Why do Dragons Love Gold so Much?

We, humans, love gold so much that we have even imagined that giant, flying reptiles would share our love for the yellow metal. This curious vision of dragon's motives has a certain logic, although it takes some work to understand it. But it is sure that gold has been important in human history from the time, at least five thousand years ago, when our Sumerian ancestors started to collect gold and use it to prop the power and the prestige of their big men, the Lugals. 

Cassandra's Legacy has published several posts dedicated to gold. Below, a reflection by Pepi Cima, here some links to older posts. 

The Return of Gold as Currency? (2013)

The Lady doesn't Wear Gold (2013) 

The Strategy of Dragons: Hoarding your Gold (2013)

Peak Gold: How the Romans Lost Their Empire (2013)

Real gold? Are you sure? An examination of modern gold counterfeiting (2014)

Mineral Depletion: The Trouble with Gold (2014) 

Gold and the beast: a brief history the Roman conquest of Dacia (2014)

The Seneca Cliff of the Gold Mining Industry (2017)

What has Gold Ever Done for us?

by Pepi Cima

Could it be that gold mining is in modern times completely useless, very costly and terribly detrimental to the environment and nobody has seriously thought about it? Could gold acquire a status not too dissimilar to that of the rhinoceros horn?

Warren Buffet, the most revered investor of all times, says: “Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”

Present day Gold economy is very costly for the environment and for our fossil fuel reserves. Gold bank reserves, equivalent to tens of years of civilian use of the metal, could be sold on the open market to reduce gold mining together with all its environmental and social negatives without affecting any of its industrial uses.

GOLD MINING FACTS

Global gold production totaled roughly 3300 tonnes in 2017. 10 listed gold mines are responsible for nearly 30% of global output, the remaining mines are private unlisted mines and very many Artisanal and Small Mines, ASM. ASMs, triggered by booming gold prices, have become a lucrative source of income in countries such as Thailand, Peru, and Senegal over recent years.

They involve a lot of people, one widely used estimate is that more than 100 million people globally depend either directly or indirectly on ASM for their livelihood. In Africa alone, more than 6 million people are directly employed in ASM.

Gold mining is a very big industry in absolute terms: in 2017 the market capitalization of the first 20 public gold mining companies was reported at 140 B US$, for comparison oil companies in 2018 totaled 1250 B US$.

China, the largest gold producer in the world, in 2016 accounted for around 14% of total annual production but no one region dominates. Asia as a whole produces 23% of all newly-mined gold. Central and South America produce around 17% of the total. Around 19% of production comes from Africa and 14% from the former USSR.

Increased gold prices, together with low energy costs, are encouraging the exploitation of lower and lower grade mineral in bigger and bigger mines.

GOLD AND THE ENVIRONMENT

The consequences of all this mining are land damage produced by deforestation and environmental destruction at the mine and its surroundings. Its impact is particularly damaging because it mostly occurs in pristine environments, see for example the huge mines of Las Claritas in the Caribe Indian region of Venezuela and El Sauzal in the astoundingly beautiful Tarahumara region of the state of Chihuahua in northern Mexico.

A quick look at the aerial pictures of Google Earth, ( 6°11'35.00"N, 61°26'9.60"W and 26°59'52.73"N, 107°54'3.51"W are the relative geographical coordinates) would suffice to get an idea of the physical devastation. Artisanal and small-scale mines are responsible for similar, smaller scale, havoc but in larger numbers.

Gold mining is particularly destructive also from the pollution point of view: mercury and cyanide are the two main chemicals employed in gold extraction.

For every gram of gold produced using the amalgamation process between one and two grams of mercury are released in metallic form or as vapor. UNIDO (UN Industrial Development Organization) estimates that small-scale gold mining is responsible for about a third of world mercury emissions.

Every year, 2,000 tonnes of mercury arising from human activities such as coal-fired power plants and gold mining are emitted into the atmosphere, according to FOEN, the Swiss environment office. The heavy metal is found at the site of contamination but because of its extreme volatility also at locations far from where was originally released.

Cyanide, mainly used in large industrial mines, is highly toxic. Low-grade ores are stacked into heaps and sprayed with a cyanide solution at a concentration of about one kilogram NaCN per ton of ore, a few grams of gold. The precious metal is complexed by the cyanide to form soluble derivatives, e.g. Au(CN)2. The "pregnant liquor" is separated from the solids which are then discarded to a tailing pond or spent heap, the recoverable gold having been removed. The metal is recovered from the "pregnant solution" by reduction with zinc dust or by adsorption onto activated carbon. This process can result in environmental and health problems. A number of environmental disasters have followed the overflow of tailing ponds at gold mines. Cyanide contamination of waterways resulted in numerous cases of human and aquatic species mortality.

