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WSJ - New Limits to Growth Revive Malthusian Fears
March 25, 2008 12:26 PM   Subscribe

Spread of Prosperity Brings Supply Woes: Slaking China's Thirst Malthusian catastrophe does appear to be at hand, as foreseen by the Club of Rome in 1972 publication of "The Limits of Growth"
posted by sjjh (30 comments total) 4 users marked this as a favorite

 
Uh, the 4th sentence of the article actually starts: "Although a Malthusian catastrophe is not at hand..."
posted by Artifice_Eternity at 12:35 PM on March 25, 2008 [1 favorite]


"Although a Malthusian catastrophe is not at hand"...

heh.... nice spin on that one, eh?
posted by HuronBob at 12:37 PM on March 25, 2008


The multitude of poor and yet strong people still increasing, they are to be transplanted into Countries not sufficiently inhabited; where nevertheless they are not to exterminate those they find there; but constrain them to inhabit closer together, and not range a great deal of ground to snatch what they find, but to court each little Plot with art and labour, to give them their sustenance in due season. And when all the world is overcharged with Inhabitants, then the last remedy of all is Warre; which provideth for every man, by Victory, or Death.
- Hobbes
Stay tuned, folks!
posted by nasreddin at 12:45 PM on March 25, 2008 [4 favorites]


Don't worry. When a door is closed, a window opens.
posted by mullingitover at 1:10 PM on March 25, 2008


Incidentally, can someone explain the commodities graph in the article? Until the mid-70s, it seems, there wasn't enough of an increase in demand to push prices up past the baseline. Afterwards, there were very regular price cycles until 2002 or so. But just as the prices were supposed to fall again, they rose to almost double the mean index value. That's insane. Is there any non-catastrophic explanation for this?
posted by nasreddin at 1:22 PM on March 25, 2008


Doom is at hand! But if you join my cult/give money to my environmental NGO, things will be okay.

Snark aside, high oil prices will make a lot of things more difficult, including farming. But there's lots of arable land, and if farmers are forced to, they can move to more organic forms of farming that don't use petrochemical fertilizer. We might have to get over our irrational aversion to GMO crops and realize they could be part of the answer. And really high oil prices will lead to the widespread adoption of plug-in electric vehicles that only use gasoline engines as range extenders, like the Chevrolet Volt. We might eat less meat. We might eat less altogether. We might not be able to fly places for vacation. These things would not be fun. But, please, enough already with the doom-mongering. We've survived much worse.
posted by Dasein at 1:24 PM on March 25, 2008


Um, did you not read the article at all? It's not just oil. It's the 22 most important commodities. That gives us a hell of a lot less wiggle room if prices continue rising. We certainly won't be able to replace, say, timber, or steel, even if we could replace oil. And fresh water is now getting to a crisis point all over the world, which is undoubtedly the most pressing issue.

We've survived much worse.

Example?
posted by nasreddin at 1:31 PM on March 25, 2008


nasreddin - If you ask me, that is when energy industry suppliers realized, in looking at Enron, that managed scarcity - that is, artificial constraints on production via well-scheduled maintenance or back-office contract shuffling - was the Way to Wealth.
posted by mwhybark at 1:32 PM on March 25, 2008


sorry, 2002, I mean.
posted by mwhybark at 1:33 PM on March 25, 2008


We might have to get over our irrational aversion to GMO crops

Heh. That still would leave the rational aversion to be gotten over. Genetic modification is not necessarily inherently evil but it matters very much what you do with it and within what ethical and legal framework. Just ask a Canadian canola farmer destroyed by Monsanto and a compliant judicial and regulatory system.
posted by George_Spiggott at 1:37 PM on March 25, 2008


Hm. I've just read a bit more on that case (Monsanto Canada v. Schmeiser) and I suppose that's not an uncontroversial example. To put it more generally, I frankly don't trust the effects of laissez-faire (and worse) and GMO technology -- control of which Frankensteins can be released into the ecosystem shouldn't be left to the corporations who stand to profit by it. On the whole I'm opposed to patenting genes at all, be they modified or naturally occurring -- and especially the latter.
posted by George_Spiggott at 1:49 PM on March 25, 2008


Eat recycled food. Its good for the environment, and OK for you!
posted by OldReliable at 2:36 PM on March 25, 2008 [1 favorite]


Although a Malthusian catastrophe is not at hand, it appears to be at hand.
A lot of people think it’s a pyramid scheme, but it’s not.
(It's almost guaranteed you can double your money, maybe even triple it in the first year alone.)

