The Economy – At Seneca’s Cliff?

“Well, what do you expect to find? A story about a guy who drove his car off a cliff in a snowstorm?” – Misery

Why don’t the sounds of pigeons echo?  A coo sticks.

I have written before about Ugo Bardi’s (Living Italian Economist) theory that he called Seneca’s Cliff.  Seneca’s Cliff is a restatement of something Seneca (Dead Roman Dude) philosophized about.  It was a simple idea:  stuff gets built only slowly.  But when it comes down?  It comes down all at once, like falling off of a cliff, hence Bardi calling it Seneca’s Cliff.

A house is a good example of Seneca’s Cliff.  A house is built over time – in most cases it takes several months to build one.   But if there’s a fire, that same house can be burned to the ground in a manner of minutes.  There are exceptions, of course:  in a Mexican neighborhood in Canada, the house might be saved by a hose, eh.

Race car backwards is . . . race car.  But race car sideways is . . . James Dean.

So, that’s Seneca’s Cliff.  I wrote about it myself back in the day, when I was trying to write a novel.  It started, “The world had been a web . . .”  This is a metaphor that has always stuck with me – the web of interconnections required to maintain society as we know it.

The world is a web.  As I write this, I’m writing it on a laptop that was built halfway around the world, with components and materials sourced on nearly every continent.  Dude, I got a Dell®, but the Dell™ came from everywhere.

When everything works, that’s great.  People communicate with each other through price and supply and demand and produce things like computers and cars and wedding rings and beer and PEZ® and the burrito that Amber Heard ate before she left a “grumpy” in the bed.

Believe all women?  That’s the dumbest thing I’ve Amber Heard.

Unfortunately, we’ve been working at a world that’s based in efficiency, too.  Efficiency is nice if you’re a company that’s trying to put together a lot of iPads® or Funko Pops©, but in reality efficiency sucks.

Why do you have two lungs?  Two kidneys?  Two bellybuttons?  Because those are really, really important.  I have a buddy who lost 90% of his lung capacity in one lung due to the flu back in ’92.  Guess what?  He conducts a full life like it never happened.  He coached a wrestling team, and rides bicycles long distances.

When something is important, you don’t want an efficient system, you want an inefficient system.  This is why the water department can make more water than it needs to.

What does Ghislaine Maxwell and July, 2022 have in common?  Neither of them will see August.

But our global systems, at the top level, are efficient.  We don’t produce 10% extra oil.  We don’t have that capacity.  In spring and fall we generally have plenty of excess electricity generation, but tell me how summer looks?  Lots of spare capacity?

No, not so much.  Sure, there are substitutes for lots of things – we can have Wheaties® instead of Rice Krispies™.  But in the end, we have to produce enough food to feed 7.96 billion people, and enough energy to grow the food and move it from place to place as well as make clothes and iPods© and pantyhose.

If Biden made dumpsters, they’d be called trash can’ts.

But this means that we’re in a world where there is simply less food because there is less energy, and also because war took out production of a significant amount.  This was added to by the Biden sanctions on Russia.  They are strange sanctions, indeed.  So far their result is that it actually resulted in more cash going to Russia every month.  Oh, higher prices on energy mainly to Europe and the United States.  The shortages we’re seeing now in food, which will soon become much worse will have an even larger impact.

It has already created stress in the developed world.  But in fragile places, like most of the Middle East and all of Africa, food prices will increase to the point where many of the poorer governments will simply cease to exist as the revolutions start.  The last time this happened, mass migration into Europe was the result.  It’s possible that this time, violence will be exported to Europe, as well.

I hear that Miley Cyrus will star in a remake of Silence of the Lambs as Hannibal Montannibal.

These are the conclusions if things go well, based on where we are now.  From everything I’ve seen, we’re not on the trajectory of things going well.  The capital markets are slowly failing in the West.  Why?  All the spending from the decision to print all the cash to paper over the previous holes in the economy that were caused from all the cash printed to paper over the holes before that is a game we can’t play anymore.  The holes are too big.