Switzerland hosts the environmental policy center of competence for chemical products and toxic waste in Geneva, Global Environment Facility (GEF), a 183 member countries environmental cooperation voluntary organization. Coincidentally most of the gold produced in the world physically transits Swiss refineries. In 2017 2,404 metric tons of raw gold were imported into the country, worth 70 BSF, and 67 BSF were exported. Only the chemical/pharmaceutical sector is more important with 98 BSF.

GOLD MINING AND THE SOCIAL ENVIRONMENT

Degradation of the social environment is an associated issue too. Although the vast majority of artisanal scale mines are undertaking a vital livelihood activity, there is strong evidence that elements of organized crime are involved. A host of players have vested interests in maintaining the status quo of informality and illegality for example because of money laundering or smuggling schemes or of support to civil war. Incidents occur related to unsanitary work environment, child labor, human rights abuses. Some have little to do with the mining company but take place on or in the direct vicinity of the mining concessions.

Furthermore large industrial mines don't necessarily provide jobs for local unskilled populations, as is the case for the mines in the Tarahumara territories of northern Mexico where literally none of the locals are employed and all the mine workers are flown in and out from neighboring regions to an otherwise isolated mine.

GOLD MINING AND ENERGY

Gold mining is a very energy-intensive industry. In 2013 the EIA reported that the top 5 Gold mining companies were using 104 liters of diesel fuel per gold ounce extracted, at more than 10% of the extraction cost at diesel price untaxed rates. At European street pump rates, it would have accounted for nearly half of production costs.

Incidentally, Bitcoin perpetuates the energy wastefulness of gold, another money-form which has materialized as an environmental nightmare.

There is an ample literature on gold recycling and gold is often cited as an example of virtuosity of circular economy. Unfortunately an example of something of which we already have too much. A broader view of how the "system" works is badly needed.

GOLD ECONOMY

Most of the gold ever dug out of the earth in the whole history of humanity is still stored somewhere since it is precious and doesn't corrupt. In a chemical sense.

The best estimates currently available suggest that around 190,000 tonnes of gold have been mined throughout history, of which around two-thirds have been mined since 1950. Because of its indestructibility, almost all of it is still around in one form or another. On earth, we store a supply of gold large enough to keep us going for more than 100 years. But going where? Roughly 20% of production is used in electrical contacts and jewelry but most of it as a reserve of value of one kind or another.

Many think of gold as something without which financial markets would not work.

On the other side liquidity problems with a gold-based monetary system caused the Nixon administration to abandon the gold standard and from that point forward no currency has a natural resource tethered to it. All money is now created from thin air, 95% or so via commercial bank loans. 

If there is something all economists seem to agree on is that the gold standard is a bad idea for a modern economy.

Most people don't have a clear opinion about the opportunity of saving gold as a reserve of value but many stash gold in deposit boxes anyway. Freud interpreted this behavior in his usual way.

Distinguished economists seem to have a clearer idea about the subject for example, in this excerpt from General Theory of Employment, Interest, and Money, par. VI, Keynes says with a sense of humor worthy a Monty Python sketch:

Just as wars have been the only form of large-scale loan expenditure which statesmen have thought justifiable, so gold-mining is the only pretext for digging holes in the ground which has recommended itself to bankers as sound finance; and each of these activities has played its part in progress….

GOLD AND BANKING

Governments seem to know everything there is to know, in their vaults, they accumulate gold in gigantic amounts and at tremendous cost.

Central bank reserves consist of foreign currencies and precious metals, mostly gold. From the following table, one can see central bank gold distribution among countries, as a percentage of their reserves and in grams per citizen. Interestingly the two largest economies, the US and China are at the opposite sides of the spectrum. The large US reserves percentage, 75%, has to do with the belief that the US dollar doesn't need much in terms of foreign currencies reserves, its weight in the world markets makes it believable by itself. China's small percentage reflects the young age of that country as a world financial/industrial power. Modern money theory doesn't support the use of physical gold as currency reserve.

Collectively, at the end of 2015, central banks held around 31,400 tonnes of gold, approximately one-fifth of all the gold ever mined. Moreover, these holdings are highly concentrated in the advanced economies of Western Europe and North America, a legacy of the days of the gold standard. This means that central banks have immense pricing power in the gold market, crucial to the fate of gold mines all over the world. In recognition of this, major European central banks signed the Central Bank Gold Agreement (CBGA) in 1999, limiting the amount of gold that signatories can collectively sell in any one year. There have since been three further 5 years agreements, in 2004, 2009 and 2014 and the signatories have stated that they currently do not have any plans to sell significant amounts of gold. Central banks have committed to being stewards of stable markets and that they will not engage in uncoordinated large-scale gold sales. Are they aware of their environmental responsibilities too?

WHAT TO DO WITH GOLD

Can we do something useful with this giant reserves of gold? Yes, we can, we can exploit the huge labor investment done by humanity since ancient history to the advantage of the physical and social environment we live now in, without affecting the present uses of the metal.