“But smartness will outweigh the extra resource use.”
Totally, man. Just give us a chance to demonstrate leadership. We’ll show you guys. Tau Rho Iota Rules!

(TRI - three random initials)
posted by Smedleyman at 3:13 PM on March 25, 2008


"Although a Malthusian catastrophe is not at hand"...

heh.... nice spin on that one, eh?


The FPP just says it appears to be at hand. Not that it actually is. It's like how David Copperfield appeared to have made the statue of liberty disappear through smoke and mirrors. In this case a rival crew of stage magicians led by an undead Doug Henning are sitting on several trillion barrels of crude oil, waiting for the right moment to shout "Shazam!"
posted by bunnytricks at 4:12 PM on March 25, 2008


George_Spiggott - take a look at the link in my previous comment. GMO foods can be good or bad. Monsanto modified its canola so that it would be the only living thing capable of surviving its Roundup pesticide/herbicide. But we could also use genetic modification to make crops more drought-tolerant, more naturally resistant to pests (requiring less spraying), etc. Technology alone is not an evil - it's about what you do with it. We've been selectively breeding crops and animals since forever - why shouldn't we take that basic manipulation of genes to the next level?
posted by Dasein at 5:23 PM on March 25, 2008


Dasein -- Oh I fully agree. What concerned me was the phrase "irrational fear of GM crops". Not all fear is irrational. Like nuclear power, or any other technology with immense power to cause widespread and lasting change it all depends on how you use it and whether you really even know what you're doing in a larger sense. Pebble-bed reactors are reputedly quite safe. Chernobyl wasn't, nor is the Hanford leakage currently on its way to the upper Columbia river without anybody trying very hard to stop it. It comes down to wheter it is rational to fear the people developing and exploiting it, how responsible they are, and whether regulatory interests are looking out for you and the overall health of the planet, or just looking after the near-term profits of wealthy backers. Certainly in the current regulatory climate there's nothing to prevent a kind of genetic Chernobyl -- these people will do anything and absolutely nobody in a position of authority in this country is willing to manage them.

In the end I think GM has enormous potential to save us all; it may be the only thing that does. But that doesn't mean I trust its current corporate practitioners or their government lackeys.
posted by George_Spiggott at 5:48 PM on March 25, 2008


Does anyone know when the patent on Roundup Ready seeds expires?
There is a patent on Glyphosate-resistant plants issued in 1990 that appears to be the root patent, but presumably there are other later patents that contribute to the commercial seed. Wikipedia says Roundup ready canola was commercially available in 1996, so I guess that would be the upper limit.
I ask, as I imagine there are a lot of developing world farmers who could benefit from free GMO seed.
posted by bystander at 6:56 PM on March 25, 2008


can someone explain the commodities graph in the article?

My understanding is the post-2002 spike in commodities is a combination of increased demand from Asia, and a speculation bubble. I suspect most of it is speculation. That's when commodity index funds and the like became popular as part of a diversified portfolio, not only as a long investment but a sort of hedge against economic downturn like gold, a safe place to keep money, real goods and not paper money (for people who think like that). "Rogers International Commodity Index" is a popular one.
posted by stbalbach at 7:14 PM on March 25, 2008


But just as the prices were supposed to fall again, they rose to almost double the mean index value. That's insane. Is there any non-catastrophic explanation for this?... Um, did you not read the article at all? It's not just oil. It's the 22 most important commodities.

