to this comment on my post entitled:

EROEI and the Collapse of Empires


Great post George.

Thanks for the link to that well-detailed paper on cross contamination in our overly complex system of civilization.

Once it goes i think chaos will deplete the population rather rapidly due to violence and starvation. There will be a lot of dead bodies laying around (who's going to clean 'em up?) which will in turn lead to widespread disease when the healthcare system will be inoperable. Add to this the fact that the lack of relatively simple dentistry will exact its toll on even more people and you can easily see how a cascading population decline is almost guaranteed.

There's nowhere to run and no place to hide from what's coming. Survival of anyone through this bottleneck will be short-lived due to ever increasing environmental chaos like rising sea levels, inability to grow sufficient food (due to drought, flooding, storms, diseases and pests, etc.), and other mitigating factors.

Even the most sapient of people or groups will not be able to stave off this environmental bomb we've set off (methane release isn't going to magically slow down now that it's started which will of course continue to make matters worse).

With no energy for heat, people will also succumb to the cold winters that will randomly come along.

There's no good news at this point. Live for as long as you can will be the motto of the immediate future.


Tom, what you describe appears to be the likely outcome, which also suggests that those with the most to lose atop the hierarchy of power relations and with the access to the firepower, and power to use it, will not hesitate to turn the big guns on the rest of us when confidence and legitimacy in the system breaks down.

Note that today the cumulative compounding interest to term for the US total credit market debt owed is now at the level of total US GDP, nearly three times private wages, and nearly ten times after-tax corporate profits. The point is that there can be no further growth of debt, private investment, wages, employment, and overall real GDP per capita because of the outstanding debt service costs. Additional federal gov't deficit spending will only lead to deficits approaching, and then exceeding, receipts until the US becomes one of the PIIGS.

The banksters and their surrogates at the Fed and in DC think they can just do what they have always done, that is, print more fiat digital debt-money reserves and borrow and spend still more as a share of GDP, wages, and profits in perpetuity and place the responsibility for dealing with the consequences on others in the future. The future has arrived.

What few of us realize is that the so-called United States ceased being a constitutional republic as long ago as the 1870s-80s and has increasingly since 1913 and after 1973 become a private corporate-state owned by the top 0.1%, headquartered on Wall St. and the City of London, and governed by commercial and imperial maritime law, the provisions of which have been repeatedly affirmed by the Supreme Court. The private corporate-state is a supra-constitutional entity with no enforceable legal obligations to the commitments of the federal gov't. The President of the US is the CEO of the corporate-state hired by the owners.

We are citizens of localities and states, which have become hardly more than tax colonies for the corporate-state. We are bound by commercial and perpetual maritime imperial wartime laws, but we cannot afford to defend the rights and privileges provided by the US Constitution, which has been superseded in any case by commercial law.

Once the fit hits the shan in earnest and the owners of the corporate-state refuse to make good on the federal gov't's promises for Social Security, Medicare, Medicaid, food stamps, in-kind transfers to states, gov't trust funds, etc., the corporate-state's de facto private law enforcement and military will be used against us without hesitation to enforce "property rights" and in the interest of "national security".

The US and UK are no more than 4-5 years behind the PIIGS. Few of us are prepared for conditions in the US similar to what is happening in the ME, Central Asia, parts of Africa, Greece, Spain, and soon Italy, and eventually China-Asia as the global, post-Keynesian, Anglo-American imperial trade and debt-money regime breaks down.


David Stockman explains better the situation we face than I do above.

Bodhi Chefurka

Bruce, it sounds like you're alluding to things like the UCC, is that correct? My belief-system is in neutral about the implications I've heard, but I know TPTB are working hard to shovel anything related to that set if ideas down the memory hole post haste. The usual CT tags are being hung on most people who try to talk about it openly.

George Mobus

Mark N.,

...the hunter-gather state seems to me to be the only societal form that humans [Homo sapiens] have managed to avoid the exponential population growth trap.

This is quite true. I inserted our genus/species to emphasize that we humans as currently constituted with minimal sapience, on average, are not able to stay out of this trap set by the biological imperative. But it is possible for systems to evolve to do so. The complex network of growth and growth inhibiting signals that regulate cell, tissue, and body size growth show us that there are biological ways to avoid this problem. Cancer is based on a failure of this network and shows that cells/tissues can revert to unfettered growth if released from the controls.

