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I was thinking about writing about the
relationship of debt creation and inflation, or Bernanke's "sacrifice
ratio" concept -- and come to think of it I still haven't written about
the amazing summer of 1972 -- but instead I thought I'd talk about some of my
other interests, particularly what is sometimes known as "urban
geography."
It has become clearer to me, over the years,
that the post-World War II industrial lifestyle experiment, led and
exemplified by the United States, is a gross failure and tragedy. In the
longer sweep of history it will be seen as a brief phase, somewhat like
Communism in China (i.e. a command economy under a Maoist dictator, unlike
the capitalist economy under a mandarinate government of today) will be seen
as a brief episode in Chinese history. The most basic reason why it won't
continue is that it can't: it is too consumptive of resources and destructive
of the environment. But even if that could be mitigated somehow, for example
by some as-yet-unknown energy source to replace fossil fuels, it is so
unpleasant that people will eventually decide to put it out of its misery one
way or another.
This "post World War II industrial
lifestyle experiment" has a multitude of aspects. To start with, let's
list some of the nicer qualities, perhaps things that we want to keep as part
of our New Way of Living which will replace the PWW2ILE. Here's a brief list:
1) good plumbing, which has helped greatly
with
2) cleaner cities, and thus:
3) a major reduction in infectious disease.
4) Electricity, which allows:
5) air-conditioned offices. OK, I could live
without this, and I have never used an air conditioner at home even when I've
owned one, but this seems to me like one luxury that is worth keeping.
This list is nearly exhaustive, meaning that I
would be hard pressed to think of a #6, let alone a #10. Think of that: all
of our meaningful advances can be reduced to an index card, and by the way
they were all accomplished by 1970.
I have personally experienced both rural
living (in Vermont) and urban living (in Tokyo and San Francisco), and both
are fine with me. The problem lies with suburban living, the sort of living
arrangement that appeared on the scene after World War II. This was something
completely different, made possible by widespread automobile usage. If you go
back in human history, as far back as you like, you find both urban and rural
living. People have lived in large cities since Sumerian times, around 3500
BC. Today, in the United States, there aren't many people living in true
urban environments (defined as a place where it is easier to not own a car
than to own one), nor are there many people living in traditional rural
situations, which historically has meant independent farms. "Rural"
areas today tend to be the outer scatterings of the suburbs, or just plain
depopulated places.
I won't go on too long about the problems of
the suburbs, especially as Jim Kunstler (www.kunstler.com) has done such a
good job of it. But let's think of what our living arrangement of the future,
replacing the present tragedy, may entail. First, it should be both more
urban, and more rural. More urban as city dwellers dwell in urban (no car)
environments, and more rural as, perhaps, more people also live on largely
self-sufficient farms. I don't know quite how the move to more individual
farmers might come about, but it may be a part of a process by which we
abandon today's artificial agriculture and re-embrace real food, natural
non-hybridized varieties grown without artificial fertilizers, herbicides, or
pesticides. Indeed, "organic" meats and vegetables have been a big
winner in the otherwise stable agricultural sector, growing by about 20% per
year in recent years, and much of this is produced by smaller operators. Is
this an advancement? In 1930, all food was "organic."
Perhaps we could adopt the Japanese solution of simply making corporate
farming illegal. The result of that policy has been somewhat higher food
prices, but so what -- Japanese are wealthy people and they can afford it.
The food quality is much better than what we have in the US, and a tradition
of independent farmers is maintained. There has been quite a bit of talk
recently that depleting fossil fuel supplies will lead to the readoption of
farming in historic farming districts like Pennsylvania, Western
Massachussets and New York State, which are now largely unused.
Urban (no car) environments have traditionally
been ones where the preferred method of transportation is walking, as in
London or Paris of 1830 for example, but since this is a bit impractical
today, we should expect to use trains. Trains are wonderful, highly evolved
technology, and there isn't much that one could do to make them better. Nor
are there many alternatives, except for variants such as aboveground
monorails instead of below-ground subways. Trains will be the preferred
transportation system of the future, unless we get ourselves in such a mess
that we end up walking. However, trains and cities are built together -- the
city must be built for trains, which in practice means that once you step off
the train, you are in an environment where you can walk instead of taking a
car. You cannot plop trains down in a city built for cars and expect them to
work. When you get off the train, all you find is a giant parking lot. So we
are facing the rebuilding of all our urban areas, a rather daunting prospect
although hardly an insurmountable one. The fact is, most of our urban areas
have been built in the last fifty years anyway, so in a sense we would just
be doing what we have been doing. The Chinese have been rebuilding their
urban environment at a much faster pace than that.
