In 2003 The Party’s Over: Oil, War and the Fate of Industrial Societies by Richard Heinberg was published. The book is a somber, detailed analysis of the central role that fossil fuels have played and continue to play in just about every aspect of our lives—and what happens to us when they peak.
Heinberg, a senior fellow at the Post Carbon Institute and author of ten books, has most recently published, The End of Growth: Adapting to our New Economic Reality. Biological economists such as Herman Daly and oil geologists like Colin Campbell have been warning for years, that once we hit, or start to approach the limits of natural resources on this planet, the abnormal growth that our economy has experienced these past 150 years will start to retreat. Heinberg tackles what this new era, without growth, looks like, its ramifications, and the potential for new types of human and environmental well-being. Central to his work is his overriding compassion for our world and those of us who populate it.
OTM: You start your book with a basic overview of economic history, and the roles of currency and usury. Why is it important to understand money and its relationship to our current ecological predicament?
RH: In traditional societies, money and debt played a relatively small role in people’s daily lives. With the massive economic growth of the 19th and 20th centuries, which came about because of the temporary availability of cheap fossil energy, money became an essential tool enabling capital accumulation, the trading of rights to natural resources, and the distribution of manufactured products. During the past two decades, innovations in the financial world multiplied debt and monetary claims on real goods to such an extent that now there is no way all the existing claims can ever be honored. We let the environment go to ruin, we let people suffer, and we let communities disintegrate because doing anything to protect them would hamper further economic growth.
What has gone wrong? Have we just gotten too greedy? I argue that what we’re seeing is the convergence and—crucially—the ending of two trends: a two-century expansion of production (economic growth) based on cheap energy, and a concurrent expansion of credit based on the belief that the economy will continue to grow forever. We can print all the dollars we want, but we can’t make land, water, topsoil and other resources. So we have reached a fundamental turning point in our economic history, where resource limits are forcing an end to economic growth.
OTM: In Chapter 3, “Earth’s Limits: Why Growth Won’t Return,” you discuss and show the historical correlation between rising oil prices and economic recessions. While most economists look to the housing bubble as the primary cause of the crash of 2008, you and other oil geologists and biophysical economists have looked to the escalating prices of oil as the root cause. Can you talk briefly about this?
RH: I’m not saying the housing bubble had no role in triggering the current economic crisis. Of course it was a proximate trigger, but it wasn’t the only one. People tend to forget that the oil price spiked to $147 in July 2008—the highest level ever. Every oil price spike since 1970 has been followed by a recession. On the basis of oil prices alone, we should have expected to see a long and deep recession commencing in the third or fourth quarter of 2008. The timing of the bursting of the housing bubble was also affected by oil prices. As several economists (including James Hamilton of the University of California, San Diego) have pointed out, it was in exurban neighborhoods where most residents had long commutes that house prices first started falling. Once the cost of filling the tank of a typical SUV shot to over $100, folks in those communities realized they didn’t have enough money at the end of the month to pay their mortgages and credit card bills.
It’s always important to see events in perspective. Why did we have a credit bubble in the first place? Because of expectations that the economy would continue to grow and house prices would continue to escalate. Why would people expect the economy to grow continually? Because it has grown so much over the past few decades. Why has it done so? Because we had access to cheap, plentiful energy from fossil fuels. Of course, markets and technological innovation played their roles, but without abundant cheap energy we could not have achieved economic growth on a scale remotely similar to what we’ve seen. Seen in context, the 20th century was one long fossil-fueled mania. We are just starting to wake up from it.
OTM: I found Chapter 7, “Life after Growth,” to be a great blueprint of where we need to be heading from a community development perspective. In a related blog, you discuss the need to be happier with living with less, living slower, smaller and poorer. Can you expand on this?
RH: The consumer lifestyle did not evolve spontaneously; it was deliberately engineered by corporate America and the advertising industry as a way of dealing with the problem of overproduction during the fossil-fueled boom times. Acquiring more stuff can give us a momentary jolt of stimulating brain chemicals, and we can easily get addicted to that kind of stimulation, but it doesn’t actually make us happy. Having nurturing relationships with the people around us, having a sense of autonomy and agency, and being engaged in creative work is far more satisfying over the long term. Being shackled to the consumer treadmill actually works against that kind of deeper satisfaction.
Traditional societies understood the value of slowing down and reining in consumption; that’s why most families in such societies sent at least one child to live in a meditative monastery wherein voluntary poverty was extolled as a high virtue. During the 20th century we tended to forget values having to do with community and love of nature, because they didn’t help promote economic growth. Now that the growth era is over and done with, it’s a really good idea to get back in touch with sources of happiness that don’t require a big salary, big spending, a big house, and a big car. Being a genuine optimist doesn’t mean thinking that circumstances will always be to our liking; rather, it’s maintaining a positive attitude and making the most of what life has in store.
By Juliet Sinisterra