The delicate web that keeps goods moving is stressed now, and strands are missing, putting a greater strain on the whole web.  It took hundreds of years to build up this economy.

How fast will it fall down Seneca’s Cliff?

Author: John

Nobel-Prize Winning, MacArthur Genius Grant Near Recipient writing to you regularly about Fitness, Wealth, and Wisdom - How to be happy and how to be healthy. Oh, and rich.

35 thoughts on “The Economy – At Seneca’s Cliff?”

  1. Burning it all down better for the New Man utopia.
    No matter that capitalism could go on for another 50-100 years even with everyone in the world having the “right” to come to the FUSA for the free milk and honey.
    JoJo Brandon is malevolence disguised as incompetence and Bathhouse Barry did say to never underestimate his ability to F’ it all up.
    That was a Freudian giveaway of the controlled takedown demolition.
    The faculty lounge isn’t brilliant only clever and since they cannot create anything they get busy destroying.
    At least the Miley camel toe pics are somewhat interesting and Thelma v Louise would be a major improvement over President Larry Fink and VP Emhoff.
    Comrade Emhoff is the manwife of the Kamal and don’t look now but BlackRock is about to control all of the food so get ready for the Hunger Games.

    1. (out of character) Seriously, I love these comments, they are amazing to those who can see. Please never stop. (in character)

      May the odds be ever in our favor!

  2. Let’s do a little math. Math is fun.

    People don’t usually think of it this way, but Seneca’s civilization was 100% powered by solar energy. Instead of silicon photovoltaic panels, they had agricultural plants to capture the Sun’s energy – and basically no other source of energy. Back in Seneca’s time (he died in 65 AD) there were an estimated 300 million people worldwide. They needed to produce enough food (conservative estimate) to give everybody 2000 food calories per day. So back then the world consumed 600 billion food calories per day. Say they all they ate was wheat. There’s 65,000 food calories in a bushel (60 pounds) of wheat. So they consumed (600 billion/65,000) * 60 = 550 million pounds / 2000 = a bit over a quarter million tons of wheat per day. To eat every day, their total annual harvest had to be 0.25 * 365 = around 90 million tons of wheat per year.

    Sometimes there was famine and massive starvation and millions of people died. Rounding details we won’t go into here.

    Today we’ve got 8 billion / 300 million = around 27 times as many people as were in the world in Seneca’s day, and we produce proportionally more wheat – around 760 million tons per year, or 760/90 = 8+ times as much wheat. Plus another 760 million tons of year for rice, and 1,150 million tons per year of corn, and 383 million tons of soybeans and 180 million tons of pure sugar and….so yeah, in total about 27 times as much food. People still eat the same calories per day now as back then.

    So in Seneca’s day, solar energfy via wwheat was all they had to power their civilization. You wanted to build something, you used people powered solely by wheat…and very oppressive forms of government including slavery to convince those people to work.

    Today we’ve also got hydrocarbons to go alongside solar powered wheat plants to power civilization. Google sez, “The annual global energy consumption is estimated to 580 million terajoules. That’s 580 million trillion joules or about 13865 million tons of oil equivalents. (MTOE).”

    So…if you add all the wheat and the rice and the corn and the soybeans and the sugar produced in a year you get 760+760+1150+383+180 = 3,233 tons of foodstuffs to power the people….and this compares to 12,865 million tons of “oil equivalents” to power…the machines. So our machines need four times the “foodstuffs” as our people…

    …and the “energy concentration” of oil is A LOT higher than that of wheat. A 300 pound barrel of oil contains 1,500,000 kilocalories or around 5000 kilocalories per pound. That 60 pound bushel of wheat contained 65,000 calories pr around 1000 likocalories per pound – five times less.

    So our machines need 4 times the tonnage and 20 times the energy that we do. When the oil runs out…ie, becomes too expensive to purchase…we’re gonna lose 20/21 = 95 per cent of the energy available to run and build things. That’s what falling off the Seneca cliff means. Back to human power and Seneca’s lifestyle. See ya there.

