Output Falling in Oil-Rich Mexico, and Politics Get the Blame

[Julio Huato <juliohuato@xxxxxxxxx>]

Yoshie wrote:

> But the question is, will global capitalism stay in business?
> If the answer is yes, it is safe to bet that oil consumption at the
> global level will continue to rise into the foreseeable future:

It's not a safe bet, Yoshie.  It's as risky a bet as many others.  To
paraphrase Keynes, there's no scientific basis to ascertain that your
bet is safer than others.  Projections of this kind are only as good
as the premises on which they are based.  And those premises are
usually that trends in consumption rates (or other current trends)
continue.  But, will they?  Is the continuation of these trends
consistent with the trends themselves?

Nothing wrong with thinking about different scenarios -- as long as we
understand that the conclusions depend on premises that can't be taken
as fixed.  It's all fine.  But, from a more general point of view, I
prefer what you wrote in the posting that started the thread:

> "peak oil" theory confuses everything and
> turns attention of leftists away from the
> real [political] problem.

I thought this was a good warning against environmental fatalism -- of
either sign.

In the spirit of what you wrote before, regular working people in the
U.S. (let alone activists) shouldn't limit themselves to just predict
the evolution of oil consumption while assuming ourselves as chopped
liver.  We're not.  Insofar as we take responsibility, we're *the*
decisive factor in the future evolution of oil consumption in the
country and, given the size of our economy, in the world.  We can make
projections of the kind self-fulfilling, just as we can preempt them.
We are consumers, producers, citizens, human beings -- capable of
thought, communication, and concerted action.  As such we can turn
things around.

On an impressionistic basis as sound as any other, I could predict
that the rebellion in South America, the Iraq fiasco, growing
awareness of causes and effects of global warming, combined with a
citizen revolt in the U.S. (under the growing influence of the left)
will create new ideological and political conditions in the U.S. and
the world at large.

That, under new management, the U.S. will not resist, but lead, global
policy changes aimed to internalizing the external costs of
carbon-based energy consumption by inducing changes in transportation
and industry, committing public resources to renewable energy, etc.
That taxpayers in rich countries will realize it is in their best
interest to compensate poorer countries to help them develop (or
convert) their economies on (to) a greener energy basis.

That the cost of these measures will be largely offset by smart global
macro policies.  That the international monetary system will be
reformed to release funds for an expansion in global investment.  That
the resulting increase in global investment will be directed to
"social" and "human capital" formation, to building greener transport,
communication, and urban infrastructures, etc.  I could go on and
on....

And, as it has happened with legislation on child labor, workday, the
environment, etc. and other institutional changes supported by a
political active populace, I could predict that capital will
begrudgingly adapt to these changes.

What's wrong with my scenario?  What's wrong is that -- in Keynes'
terms -- there's no scientific basis for it.  It's sheer speculation.
Your pessimism is as a good a basis for prediction as my optimism.
The fact is, whether global capitalism stays in business or not (and
that inclusive), the future is up for grabs.