I think higher sapience is part of the mechanism that will keep future humans in check via the wisdom to keep in balance with the rest of the Ecos. Indeed I suspect that pre-agricultural humans showed signs of self-regulating procreation when conditions warranted. Post-agricultural humans however, seem to have lost that capacity, replacing it with a need to expand. There is a reinforcing feedback loop in large-scale agriculture that favors expansion as a kind of risk reduction. Ergo we humans have undergone a diminution of our balancing sense. The rest is literally history.

"Once the fit hits the shan..." - transparent.

Hey this is a classier blog guy! One should say something like: "when the defecant hits the air moving device". Sounds more systems sciency.


George Mobus


Ouch. Glad I'm not an economist.



Thank you.



The picture you paint is very likely the case for the vast majority of people. But I still hold out hope that for sufficiently clever AND WISE humans there will be some opportunities for survival. Wish I could say "We'll see" but I don't expect to last that long!



Highly recommended book:

Beyond capitalism with a human face: a radically simple way

"Ted Trainer is one of the wisest, boldest, and most dedicated advocates of The Simpler Way. In 2010 he published a book called, The Transition to a Sustainable and Just World, and I have to say that it is one of the best books I have ever read in my life. If you only have time to read one more book in your life, consider reading this one. It speaks directly to our global situation and condition, and it does so with passion, humility, and penetrating insight. From cover to cover, its pages are positively alive with wisdom. I highly recommend that everyone gets a copy of this book, reads it, and then passes it on. Our world desperately needs this book."

Thanks for the Stockton link, Bruce.


Who Really Runs the World?

The author could have added that fewer than 400 American, Canadian, British, Australian, Dutch, German, Austrian, Swiss, Italian, and French families and extended family members own more than half of the world's financial and resource wealth, and even more when one includes indirect holdings via collateralized assets and the income streams therefrom; and I'm not referring to the Gateses and Buffetts.

George, I stand admonished, but it's going to be messy no matter which words one uses to describe the situation. :-(


Thanks, Tom. (For the record, it is David "Stockman".)

Referring to Alexander's report, while one can be sympathetic to the ideals, anarchism and "radical democracy" or "direct democracy" are incompatible with nation-states of 300 million to 1 billion or more citizens, let alone global empires. It is naive at best to even imagine that the economic, financial, and psycho-emotional interests of hundreds of millions or billions of human apes can be served by majority rule in which the elite top 0.1% of the population control the means of mass propaganda and social control to serve their interests increasingly at the expense of the rest of us.

It was been said that democracy is the worst form of gov't, except for all other forms. That needs to be updated to include a benign form of enlightened, techno-scientific dictatorship that "worships" a Sun god that imposes Nature's limits on human apes' desires and choices and restricts our population to a size that is sustainable to planetary scale at a standard of material consumption we would wish for those sufficiently intelligent, wise, courageous, and, therefore, worthy of the species.

It is also said that "life is tragic", which is to say that there are very real limits to our desires as finite creatures in an entropic universe. But the vast majority of us require far less in terms of net energy per capita, properly allocated and distributed, than is presumed to be required today by those imposing the values from atop the hierarchy of power relations.

We have created an (un)economic system that claims to defy the laws of physics. We have long passed the point at which it has become incumbent upon the wisest among us to devise a system that conforms to the demonstrable laws of Nature and rewards the species for doing so.


(sorry about the misspelling)

yeah - environmentally, it looks like Stupid Wins! (except they lose the edifice of civilization - to be replaced by grinding survival).


"Free-market capitalism" is no more. We're all fascists now, or "state-capitalists", if you prefer the euphemism used by the Rothschild-supported, neo-Fabian, London Schoolers at The Economist.

Once all of the property, public and private (an ironic version of the Marxist abolishing of the state and private property), is owned by the top 0.1%, who are the only ones possessing capital and the financial, economic, political, and military power that accrues to ownership, the rest of us are not required, unless, of course, the state mandates our becoming property of the top 0.1%.

There is an important distinction in terms in this regard. As a wage or salary worker, one is said to be "selling one's labor" to a capitalist or deploying it as a self-employed person in the competitive labor market. However, if the top 0.1% do not require (or want) "a competitive market" for goods and services in order to maintain their standard of living, privilege, and power, neither do they need a complex division of labor requiring the effort of tens of millions of individuals. Without paid wage and salary labor or possession of capital (means of production of goods and services), the vast majority of us are hardly more than costly charges to a private state with no statutory or moral obligation to support.