Recognizing the little utility in hoarding present-day gold reserves most governments could agree to destine their gold to civilian use in competition with gold mining. They could do so for tens of years in a row with no practical repercussions. A side benefit would also be the one of reducing the appeal of gold for illegal money recycling and tax evasion. Our fossil fuel reserves would benefit too.

CONCLUSIONS

The commercial sale of gold reserves would represent a great victory of the environmental cause over superstition and fear of the wrong enemy, a good starting point to reexamine priorities in our economy and its relationship with a degrading environment.

The gold industry is one egregious example of how badly the demand/offer feedback loops of our exchanges work. Our right hand doesn't know what the left hand does.

The supply side of energy and labor is much more heavily scrutinized that the demand one. We investigate and invest in new energy sources far more than thinking of what to do with the energy they produce.

Do we know if we are developing so much activity and destruction for a good reason? Is this subject discussed? Are legislators taking proactive initiatives, like they do about vehicles gas milage? With cars, we move around for work and pleasure, and we should question this too, but what are we achieving with gold?

Could it be that gold mining is in modern times completely useless, very costly and terribly detrimental to the environment and nobody has seriously thought about it? Could gold acquire a status not too dissimilar to the one of the rhinoceros horn?

The gold tragedy keeps reminding me of Atahualpa's execution at the hands of the conquistadores after requiring a ransom in gold. Different actors but the end of that sad story is still not in sight.

Inca jewel, very original and beautiful art was melted to pay for Atahualpa's ransom

The Seneca Effect in Six Easy Steps

The Seneca Effect illustrated in an image by Roman Pfeffer

Dealing With Collapse: The Seneca Strategy

The ruins of the Egyptian Pyramid of Meidum, perhaps the first large building to collapse in history (*). The collapse of large structures is part of a fascinating field of study that we may call "Collapsology." I already wrote a book on this subject, titled "The Seneca Effect" (Springer and Oekom 2017), available in English and in German. Now, I am writing a second book with Springer which expands and goes more in depth into the matter with the idea of being a "collapse manual" dedicated to how to understand, manage, and even profit from collapses. It should be titled "The Seneca Strategy" and it will be available in 2019. 

About 2,000 years ago, the Roman philosopher Lucius Annaeus Seneca wrote to his friend Licilius noting that "growth is slow, but ruin is rapid". It looks obvious, but it was one of those observations that turn out to be not obvious at all if you go in some depth into their meaning. Do you remember the story of Newton's apple? Everyone knows that apples fall from trees, isn't it obvious? Yes, but it was the start of a chain of thoughts that led Isaac Newton to devise something that was not at all obvious: the law of universal gravitation. It is the same thing for Seneca's observation that "ruin is rapid." Everyone knows that it is true, think of a house of cards. But why is it like this?

Seneca's observation - which I dubbed "The Seneca Effect" (or the "Seneca Cliff" or the "Seneca Collapse") is one of the key elements we need to understanding the developments of what we now call the "science of complexity." In the space of a few decades, starting since the 1960s, the development of digital computing has allowed us to tackle problems that, at the time of Newton (not to mention those of Seneca), could not be studied except in a very approximate way.

Using system dynamics, network science, agent-based modeling, and more, this new science has allowed us to penetrate a world that in a certain sense was familiar to us: the world of real things that are born, grow, and sometimes collapse in a ruinous way. The basic ideas in the behavior of complex systems are always the same, especially when dealing with collapses: complex systems are complex because they are dominated by the mechanism we call "feedback." Because of feedback effects, a large structure may collapse when just one of the elements that compose them fails. That may lead to the failure of the elements that surround it. These, in turn, cause the failure of other elements of the system, and so it goes. The result is what we call an "avalanche" and, as Seneca said, "ruin is rapid". 

One question I am often asked about system science is, "can we use it to predict the future?" Alas, there is a small problem with this question: we cannot have exact data on the future because the future doesn't exist (yet). But that doesn't mean that we can try to understand the future. After all, what is the future if not a fan of possibilities that we ourselves may decide to turn into reality? Seneca himself would probably have agreed with this concept: he was deeply involved in the Stoic philosophy. As a good Stoic, he knew that we must always be prepared for the future, knowing full well that ruin can come upon us at any moment. This is true for individuals as well as for an entire society. He himself experienced a "rapid ruin" when his former pupil, Emperor Nero, accused him of treason and ordered him to commit suicide. Seneca had no other choice but to comply. 

So, we can use mathematical models to describe the Seneca Effect, but they are mainly a quantification of ancient wisdom. It is not a question of predicting the future, it is a question of understanding it. And we can use the models to understand that the ecosystem in which we live is not a supermarket from which we can take what we need - and without even having to pay. It is a complex system, subject to the Seneca Collapse. And since we are also part of the ecosystem, when the ecosystem collapses, we collapse, too. Even a stoic like Seneca would have said that if we have a chance to avoid the climate collapse, we should try.

