Managing Austerity

The CC41 Utility logo was a British Board of Trade requirement that appeared on footwear, utility furniture, textiles, and utility clothing for just over ten years from 1941. CC41 designated that the item met the government’s austerity regulations.

by John Reid

Malthus Postponed

Thomas Malthus, in his 1798 book An Essay on the Principle of Population, observed that in a period of resource abundance, a population could double in 25 years. However, the margin of abundance could not be sustained as population grew, leading to checks on population growth: If the subsistence for man that the earth affords was to be increased every twenty-five years by a quantity equal to what the whole world at present produces, this would [require] the power of production in the earth to be absolutely unlimited, and its ratio of increase much greater than we can conceive that any possible exertions of mankind could make it.

According to the learned authors of his Wikipedia entry: … the hypothesis is rendered irrelevant. due to a disregard for technological advancement. This is because food production has increased as a result of technological advancements such as genetically modified organisms (GMOs). … The static aspect of the Malthusian hypothesis, which is based on the rule of decreasing returns, limits its applicability.

This is nonsense. Malthus’ proposition was not “based on the rule of diminishing returns” at all, but on the simple, arithmetic fact that a finite or arithmetically increasing supply must inevitably fail to meet an exponentially increasing demand. Even children understand this when they encounter the wheat and chessboard problem, but, evidently, it is beyond the intellect of economists. Economists also seem unaware that increases in food supply due to genetically modified organisms would not have been possible without the widespread use of nitrogenous fertilisers. These, in turn, are manufactured using a considerable amount of fossil fuels, of which there are finite reserves. As Vaclav Smil points out: At least half of the global crop harvests have been produced thanks to the application of synthetic nitrogenous compounds and without them it would be impossible to produce the prevailing diets for even half of today’s eight billion people.

It follows that, if it happened now, net zero emissions would result in death by starvation of several billion people.

Wartime Austerity

I was born in 1938 and I grew up in the war years in the Midlands of England. Although only a child I was well aware of austerity. Phrases like “off the ration”, “under the counter”, “black market” were part of everyday speech.  I remember the metal stumps where the park railings had been taken away for the “war effort”. As the war came to an end, luxury items, such as ice-cream, began to reappear. Everyone laughed when I asked “How do you shell it?” about my first banana.

It was a managed austerity. Government nutritionists had calculated the optimum diet for every man, woman and child in the country and ration books were issued accordingly. All new clothing had a “utility” label (see above) to demonstrate  there had been no extravagant use of resources. In contrast to the picture often painted in documentaries, people were not miserable. They had a common purpose. “We are in this together.”  “Don’t you know there’s a war on?”  As a child I was, no doubt, sheltered from the consequences of people losing loved ones in the armed forces or losing their homes to bombing, but the mood was definitely “up”.

Since setting foot in Australia, in 1947, I have experienced ever-increasing prosperity. It has been, arguably, the most prosperous time in the history of the human race.

This unprecedented prosperity has been largely due to the use of machines to replace human and animal labour in the production and distribution of food and other necessities. Most of these machines are powered by fossil fuels. When fossil fuels start to dry up and become prohibitively expensive, this age of prosperity will end and a new age of austerity will begin.  If not handled properly this “energy famine” could have consequences comparable to the arrival of the Black Death in Europe in 1347.

Energy famine austerity will differ from the wartime austerity discussed above, because:

  • At present few people believe it is going to happen.
  • There is no foreseeable end apparent.
  • The adrenalin motivating a nation in wartime is absent.
  • Society is already polarised on the moral issue of whether conserving the environment is more important than conserving people.
  • For more than three decades, all research which might have been relevant has been monopolised by environmental activists and climate modellers.

The Upside

It is not all doom and gloom for the following reasons.

