Australian climate change minister Penny Wong recently made a speech to a conference on “Coasts and Climate Change” (see Wong: Climate sceptics are all red herrings and quackery for the full text) where she made some remarks about climate skeptics and their frequent theorising that climate scientists are “part of a vast conspiracy to de-industrialise the Western world” – which is often just one facet of conspiracy theories involving the “New World Order”.

While the climate scientists are no doubt innocent of these charges (and most likely correct when they point to global warming being a serious and growing problem) the idea that the West is being deindustrialised may not be as wacky as it appears at first glance, so I might spend some time exploring a few problematic trends affecting the western world in general and the United States in particular.

Given recent allegations you might be excused for thinking that climate change science has been completely discredited.

Remember the people who have been barrackers for policy failure at home and abroad are the same people who have been peddling misinformation and misleading information about the science of climate change.

There is, in fact, a certain similarity between debates about the impact carbon pollution is having on our planet, and earlier debates about the impact cigarette smoke has on our health.

It’s not hard to imagine these barrackers for failure as the characters in the sequel to ‘Thank you for smoking’, which will be called: ‘Thank you for polluting.’

Given how confused debates on the science have become, I think it is important to get some facts on the table.

And I don’t just mean facts like that 2009 was the second hottest year on record in Australia and the fifth hottest globally, and that 2009 finished the hottest decade in recorded history.

I refer more to the series of breathless, scandalised claims implying that we have all been hoodwinked by climate scientists, who have manipulated evidence and published bare-faced lies as part of a vast conspiracy to de-industrialise the Western world.

Those hoodwinked would have to include the Pentagon and Margaret Thatcher.

Michael Lind recently had an interesting column in Salon (Mythological politics), exploring the beliefs of the populist right, in particular its recent manifestation via the “tea party” movement in the US (occasionally referred to as the “tea baggers” by their detractors), noting that they are ideological descendants of liberty loving Britons of the 17th century.

American political culture was British before it was American. During the English civil war of the 17th century, two themes crystallized — and have influenced American public discourse to this day. One was the idea of the Ancient Constitution. The other was the idea of the True Religion.

Many British opponents of the Stuart monarchs claimed that they were defending an ancient, unwritten English constitution against corruption in the service of tyranny. Sometimes this ancient constitution was identified with the laws of the Anglo-Saxon King Alfred, and contrasted with the “Norman yoke” imposed on freedom-loving English people by William the Conqueror and his despotic successors after the Norman invasion of Britain in 1066. As history, this was nonsense, but as political mythology this narrative had enormous appeal. History was viewed as a gradual decline into tyranny, a long fall following a golden age of English liberty in the distant past.

This myth of primordial English liberty rhymed neatly with radical Protestantism. According to dissenting Protestants, the true church was the earliest church. Christianity had been corrupted over time, and Reformation required a restoration of the early, pure practices and beliefs of the apostles.

Put the myths of the ancient constitution and the early church together, and you have a view of history as decline from an original state of perfection, in politics and also in religion. Innovation is equated with tyranny in politics and heresy in religion. Virtue consists of defending what is left of the old, more perfect system and, if possible, restoring the original government or church. Progress is redefined as regress — movement away from the wicked present toward the pure and uncorrupted past. …

This is the key to understanding the otherwise inexplicable accusations by the populist right that Barack Obama is a socialist or fascist or whatever, as well as fantasies about a global secular humanist conspiracy. We are dealing with a mythological mentality, based on simple and powerful archetypes. Contemporary figures and current events are plugged into a framework that never changes. “King Charles (or King George) is threatening the rights of Englishmen” becomes “Barack Obama is promoting socialism” — or fascism, or monarchism, or daylight saving time.

As in other cases of mythological politics, like messianic Marxism, this kind of thinking is resistant to argument. If you disagree, then that simply proves that you are part of the conspiracy. Inconvenient facts can be explained away by the true believers. It’s hard to come up with arguments that would persuade people who think that Harry Reid and Nancy Pelosi are totalitarians to change their mind.