Your question has a lengthy answer. Some commodities (Aluminium, for example) are barely trading above their marginal cost of production, which has gone up as energy costs have gone up. Others (phosphate rock used in fertilizers) were once practically given away by their chief producer (in this case, Morocco) until said producer wised up after realizing that no one had commissioned any new mines of sufficient size in a long time, and started taking price because it could. Canpotex-- the marketing arm of Agrium, Potash Corp, and Mosaic-- has done something similar in the potash business. It takes five to ten years to commission a potash mine, and almost all the world's potash reserves are locked up by Canpotex and BPC (the Russians, mostly-- Uralkali and Silvinit), which realized in the early part of the decade that they, too, have pricing power. They have pricing power because no one who mattered realized 10 years ago that China would expand at double digits and crave protein. Additional others (iron ore) have gone up because they are controlled by a very small number of players who maybe are, erm, cooperating. Still others (copper) are trading way above their marginal cost of production ($3.50 versus, say, $1.60) because Chinese industrialization caught the world very short, and very by surprise. And new copper mines aren't being commissioned very rapidly because they are very long-lead-time projects. Further, no matter where you are in the world you can't just dump tailings and sulfur in the local streams anymore. Of course, the ammonium nitrate that you need to remove the overburden has doubled, because the natural gas market is tight as a drum, because of China, and also because the gas turbines that will replace the now-offline-due-to-earthquakes Japanese nuclear capacity need to be fueled. And you can forget about the mines in South Africa growing, because the central planners at Eskom had no idea that running a power grid at capacity for an extended period of time presents its own problems. And the grid in the copper belt of Chile isn't so hot either. Of course terrorism has made it so the explosive guys have a tougher compliance structure, too, raising costs. And even if you manage to get your explosives, and your site plans, (and your crushers, grinders, and mills, which are also backordered in some senses) the new mines-- the resource-rich ore bodies-- are in places like the DRC which is a whole heap of fucking trouble. The Congo makes drilling in Nigeria look easy.

Piling on top of all of this, of course, are the rolling shortages in things like mining tyres, skilled labor, and sulfuric acid.

Don't forget, by the way, that the biggest cost of a running a mine nowadays is diesel. Which has done nothing but get more expensive over the past five years.

Remember that the population dynamics involved in the industrialization of China (and India, forthcoming) dwarf those of Japan and Germany. So your early-industrialization commodities (steel and copper) might be tight for a long time. And by "tight", I mean trading above their marginal cost of production.

Last, one suspects that miners are maybe low-grading it-- that is, they are mining the lower quality ores and leaving the higher quality ores for when prices are lower. Sort of a permanent income hypothesis for corporates.

As to whether this is a speculative, financially-driven bubble, well, maybe. Look at BHP's chart, f'r'instance, and you can see that plenty of people think this party may be coming to an end soon. But (again) when you're dealing with long-lead-time projects, supply in the short and medium term is more or less fixed. Which results in buyers bidding against each other. The price at which the next-to-last buyer's demand is destroyed is the price at which things are set in markets like these.

Production will catch up, eventually. Caterpillar's backlog growth will slow, and the upstarts of the world will eventually get their mines commissioned. But for now too many things are scarce. And their substitutes are scarce. Remember that just ten years ago every hot business (internet, pharma, software) had a near-zero-marginal-cost product, and anyone who you asked believed that we were in an age of permanent surplus. Merrill Lynch shuttered its commodity operations (after 50+ years of operations IIRC) in 2000, as the "smart money" believed the same things about the new economy that Joe Sixpack did. So you can see, maybe, just why the world got caught so short of so many things.


nasreddin - If you ask me, that is when energy industry suppliers realized, in looking at Enron, that managed scarcity - that is, artificial constraints on production via well-scheduled maintenance or back-office contract shuffling - was the Way to Wealth.
posted by mwhybark at 3:32 PM on March 25 [+] [!]


Well, he shouldn't ask you, then, because you have no idea what you're talking about. The kind of conspiracy that you believe exists has far too many players and far too many substitutes. Exxon's stock would go up by 50% overnight if they could demonstrate a credible plan to deliver double-digit production growth. Every motherfucker on that board and in that head office would do it if he could.
posted by Kwantsar at 7:34 PM on March 25, 2008 [9 favorites]


In the end I think GM has enormous potential to save us all

Ha ha ha ha ha ha ha. Did you just say that about a system of intense monocropping? Not polycutures? Not genetic diversity and wild relatives of food crops? You guys have heard of evolution, right? And pesticide resistance?
posted by salvia at 7:40 PM on March 25, 2008


salvia, I didn't say how I though it might save us all. Not planning to go into it either, as it'd be something of a derail, but that doesn't mean you should jump to conclusions. Did you read any of the rest of my comment, or just that bit? I'm enormously suspicious of GM practices and horrified by our agricultural practices. What I had in mind for GM as being of some future value has very little to do with how it's used now.
posted by George_Spiggott at 8:57 PM on March 25, 2008


George_Spiggott, yeah, and I agreed with everything else you said. So I didn't get why you'd support it even in theory, when it's not like the Union of Concerned Scientists is poised to take over the industry any day soon. There's genetic pollution of wild corn in Mexico; the WTO is about to force GM foods on European eaters; it's not like this is in the conceptual phase.

