economics

In the beginning, it was all so simple. Rub two sticks together, get a fire. Stick a pipe in the ground, get some oil. Trade a cow, get a llama. Simple systems require only straightforward applications of engineering, with little need to examine precisely how individual components might interact. But as our global production system has evolved, so too has the level of complexity amongst the various components. Our society, based on ever-advancing technology of all kinds, has become a seething morass of indecipherable interactions between mind, body, finance, and resources.

What was once a world of isolated simple systems is now what we (so creatively) call a complex system. Complex systems don’t have straightforward relations between cause and effect (input and output) because there are such high numbers of interactions within the system. As such, complex systems fail in complex ways.

I tend to stay away from specific financial predictions about the future, as I lack the expertise for accurate in-depth analysis (even assuming the data is out there). PeakOilDesign is a site more about preparing for crises than predicting them. But, as the saying goes, it doesn't take a rocket scientist to see where the economy is headed in the very near future.

I've mentioned before that there is a whole host of problems we face aside from Peak Oil and global warming, as dire as those issues are. There are dozens of other, more subtle (read: unreported) catastrophes that could yield equally devastating economic effects, depending on your personal situation. Most immediate among those is the ongoing housing collapse; while it is frequently a topic in the news, the media usually try to put a positive spin on it.

In truth, there is no room for positive spin:

I'm an engineer and physicist, not an economist, but in my casual studies of economics I've learned that there are many parallels. Most important among them: exponential growth is not sustainable. CNN reported with some jubilation on Friday that the Dow Jones Industrial Average has risen for 23 of the past 26 weeks, nearly matching the 24/27 record from 80 years ago. This should have given the CNN writers pause: what shortly followed this record rise 80 years ago? Ah yes, the Great Depression.

Investing in self-sufficiency is expensive, both in time and money. At first glance it seems that by the time we’re done building our house, we’ll have no money left over for purchasing so much as a chicken, let alone a barnful of critters. What about including solar panels, a cistern, or a composting toilet?

That’s why I am all about approaching Peak Oil preparations in an organized manner using tools such as Systems Engineering. We must have a structured plan on we risk making mistakes in allocating our scarce resources.

At the end of this post is a rough list I compiled for the cost of many of the major components of a home. This list is by no means inclusive, but serves to give an idea of the cost of typical items you might choose to include in a house. I based the estimates off of the 1700 sq. ft. home size used in the Peak Oil Homestead Project.

An article at LiveScience today discussed the results of a study showing that even thinking about money can lead to a reduction in selfless behaviors, even when the selfless activity has nothing to do with competition for wealth. It's unfortunate that we're wired this way, but it's something to consider when trying to build community. How can we encourage our neighbors to emphasize cooperation over competition?