While the narrative expounded by the populists is frequently based on myth rather than reality, their charge that the west is being deindustrialised is partially true (as a result of globalisation) and the people who support these groups are mostly the people directly impacted by this.

As an aside, a lot of conspiracy theorists – from both the right and the left – often quote influential Canadian Maurice Strong (viewed as a prototypical member of the “New World Order” in tinfoil circles) as saying “Isn’t the only hope for the planet that the industrialized civilizations collapse? Isn’t it our responsibility to bring this about?”, though apparently this was a fictional scenario being described rather than an actual plan he wanted implemented.

Stuart Staniford has an interesting post (Chinese Labor Costs, Tea Partiers as True Believers) exploring the impact of low cost Chinese manufacturing on workers in the US and how this is likely to create the conditions necessary for mass movements (of the right or left, but given the current state of the US left these are much more likely to form on the right) as large numbers of workers find themselves in long term unemployment, with few prospects.

Tuesday evening, I was reading Don Peck’s generally excellent cover piece, How a New Jobless Era Will Transform America in the March Atlantic. The piece lays out the social damage caused by extended unemployment. … The entire thing is very well worth reading. I have intimate personal acquaintance with this issue – my Dad had an extended period of unemployment that began during the economic backwash from the 1973 oil shock, and I still bear a few psychic scars from that episode.

I was musing on this piece, and couldn’t help thinking of the statistics in Chinese steel production I examined a few days ago. In particular, Peck’s piece gives the example of “Errol”, a young unemployed machinist … US steel production has roughly halved since 2006, and so jobs for folks like Errol working with that steel are naturally going to be very hard to find. …

Alright, so the federal government could continue to run a big deficit, fix a bunch of old infrastructure in Pennsylvania (and elsewhere) and Errol might find a job in that effort for a while. But clearly, the US, with its strong political resistance to paying taxes, can only increase it’s national debt up to a certain point, and so after a few years such a government program would have to cease (if indeed it were politically feasible even to start it). So that gets Errol to, say, his mid thirties as a much more experienced and capable machinist. Then what is he to do?

It seems to me that Errol has a much deeper problem: what is it that some US company can employ Errol to make that cannot be made much cheaper in China? And do not the data on Chinese steel production (above) and Chinese transportation and housing, make it clear that the Chinese have every intention of building industrial production capacity that completely dwarfs that of the US?

In search of data on comparative labor costs, I discovered the the US Bureau of Labor Statistics sent a couple of experienced labor statisticians to China to sort out the data situation there. The latest summary of their work is here, and the key graph is this one:

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While Chinese wages are increasing, they clearly have an incredibly long way to go before they reach anything like Western levels. The current average for manufacturing wages in China is less than $1/hour. …

But, and perhaps more importantly, I want to address a reaction I suspect many readers might have – “Oh, we’ve been dealing with Asian competition for decades now, yeah it’s not good, yeah unemployment in Michigan is bad, but the sky hasn’t fallen.”

Indeed, this is true. However, I suggest that the problem with China is an order of magnitude larger than the earlier problem with Japan and Korea. Firstly, those countries have population of about 130 million (Japan) and 50 million (Korea). China has a population of 1.3 billion – ten times larger than Japan – and is determinedly trying to bring them all into the twentieth century. Secondly, as the labor cost graph higher up shows, Japanese manufacturing wages, for example, are about 80% of those in the US, while Chinese manufacturing wages are about 3%. It’s going to take a very long while, or an unthinkably large correction in exchange rates, for Chinese wages to get anywhere close to those in the US.

You can see the effects of this in the data for US manufacturing employment. It peaked in 1980 and then gradually descended to the 2000 recession. But since then, as Chinese exports have ramped up, it’s gone into a much more serious decline. It goes off a cliff in each recession, and it doesn’t recover at all in between – in fact it continues to decline, only more slowly.

