Better Regulation of Business Will Be Necessary as Population Explodes and Energy Prices Rise

Big corporations are like big sharks.  They’re not evil.  They’re just eating. I read this clever observation several years ago on CDBaby, and had the immediate realization that WE have to swim with those sharks, and our shark cage (government) just isn’t protecting us like it once did.  On this, the eve of release of Michael Moore’s new movie “Capitalism: A Love Story“, I just have to write about the impact of capitalism on our future, and how we might possibly avoid sliding into an almost feudal state where a tiny upper class of owners dominates a huge but painfully poor mass of wage slaves. 

What Will Happen to Businesses When Energy Cost Eclipses Labor Cost?

Today the cost of labor is the biggest single cost element for many businesses, and drives most decisions. The rise of fossil fuel prices will not be smooth,  however, as we have seen in 2008, when oil prices doubled in a matter of months and then fell back to 30% of their peak in a few months more.  During these spikes, and in the longer term as fossil fuel sources become more difficult and costly to extract, energy costs will rise to a level that challenges or surpasses labor as the biggest component of cost for many or most businesses.  The law of supply and demand also kicks in as population continues to expand, and labor costs in many industries will fall as increasing numbers of people are seeking those jobs.  At the same time, rising energy costs will reduce or eliminate the advantage of manufacturing in “low cost countries” such as China.  How will businesses react?  Will the net effect be to cause people to generally live at a lower economic level and make less money for equivalent work compared with today?  Will manufacturing of progressively lower cost and higher margin goods return to the developed countries?

Harnessing the Power of the Masses to Achieve a Population “Glide Path”

The population explosion is testing our intelligence as a species. There are a great many of us on the planet now, and the power of the masses has become incredible. When there are 6 billion people, and 10% of them change their habits in a way that causes them to use a tenth of a gallon less water per day, the savings of 60 million gallons of water per day, or almost 22 billion gallons of water per year, is staggering to contemplate. This incredible power over our planet and our future can only be harnessed through the use of our media to educate all those people, and that will require breaking through a lot of political and economic barriers. Can we do this and get ahead of our problems before a large proportion of the world population dies from famine, disease, or some combination of natural and man-made disasters?

Why and How Do We Avoid Addressing Global Warming and Similar Problems?

A brilliant article opened my eyes as to how and why we keep ducking our biggest problems. I recently came across an article by Dr. Albert Bandura that is simply a brilliant analysis of human behavior as relates to the need for sustainability, and I put it in my sidebar of favorite links.  Since then what I read has kept coming back to me, as I think his paper explains a great deal about why we are where we are today.  I have long been perplexed about the fact that the main stream media almost never brings up overpopulation as a problem, and only global warming has gotten anywhere near the attention such problems deserve (though energy shortages are an up-and-coming second, and water shortages not far behind).  Dr. Bandura’s article is deep and scientific, and not the easiest to read for a variety reasons, perhaps more than anything because it describes us, but also because it is written in the language of the science of psychology.  For that reason I have written this entry to try to break down into simpler language what is going on.  Why do people keep doing things we know are bad for our future, and why do they ignore or dispute the facts?

Will Rising Energy Costs De-Globalize Us into Regional Economies?

Short term fluctuations in energy prices notwithstanding, the long term trend of rising energy costs will affect commerce and change where our goods are manufactured. Last May I heard a radio interview in which an importer in New York City said the cost of moving a container of goods from China to NYC had increased in less than a year from $4000 to $5600, and it occurred to me that this is a greater increase than the gross margin on many of the less expensive goods currently being shipped.  Will manufacturing return to the affluent areas like North America and Europe in a reversal of the globalization trend we’ve seen in the last few decades, due to increasing energy prices?

Is It Time for a Great Awakening? Globalization May Make It Unavoidable.

Globalization has changed me personally. 20 years ago I knew about the population explosion. I had been aware of it and watched it since I was a teenager in the 60’s, but I now realize I was watching from the sidelines. I lived my life like those around me, and certainly wasn’t putting two and two together to come up with a very complete picture of where we appear to be going, nor was I integrating my expectations and actions with where we are, where we have been in time and history, and where we can expect to go. The times are changing rapidly, though, and have brought me some striking revelations.

Civilizations Rise and Fall Due to “Global Warming”-like Problems

If We Must Fall, Can We Manage to Do It Gradually? Every civilization in history has fallen except the current one. That is simple truth, and we have no reason to think that we can carry on indefinitely as we have been. In fact, there are many indications that we are headed into a decline of our own: population exceeding the global capacity in more and more aspects, significant signs of negative impact on the ecology, the accelerating extinction of many species in our highly interdependent environment, overuse of important resources leading to exhaustion. All this brings up the important questions: Are we any smarter than our predecessors, and can we understand what is happening and work together effectively to control the decline and mitigate the suffering involved?

