In Part 1 of this Contemplation (see: Website Medium Substack) I argue that Gail Tverberg’s affordability argument complements my supply-side, EROI one. Extraction costs rise as EROI falls, and the subsequent increase in energy prices erodes affordability for the 90% of income earners whose incomes have stagnated over the past 50 or so years. The reduced demand curtails consumption, which results in energy spot prices falling below marginal extraction costs, leading to the stalling of investment and an acceleration of supply decline. I reviewed the three “Troubled Periods” Gail identifies in the historical data, using the Soviet collapse as a template for cascading failures resulting in collapse or simplification–whereby EROI falling below the surplus necessary to maintain complexity is part of a terminal decline. I suggest that collapse, as in the past, will be uneven and occur along different timelines for different regions.
What This Means for the Architecture of Collapse
I believe that Gail’s thesis bolsters mine regarding the collapse of industrial civilisation: it is unlikely to be precipitated by a single event but be characterised by a cascade of interacting and self-reinforcing failures. Gail identifies a number of economic bubbles that appear to be on the cusp of collapse (e.g., commercial real estate, artificial intelligence and their data centres, government debt). I would add to these the debt underlying the entire hydrocarbon extraction industry; a lot of which is predicated on the “hope” of future reserves being extractable–the dilemma here is the demand destruction occurring with higher prices, and the subsequent drop in prices that fall below marginal extraction costs. Regardless, to better understand this collapse architecture I need to incorporate the theses of Joseph Tainter and Ronald Wright with Gail’s affordability argument.
I’ve long viewed Tainter’s work on societal collapse as fundamental to better understanding our predicament. Arguing that human societies are problem-solving organisations whose various “solutions” to problems is to add complexity via bureaucracy, specialisation, infrastructure, and technologies; Tainter pointed out a fundamental pattern that leads to collapse: the marginal returns on these problem-solving solutions diminish over time. Smaller and smaller benefits are reaped with each additional layer of complexity, yet more and more energy and material inputs are required to sustain the complexities. Eventually, at the point when the benefits become lower than the costs, society becomes more vulnerable to collapse.
If we are to look at our hydrocarbon predicament through this lens, we can see that early complexity was quite beneficial with initial investments in the extraction and necessary infrastructure yielding extraordinary returns in the form of significant surplus energy. In the 1950s, the world was looking at about one hundred barrels worth of energy being produced for each single barrel’s worth invested. This surplus helped to build and fund expanded education, health, transportation, and industrial systems, as well as all the various institutions in place to support modernity’s complexities.
But complexity compounds, as Tainter pointed out. He argued that solutions and their layers of complexity get added on top of previous solutions and their complexity in an ever-expanding feedback cycle that requires ever more energy and resource inputs. Wright’s point–which I will expand upon below–is complementary: our solutions lead to new and more intractable problems. For example, hydrocarbons helped to build and expand our complicated global trade networks, but this required a complex global financial system, which in turn needed regulatory oversight to ensure compliance of hundreds of nations. Each of these layers of bureaucracy required energy and material resources to maintain; which was not overly problematic when the easy-to-retrieve and cheap-to-access hydrocarbons had the world awash in surplus energy.
By the 1970s, however, the conventional crude oil reserves upon which most of the preceding was based were encountering depletion, and the extraction industry addressed this by increasing complexity via enhanced recovery techniques, deep-water wells, hydraulic fracturing, and tar sands extraction. While helping to support our various societal complexities at that time, these innovations were experiencing declining marginal returns relative to earlier returns and the resulting surplus of energy was declining; and all the while, our population ballooned and we continued to chase perpetual economic growth with its ever-expanding energy and material throughput. The earlier energy return on investment (EROI) mentioned above (about 100:1) fell for each type of extraction: 20:1 for depleted conventional reserves, 10:1 for tight oil, 5:1 for tar sands.
For hydrocarbon extraction, it appears that we have reached the point that Tainter identified where collapse becomes increasingly likely: unsustainable complexity in which the costs of extraction exceed the benefits provided by any surplus. Falling EROI and extraction rates suggest this is not some future, let’s-be-careful-and-be-on-the-lookout scenario; this is occurring in real time. The complexities we have created to help us extract as much hydrocarbon energy as possible and to supplement this finite energy source (i.e., nuclear, “renewables”, etc.) are leaving less and less surplus for everything else.
Our response to this situation, regardless of the salvation narratives being propagated, is actually counterproductive. We are doing exactly what Tainter argues complex societies do: increasing complexity to temporarily avoid collapse while accelerating the underlying dynamics through the consumption of increasing energy and material resources; and thereby increasing our vulnerability to collapse. We are digging the hole deeper while convincing ourselves we are constructing a ladder so we can escape the hole we’ve put ourselves in.