All these things, and many more, I put them together in the book published in 2017 that I titled "The Seneca Effect." Now I am writing another book that should be called "The Seneca Strategy" -- it should be published by Springer in 2019. This second book is more a "collapse manual" that can be used to manage collapses: that is, it explains how to avoid being destroyed by collapses, how to minimize damage, and even how to profit from collapses (hint: have your enemies collapse first!). What I said in my first book remains valid: collapse is not a bug, it is a feature of the universe!




_____________________________

(*) Of course, the collapse of the Meidum Pyramid was an inside job. Look at how the building crumbled: would you believe that it collapsed vertically, all in a symmetric heap? No way. And the witnesses of the collapse say that it fell as rapidly as an apple falls from a tree - which is just impossible. So, it was an inside job devised by Pharaoh Sneferu who had his acolytes strategically placing explosive charges within the pyramid. The Pharaoh wanted the pyramid to crumble so that he could accuse the King of Nubya of having thrown it down by having a charioteer throw his horses against the building at full speed. A classic false flag operation.



 

The Seneca Glass: Half Full or Half Empty?

Optimist: the glass is half full.

Pessimist: the glass is half empty.

Catastrophist. It will not be half full for long.

Cornucopian: We are running into water rather than out of it.

Oil executive: The more we drink, the more the water level grows.

Conspiracy Theorist: Water? What water? THEY want us to believe that there is water in the glass.

Chemtrail believer: Don't look at the water! Look up at the sky! Don't you see THEY are poisoning us?

Climate Science Denier: Scientists cannot predict the weather one week in advance, how can they say if the glass is full or empty?

Bad Pun Lover: A fish was swimming in the glass. It swam into the wall and said, "Damn!"

Thomas Malthus: You can only fill the glass at a linear rate, but people will drink from it at exponentially rising rates.

Harold Hotelling: When there will be no more water in it, we'll use beer as a backstop resource.

Robert Solow: the amount of water in the glass will keep growing exponentially.

Neoclassical Economist: when the water level will be low enough, market forces will create more.

Julian Simon: there is enough water in the glass to last for six billion years.

Colin Campbell: After you drink the water in the glass, there will be none left.

Charles Hall: the water return on energy invested (WROEI) declines as you drink it.

Gail Tverberg: Water is not really a renewable resource: you will always need fossil fuels to pump it into the glass.

Guy McPherson: All the water will have disappeared from planet Earth by 2030.

Donald Trump: We need to build a wall to keep the Mexicans from drinking our water.

Matsuo Basho: The old glass. A frog jumps into it. The noise of water.

William Shakespeare: The empty part of the glass is filled with the stuff dreams are made of.

Erwin Schroedinger: The glass is neither half full nor half empty - until you drink from it.

Jesus Christ: Have faith and walk on the stones, just like I do.

Lao Zi: A glass of a thousand gallons is filled starting with just one drop.

Buddha: The water is an illusion, just like the glass. And the drinker, too.

Lucius Annaeus Seneca: It takes a long time to fill the glass, but emptying it is rapid.





  

Overpopulation Problem? What Overpopulation Problem?

Some people seem to be horrified at the sight of these images. For me, it is more a sensation of melancholy. These masses of people can exist only for a brief moment in the history of humankind. Overpopulation is a problem that will solve itself rather quickly although, unfortunately, not without pain.

I keep reading more and more comments about overpopulation on the social media. It is not just an impression: the trend of increasing interest in population matters is visible in Google Trends. Still weak, but it is there.

It is puzzling how the question is returning. It had disappeared from the media after it had been popular in the 1970s, at the time of the first "The Limits to Growth" study. At that time, there were less than 4 billion people and that was viewed as a huge problem. Then, somehow, it became unfashionable to mention overpopulation, just as it became unfashionable to consider "The Limits to Growth" as anything more than a completely wrong study written by people not smarter than Chicken Little (it wasn't the case).

Now, with twice as many people - 7.6 billion humans - we see a return of the idea that - really - there may be a little problem of overpopulation. Humans are so many that they are appropriating a larger and larger fraction of the ecosystem. That means less and less space for other species which are, indeed, fast disappearing. When you read that, in a not too remote future, the only large animal left on the Earth will be the cow, well, that makes you think.

A specific streak of the discussion is that overpopulation is not just a problem, it is "the" problem. If we could reduce the number of humans, it is said, then all the other problems, pollution, global warming, resource depletion, would all become automatically much more manageable - if not completely solved. This opinion is often accompanied by statements that the reduction must be accomplished by fair and nonviolent means: voluntary birth control only. That doesn't prevent some people from accusing the "Greens" or the "global elites" of planning the extermination of most of humankind. Others see an evil plot in the growing population, accusing the powers that be - governments, religious organizations, the Illuminati, the gnomes of Zurich, or whatever - to be engaged in a global conspiracy aimed at hiding the dangers of overpopulation.

