Humanity being what it is, most of us expect the future will be like the present – only a little better.
We think this because when measured against recorded human history, a single lifetime is a very tiny window on what has been before us. Being a tiny window it also casts very little light outside to illuminate our prognostication skills about the future.
Historians excluded (and they certainly are in today’s educational system), most of us see only the present. But we take great note of the changes that have occurred during our short lifetimes. Still, we lack perspective.
What if the future is not like the present – or even a little better? What if the progress the world has experienced since the industrial revolution is really an aberration? What if such rapid progress was made possible simply by abundant energy supplies and mankind’s tool building and using skills?
Energy extraction has come a long way since since the days of the Beverly Hillbillies and Jed Clampett (1962-1971 TV series), who watched oil ooze up through a hole in his backyard. It certainly costs more to extract a barrel of oil from the sea floor or Alberta’s tar sands than it does from a well in your backyard (should you be so fortunate).
For a view on what happens to the economy when oil suddenly costs more, check out the Jimmy Carter sweater days at the White House. My perspective from that time was sitting in a long line of cars waiting for a turn at the gas pump.
I do remember from the sixth grade that nuclear power would make electricity so cheap that the power company wouldn’t even install a meter on your house – they would just charge a flat fee each month. But it seems like they forgot to include the cost of disposing of the spent nuclear fuel. At any rate, the new meter the electric company installed last year is digital and blinks at me when I walk by. Oh, and the bill is bigger than from the old meter.
That means I have less money to spend on other things – like watching old TV shows (from before the world had gone certifiably insane). That’s good for places like North Dakota, where they extract the more expensive oil – lots of work, great pay, new supporting businesses everywhere … in North Dakota. But I’m guessing some of the old actors and actresses from those shows who are still around would enjoy the royalties from lots of folks like me enjoying their show one more time.
The Fed has been watering down the money supply since the most recent financial crisis to the point where even the bankers in New York City are having trouble getting drunk on the greenback. At some point lots of people will figure out that all those extra dollars means things ought to cost more. When they do, they will.
And right up at the top of the list of more expensive things will be energy. The wages and housing and food and entertainment costs in North Dakota will begin to rise – and so will the energy they produce that runs our economy. Think Jimmy Carter sweaters, 19 percent home mortgages and long lines at the gasoline pump. And don’t imagine that electric cars won’t feel the shock.
This time it won’t be the Saudis getting greedy – it will be the inputs – the steps to produce that barrel of oil. At some point – I don’t pretend to know when – the inputs will raise the price to where it is no longer worth having. All the leverage that energy has provided for the industrial revolution will fade away.
When that happens, is it still possible that tomorrow will be better than today? I’m just wondering‚ what if our age of progress was just a brief blip outside humanity’s historic toil for a living? How will we handle that?
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