    1. And population drops rapidly (and some overshoot) to what amount of food available.

      Before violence and chaos damage US population reduction to 1800’s or 80 percent die.

      Got food ,safe water and trusted friends?

    2. Without concentrated energy like fossil fuels, our present society is impossible, and the carrying capacity of the Earth goes down to less than a billion folks.

  3. John – – I do not know who Ricky is, but you and he make a good tag team.

    His mathematical approach to putting energy and food into their relative relationships yields a perspective that is one of the best things I have ever seen. It was intended to explain the functioning of our complex interlocking world and does so, with logic and understandable terms.

    Kudos, maga kudos !

    MAGA KUDOS TO YOU BOTH !

    1. I REALLY appreciate the kudos, especially since I don’t think anybody’s gonna be talking about Ricky’s Explanation of Seneca’s Cliff a couple of thousand years from now. Gather ye rosebuds while ye may and all that. Also, thanks for overlooking the numerous small errors in my writeup. I was in a rush to hit “post comment” before taking my grandson 20 miles across town in time for summer theatre camp, guzzling precious hydrocarbon energy all the way and back and once again this afternoon and for the rest of the week….

  4. If ‘Seneca’s Fall’ isn’t the name of a Norwegian death metal band yet, it ought to be.

    Speaking of which, the eavesdropping little hockey puck and I are not on speaking terms any longer. Why, you ask?

    TwoBuckChuck: Alexa, play ‘Appetite For Destruction’.

    Alexa: You’re gettin’ Adele, dude.

    1. To each his own. However, just like your phone, unless it’s the old fashioned wired kind, that thing is recording everything you and yours say 24/7/365, even when it dupes you into thinking it’s turned off.

    2. Hahahaha!

      Mine will play Astronomy, but I *must* specify that it’s from Blue Oyster Cult.

      Nordmenn spiller gitar med Seneca’s Fall!

  5. When Ben Stein’s father Herbert (Nixon’s Chief Economic Advisor) was asked how long the economic recovery would continue, he had a simple response.

    “Until it ends.”

    That’s where we are today. Gradually, then suddenly.

    1. Yes. We’re double binded – can’t print it, can’t pretend it’s not happening.

      Look out below.

  6. I’ve been wondering how the vax ultimately will affect world population. The side-effects are many, and it appears fertility is taking a hit. In the long run, the need for what is demanded today may not be as high, but getting to that point will involve a lot of suffering.

    1. It is hitting fertility. I’ve seen projections from “nothing” to “nearly everyone dies in three years” but I just know I get to watch, not participate in the field trials.

  7. Never mind running and building things, we are already running out of fossil fuels to produce and move food. Diesel is too expensive for farmers to run tractors and truckers to distribute it here in the US. Natural gas for/and fertilizer production in general in Ukraine is disrupted.

    All processed foods have a huge energy component that was totally absent in Seneca’s time. Ancient cooks ground whole grain and baked bread by hand and with animal labor and waste. We refine grains, sugars, oils, and add all kinds of chemicals, pack most of it in plastic, all made with fossil fuels. We prevent bugs from eating crops using pesticides derived from petroleum.

    Oil touches everything most people in the developed world eat.

    1. As long as we’re talking about oil and Seneca’s Cliff, ZH has a great overview today of where Biden’s puppetmasters are taking us between now and midterm elections. Spoiler alert: They’ve drained a third of the emergency Strategic Petroleum Reserve down to its lowest level since 1985, the Cushing Oklahoma pipe maze crossroads/ pumping station that shuffles oil all around the USA is about to drop below the minimum required to support its continued operation, and we’re STILL lookin at $200 / barrel oil as we cruise on down the Highway to Hell….

      https://www.zerohedge.com/commodities/white-house-quietly-modeling-shock-200-oil

      Fun times!!!

  8. The math is good enough for back-of-envelope figuring.

    But a fallacy some folks make is in thinking that history is like an elevator, and not Seneca’s Cliff.
    We can’t fail at the modern petro-energy game, and just get off the elevator at the 19th Century.
    That economic system disappeared long ago.