Mainly, I reacted the way I did because the phrase "in the end I think GM has enormous potential to save us all; it may be the only thing that does" was so over the top that it cracked me up. I didn't realize you had some well thought out plan for how GM was going to save us all.

And I agree that we should try to end the GM derail, good idea.
posted by salvia at 10:55 PM on March 25, 2008


What I was trying to get around to saying was that I'm sorry for being harsh and jumping to conclusions about your plan. But I still suspect it might be giving GM too much credit, and I don't personally like any form of the idea that "technology will save us all."
posted by salvia at 11:00 PM on March 25, 2008


salvia, I wrote a long response here, but even that begged for more detail, so I'll sum up instead. We are very, very screwed, right now. If we're to keep everything from collapsing, or (more likely) find a way to recover in some way when it does collapse, we'll need tools of a power, scale and subtlety unlike anything that we're able to produce now, and what's more, those tools will have to function without massive infusions of cheaply produced energy, because we won't have it. The only mechanism I know of that qualifies is life. I don't have any firm, specific reason to believe biotech will save us. It's just the only technology I know of that meets the criteria of a technology that can save us.
posted by George_Spiggott at 11:27 PM on March 25, 2008


Consider the implications of this sort of application, for example: Phytoremediation of Munitions Waste by Hybrid Poplar. This is classical biotech as it were, ordinary hybridization rather than genetic manipulation, but it's suggestive of solutions to problems like Hanford, which may evade even the most strenuous (and expensive) engineering aproach.

Simple sunflowers are used in remediation of metals-contamiated soils and water elsewhere. Maybe we won't have to fiddle any genes, but I suspect that we've made a lot of things bad enough to where we're going to have to come up with something a little more targeted than anything nature has in its arsenal by default.
posted by George_Spiggott at 11:51 PM on March 25, 2008


The WSJ must read Thinkin' Lincoln!
posted by blasdelf at 4:48 AM on March 26, 2008


I think the FPP intends to reference (as the title does) "The Limits to Growth," which is an interesting read, actually (30 Year Update here). See also Malthus's seminal "An Essay on the Principle of Population."

For what it's worth, I think Malthus was pretty clearly wrong on a number of economic points, but chief among them the assumption that as wages increase, the population increases as well. I haven't really thought about this assumption with regards to China, though, so this post has made for some pleasant morning consideration. Thanks.
posted by rush at 9:49 AM on March 26, 2008


> "But smartness will outweigh the extra resource use."

I had all kinds of snark lined up for that particular quote, but then I realized there's just no arguing with that calibre of logic.
posted by you just lost the game at 2:57 PM on March 26, 2008


George_Spiggott, thanks for the additional explanation. Interesting perspective. I like the bit about "the only mechanism I know of that qualifies is life."
posted by salvia at 5:51 PM on March 26, 2008


Well, he shouldn't ask you, then, because you have no idea what you're talking about. The kind of conspiracy that you believe exists has far too many players and far too many substitutes.

I didn't introduce the word conspiracy, nor was I insulting, where you did, and you have been.

Why on earth should I choose to examine your reasons for insisting that the players are trustworthy in this matter, and that the stock price governs the actions to be taken by the, um, motherfuckers with regard to production?

I seems likely to me that you don't have a high opinion of the decision-makers you refer to either. Why choose to trust them and believe that their actions will always be governed by whatever it is that you believe they are governed by?

As well-reasoned, researched, and founded as your opinions and narrative may be in the post above, you cannot convince me that my opinion in this matter is incorrect. Over the past fifteen years there have been numerous documented cases of just such manipulations being deployed in order to inflate selling prices, Enron being the best known. I'm quite sure it's a standard methodology whenever it is possible, as you implicitly accept above.

The difference in our perceptions, I think, is that you view the set of suppliers as too well-populated to provide opportunities for this sort of thing, while I view the national and global economic culture as devoted to the pursuit of consolidation specifically to create these opportunities, inside and outside of energy.
posted by mwhybark at 6:32 PM on March 27, 2008


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