If we continue with our existing policies, it’s very hard to see how this is going to change in the next decade or so (absent some internal collapse in China). As the Chinese figure out how to make cars, computers, furniture, etc, etc, to western quality standards, the entire industrial production capacity of the United States is going to get hollowed out. Manufacturing employment in the United States would appear to be headed towards zero, give or take some noise.

Let’s not put too fine a point on this: guys like Errol are fucked.

In fact, the entire working class of the United States is fucked. Without manufacturing jobs, they are reduced to the small number of jobs installing and fixing the stuff that comes from China, and then low paying unskilled retail and service jobs. With large numbers of chronically unemployed, the folks who are employed will have no leverage whatsoever on pay and conditions. …

It appears to me that the Tea Party movement, as disorganized and incoherent as it may currently be, places us on notice that conditions in the United States are now such as to support the beginnings of mass movements of the kind Hoffer is talking about. Such movements are not known for having good ideas for how to run society (note the failures and crimes of both Communism and Nazism when put into practice). In particular, they don’t need to have ideas that make sense to the elite of the current society (such as abolishing the Federal Reserve). They just need to have ideas good enough to appeal to the unbearably disappointed and frustrated, the failed and the failing, and credibly promise to solve their emotional problems and give meaning to their lives.

It appears to me that with a working class that is now fundamentally and massively uncompetitive with China, a country with four times the population and wages a tiny fraction of ours, the United States is ripe for a lot more of this kind of thing. What ails us is not just the aftermath of a financial crisis, to be solved with a stimulus. Instead, if present trends continue, we face a national crisis of the first order which will play out over decades. What should our entire working class do now that will give their lives meaning? No quick fix is apparent.

While its arguable that lower wages will mean all manufacturing shifts to China (Germany and Japan have had some success at retaining manufacturing industries in spite of high local wages by concentrating on high quality products, for example), given present trends it does seem that the manufacturing base for the US and other Anglo-Saxon countries, along with much of western Europe, is in long term decline.

The US has had some success in shifting to a services and intellectual property based economy, however financial services have proved to be a not entirely reliable pillar of the economy and intellectual property is hard to protect and extract revenue from offshore (as Cory Doctorow noted in an interesting speech a few years ago).

As Stuart points out, the working class in these countries have little to gain from globalisation – while it may eventually result in a higher standard of living for everyone, it will take decades before labour costs equalise globally and the “rising tide raises all boats” effect could kick in. In the meantime elites seem to be prospering from the trend, so there will likely be a continuing increase in inequality and the resentment this causes.

We’ve seen populist movements have some limited political success in the past as a result of this. For example, the One Nation party which arose in Australia in the 1990’s following the liberalisation of the economy by the Hawke and Keating governments – interestingly there has been some speculation ex-One Nation leader Pauline Hanson will become involved with the BNP in the UK (a right wing group that has shown an interest in using peak oil as a campaigning tool) now she has decided to leave Australia.

The US seems to be most at risk of seeing a revival of a populist mass movement (there seems less chance of a sudden revival of socialism there as a result of rising levels of joblessness, given the political left remains largely moribund outside of Latin America), with the last decade seeing revenge fantasies like the “Left Behind” series being lapped up by those in the working class who are being left behind and the tea partier / bagger movement being the latest sign that populism is on the rise.

Unemployment caused by globalisation and cheap Chinese labour is one reason, but there are a number of others :

1. The US is slowly losing the geopolitical dominance it has enjoyed since the end of the second world war. As George Kennan famously put it half a century ago:

We have about 50% of the world’s wealth but only 6.3% of its population. This disparity is particularly great as between ourselves and the peoples of Asia. In this situation, we cannot fail to be the object of envy and resentment. Our real task in the coming period is to devise a pattern of relationships which will permit us to maintain this position of disparity without positive detriment to our national security. To do so, we will have to dispense with all sentimentality and day-dreaming; and our attention will have to be concentrated everywhere on our immediate national objectives. We need not deceive ourselves that we can afford today the luxury of altruism and world-benefaction.