A complementary insight to Tainter’s thesis is fellow archaeologist Ronald Wright’s one on progress traps where it is argued solutions actually lead to new, more intractable problems. In focussing almost solely on the benefits of solutions, we are blind to the dangers and costs that accompany them. The age of hydrocarbons is a wonderful example of the progress traps Wright discusses: upon the discovery of a one-time cache of concentrated, energy-dense, and easily-transportable solar energy, humanity was able to expand beyond the limits that pre-industrial agriculture imposed and build large urban centres, massive industrial complexes, financial superstructures, global-spanning trade networks, and significantly increase our populations and living standards.
The trap was constructing a global, industrial civilisation based almost exclusively upon a finite resource and requiring continual flows of the surplus energy it provided. The relatively short-term success of this particular solution to living in an uncertain world helped to lead to expectations of perpetual growth and endless economic expansion; but we did so without considering the repercussions of such things as building an industrial agricultural system that feeds many billions of us but has become almost entirely dependent upon a finite resource and that has contributed to the destruction of our ecological systems. We also created comforting narratives that the prosperity we were experiencing was due to our ingenuity and technological prowess rather than a one-time geological gift. Sociocultural narratives that celebrate our cleverness have helped us to deny and ignore the biophysical underpinning of our circumstances, and prevented us from considering the consequences of our actions.
And rather than acknowledge our dependence upon this finite resource as it experiences decline, we are doubling down on the narratives of our brilliance and innovation. Most are insisting we can maintain–no, expand–our progress through massive buildouts of trumpeted technologies (or some as-yet-undiscovered ones) to maintain our complexities without the need for hydrocarbons. We can’t see the reality of our predicament mostly because we’ve trapped ourselves within stories that prevent us from doing so; and it’s a particularly insidious progress trap because it’s operating at the sociocognitive level. Technology has become not just a solution tool but it has helped us to construct identities, institutions, and worldviews regarding modernity around it.
To acknowledge our dependence upon hydrocarbons and that they are in decline towards their eventual termination–and thus in their ability to support us–would be akin to questioning our framework of meaning that has helped to define modernity and our species. Our salvation narratives are not simply stories about technology but have become ones that help to define who we are and what gives our existence meaning; and this is why they are so powerful and largely resistant to evidence. We are, after all, the clever ape whose tool use helped to move us out of the trees and forests and eventually take over the world. To recognise that what we celebrate as our defining evolutionary traits are leading us towards a possible civilisational collapse–and, in the worst-case scenario, a potential extinction-level event for our species–is an existential psychological kick to the head; and we are avoiding this blow through denial and avoidance.
As I noted in Part 1, societal collapses to date have not been extinction-level events for our species, but the possibility of this for modernity is greatly increased given our nuclear weapons, ecological degradation, the planet-spanning existence of dangerous complexities that require ongoing management (e.g., nuclear power plants and their radioactive wastes; chemical production and storage facilities with their toxins and pollutants; biosafety labs and their dangerous pathogens), and the global scale of our interdependence. It is possible we avoid this, but the probability that we don’t increases with each day that passes and with each new complexity that we add.
The architecture of collapse begins to take on a clearer picture once Tainter’s diminishing returns and Wright’s progress traps are combined with Tverberg’s affordability crisis argument, as well as the physical realities of peak oil with its falling EROI.
The finite nature of our hydrocarbon foundation means that our constant extraction of it is depleting it, with the easy-to-access and high-EROI resources in the rear-view mirror requiring more costly extraction techniques resulting in yields that have encountered diminishing returns. We are also caught in a complexity bottleneck due to what Tainter showed with complexity building upon complexity and requiring ever more energy and material resources to sustain itself. As our energy surplus falls we are going to be forced to drop complexity layers, but this will be resisted by the powerful interest groups that benefit the most from status quo systems and because of how intertwined modernity is with our sociocultural identity.
The affordability crisis precedes collapse as Tverberg demonstrates: declining consumer income makes energy increasingly unaffordable which reduces demand; prices drop with lower demand but this leads to a fall in production as marginal extraction becomes more costly. This is how physical depletion appears to lead to economic collapse, and we are prevented from adapting to this due to the progress trap that exists: our technological salvation narratives blind us to reality and prevent us from pursuing the simplification pathway. Instead, we pursue impossible and costly solutions; and will continue to do so long after it becomes clear that such remedies cannot work at scale and are actually exacerbating our predicaments.