Personally, I am not too worried about human overpopulation, nor about these pretended evil conspiracies. Not that I think that there aren't too many people around. The point, I think, is that if today overpopulation is a problem, and it is, it will solve itself rather quickly (although not without pain). No need for evil elites plotting extermination, nor of well-intentioned activists teaching the poor how to use condoms. The system itself will cause the human population to collapse.

The current 7.6 billion people on the Earth are alive in a very special moment of human history. It had never happened before and it is unlikely that it will happen again the foreseeable future. So many people are alive today because there exists a sophisticated and incredibly complex system engaged in keeping them alive. The stupendous transportation system that carries food all over the world is powered by fossil energy and controlled by the financial and political system we call the "globalization." As long as fossil energy and globalization exist, people will be fed and population may continue growing.

But for how long? The whole system is under heavy strain because of depletion and pollution. Natural resources are more and more costly to produce while fighting pollution - also in the form of global warming - is becoming more and more expensive. A new major financial collapse will be sufficient to disrupt the transportation chain which ships food it all over the planet. Without this system, the food will rot where it is produced and the people at the other end of the chain will starve. It will be the Seneca Cliff of the whole system, including the human population.

There are other factors which may also work in the direction of reducing the human population. Think how interesting are the 400+ million tons of human flesh existing today for predators such as viruses, bacteria, and assorted parasites - we are their prey and we are rapidly becoming an abundant and easy prey. And there are more possibilities, from reduced fertility caused by heavy metal pollution to the old-fashioned, but always effective, large-scale wars. (1)

Recently, I published a paper on the Journal of Population and Sustainability where I looked for some historical examples of how populations (not just human ones) crashed down in the past. I found more than one reason that can lead to an abrupt collapse. An especially poignant example is that of the horse population in the US. It experienced a fast when the horses went down from some 27 million in 1920 to about 3 million in 1960. No one called for the extermination of horses but they had lost their economic value - replaced by machines -  and so they were not cared for anymore and not even allowed to reproduce. And that was the Seneca Cliff for horses.

Why not a similar cliff ahead for humans? They, too, have lost their economic value, being replaced by machines. You say that humans are not horses? Sure, but think about something: who decided the fate of horses? And who decides the fate of humans? You get my point, I guess. With humans rapidly becoming technologically obsolete, there would be no need to wait for an energy cliff to bring down civilization as a whole before seeing their numbers radically curtailed.

So, you may like to read my paper in the Journal of Population and Sustainability.




(1) I know that Paul Ehrlich cried wolf too early about population collapse, in 1968. Sure, that means population will keep growing forever, right?

(2) To explain this point, the fate of horses in the US 

Trump Takes Italy by Storm: the Rise of Matteo Salvini and of the Italian Right

Matteo Salvini, the leader of the Italian League and Minister of the Interior since June 2018. During the past few weeks, he has gained political prominence in Italy by adopting Trump's style and policies. Here, you see him together with the slogan "Italians First."

During the past few weeks, we have seen a true political revolution in Italy. Matteo Salvini, leader of the Italian League, has successfully exploited his new position of Minister of the Interior to gain personal prominence. The M5s movement had won the elections, this year, but it has been emarginated to a secondary role, while Salvini acts and looks like if he were the real Prime Minister. If new elections were held now in Italy, Salvini and the League would win hands down. 

All politics is, after all, about blame shifting. So, political success means simply finding someone to blame. Matteo Salvini was successful by adopting the same style and content that made the political fortune of Donald Trump. Both Trump and Salvini found a good target to blame with immigrants and foreigners in general. Both used harsh language, insults, callousness, and plain racism. Both found that the more shrill and violent their utterances were, the more they were approved by the public. It took a remarkably small effort to convince a large majority of Italians that all their troubles are caused by immigrants and, in particular, by the Roma people (less than the 0.2% of the Italian population). Salvini also capitalized on demonizing the Euro and the European Union, although he can't afford (so far) to exaggerate with insults and threats in that field. In any case, right now, it seems that 72% of Italians approve Salvini's actions. 
 
For everything that happens there is a reason and there has to be a reason for the outburst of hate and of racism in Italy. It has to do, probably, with the return of nation-states as protagonists in the world power game and with the ongoing disgregation of the American Empire. 

After the end of WW2, the European Union took the role of an agent of the American Empire to keep the European states under control. But the EU itself had to be kept under control, least it could become another empire that could have challenged the American supremacy. So, the EU wasn't allowed to develop an army, nor all the paraphernalia that would have turned it into a recognizable state, from an official language to a decent flag. It was an exercise in political acrobatics and it is remarkable that it worked reasonably well for more than half a century. 