For these reasons, we must observe great restraint in our attitude toward the Far Eastern areas. The peoples of Asia and of the Pacific area are going to go ahead, whatever we do, with the development of their political forms and mutual interrelationships in their own way. This process cannot be a liberal or peaceful one. The greatest of the Asiatic peoples-the Chinese and the Indians-have not yet even made a beginning at the solution of the basic demographic problem involved in the relationship between their food supply and their birth rate. Until they find some solution to this problem, further hunger, distress, and violence are inevitable. All of the Asiatic peoples are faced with the necessity for evolving new forms of life to conform to the impact of modern technology. This process of adaptation will also be long and violent. It is not only possible, but probable, that in the course of this process many peoples will fall, for varying periods, under the influence of Moscow, whose ideology has a greater lure for such peoples, and probably greater reality, than anything we could oppose to it. All this, too, is probably unavoidable; and we could not hope to combat it without the diversion of a far greater portion of our national effort than our people would ever willingly concede to such a purpose.

In the face of this situation we would be better off to dispense now with a number of the concepts which have underlined our thinking with regard to the Far East. We should dispense with the aspiration to “be liked” or to be regarded as the repository of a high-minded international altruism. We should stop putting ourselves in the position of being our brothers’ keeper and refrain from offering moral and ideological advice. We should cease to talk about vague and — for the Far East — unreal objectives such as human rights, the raising of the living standards, and democratization. The day is not far off when we are going to have to deal in straight power concepts. The less we are then hampered by idealistic slogans, the better.

2. This geopolitical dominance had enabled the US to exert a large degree of control over much of the world’s oil supply (viewing the middle east as ‘the most strategically important area of the world’ and ‘…one of the greatest material prizes in world history’) and to become by far the largest consumer of it.

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3. US control of oil is steadily slipping. While the Iraq war was viewed by many as a grab for the country’s oil reserves, control has remained elusive, with the Iraqi government handing over rights to exploit a lot of large fields to oil companies from other countries (with the Asia Times putting it like this – “After at least US$2 trillion spent by Washington and arguably more than a million dead Iraqis, it has come to this: a pipe dream definitely buried this past weekend in Baghdad with round two of bids to exploit a number of vast and immensely profitable oil fields.”)

4. As US economic pre-eminence fades, US consumers are going to find that they no longer get to consume the lions share of the oil that is being produced and their per capita consumption will steadily decline towards the global mean (meaning a huge shift in relative consumption in the graph shown earlier).

5. As oil becomes harder to extract and we reach a peak of production, consumers will be competing for supplies that are static or falling in volume and there is further pressure for average per capita oil consumption to shrink.

6. As the global population continues to rise towards the 9 billion mark there is again further pressure for average per capita oil consumption to shrink.

7. The US has a large population of war veterans who are likely traumatised by their experiences in Iraq and Vietnam and facing a weak economy and poor employment prospects when they return home (especially those who are less skilled).

The combination of these factors means the average US consumer is going to find maintaining the lifestyle they are used to (particularly regarding effectively unlimited use of motor vehicle based transportation) impossible over the next decade or two, unless there is a large and sudden shift to electric transport and clean energy sources.

The stress that this transition will cause seems likely to amplify the appeal of populist politicians offering “simple” solutions (involving further military adventures abroad or draconian policies at home).

What can be done about this (to ensure a prosperous and peaceful future for all) remains an unanswered question, but Jeremy Rifkin has some interesting ideas in a recent article in New Scientist (“The third industrial revolution “), involving the “democratisation of energy”.

What is the premise of The Empathic Civilization?