Austerity caused by plagues and war comes on suddenly, within a year, as in 1347. Energy Famine will, hopefully, creep up slowly over decades as petroleum becomes ever more expensive to extract and refine. So far we have only picked the low-hanging fruit. As the price rises, demand will fall as various activities become too expensive to pursue. First among these will perhaps be air travel for international tourists and air freight for perishable commodities. Once ordinary people are affected by these changes they may come to see the need for urgent action. Will this change in attitude be fast enough to allow currently unpopular alternatives, such as nuclear power, to  be brought on-line in time to avoid industrial collapse?

We can stop worrying about emissions. Of the various emissions scenarios postulated by the IPCC, future emissions are likely to follow the more modest speculations, as hydrocarbons dry up, with little effort on the part of humanity. Furthermore, a recent statistical analysis of CO2 emissions and concentration data shows that the (pessimistic) Impulse Response Function, widely used by modellers, is wrong and that half of all emissions are absorbed by the ocean within about 50 years. The emissions problem may not be not quite as dire as once thought.

We have been addressing the wrong problem, i.e. emissions rather than supply. However the rush to install intermittent energy supplies, solar and wind “renewables”, has had an unexpected benefit. Some of these installations are now being used to generate hydrogen rather than extracting it from fossil fuels. This “green hydrogen” can, in turn, be used to make ammonia and ultimately the synthetic nitrogenous fertilisers mentioned above. No doubt renewable power generators will soon be disconnected from the grid and used more fruitfully for this purpose. Local production of fertiliser in this way should  appeal to Third World countries although subsequent ammonia synthesis requires significant capital investment. The upside is that we have already started down the path of decoupling synthetic fertiliser production from fossil fuels.

The Great Reset

Mancur Olsen in his book The Rise and Decline of Nations points out that developed nations tend to grow more slowly and ultimately stagnate due to special interests gaining more and more political power so preventing competition, faster growth, innovation and development. Such special interests include industrial cartels and trade unions. War and revolution are often followed by a boom in a nation’s prosperity. Germany after WW II is the prime example because special interest groups had been swept away by Hitler and the War.

We are now living in such an age of stagnation but this has been obscured by massive growth in the electronic sector, i.e. by Moore’s Law. This was the result of the invention of the transistor and the optical etching of semi-conductor substrates, which occurred in the 1960s. The market for consumer products in the form of desk-top computers and mobile phones has been ever expanding and is now global. Similar, but less spectacular growth occurred in other areas, in pharmaceuticals and in agriculture as mentioned above. In the energy and transport sectors little has changed since the 1950s. In fact, the energy sector has gone backwards with its obsession with ineffective “renewables” and the closing of nuclear power stations in some countries.

There has been so little progress in the energy sector simply because petroleum is so cheap. A litre of gasoline is about the same price as a litre of water and cheaper than a litre of milk. This has kept all competition at bay for a century. As petroleum inevitably increases in price competing products will gain market share.

Bio-fuels are one group of products which come to mind. So far all that has happened is the growing of corn for conversion to ethanol by fermentation and distillation. One such project led to a corn shortage in the USA and ultimately to food riots in Mexico. It typifies the blinkered thinking of existing interest groups.

A far more viable bio-fuel experiment is to look at the use of wood as the feed-stock for bio-fuel. Even at present energy prices, wood, in the form of wood-chips, is an economic alternative to coal for electricity generation in some localities, such as the well-forested parts of SE Australia, where it is already, by far, the cheapest form of domestic heating.

But wood is better than that. It can be easily converted to another fuel/feed-stock in the form of charcoal. Charcoal can be converted, in turn, to a high octane gasoline substitute by the Fischer-Tropsch process.  Powdered charcoal  or an emulsion of powdered charcoal in water can fuel a diesel engine directly without further chemical processing. Proof-of-concept has already been demonstrated but further research is needed to create viable commercial products. That this research has still to be undertaken is an indictment of Big Oil and the present energy hegemony.

Once the stranglehold of the various industrial and political lobbies is released, other off-the-wall ideas can be considered. One such is the use of offshore nuclear reactors to mix nutrients from the deep ocean into the surface layers to create a rich, artificial eco-system to support a commercial fishery. Another is to explore the genetic modification of yeasts or bacteria to fix nitrogen, so avoiding the high energy costs of the Haber-Bosch process.

