The money shot? "This willingness to hurt the poor to pull down the rich was predicted only by the individual's proneness to envy."
Read it in full, very interesting.
Furthermore, the causes of this supposed new reality are simply window dressing. The much larger macroeconomic drivers which fueled Peak Oil theory are still intractably at work. Let’s take them in order:
Part of the confusion, I think, lies in the fact that most people are unaware of the subtleties of Peak Oil theories. Peak Oil is popularly described as a theory which says that we are running out of crude oil, and that once the death spiral starts, the world will be plunged into a Road Warrior-like dystopia. While there are indeed believers in this bleak future, most thoughtful Peak Oilers describe a more extended version of the slide, where the initial signs of Peak Oil are primarily reflected in high prices and a gentle plateauing of energy production. Gains in prices are met with capital investment to reap higher profits, but also cause economic shocks. The world slips in and out of recession as economies adjust to new, higher energy prices. The world will never actually run out of oil, it’s just that the marginal cost of new barrels will rise so high that it’s quite irrelevant.
Does this scenario sound familiar? (See my post of January, 2009 (!) for my own prognostications on the issue). Eventually, even these more optimistic Peak Oilers believe that production will eventually slide downward with ever more devastating effects. How long that takes depends on who you’re talking to.
The world rejoiced a few years ago when Petrobras confirmed the existence of approximately 7.5 billion barrels of light, sweet crude off the Brazilian coast. Everyone said, “See? We’ve got plenty of oil!” Unfortunately, the oil is located in a spot where the ocean floor is 1.2 miles below the surface, and, once there, the drill has to venture through another 3.0 miles of almost impenetrable salt, sand and rock. Getting all those barrels out of the ground will cost staggering amounts of money. What is marginal cost in that case? The cost of the rig, labor and consumables are only a part of it. Just to start a program like that requires tens of billions of dollars in overhead: engineers; consultants; lobbyists; bureaucrats; and specialists of every sort, not to mention the costs of safety, insurance and environmental protection. In effect, the marginal cost of that oil becomes the entire cost side of the Petrobras P&L. And for what? 7.5 billion barrels of oil is about three months of global demand. Big whoop.