Moreover, the situation becomes more problematic as machines increasingly perform jobs most of us have come to rely upon for living wages/salaries or at least a subsistence living, which is now occurring in the so-called "developing world".

The post-Oil Age era is also the post-capitalism era, which in turn is becoming the post-employment era and eventually the post-gov't era, or the emerging epoch of the private corporate-state.

Given history and human nature, one might also envision a state-less neo-feudal society, including a return of slavery, military conscription, debtor and work prisons, and the like.

Aboc Zed


even if 0.1% does not "need" us for material comforts it does not mean they will want to exterminate us

at the moment they are clueless and they are expected to continue so

they are also in need of gratification for their egos delivered by feeling god-like being atop of billions of people

you are worrying for nothing because if they understood the idea of "rebooting" the civilization thru the managed die-off they would be sufficiently advanced and sapient but if they were sufficiently advanced and supient they would also understood that implementing managed die-off thru means that are other than controlling birthes and allowing deaths is logistically not possible given the level of the complexity we find ourselves in

i therefore think that your worries are ungrounded

the top 0.1% are very much like the bottom 99.9%: clueless about system properties and system dynamics

the fact that they have the power does not mean anything because when the contraction begins and government and governance fails the power as we know it know is useless - we will rever to "raw power dynamics" but it will not be "implemented" or "introduced" by the top 0.1% to the bottom 99.9%

i think extreme weather events, food crisis and disease (antibiotics resistan bacteria and genetically novel viruses) will kill many of us before mad max police state kicks in


AZ, today as I type, 1-2 robots and 10,000 nano-bots and algo-bots functioning by the direction of the robots and by way of self-organizing criticality of recursive look-ahead routines, which can be interconnected worldwide with thousands more like it, have the potential within a decade to replace virtually 90-95% of existing labor, including production, accounting, inventory control, logistics, marketing, and positions in financial services, banking, insurance, real estate, title officers, security and surveillance, most computer programming, routine gov't functions, "education", diagnostic "health care", and the like.

Hundreds of millions, even billions, of living-wage jobs and entire industries and occupations will be permanently eliminated worldwide with no replacement for income and benefits.

I am not referring to a similar period as occurred when steam engines replaced horses, and when diesel locomotives and autos supplanted steam over a generation. I am talking about the wholesale collapse of the existing division of labor and associated incomes, benefits, and tax revenues with no emerging sectors poised to replace lost hundreds of millions of jobs as during the periods of transition from S-curve techno-economic paradigms since the 18th century.

The top 0.1% are by no means "clueless" in this regard, although their surrogate politicans, eCONomists, professional middle class, and financial media influentials might well be largely and necessarily so, because they are not rewarded for sounding the alarm, and they are educated, socialized, and sufficiently self-satisfied with their positions within the occupational and status hierarchy to perceive themselves as particularly worthy and thus capable of avoiding the consequences of same that will befall the bottom 80-90% working-class masses.

I will reiterate that the top 0.1% and the techno-scientific caste benefiting from their luxurious position with the occupational and status hierarchy are so privileged and sufficiently advantaged intellectually, scientifically, technologicially, economically, financially, and politically as to be like extraterrestrials from an advanced civilization compared to the rest of the 99%+ of the human ape species. They do not need the mass of humans with IQ's of 80-110 in order to evolve, actualize, and advance the next stage of development of the post-bottleneck 21st century techno-scientific civilization.

When net energy surpluses were abundant and the means of allocation of resources and distribution of income and wealth permitted the elites to share a third of output with the bottom 80% to maintain the system, it made sense for the elites to do so. However, today the net energy surplus no longer exists and declining output per capita will eventually result in increasing poverty, debt deflation, fiscal insolvency, and a breakdown of confidence in, and legitimacy of, primary institutions and a risk to the system and thus the status and power of the top 0.1-10%.

Moreover, the mass of human apes is a burdensome cost to the top 0.1% and the techno-scientific remnant elite's further evolutionary adaptation and development under conditions of finite resources on Spaceship Earth.

By the time most of us understand this, if even a small plurality ever do, it will largely be a moot point; it is largely academic today, in any case.

