In 1873 a financial panic started a period called the “Long Depression”. It was a period that lasted until at least 1896. Now some economists have declared the current, persistently lackluster economic conditions a true depression and some are expressing concern that it may be long-lasting and similar to the Long Depression of the 19th century (article). After the Panic of 1873 recessions were noted in 114 of the following 253 months ending in 1901. The recession of 2008 (or thereabouts) seems to have changed the way people feel, sapping their confidence in economic recovery and leaving many spending less, many in an attempt to pay down the large commercial debt almost everyone in the United States (and many in the rest of the developed world) had accumulated during decades of financial deregulation and regulatory neglect. With population exploding over the next few decades, climate change at least inevitable if not on the increase, and energy supplies and other resources increasingly scarce and troubled, can we expect an extended depression through the middle of the century?
A lot of people have lost confidence in our national and global economies. Due to this major shift in the mood and thinking of the general public, the future does not promise a strong or short recovery period. In the short-term public confidence will increase only slowly, and I have said I will spend more AFTER my credit cards and short-term credit are paid off. (Unfortunately the world keeps visiting unexpected bills on me, making paying down my debt more difficult than anticipated.) In the longer term, the population explosion and increasing per-capita resource use in developing countries, along with supply fluctuations from climate change and both commercial and natural disasters, promise rising prices for resources.
New cost reduction options are not emerging very rapidly. Major reductions in transportation costs for bulk goods were achieved in the late 20th century by container-based shipping, but further reductions from improved technology are not on the horizon, while rising energy costs will only drive prices upward going forward. The advantages that energy and food corporations have milked have enriched few and impoverished many worldwide, as well as increased our ecological risks, and the growing population promises increases in demand that are not matched by average buying power, suggesting that while this may limit demand and mitigate the rise of global prices, the buying power of the average family will decline further and decrease potential for economic resurgence. Given the expected 50% increase in global population by 2045, it is likely we are seeing the beginning of a long depression made of small recoveries and declines that will last through mid-century.
Global economics is a quirky field. At a macro level, is the total production of resources from the earth the main factor sustaining our huge and growing human population? As the extraction of resources become more difficult, raising the cost of the resources, will it lower the average global standard of living? Will enough new resources and more efficient methods for extracting them be discovered to mitigate the increases in cost and corresponding decrease their affordability? On balance, these factors may all add to a drawn-out period of declining average standard of living that will only turn around after, and perhaps decades after, mid-century.
The timeline for exhaustion of the earth’s resources is far from clear. Even when fossil fuels have been run down and costs put them beyond the reach of the average individual, we could have newly developed energy sources such as fusion power or, in the end, at least the incredible amount of energy stored in the still-molten core of the planet combined with solar energy from the sun and the winds and waves it powers. The hydrates that keep plugging the oil recovery equipment trying to reduce the loss of oil from the Deep Water Horizon oil well blowout represent energy reserves frozen beneath the ocean floor, and eventually someone will figure out how to recover them economically. Increases in efficiency and possible (and probably unavoidable) decreases in population after the peak is reached mid-century will prolong the current resource base. Still, rising cost is always a problem since we already adjusted to the way things were, and any increase puts the pinch on the average person.
In the final analysis, it is hard to see where the population explosion will do anything but prolong the current economic slump and complicate the recovery. The quality of our future lifestyles will depend on how well we cope with our problems, large and small, among which the population explosion ranks as the biggest and most fundamental problem. Better conservation and finding new energy sources have the potential to alleviate some of our issues, but could also enable even greater population growth, making global problems worse than we anticipate now. In the end, how smart we are as a species, and how smart we become in the near term, will do more to define the long-term future and quality of our lives and those of our descendants than any other single factor.
Please tell your elected representatives (and anyone else) that we need to acknowledge the population problem and its relationship to our energy and ecological problems, among others, and work specifically and creatively at the highest levels to deal with it. We also need to fund basic research in energy, medicine, resource conservation, and economics to give us more time to address our biggest and most fundamental problem – the population explosion.
As always, I appreciate your comments.