I am writing this in part because I think of
the Chinese, who, understandably, have visions of living a
"western" i.e. US-style lifestyle in the future. They will fail, as
they will find it physically impossible to do so, but even before then I
would like to warn the Chinese and others that imitating the US is not even
desirable, as it is a failure and a tragedy. Chinese people would be better
off imitating Hong Kong, which is much closer to what I have in mind, as Hong
Kong is both a hyper-dense city of six million inhabitants and a place where
nature is close at hand and relatively unmolested. You can actually put your
boots on in the middle of the financial district in Hong Kong and go for a
nice hike in the mountains of Hong Kong Island. So, for China: lots of
trains, tall buildings, narrow roads, no parking, and stop building
expressways. (It's best to be specific and not too
philosophical.)
More like this. (Hong Kong)
Narrow streets, tall buildings, people walking
around, no parking, trains
Less like this. (Las Vegas)
Crap like this as far as the eye can see. (Some nameless suburban hellhole.)
Is there anything more
dismal in the 5500-year history of cities?
China is already running into problems with
water supply. Humans are grossly wasteful of water, and not because you leave
the faucet on when you brush your teeth. The average US citizen uses roughly 70 gallons of water a
day. Much is flushed down the toilet, due to the somewhat bizarre practice of
pooping in drinking water. Even more is used for taking care of the bits and
pieces of suburbia, such as watering lawns and washing cars, especially in
arid environments like Los Angeles or Phoenix, where people have the
psychotic need to maintain lawns reminiscent of the English countryside. In
my better future, human waste would be composted, which is what the Chinese
did with their "night soil" for thousands of years, before adopting
the recent habit of pooping in drinking water. Nevertheless, it must be said
that the modern flush toilet contributes greatly to general urban
cleanliness. Fortunately, today we actually have flush toilets (they use
about a pint of water, and there are no-water toilets as well) that are
connected to a central composter, which could be kept in the basement of an
apartment building for example.
Sun-Mar commercial composting sy
Stem
www.sun-mar.com
As for electricity, we should eventually be
using much less of it, which would allow a far greater portion of total
electricity generation to be accomplished by "renewable" methods.
If 25% of electricity today comes from hydroelectric, solar, wind, etc. (it's
not 25% but let's imagine), then if people used 75% less electricity in
total, then 100% of electricity could be supplied from renewable resources.
This inevitably conjures up images of huddling around a kerosene lamp, but in
fact it is not very hard at all to reduce electricity usage dramatically
while maintaining a fully modern lifestyle. Anyone who investigates
"getting off the grid" with some backyard solar/microhydro/wind
project inevitably finds that it is far easier to use less electricity than
to generate more. A 100W incandescent light bulb uses 100W of electricity.
That's a lot. A compact fluorescent bulb that produces the same amount of
light uses 25W. And a hyper-bright LED bulb that can produce the same amount
of light in a small area (but not in all directions) uses about 4W. 100W to
4W, just by changing lightbulbs. Then, of course, if you have a smaller
domicile (like those in Hong Kong instead of those in Alexandria, Virginia),
you might have three or four light bulbs in a room instead of ten or fifteen.
Of course, it's easy to turn off the air conditioner, which is not at all
needed in residential environments even in the hottest weather, if the
building has been properly designed. An electric fan uses about 5% of the
power. Today's superefficient refrigerators use about 20% of the power of the
regular ones, but keep food just as cold. Higher electricity prices (MUCH
higher) would bring all this about. How about this: put a $0.15/kwh tax on
electricity (mine costs about $0.13 now so this would be a doubling), and
eliminate taxes on something else, like capital gains? Or maybe use the
proceeds from higher taxes on energy/water to fund a national health system.
There is a lot to think about here, so we will
revisit it from time to time.
Nathan
Lewis
Nathan Lewis was formerly the chief international
economist of a leading economic forecasting firm. He now works in asset
management. Lewis has written for the Financial Times, the Wall Street
Journal Asia, the Japan Times, Pravda, and other publications. He has
appeared on financial television in the United
States, Japan,
and the Middle East. About the Book: Gold:
The Once and Future Money (Wiley, 2007, ISBN: 978-0-470-04766-8, $27.95) is
available at bookstores nationwide, from all major online booksellers, and
direct from the publisher at www.wileyfinance.com or 800-225-5945. In Canada,
call 800-567-4797.
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