As I recall, runaway inflation has been a standard prediction of much of the Peak Oil blogosphere over the past several years as well. This was also combined with warnings of the imminent collapse of the U.S. dollar and a default on the federal debt. Many Peak Oil commentators also called for eliminating the Federal Reserve, and a return to the gold standard.
My question, and I ask it in all sincerity, is, why? These economic ideas come directly from the right-wing “Austrian School” of economics. Why were these obscure, right-wing economic doctrines embraced by so much of the Peak Oil commentariat? You know who these people are, so I’m not going to name names.
What’s exceptionally bizarre to me about this is that Peak Oil, rightly or wrongly (in my opinion wrongly), has been associated with the political Left. Yet so many people in the Peak Oil sphere enthusiastically embraced the narrative being promoted by right-wing Libertarians that the Federal Reserve is the (exclusive) source of all our economic woes, that gold is the only “real” money, and that “money printing” will lead to runaway inflation and a “debasement” of the currency. If you read many peak oil sites, you would also hear constant scorn being heaped on the likes of Krugman and Ben Bernanake (like Krugman, Bernanke seemed to inspire a bilious, visceral hatred in the angry white males of the blogosphere that Janet Yellen simply can’t match. Must be something about bearded Jewish Princeton economists)
Again, why? Why did so much of the Peak Oil movement embrace these narratives promoted by people like the Koch Brothers and Ron Paul? It’s strange bedfellows indeed – you had libertarian free-market fundamentalists espousing the exact same economic ideas as people who believed that the very substance that underpins modern industrial capitalism was irretrievably running out. How did they end up espousing the exact same economic philosophy? Why did so many Peak Oil people align themselves politically with extreme free-market fundamentalists like Ron Paul, who believes that a nineteenth century economic regime with no central banking, regulations or worker protections is the key to prosperity for all?
And many in the movement have been doubling down on this. If you point out that inflation is low, you get conspiracy theories about how inflation numbers are secretly being manipulated. Oil prices are going up, but of course Peak Oil people should know that has nothing to do with money printing but rather the increased costs of going after harder-to-get oil sources. College and medical costs have been rising, but that’s because these industries are predatory and fuelled by federal subsidies. Housing costs have been rising, but this is due to a housing bubble, scarcity (in urban areas) and extreme income inequality. These aren't caused by “money printing.”
I think maybe the idea is that if the authorities were not talking about Peak Oil, than they were not talking honestly about other things, and conspiratorial anti-government ideologies were embraced. And the biggest ones on offer ready to go was the ones being stoked and kept alive by anti-government libertarians and the John Birch Society. So, many peak oilers encountered these ideologies and signed on board, thinking that these ideas were another “suppressed" ideology just like peak oil. If the authorities were lying and keeping peak oil a secret, then they must be lying about the Federal Reserve and money printing and all of that as well. And economists like Krugman were in on the scam!
I think there’s also an element of nostalgia. Ron Paul and his libertarians portray an idealized world before the Progressive movement and central banking destroyed a land of plucky individualists and striving entrepreneurs. The fact that the people themselves who lived in this time period (1880s-1920s) fought to end the rapacious rule of Robber Baron elites, the impoverishment (and sometimes outright murder) of the working classes and the complete immiseration of people who had no social safety net to fall back on (no “private charity” was not better) is not mentioned. America’s expansion took place before central banking and during the days of the gold standard (or bimetallism), and there fore if we go back to those days we will go back to economic expansion. Correlation does not equal causation, however. The nineteenth century expansion was caused by a wide-open frontier (the Homestead Act, land speculation), plentiful raw materials, and new technologies (telegraphs, railroads, electricity). Not to mention constant booms and busts occurred during that time ruining millions of people and plunging them into desperate poverty much worse than today. All of this is ignored by Libertarians.
Finally, there is a general anti-centralization, anti-government vibe in much of the movement that was amenable to the anti-government message of libertarianism. But the anti-government message of libertarianism has always been self-serving. It’s all about eliminating the regulations that hold back and restrict the power of the wealthy while maintaining and strengthening the powers of the wealth and corporations. The people who sign onto that agenda are “useful idiots” for the plutocrats. Many peak oil commentators (Kunstler specially) are openly nostalgic for the Horatio Alger days of nineteenth century America and believe that they can magically be recreated by shrinking the government. Peak Oil feeds into this nostalgia and distorts their views, causing them to embrace this libertarian idealization of the Robber Baron era.
But by embracing these fringe economic ideologies, hasn’t the peak oil movement done tremendous damage to their credibility? By throwing their lot in with these obscure schools of economics and constantly predicting things that haven’t happened (derp), the Peak Oil movement risks undermining the message of very real and imminent dangers of Peak Oil that threaten our civilization and our economy. It doesn’t help matters when people like Kunstler consistently predict a stock market collapse and that all 315+ million Americans will become dirt farmers staring at the backside of a horse all day and living like Amish in the next twenty years when the U.S. oil output is a actually increasing. Yes, its is temporary and these are wells that will deplete very quickly, but rather than examine the implications of that, he just doubles down on his earlier predictions.
