In the first Part of this series, I outlined some thoughts about the dangers to come from the concatenation of the disruptive changes already occurring from the nascent waves of the technological Singularity (I will be offering a more refined explanation of the term in a future post) and the Apocalyptic vision of our adversaries. As usual, the Commenters offered a number of insightful and fascinating replies and extensions, among which two themes stand out:
1) In response to saying that Rome was the first technological civilization that fell, whether someone agreed with the premise and whether or not they weighted the causes in similar fashions, there seemed to be general agreement that, in Alan's words, " In the end the Empire (at least in the West) fell because in effect those involved didn't really care enough to save it." This has rather obvious relevance for our current struggle, which I would maintain can only be lost by the West, rather than won by the Islamofascists.
2) Several Commenters agreed that it starts with Oil. There seems to be general agreement that we can, with great effort, achieve energy independence, though there was a fair amount of disagreement whether big business, the environmentalists, societal inertia, or poor leadership was the major factor at work. I think it is most accurate to say that "all of the above" are contributory. I would suggest that the Environmental Movement has been extremely successful in working with the NIMBY mentality where possible and with the pristine natural environmental tendencies of most Americans in areas where NIMBY doesn't apply, to block any exploration for new energy, to limit the use of coal, and to prevent the building of new refineries in the last 30 years. However, certainly since 9/11, a more robust leadership stance by this administration might have been effective in initiating an integrated approach to reducing our dependency on oil (ie concurrent increased exploration and drilling, more efficient CAFE standards, new and more efficient electrical generating plants, new refineries, etc).
Oil is thus the first step to understanding the dangers the next few years present.
Implicit in many of the comments about Oil and energy is a growing recognition that the status quo not only is unstable, but is already breaking down. I suggested a 5 year horizon because most of the commentators who I have read suggest that it will take about that long to bring enough new sources of energy to the markets to make a meaningful difference. With the price of Oil hovering above the $70 barrel price, it becomes economical for Big Oil to begin large scale extraction of Canadian Tar Sands Oil and eventually from the Colorado Oil Shale deposits, both of which are reported to have reserves that are multiples of what the Saudis have. Furthermore, as long as Oil stays high, the switch to more fuel efficient cars will accelerate, with or without increased CAFE standards. This just represents the markets at work. More speculatively, almost everyday I read reports coming our of high tech labs of incremental improvements in the efficiency of solar cells, fuel cell technology, information processing. While the fruits of these advances are further down the role, as many tiny incremental improvements in fuel efficiency of our society's hardware comes on line, the future promise of decreased dependency on foreign Oil has ramifications well before their actual use can meaningfully affect the price of Oil.
The price of commodities (as in most markets) is highly sensitive to human psychology. We have seen this quite visibly in the last several weeks. Every time Iran's President Ahmadinejad makes threatening noises, the price of Oil goes up; after a short time without further incident, the price starts to drift back down. According to knowledgeable sources there is a $10-15 a barrel threat premium build into the current spot price of Oil. Maxed Out Mama has some numbers to back this up; she also reports that, to the surprise of no one who has been paying attention, when the price increases, the use of a commodity decreases; strangely enough, when the price rises, the supply also tends to rise, though with a lag.
This is important because Iran has made the Devil's bargain that most Oil producing oligarchies have chosen to make. The leaders purchase the acquiescence of their people by essentially bribing the people with part of their Oil proceeds. They also use the fear of an outside enemy as a force to focus the energies of their often restive peoples. This can be a workable system as long as the Oil revenues are enough to maintain the level of bribery; once the "protection money" starts to slip, all bets are off. In countries like Iran (and Saudi Arabia) with high birth rates unless they can find the sweet spot where ever increasing Oil revenues keep ahead of their ever expanding populations, trouble ensues. If they raise the price too high, their customers find alternatives, or fall into recession which drops demand; if they pump too much Oil, the price also drops. It is a balancing act that the Saudis were masters of for a very long time; now the Saudis have much less ability to control the markets (they need to pump a lot for their own Devil's bargain) and they are also mortal enemies of the Persian Shia.
[As an aside, this use of Oil wealth typically is disastrous in the long run, since it creates a culture of entitlement and dependency with minimal ability to produce wealth as opposed to chronic parasitism, which intersects honor-shame cultures in particularly disastrous ways.]
Iran needs the price of Oil to stay high; their survival depends on a robust price of Oil. Every time a new source of energy appears to have any potential , the price of Oil slips. In order to keep the price high, then, Iran has to keep escalating their rhetoric; otherwise, the markets will start to discount their wild ravings as being empty threats. This ensures that Iran will have to keep pushing the envelop in terms of their threatening words and behavior. It also suggests that Iran only has about 5 years until the market corrects in such a way as to make the curve of their Oil income flatten or reverse. There is a clear implication to this:
Iran has no choice but to provoke a war within the next 5 years; the regime's survival depends on it. It is the only way they can keep the price of Oil elevated and/or gain more Oil fields to control and plunder.
It is in the world's best interests to have this war before Iran has a stockpile of Nuclear weapons.
Whether or not the Civilized World can recognize the danger is an open question, which I will explore in my next post in this series.
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