Price of Rice Reflects Overpopulation Problem

The scale of problems from overpopulation will increase as the population grows. The Christian Science Monitor, long a bastion of sound journalism that has never followed the corporate main stream media (one of few), ran an article recently (link) explaining how a lack of agricultural development in the Philippines is combining with their rapidly growing population (and that of other less-developed nations) to create food shortages. The clearest evidence of the shortages is in the doubling of rice prices in the past year (2007-2008). While most people in North America, for instance, won’t think that is a very big deal, there are hundreds of millions of people in other parts of the planet who depend on rice as a staple – a major part of their diet – and for whom any price increase is seriously bad news. I remember reading in the news a month or two ago that the price rise has caused people who used to get two bowls of rice per day to cut back to one. (Try living on that diet, you in the developed countries, if you want a dose of reality.) The important realization is that, as energy shortages and population growth exacerbate food shortages, there will be more food riots and unrest in the fastest growing and least-developed countries. In response, the developed countries need to put more family planning, education, and economic aid, all proven to reduce birthrates, into the poorest areas of the globe for the good of all. Here’s a more detailed analysis.

Delivery Food of the Future?

Energy cost increases, and their effects on food prices, raise deeper questions. As fossil fuel costs increase, and in the period before a seriously viable substitute like fusion-derived electricity arrives (I’m guessing 2040 or later), economies of scale will continue to increase in importance, especially in the provision of what will become relatively lower cost commodities such as food. Will energy prices pull food prices higher to the point where we will once again have only locally produced food? Will everyone, even in suburbia, be turning their front yards (and every available patch of dirt) into a garden to reduce their food bills? Or, thanks to large scale agribusiness, will food remain cheap enough to have its cost increases eclipsed by those of energy itself?

Will Overpopulation Exceed the Capacity of Our Global Infrastructure?

Perhaps the question is, more appropriately, when will population exceed the capacity of our global infrastructure? I am amazed that enough food and other goods can be produced and delivered today to sustain cities like Karachi, Pakistan (12-18 million) and Mexico City (19-35 million), especially since the average family income in these cities is relatively low compared with that in the more developed countries. I wonder how long such cities can continue to grow, and why the infrastructure to sustain them doesn’t appear to be increasingly fragile and at risk from human and naturally-caused problems. What are the signs that tell us that we are pushing our infrastructure to the point where risk of problematic or disastrous collapses is significantly increased?

Will Globalization Be Slowed By Rising Energy Costs?

Energy is the backbone of our civilization, and the clear enabler of globalization of business and our great agricultural and manufacturing productivity.  Cheap energy has allowed us to be comfortable and prolific, increasing the world population rapidly during the past century, and making my enjoyment of the apple on my desk, which came from several thousand miles away, possible.    This is just one of the myriad benefits of globalization that would never have occurred without cheap energy, and I admit to enjoying it.  Unfortunately, the era of cheap energy must come to an end, but how might that come about?

Economic Boom in Developing Countries Puts Farmers in Other Countries at Risk

The economic boom in developing countries is putting farmers and whole communities at risk in less developed countries hungry for cash.  The Chinese economic boom is becoming SE Asia and Africa’s boom (link) as China struggles to feed its booming industries, but not without problems.  The demand for input by companies in China is putting smaller, remote economic regions at risk as food farming is replaced by single-crop agrobusiness farms.  How is this occurring and what does this mean in the long term?

Worshipping the False Idol of Growth

American culture worships at the feet of the great god Growth.  It becomes increasingly clear, though, what a false idol it is.  In practically every report of financial news the word Growth comes up, sooner or later.  Reporters use the word as if it is a given that profitability can only be achieved through Growth, and that prosperity, the lifestyles of the average people, and indeed the entire world economy, are dependent on it.  Is this really the case?  Are we lost without Growth?  What will happen when we have no more room to grow?

“Low-Cost Countries” – What Goes Around, Comes Around

In a story I heard on NPR this morning (link) it was mentioned that China’s workers are finding new power and demanding higher wages and better working conditions, walking off the job if they don’t like the way they are being treated.  The article went on to discuss the resulting rise in the prices of Chinese-manufactured goods, how that will affect their biggest customers in the West, and describe how Chinese business is working aggressively to move up the value chain into managing brands, where the biggest profits are.  It cited factory closings in South China as directly related to their rising labor costs.  So where does this all lead?

Sustainability and Product Quality Improvement

As Dr. Saul Griffith was reported to have said in his talk at the eTech conference in March of 2008, and as I mentioned in a previous entry (link), in a sustainable future we can expect to have one tenth as much stuff, and make it last ten times as long. This will mean achieving quality and durability levels in the items we use everyday that will support, or at least approach this. There is more to this, however, and the implications for business are interesting.