And that leads me to another rant. Why is Ron Paul-style Libertarianism portrayed the only possible option for those opposed to the drug war and military industrial complex? This article got quite a bit of attention recently: Has the ‘Libertarian Moment’ Finally Arrived? (New York Times)
Libertarians, who long have relished their role as acerbic sideline critics of American political theater, now find themselves and their movement thrust into the middle of it. For decades their ideas have had serious backing financially (most prominently by the Koch brothers, one of whom, David H., ran as vice president on the 1980 Libertarian Party ticket), intellectually (by way of policy shops like the Cato Institute and C.E.I.) and in the media (through platforms like Reason and, as of last year, “The Independents”). But today, for perhaps the first time, the libertarian movement appears to have genuine political momentum on its side. An estimated 54 percent of Americans now favor extending marriage rights to gay couples. Decriminalizing marijuana has become a mainstream position, while the drive to reduce sentences for minor drug offenders has led to the wondrous spectacle of Rick Perry — the governor of Texas, where more inmates are executed than in any other state — telling a Washington audience: “You want to talk about real conservative governance? Shut prisons down. Save that money.” The appetite for foreign intervention is at low ebb, with calls by Republicans to rein in federal profligacy now increasingly extending to the once-sacrosanct military budget. And deep concern over government surveillance looms as one of the few bipartisan sentiments in Washington, which is somewhat unanticipated given that the surveiller in chief, the former constitutional-law professor Barack Obama, had been described in a 2008 Times Op-Ed by the legal commentator Jeffrey Rosen as potentially “our first president who is a civil libertarian.”So, according to the article, the reasons for the “Libertarian moment” are:
1.) Opposition to the failed drug war.
2.) Opposition to the military-industrial complex and persistent foreign wars.
3.) Opposition to the prison-industrial complex
4.) Support for gay marriage.
5.) Decriminalizing victimless crimes like drug use, prostitution, and abortion.
6.) Opposition to the banking and corporate bailouts (not mentioned, but also true)
How did these views become associated with the right-wing? It’s a stunning piece of co-opting. In the 1960’s the people protesting the war and dropping acid weren’t right-wing libertarians, they were left-wing hippies. Many were even Marxists! In fact, the left has always supported every single one of the above points. Yet we’re not told the country is moving to the left, or having a “Marxist moment,” instead it’s a “libertarian moment.” And then we’re given all this evidence that Libertarianism is “young,” “hip,” and “cool.” Gee, why is that?
Meanwhile, the age group most responsible for delivering Obama his two terms may well become a political wild card over time, in large part because of its libertarian leanings. Raised on the ad hoc communalism of the Internet, disenchanted by the Iraq War, reflexively tolerant of other lifestyles, appalled by government intrusion into their private affairs and increasingly convinced that the Obama economy is rigged against them, the millennials can no longer be regarded as faithful Democrats — and a recent poll confirmed that fully half of voters between ages 18 and 29 are unwedded to either party. Obama has profoundly disappointed many of these voters by shying away from marijuana decriminalization, by leading from behind on same-sex marriage, by trumping the Bush administration on illegal-immigrant deportations and by expanding Bush’s N.S.A. surveillance program. As one 30-year-old libertarian senior staff member on the Hill told me: “I think we expected this sort of thing from Bush. But Obama seemed to be hip and in touch with my generation, and then he goes and reads our emails.”How did the left become associated with big, oppressive government? When did it become associated with absolute statism? Do people on the left support any of the above things? WTF? The (real) left has opposed these things forever! But there is not “leftist” or “socialist” moment. Socialism isn’t “young, hip and cool." It doesn’t have fancy conferences and media personalities (generously funded by corporate elites as the article points out). Hmmm, I wonder why.
Moreover, if you oppose all of the above things (and I do), why must you also embrace the libertarian principles of no regulations for Wall Street, no unions, no worker protections, and no interference whatsoever in the “free” market? If you oppose the above, then apparently “Libertarianism” is your only option. Gee, isn’t that convenient that this anti-military, anti-drug war ideology also embraces eliminating all taxes and regulations on corporations and worker protections? Yet many who would consider themselves leftist have embraced this movement with open arms. As I remarked to KMO, the drug war has served as the best recruiting tool libertarians could ask for. But are libertarians the only people opposed to the drug war? I seem to recall that the people smoking joints in the sixties weren't exactly right-wingers. What happened?
Here’s what I think – the corporate elites see the writing on the wall with the failure of the drug war, the authoritarianism of the religious right agenda, and the frustration with an out-of control military/police/incarceration complex. These ideas were associated with the left in the 1960's, but a true leftist movement would threaten corporate power and extreme wealth inequality as well. What to do? The answer: Embrace these obscure right-wing libertarian doctrines of free market fundamentalism and heavily subsidize them to co-opt the left. Voila, you have Libertarianism! Because if the corporate elites can co-opt this social shift and channel into Libertarianism (which they can control), they can ride the social changes without any threat to their wealth and power. In fact, they can even expand it! And that’s exactly what they have done; wealth inequality is back to where it was before the Great Depression, and yet people are fighting for a smaller social safety net, less worker protections, less regulation for Wall Street, and lower taxes on the wealthy thanks to Libertarianism. Genius!
And that ties in to my first point. Because the right-wing libertarian ideas are heavily subsidized, I think a lot of the Peak Oil commentariat jumped onboard, not realizing they were secretly backing the power of the wealthy and corporations. And that’s too bad. Because if you care about the implications of peak oil, you can’t help but be saddened by this ongoing display of peak oil derp. If peak oil wants to be taken seriously (and it should), it needs to start dealing with the real world and real facts, and not embrace these ridiculous fringe ideologies and conspiracy theories.