But, today, the EU is weakened by the economic crisis and probably fatally wounded by the loss of Britain. All Empires tend to collapse in times of economic hardships, an even more likely outcome for a entity, the EU, which was a failed empire from the beginning. So, the old states are rising again - a trend that we see also outside Europe. Even in the US, Donald Trump is busy at turning the American Empire back into a nation-state. That changes many things, not necessarily for good.

Normally, empires are not racist and they don't engage in ethnical cleansing. They cannot afford that, since they are composed of heterogeneous entities which may need to be kept together by force. That makes Empires expensive: one of their characteristic is the large and costly military apparatus they are forced to maintain. Excessive military expenses is the most common cause of the collapse of empires. It happened to the Ancient Romans, just as it happened to the Soviet Union. And it is happening right now to the American Empire. It just can't survive for long without the influx of cheap energy and resources that created it.

Nation-states, instead, are relatively homogeneous entities in linguistic and ethnical terms, less likely to fragment in smaller pieces. What they need in terms of military force may be just a militia able to put down or exterminate ethnical or ideological minorities. That makes them less expensive and more resilient than empires. They can survive the economic hardships that shattered the most powerful empires in the world's history.

Nation-states often generate great enthusiasm among their citizens, but they are far from being benign entities. Their ethnical and linguistical homogeneity may be more a dream than reality and their survival may need to be propped up a poisonous mix of aggressive nationalism, hate, and racism directed against foreigners. It was one of the methods used in Italy by Mussolini's government in the 1920s and 30s, so it is not surprising that Mr. Salvini's government (formally known as Conte's government) is using the same methods today. As we know, hate and racism may not remain confined to insults.

And here we stand. The message that the current economic hardship is the result of resource depletion and of the negative effects of ecosystem disruption didn't pass, and maybe it never will. At this point, accusing Salvini or Trump of "populism" or of "racism" is not going to stop the trend. It is clear that their methods work wonderfully well. The skunk is out of the bag and we don't have to wait for long before other leaders will follow their example. A new round of ethnical cleansing in Western Europe, if not the start of a new European war, may be a plausible scenario for a non-remote future. 

But nothing is unavoidable. With enormous changes going on worldwide, with the ecosystem collapsing, with natural resources dwindling, with the human population still expanding, we may be rather facing a Seneca Collapse that will make short work of the European nation-states, just as the current crisis is destroying the American Empire. The future is never like the past and the only thing we are sure about it is that we cannot be sure of anything.
 

 

New Data Reveal the Hidden Mechanisms of the Collapse of the Roman Empire

The reasons for the fall of the Western Roman Empire have remained a mystery for modern historians, just as for the Romans themselves. Yet, recent data from the Greenland ice core provide us with new data on collapse of the Empire, showing how fast and brutal it was - a true "Seneca Collapse." Could our civilization go the same way? (above: the sack of Rome by the Visigoths of King Alaric in 410 AD).

The Ancient Romans never understood what hit them. Nor did later historians: there exist literally hundreds of theories on what caused the fall of the Roman Empire. In 1984 Demandt listed 210 of them, ranging from moral decline to the diffusion of Christianity. Today, some historians still say that the fall is a "mystery" and some attribute it to the improbable piling up of several independent factors which, somehow, happened to gang up together. 

Why is it so difficult to understand something that was so massive as the fall of the Western Empire? There is more than one reason, but one is the lack of data. We have scant written material about the last centuries of the Empire and very little has arrived to us in terms of quantitative data. Things are changing, though. Modern archaeology is generating astonishing results telling us a lot about the mechanisms of the collapse of the ancient Empire. For instance, look at this graph: (from Sverdrup et al., 2013):    

Recent data by McConnell et al on lead pollution provide a more detailed picture (See also Peter Turchin's blog).

The beauty of having data is that we are not discussing any more of vague concepts such as the "lack of moral fiber," a factor that was proposed as the cause of the fall. No, the data are there, stark clear. They show that, when the Roman Empire officially disappeared during the 5th century, it was already an empty shell. The actual collapse took place during the 3rd century, when the Roman economy ceased to function, as shown by the data on lead production - a proxy for the industrial activity of the Empire. Look at how abruptly the collapse was. It is a typical case of a "Seneca Collapse," when growth is slow but decline is rapid. A general phenomenon shown in the image below.

Now, the big question: the data tell us how the collapse took place, but why did it occur? Here, we face a problem typical of complex systems. These systems are dominated by the phenomenon called "feedback" which may strongly amplify the effects of a small, nearly undetectable perturbation. It is the story of the straw that broke the camel's back: if you were to see the camel falling down, you wouldn't notice the role of the straw. This is another reason for the proliferation of theories on the fall of the Roman Empire: people saw consequences and thought they were causes. For instance, it is tempting to say (and many people did) that the Roman Empire collapsed because it was overwhelmed by invading Barbarians. But that's not the case: the Barbarians invaded an already weakened Roman Empire as the data clearly show us. 