    The elevator will keep falling until it slams into the bottom and bounces, in pieces.
    IOW, a cliff, not an elevator. Like Wilder says.

    If agricultural outputs fall 75% (or more) due to a collapse in global supply chains (fuel for diesel to run trucks and combines, cheap and safe ocean shipping, natural gas to dry grain, shortages of fertilizer, pesticides, seeds etc), the global population will probably fall 90% or more during the subsequent global catastrophe.

    In America, I worry that our bullet supply will outlast our canned bean supply, after the food conveyors to our cities grind to a halt. Then what?

    I can only recommend living near fertile farmland and accessible water. If life continues anywhere, it will have to be near where food grows easily, even if it’s with horse, mule and human power.

    1. The problem is where do you get the horse and mule? Or the horse collar, the traces, the triple tree, the plow, or even shoes for the horse? That tech was all the tip o the spear, with a vast amount of infrastructure below it. That infrastructure is long gone. Just getting coal for a hobby or farm sized forge isn’t going to be easy.

      IDK if there are enough amish to teach the rest of the survivors, or enough old tools to do the work with.

      Granted that there are lots of guys that collect and restore old hit and miss engines, old tractors, old farm equipment, but how many collect the seeds?

      Just keeping rats out of the granary will be a difficult task, if there’s any grain to store.

      How many borax mines are there anymore? Or potash?

      If there is a massive population collapse, it’ll be a salvage economy for a long time, collecting oil from abandoned vehicles, transformers, and storage tanks, and rebuilding 1800s levels of tech and infrastructure, but there won’t be much extra manpower or brainpower for anything beyond subsistence for a long time.

      I hope it doesn’t come to that, but I’m not counting on it.

      nick

      1. Unless they start building fission reactors in the next decade in quantity, Nick, it’s certain the fall will will be deep and dark.

    2. The carrying capacity of this place is (nearly certainly) less than a billion without fossil fuels. And fresh fruit in January? Wait until September. The world changes when it all breaks. I expect the food supply to drop even farther during the inital drop.

      Very honored to have you drop by again, Matt!

  9. Missed your Bombs and Bants today. Was going to increase your audience size by two!

  10. I think Roe was intentional but it’s creating a smaller distraction than the stupid J6 stuff. While else would it leak other than to see what they could get away with. They are running out of ideas.

    1. Running out of ideas? That ship has sailed. Nothing but lies and “feels” left in their ammo pouch.

  11. One of the only things I remember from my Macroeconomics class is that the modern economy is a complex thing, and all complex things can fail at numerous points.

    Someone – I forget whom – made the point that if the modern world were to “fail”, it would not be back to the pre-industrial 19th century. That assumes one still has the knowledge of the pre-Industrial world, which we by and large do not (or if we do, will be locked in frozen computers). We will plunge directly to the days of the Roman Empire – or farther.

    1. Take a glance through Eric Flint’s 1632 series sometime.
      It won’t be Rome. It’ll be pre-industrial/late Renaissance.
      With scattered pre-Colombian/Stone Age wisps.

      1. My other half, a “cum laude” MBA/JD, has EVERY Flint book. Other than Faulkner (mostly), I’m not a fiction guy. She’s not.

        Just starting Bart Sibrel’s “Moon Man”. Its premise is very telling about the world today.

      2. Yes. Around Modern Mayberry there are actually old iron folks who could make tractors that are 120 (!) years old work. Plus implements. And our food would depend on it, which increases our ingenuity 74%.

        1. The key is to make brand new tractors that work from scratch, and run on steam. Then wood gas.

          Steam to The Next Big Thing is much shorter the second time around, because we already know what works and what doesn’t, and nobody is afraid people will combust from air friction if they go faster than 40MPH.

          It’s a big world. Trying to pound humanity down to the Stone Age (for those in the Industrial/Information Age) is a much bigger task than most people can comprehend.

          But it’s not nearly as hard to crunch civilization from the Information Age back to the Steampunk Age. For awhile.

    2. It would not last that long, since those skills are long gone. Don’t underestimate the how far down the floor is.

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