It would appear that a cascade of failures is likely, much like Tainter observed for past complex societies that became unsustainable; in fact, there’s compelling evidence that this process is already underway for our global, industrial civilisation. Supply chain disruptions. Institutional trust erosion. Increasing frequency of financial crises. Geopolitical instability. With each of these failures amplifying the others in a downward spiral that is extremely difficult to avoid.
Perhaps the most vulnerable sector is our financial superstructure. As Tverberg suggests, energy prices are falling due to affordability constraints and this will have significant impacts upon the sustainability of the debt underlying our material and energy extraction, societal infrastructure, and general consumption. The world is awash in debt and when the growth that our economic systems rely upon can no longer occur due to falling energy surplus, problems lie just ahead. Bank failures. Pension collapse. Financial disarray.
What may precede this, however, is government failure of some nature. Economic contraction and turmoil negatively impact tax revenues, and this occurs at a time when government obligations–social services, unemployment support, and infrastructure maintenance–become more urgently needed with floundering citizens seeking government assistance. As a result, governments will be forced to choose between their various commitments and may fail as the Soviet Union’s did, leaving many citizens to fend for themselves without the help of government services. History has shown that such circumstances result in regional instability as well as geopolitical volatility.
It is also quite possible–perhaps even likely–that our nation states will not respond by reducing their consumption willingly, but by competing for what resources remain–a response that Wright’s progress trap thesis strongly suggests is a recurring pattern. Oil. Water. Food. It is quite probable that wars over these fundamental resources will occur alongside the erosion of societal cohesion.
Tainter argues that societal complexity is partially held together through social legitimacy narratives that create the belief that status quo systems are fair and beneficial to all. But such stories are hard-pressed to remain intact when the benefits of complexity begin to fade yet the costs remain or increase. For example, today’s exceedingly complex, just-in-time logistics, global specialisation, and centralised production all require significant energy inputs to function properly; but as this energy becomes less available and more costly, supply chain disruptions increase in frequency and severity leading to shortages of various goods. This is not a single crisis but a cascade of them that serve to amplify one another: Tverberg’s affordability crisis accelerates energy production decline; this decline undermines modern life’s complexities; a shedding of complexity layers reduces economic activity and further erodes affordability; and so on. This is the architecture of collapse in a nutshell.
This ends Part 2 of this Contemplation. While I had initially aimed to make this a two-part article, as I got deeper into the subject it lengthened beyond my original plan, so there’s one more installment of it to come. In Part 3 I will provide a “Final Reflection” on what all this means for my ever-evolving thoughts on the Architecture of Collapse.
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If you have made it to the end of this Contemplation, I have an offer for you. Send me an email at olduvaitrilogy@gmail.com requesting a copy of Part 1 of my trilogy and I’ll fire off a PDF of it to you for your “fictional” reading pleasure. If you like the beginning of the tale, please consider ordering the trilogy here: Purchase Book(s) — Olduvai.ca.
What is going to be my standard WARNING/ADVICE going forward and that I have reiterated in various ways before this:
Only time will tell how this all unfolds but there’s nothing wrong with preparing for the worst by ‘collapsing now to avoid the rush’ and pursuing self-sufficiency. By this I mean removing as many dependencies on the Matrix as is possible and making do, locally. And if one can do this without negative impacts upon our fragile ecosystems or do so while creating more resilient ecosystems, all the better.
Building community (maybe even just household) resilience to as high a level as possible seems prudent given the uncertainties of an unpredictable future. There’s no guarantee it will ensure ‘recovery’ after a significant societal stressor/shock but it should increase the probability of it and that, perhaps, is all we can ‘hope’ for from its pursuit.
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Attempting a new payment system as I am contemplating shutting down my site in the future (given the ever-increasing costs to keep it running).
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You can also find a variety of resources, particularly my summary notes for a handful of texts, especially William Catton’s Overshoot and Joseph Tainter’s Collapse of Complex Societies: see here.
Steve, you are the man! Well, one of many anyway that pretty much has it figured out. I agree with most all that you say. We are all down the tubes for sure. I wish I could determine which avenue of failure will be the "big" driving agent. Keep it up!
Thank you for another fascinating and very well researched article.
In common with many people who write about the theme of societal collapse, you seem to assume that the current ( grossly iniquitous) economic pie cannot be shared out more equitably than it is at the moment.
How would collapse play out if a radical redistribution of wealth - i.e., a green form of socialism were to take place - presumably, under such conditions, the coming simplification would be more gradual, and perhaps civilised enough to end up with some capacity to at least ‘keep the lights on’ for a long while?