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Peak Oil Preparations:
Money And Labor

By Peter Goodchild

16 September, 2006z
Countercurrents.org


Almost everything in our modern economy is either made from oil or requires oil for its functioning or its transportation. As the price of oil begins to skyrocket, therefore, so will the price of everything else. The same happened on a smaller scale during the temporary oil crisis of the 1970s and '80s.

The hardest hit will be those with debts: car payments, house mortgages, credit cards, student loans. But everyone will find that a dollar just doesn't "stretch." High prices will be combined with low wages. Even now, the news media are always claiming that the unemployment rate is low, but they fail to mention that so many "employed" people are working at low-paying jobs. It is not easy to get together the required food, clothing, and shelter when one is being paid minimum wage.

At first, money will be an immensely important issue. It will take a handful of bills to buy anything. And largely because of the high prices, unemployment will rise dramatically. For the first few years of the collapse, there will be a financial Reign of Terror.

The "economic" problem of peak oil is occurring when North Americans have already been battered by other economic problems. One serious issue is globalization: for many years, big companies have been getting their work done by sending it out to whatever countries have the poorest people and the most repressive governments. The side effect is that people in "developed" countries lose their jobs.

Rather distantly related to the problem of globalization is that of income disparity: although the gap between the rich and the poor in the U.S. has been fairly constant for decades, one must distinguish between the "rich" and the "super-rich"; the upper five percent of American families have had an astonishing increase in income over the last few decades.

As a result of all these vagaries within the capitalist system, government services are perpetually being cut. The common expression is that "money is tight these days," although very few people ask why that is the case. Taxes continue to rise, but the individual receives little in return.

Of course, the basic avarice of the "consumer" also has its financial effect: we are so bombarded by advertising that we cannot grasp the fact that Billy doesn't need a car, an apartment, and a cell phone just to handle his first year of university, where he is taking courses (with trendy pretentious titles) that will never enable him to find a steady job.

All the above-mentioned economic problems are intertwined. The Marxist mega-theory about "what's wrong with the world" is that "the rich get richer and the poor get poorer." An alternate theory can be found in John Gever et al., _Beyond Oil_ (pp. 138-46): the decline in natural resources (deeper petroleum, lower-grade ores, eroded farmland) creates higher costs for everything else, more "service industry" jobs, and a lower standard of living for most people. The two theories are not mutually exclusive, however, because they are tied together by a fundamental problem, that of overpopulation. The poverty that Marx describes is caused largely by overpopulation. Gever is also right: we would not be using 30 billion barrels of oil every year if the world's human population were not so large.

At one point, the money problem will be everything. A few decades later, the money problem will be nothing. (Orlov's essay, "Post-Soviet Lessons for a Post-American Century," provides a good example of the final irrelevance of money.) Money is only a symbol, and it is only valuable as long as people are willing to accept that fiction: without government, without a stock market, and without a currency market, such a symbol cannot endure. Money itself will be useless and will finally be ignored. Tangible possessions and practical skills will become the real wealth. Having the right friends will also help.

The answer, in part, is to give up the use of money well ahead of time, instead of letting the money economy claim more victims. Barter would allow people to provide for their daily needs on a local basis, without the dubious assistance of governments or corporations. Such a way of doing business, unfortunately, is illegal if the participants are not paying sales tax on their transactions. Politicians disparage the age-old practice of barter as "the underground economy" or "the gray economy," but of course their own income is dependent on taxes. In any case, the transition would not be simple: there are so many rules, from building codes to insurance regulations to sales- and income-tax laws, that make it difficult to provide oneself with food, clothing and shelter without spending money. Nevertheless, as the economy breaks down, so will the legal structure; where there is no law, there are no criminals.


BIOGRAPHICAL NOTE: Chicago Review Press has published Peter Goodchild's _Survival Skills of the North American Indians_, _Raven Tales_, and _The Spark in the Stone_. He has an M.A. in English from the University of Toronto. For ten years he was a teacher in both English as a second language and computer skills; two of those years were spent in Japan. He now owns and manages a market garden in Irondale, Ontario, where he is involved in issues of self-sufficiency and localized economy. He can be reached at:
peter.goodchild@sympatico.ca

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