My sense is that we’re nearing an endgame for the modern age. I think we had two singular events in the last 18 months that signal the end. First, in July 2008 the price of oil hit $147/barrel. Food riots broke out in 30 countries, the price of basic items shot up and purchasing power plummeted. That was the earthquake; the market crash 60 days later was the aftershock. It signaled the beginning of the endgame of a great industrial era based on fossil fuels. The second event, in December 2009, was the breakdown in Copenhagen, when world leaders tried to deal with our entropy problem and failed.

That’s the context of the book. Why couldn’t our world leaders anticipate or respond to the global meltdown of the industrial revolution? And why can’t they deal with climate change when scientists have been telling us that it may be the greatest threat our species has ever faced? …

In the book you argue that we can break the paradox by shifting from geopolitical consciousness to biosphere consciousness.

We need to implement reglobalization from the bottom-up in order to achieve a more sustainable global economy. Geopolitics is an extension of the Enlightenment view of human nature, the idea that we pursue our utilitarian pleasures and individual self-interests. In geopolitics, the nation-state becomes a macro view of that. Nations deal with nations by being rational, detached and calculating, pursuing self-interests, excercising power and acquiring more capital and wealth. That’s why Copenhagen failed. The world leaders weren’t thinking biosphere, they were thinking geopolitics. Everyone was looking out for their nation’s self-interest.

What we need to do is attempt biosphere politics. Governing units are going to change–I think there’s going to be a shift toward continentalization. The EU is a first attempt at organizing a new frame of reference across continents, but it’s a transitional governing form. The Asian Union, African Union and South American Union are in their early stages. …

What will the Third Industrial Revolution look like? When will it happen?

I think we’re on the verge. I had the privilege to help design the European Union’s Third Industrial Revolution economic stability game plan, which was endorsed by the European Parliament in 2007. What we noticed is that in the last 10 or 15 years we’ve had a very powerful communication revolution with the internet, and the key word is that it’s distributed. What’s beginning to happen now is that the distributed ICT [information and communication technologies] revolution is beginning to converge with a new energy regime: distributed renewable energy. When they do converge, it’s likely to change consciousness once again.

Distributed ICT will organize distributed energies. Renewables like wind, solar, geothermal and biomass are found in some proportion everywhere, in people’s backyards. As people begin to harvest these renewable energies they can share electricity peer-to-peer across an internet-like smart energy grid that extends across nations and even continents. We see buildings as the new power plants. Buildings are the number one source of C02 emmissions, but they might also be the solution if they can harness renewables to produce their own energy on site. People will also need new energy storage technologies like hydrogen. The EU has committed 8 billion Euros to hydrogen storage technologies. Those technologies will give us dependable distributed energy.

I founded the Third Industrial Revolution Global CEO Business Roundtable, which is comprised of 100 leading companies from renewable energy to utilities to architectural firms. We’re starting to lay out plans. …

You said that people hear “empathy” and think “socialism”. How does capitalism survive an empathic society?

Market capitalism will be transformed into “distributed capitalism”. Just as the internet led to the democratization of information, the Third Industrial Revolution will lead to the democratization of energy. The required changes to infrastructure are going to create massive amounts of jobs and a whole new economy. But when you have peer-to-peer sharing of energy across an intelligent grid system, you no longer have the top-down, centralized economic system. Distributed energy requires distributed capitalism, and that relies on the opposite view of human nature than that of market capitalism. But the politics isn’t right or left–its centralized, top-down versus collaborative commons. You don’t hear people say, I’m going onto a social networking space because I’m a socialist–it’s just a different frame of reference.

I’ll close with a quote from Bucky Fuller, who foresaw many of these problems a long time ago and advocated a revolutionary approach to solving them. I should have the (long delayed) next installment of my series on Bucky ready in the near future.

We are in for the greatest revolution in history. If it’s to pull the top down and it’s bloody, all lose. If it is a design science revolution to elevate the bottom and all others as well to unprecedentedly new heights, all will live to dare spontaneously to speak and live and love the truth, strange though it often may seem.