Aboc Zed


again i would use the evidence provided by the mess we all are in that 0.1% is not sufficiently advanced intellectually as to understand where the system is going

you are giving them too much credit

i agree that some individuals among 0.1% may be as you descrinbe them but they are as dispersed and as unorganized as the similarly advanced individuals among 99+%

there are ways of decreasing population quickly (pay women to undergo sterilization and promise them 'good life' until death)

if they really were as smart as you think they are they would have used resources they have in a completely different way from the pattern we observe now


AZ, perhaps we are left to agree to disagree on this particular point. The top 0.1% are sufficiently amoral and keenly self-interested as to have anticipated as long ago as two generations, if not more, what is happening and, therefore, likely to happen to the rest of us.

Wisdom or sapience required to adapt and evolve successfully need not be moral (as generally conceived) or intellectually satisfying for those who are not on the winning side of the winner-take-all game of evolution. The top 0.1-1% so-called "sociopaths" know this well and hardly concern themselves with it. They must be this way in order to be where they are; it is a self-selected, self-reinforcing trait, or set of traits, necessary for them to remain at the top of the hierarchy of power relations.

The vast majority of the rest of us are not required by the elites. Most of us don't get this, but at some deeper mass-social-psychological level the human mind innately "knows", which is why so many cultures throughout history have their versions of "the end of the world" and redemption of the faithful by some extra-planetary entity or vengeful sky god.

Consider the appeal one would make to the most influential and powerful of the top 0.1%. Using such constructs as "we" or "us" to them in the context of their prospects and that of the mass of human apes on the planet has no relevance to them. "They" are not "us". "They" don't want to be in the same evolutionary trajectory facing the same grim prospects as "we" will. Therefore, they have no incentive to listen to us. While we might self-identify with the larger "us" and how to adapt to the bottleneck conditions, "they" don't want "us" around as competitors.

Stepping back, is this not wisdom? Why self-identify or empathize with the prospects of evolution's losers over whom you have a disproportionate power and control? We are like microorganisms beneath the feet of a human walking on a sidewalk. While there might be a vague recognition of the existence of the organisms, their well-being or existence is virtually irrelevant to the walker. Such is the case for the top 0.1% (and many within the next 0.4-0.9%) WRT the rest of us.

But then what? If we don't matter to the top 0.1%, and they have increasingly most of the wealth and power, what do we do? If their long-term objective is to permit or encourage mass die-off of 90% of the population, what is one to do if one is not permitted to join them? We can't beat 'em, but neither can we join 'em.

The obvious conclusion is that we are on our own to devise adapting strategies, which might include cooperation, competition, conciliation, alliances, violence, theft, bribery, deceit, betrayal, and genocide. The top 0.1% is prepared to use, and has many times used, all of these.

That "we" are "on our own", it becomes imperative that one defines "we", that is, What defines those with whom we are most likely to be successful? Which traits and racial/ethnic, intellectual, socioeconomic, physical, and psychological characteristics will most likely be successful? How does one secure membership in such communities? Is it too late? Or is this a delusional objective given the circumstances?

I'll stop there.

Aboc Zed


i totally agree with you about moral/immoral dimension is being simply irrelevant - no argument there

and on self-selection i am totally with you

and on the fact that at some point getting rid of the 99.99% is the only 'action' that is 'left' logically

but were i feel you overreact is on the count of how not-sapient and clueless our environment, culture or 'human condition' is

it is a chicken and egg problem

when one climbs atop he/she 'specializes' and 'tunes-in' whant works best in terms of pushing you upward

when the 'human condition' is not sapient the top and bottom are not sapient because they are slaves of the structure

the near-sapient are more likely to be in betweeen, not at the top

my view is the near sapient in between will be pushed up the structure over the downslope when the they will have no other choice as to go into government and governence or die

when you talk "we are on our own" you imply "us" versus "them" but i think we all are equally clueless and we all will suffer from collapse of fossil fuel civilization - the whole will shrink - the bottom more the top less but the shrinkage will happen at _all_ levels

Aboc Zed


i ran a quick calculation starting with 1 at the level 1 and multiplying it by 10 i got the population of 10,000,000,000 at level 11 giving the total population at all levels to be 11,111,111,111

when i change multiple to 7 i get 282,475,249 at the level 11 and 329,554,457
cumulative population at all levels

if one checks the percent change of population at each level one quickly notes that only at level 2 and level 3 the percent is below 50 (27% and 46%) all other levels are above 50% and the total population percent change is 87% with the total die-off to be 9,717,524,751

this simple math example shows that one only needs to decrease level multiple from 10 to 7 and the corresponding decrease of the total is 87% with the stratification intact

the heat will be felt at all levels: nobody will escape it

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