Harsh, but It Makes Sense

Gary’s Note: Higher oil prices have been heralded as a sign that the economy is stirring, but James Howard Kunstler warns that the oil price is headed into a zone that destroys industrial economies, particularly the credit-based consumption economy in the U.S.

Whiskey & Gunpowder
By James Howard Kunstler
January 5, 2010
Saratoga Springs, New York, U.S.A.

The Futility Economy

On the first business day of the new year and oil traded above $80 a barrel, which means the price has re-entered the danger zone where it can crush industrial economies. This is a central element of the predicament we find ourselves in. The US economy is essentially a Happy Motoring economy. During the whole nervous period since the collapse of Lehman Brothers, American gasoline consumption hardly went down at all, though so many other activities collapsed, from house-building to trucking. Yesterday, The Seattle Times published a story with the idiotic headline: Oil Touches $80 on US Economy, Demand Optimism. Apparently, they think high oil prices are “a good sign.”

How much can a nation not get it? Would $100 oil ignite a new orgy of “consumer” spending and another round of investment in commercial real estate? Welcome to the Futility Economy. This is the economy where Nature and its material companion, Reality, punish us for our stupidity and fecklessness. This is the economy that will tear the United States apart, after it bankrupts us at every level, and mercilessly drives the population down by one-third through starvation, homelessness, violence, disease, and sheer political cruelty.

Whatever you thought our economy was the past thirty years — whatever model of it you have in your head — that is definitely not what we are going back to. Like one of Dickens’s Yuletide ghosts, Reality is leading us by the hand into new circumstances. We resist like crazy. We throw our hands over our eyes. We don’t want to look. We want to return to the comfort of our dreary routines — living in places that aren’t worth caring about, weaving endlessly in freeway traffic, drawing a paycheck at the air-conditioned cubicle, inhaling Buffalo wings by the platterful, with periodic side-trips to the state-chartered casino where there’s always a chance of scoring a lifetime’s income on one lucky bet. And at the end of the day, you can retire with a simulated prostitute on your laptop screen! And not even have to fork over a dime — except perhaps for the Internet connection fee.

Reality is taking us out of that familiar, if sordid, realm, whether we like it or not. Our destination is an everyday economy where you rarely travel far from the place you live, where you have to make provision for you own health, your own old age, your own income, your own diet and your own education. If you’re really fortunate, some or all of these necessities can be obtained in conjunction with your neighbors in the place where you live — but don’t expect an increasingly mythical federal government to supply any of it. Expect a new and different way of organizing households based on extended families and kinship groups. Be prepared for agriculture to return to the foreground of everyday life, where farming is back at the center of the economy. Think about how you will cultivate your best role in a social network so the things you do will be truly valued by the other people who know you. Learn how to make your own music and write your own scripts. Try to study history. Keep your mind clear and your senses sharp.

Even if you have a dim sense that this is where we’re headed, most of you probably want to stay where you are. The investments we’ve made in the current mode of existence are so monumental that we can’t imagine letting go of them. This will be the theme of American life for the next couple of years as we struggle mightily to escape the confining armor of the Futility Economy and move closer to ways of life that have more of a future. Right now, all the power and authority in our culture has dedicated itself to remaining inside that old armor.

The Master Wish around the country, including among people who ought to know better, is that we can “solve” our economic problem by finding some other way to run all the cars. Even hardcore environmentalists yammer incessantly about hybrid and “plug-in” cars as the “solution” to our blues. One of Barack Obama’s first acts as president was to “save” the giant car companies. This is exactly the kind of signature behavior of a Futility Economy. It’s based on the idea that we have to continue driving cars all the time and for everything, at all costs.

The religion of the Futility Economy is Techno-Triumphalism, which is the belief that an endless sequence of magic tricks performed by shaman scientists can defeat the Second Law of Thermodynamics, which rules the universe — which true scientists ought to know cannot be defeated. Their colleagues, the shaman economists believe in parallel magic tricks, such as the idea that increased borrowing can “solve” a problem of runaway over-indebtedness. These are the actions that currently engage the people in charge of things in our society.

Given this current state of things, and the current course we’re on, my guess is that when the falsity of these ideas and actions are exposed, they will become evident not gradually but very rapidly and shockingly. The people in charge of things will lose their vested legitimacy in a flash, and the institutions they command will become irrelevant overnight. The process would be traumatic for all of us as routines we counted on for a thousand particulars of everyday life vanish or collapse. A Great Indignation will rise across the land over the perceived swindles involved. A lot of effort will go into avenging the swindles instead of rebuilding an economy out of the ashes of futility.

Regards,
James Howard Kunstler