Wars and/or revolutions are inevitable once the man-in-the-street is severely affected by the coming energy famine.  The first symptoms are beginning to appear. Vladimir Putin is already using the EU’s energy problems to leverage his imperial ambitions in Eastern Europe and a harvest collapse in Sri Lanka has led to civil unrest and the re-introduction of imported fertilisers. This “reset” may not lead to  “blood in the streets” but it will lead to the rapid dissolution of some socio-economic structures none-the-less.

We must endeavour to manage these changes with reason and integrity and, as far as possible, for the benefit of all. Heaven forbid that any of the plethora of ideologues, now so vocal in the media and on the Internet, should finish up calling the shots.

See Energy Crisis Links for further information on this topic.







19 Replies to “Managing Austerity”

  1. Thanks John,
    I’m still the glass half full kinda guy.
    Nitrogen fixing has been around a long time and there’s multiple pathways to improve the distribution of nutrients and increase biological yields. Population is plateauing in the forecasts, at least in part to reduced fecundity in developed areas . The road will always have some bumpy patches as we adapt to the circumstances presented., some foreseeable, others not. Education is the key to adaptation both in orchestration of the surroundings and of our ability to cope with changes. This area is in need of reassessment in the short term in my view as the perpetual diet of apocalypse is dragging the mindset, particularly of the young, into some kind of doomsday hopelessness, well short of our potential resilience.

    1. RobK, I agree with your comment re “perpetual diet of apocalypse” but my article is not on that menu. My intention is the opposite, viz,:
      1. To point out that we are addressing the wrong problem, and
      2. To suggest that there are positive ways of dealing with the real issue by finding alternative fuel resources and alternative methods of fixing nitrogen,
      3. To promote a humanist view of these issues in contrast to the “scourge of the planet” view of people like Attenborough.

      1. I agree your article isn’t trying to be apocalyptic, rather trying to put reality front and centre. The flow of information has undergone a revolution in this generation. Volume of data is massive but the quality leaves a lot to be desired. This puts good science at odds with politics and public opinion in various pursuits.
        I cringe at a news story about covid 19 with creepy music and giant virus graphics floating in the background. It’s all theatre and little substance. This kind of dramatics isn’t helpful for rational thought nor education.
        This is a tricky subject because there are so many facets to it. I have no doubt that we will adapt but I suspect it will be easier if there was less tendency for centralised control because more avenues will be explored quickly and errors in judgment will tend to be smaller, less significant.

        1. I completely agree, Rob. Bureaucratic Centralism would be a disaster but it is often where people turn: “Why doesn’t the Government do something”. The best way to kill innovation. The sort of off-the-wall ideas I mention would work best in a Free Market Economy. I foresee plantation forest owners as the first to exploit charcoal-for-fuel.

  2. An excellent piece John, with mention of a wide range of technologies still on the horizon. I still feel a bit uneasy about your implied negative regarding CO2 as follows:
    “Furthermore, a recent statistical analysis of CO2 emissions and concentration data shows that the (pessimistic) Impulse Response Function, widely used by modellers, is wrong and that half of all emissions are absorbed by the ocean within about 50 years. The emissions problem may not be not quite as dire as once thought”.
    I have mentioned this before. I see it as no threat at all, even a benefit, and certainly a net benefit. I think many of your readers would feel the same, but I’m worried about the clueless politicians that govern us and are imposing their ignorance on the country. Keep up the good work.
    PS. I’m also from 1938

    1. You may see no threat, Aert, but other people do . It is them I am talking to.

    2. John, there is absolutely no evidence anywhere that CO2 drives, or has even a small impact on climate change. Those that are unaware of that are scientifically illiterate. Show me the evidence other than to say it is a greenhouse gas, which it is, but which has very, very little effect on climate change. The effect of water vapour is much more profound. But your piece is very well suited to a political readership, but not a scientific readership.