So, what was the straw that generated the economic collapse of the Empire? The most likely culprit is the debasing of the Roman denarius. As you can note in the figure by McConnell, above (look at the red dots), the content of silver in the denarius coin collapsed along the same trajectory followed by lead. The Romans could surely survive without lead, but could they survive without the currency that made the whole system work? No money means that nobody can buy things. And if nobody buys, nobody sells. And if nobody sells, nobody produces. The collapse of the production of precious metals may very well the element we are looking for: the perturbation that broke the Empire's back.

Of course, the debasing of the denarius was not a choice: it must have been a necessity. And the obvious factor may have been mineral depletion, provided that it is correctly understood. We have scant direct data on the production of the Roman mines, but we know that progressive depletion forced the Romans to go deeper and deeper into the veins of precious metals they were exploiting in Spain. That required more and more expensive procedures and equipment. The mining system gradually became a terrible burden for the Roman economy and, eventually, something had to give. We don't know exactly what broke the back of the Roman mining system - maybe a political crisis or the Antonine Plague (*) - but, in any case, by the end of the 2nd century AD, the mines were abandoned. The pumps ceased to function, the shafts were flooded with water, and the production of precious metals stopped. Without a constant supply precious metals, the Roman gold disappeared, used to buy luxury items from China. Without gold, the Roman economic system couldn't work - at least not in the same way as before.

Note that depletion is not the same thing as "running out" of something. The Roman mines still contained some precious ore when they collapsed, it was just too expensive for the Romans to extract it. Only much later, during the 19th and early 20th century, the availability of modern technologies made it possible to restart exploiting these old mines. Note also how different is the case of lead: by the late Middle Ages, more lead was produced in the world than during the high times of the Roman Empire. Depletion was not an important factor in the decline of lead production.

So, you see how the Roman system went down in a cascade of effects that was originated by the depletion of their precious metal mines. It was slow and it wasn't recognized by the Roman themselves, nor by modern historians. But it was unavoidable: no mine can last forever. It is what's happening to us, today, with our "black gold," petroleum. Depletion may well cause crude oil production to go through a "Seneca Collapse" not because we are running out of oil, but because extracting it is becoming progressively more expensive. A new perturbation, such as a regional war, could be the straw that breaks the oil industry's back. And that could have devastating consequences on the modern empire we call "globalization".

(*) Note that McConnell and the others cite the "Antonine Plague" as the direct cause of the decline in lead production revealed in their data. This is most likely an oversimplification of a much more complex chain of events. In any case, the highest lead production was attained with a total population of some 45 million people. At the foot of the collapse curve, around 250 AD, the Empire had about 65 million inhabitants. The plague may have caused a temporary perturbation, but no long-lasting reduction of the Empire's population (BTW, this is a behavior, reproduced by the models of "The Limits to Growth" study for our society: the population starts declining much later than the industrial system.)

Five Things You Should Know About Collapse

The Roman philosopher Lucius Annaeus Seneca was perhaps the first in history to identify and discuss collapse and to note that "the way to ruin is rapid." From Seneca's idea, Ugo Bardi coined the term "Seneca Effect" to describe all cases where things go bad fast and used the modern science of complex systems to understand why and how collapses occur. Above: the Egyptian pyramid of Meidum, perhaps the first large edifice in history to experience collapse. 

1. Collapse is rapid. Already some 2,000 years ago, the Roman philosopher Seneca noted that when things start going bad, they go bad fast. It takes a lot of time to put together a building, a company, a government, a whole society, a piece of machinery. And it takes very little time for the whole structure to unravel at the seams. Think of the collapse of a house of cards, or that of the twin towers after the 9/11 attacks, or even of apparently slow collapses such as that of the Roman Empire. Collapses are fast, it is their characteristic.

2. Collapse is not a bug, it is a feature of the universe. Collapses occur all the time, in all fields, everywhere. Over your lifetime, you are likely to experience at least a few relatively large collapses: natural phenomena such as hurricanes, earthquakes, or floods - major financial collapses - such as the one that took place in 2008 - and you may also see wars and social violence. And you may well see small-scale personal disasters such as losing your job or divorcing. Nobody at school taught you how to deal with collapse, but to cope with it you'd better learn at least something of the "science of complex systems."

3. No collapse is ever completely unexpected. The science of complex systems tells us that collapses can never be exactly predicted, but that's not a justification for being caught by surprise. You may not know when an earthquake will strike but, if you live in a seismic zone, you have no justification for not take precautions against one - such as having emergency tools and provisions. The same holds for defending yourself and your family against thieves, robbers, and all sorts of bad people. And make plans for political unrest or financial troubles. You cannot avoid some collapses, but you can surely be prepared for them.