  3. Another reason why “energy famine austerity will differ from the wartime austerity” is the Internet chaos explained by Jonathon Haidt, starting at 3:16 in the following video, where he likens what has been happening on the Internet since ~2015 to the Roman Colisseum. Note that JH is THE most astute of online psychologists. See :

    1. I agree that ready access to high powered weaponry is an important factor in school shootings, but other factors are being ignored. One of these is the psychology of the perpetrators, many of whom have experienced chronic, extreme humiliation in childhood or are otherwise disturbed. Even Martin Bryant was regarded as a wierdo by the other kids. Rosie told me about him after her first day teaching at New Town Boys High: “He tortures cats, Miss”. This suggests that “Red Flag Legislation” now being mooted by US Congress may have some merit.

  4. Aert Driessen states that ‘there is absolutely no evidence anywhere that CO2 drives, or has even a small impact on climate change. Those that are unaware of that are scientifically illiterate’. As one of the illiterati brainwashed by Arrhenius onwards I plead for some convincing references I can read and publicise.

  5. Managing Austerity is a very useful article. Just to show that what you have written about is not an abstract or distant prospect here are three items I came across on the web today.

    1. : Mismatch in the UK’s installed capacity of “renewables” and actual performance, on June 1

    “I just checked 3 websites for wind power U.K. is getting 0.50 MW out of 26,000 installed, France 2.25MW out of 12,000 installed, Germany getting 5.0MW out of 50,000 installed. 4:00 pm EDST, June 1. It’s night so ZERO from solar. Thank God for nat gas, coal and wood pellets.” [Comment on the peakoildrum website yesterday]

    2. US facing blackouts—Wall Street Journal editorial

    Summer is around the corner, and we suggest you prepare by buying an emergency generator, if you can find one in stock. Last week the North American Electric Reliability Corporation (NERC) warned that two-thirds of the U.S. could experience blackouts this summer. Welcome to the “green energy transition.”

    “Welcome to the “green energy transition.” We’ve been warning for years that climate policies would make the grid more vulnerable to vacillations in supply and demand. And here we are. Some of the mainstream press are belatedly catching on that blackouts are coming, but they still don’t grasp the real problem: The forced transition to green energy is distorting energy markets and destabilizing the grid.”

    3. UK facing blackouts [from The Independent]

    Ministers have been warned of potential power cuts to as many as six million households this winter, with the government reportedly drawing up plans for rationed electricity if supply issues deteriorate.

    Government modelling of a “reasonable” worst-case scenario predicts major gas shortages in winter if Russia cuts off more supplies to the EU over the Ukraine war, it is claimed.

    Limits could be imposed on industrial use of gas, including on gas-fired power stations, causing electricity shortages.

    As a result, six million homes could see their electricity rationed, primarily during morning and evening peaks, in curbs that may last more than a month, according to The Times.

    Threats to security of supply have prompted business secretary Kwasi Kwarteng to ask Britain’s coal-fired power stations to delay their planned closures.

  6. It would seem that the population increases to consume whatever technological advances can provide, but you consider food and energy. My own work suggests that the first block will be not food but fresh water. Essentially we aren’t making any more, rainfall is not going to increase dramatically, and we are mining our groundwater at an unsustainable rate. We alrady have water wars in various places to maintain or increase supplies. Desalination is the new answer, and Israel is using it to even provide water for irrigation. Last time I looked it up Perth got 45% of its water from desalination. But desalination is only an option for rich people with access to the coast – so not an option for many highly populated areas. I doubt if there is enough fresh water to sustain another doubling of world population, so we might reach our limits in the next twenty years.
    What do you think?

    1. A good point. I had always assumed that desalination was too expensive to be practical in energy terms but when I checked it out it is remarkably cheap. SWRO (Salt Water Reverse Osmosis) comes out at about 3kWh/m3, i.e about 0.3 cents per litre.

  7. The gasbag reminds me of my uncles Dodge in the 1940’s although in his case the charcoal burner was on a small trailer. The failure to lift petrol rationing was the main reason Ben Chifley lost office,

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