4. Resisting collapses is usually a bad idea. Collapse is the way the universe uses to get rid of the old to make space for the new. Resisting collapse means to strive to keep something old alive when it could be a better idea to let it rest in peace. And, if you succeed for a while, you are likely to create an even worse collapse - it is typical. The science of complex systems tells us that the main reason for the steep "Seneca Collapse" is the attempt to stave it off. So, let nature follow its course and know that there some problems may be unsolvable but can be surely worsened.

5. Collapse may not be a problem but an opportunity. Collapse is nothing but a "tipping point" from one condition to another. What looks to you like a disaster may be nothing but a passage to a new condition which could be better than the old. So, if you lose your job, that may give you the opportunity to seek a better one. And if your company goes belly up, you may start another one without making the same mistakes you did with the first. Even disasters such as earthquakes or floods may be an opportunity to understand what's your role in life, as well as give you a chance to help your family and your neighbors. The Stoic philosophers (and Seneca was one) understood this point and told us how to maintain one's balance and happiness even in the midst of difficulties.

To learn more about collapse, see Ugo Bardi's main blog "Cassandra's Legacy," Ugo's blog specifically dedicated to the Seneca Effect, and Ugo Bardi's book "The Seneca Effect" (Springer 2017)

The Fisherman and the Farmer - A Tale About Overexploitation

Ilaria Perissi and Nicola Calisi playing the fisherman and his wife in a theatrical piece shown in Florence in 2017. The piece was based on the story told below (text by Ugo Bardi). The origin of this story is told here.

Once upon a time, a fisherman who lived on the shore of the lake went to visit his cousin, a farmer, who lived in the countryside.

“Cousin,” said the fisherman, “I am glad to see you and that God blessed you with a good wife and many children. But I also see that your children are thin, and they look hungry, and the same is true for your wife. I am sad at seeing that, cousin. Why don’t you make bread for your children with the grain that I saw you keep in the granary? Don’t you trust God to provide for you in the future? I can tell you that God gives me abundant fish from the lake where I fish, and my good wife and my children don’t starve.”

“Cousin,” said the farmer, “I am glad to see you, too, and I am sure that God blessed you in giving you abundant fish so that your wife and your children do not starve. But you are right when you say that my children are hungry, and it is true that we haven’t had much bread to eat. But the land sometimes gives us plenty and sometimes not so much. This year, times were more difficult than usual and the harvest was not so good as I hoped it would be. Yet, I must follow the rules that my father followed, and my grandfather before him followed, and the ancient fathers of all of us followed. And I follow these rules not because I don’t trust God to provide us with food that, but because I think that it is what God wants us to do. Every year, some seed must be kept for the new harvest and this is the seed I keep in the granary. No matter how hungry we are, this seed cannot be eaten. And that the same for everything we have: from mushrooms to the berries of the woods. Whatever we take from the land, we must not take too much of it, so that there will be more of it in the new season. And this is the way of the farmer and I will follow it.”

“And so be it, cousin,” said the fisherman, “I will go back to my family on the shore of the lake, and may God bless you and your family and keep hunger away from all of you.”

“And so be it, cousin,” said the farmer, “I wish you a good trip back home on the shore of the lake and may God bless you and your family and keep hunger away from all of you.”


Some years later, the farmer went to visit his cousin, the fisherman, who lived on the shore of the lake.


“Cousin,” said the farmer. “I am glad to see you again, but I see that your children are thin, and they look hungry, and the same is true for your wife. What happened? Why can’t you fish enough to feed your family? I remember that the last time I saw you, you told me that God had blessed you with abundant fish from the lake.”

“Cousin,” said the fisherman, “I am glad to see you again, too. And I told you the truth, some years ago, when I said that God had blessed us with plenty of fish. But since then, many fishermen have been fishing in the lake, and they all have children, just like me. And the more we keep fishing, the less fish there is in the lake. And now that the lake is almost empty of fish, we can’t feed our children.”

“But, cousin,” said the farmer, “why didn’t you and the other fishermen fish a little less when there was still plenty of fish? You should have waited for the new fish to be born, just as we farmers wait for the new harvest to grow. In this way, you wouldn’t have emptied the lake of fish and your children would not starve now.”

“Cousin,” said the fisherman, “you are right and what you are telling me is something that I thought myself. But I also thought that, if I fished less, then the other fishermen would catch the fish that I wouldn’t catch. And I think that every fisherman thought the same and we all went fishing as often as we could, and we fished as much as we could until there was almost no more fish in the lake because we fish the young fish just as the old. And now we don’t have much food to feed our children, but we still must follow the way of the fisherman, as my father did, and his father, and the ancestors of all of us. And this way is to fish and to keep fishing and hope that God will keep hunger away from us and from our families.”

“And so be it, cousin,” said the farmer, “I will pray God for you that He may keep hunger away from you and from your family. But I am afraid that God may not help those who caused their own ruin.”

“And so be it, cousin,” said the fisherman, “and I thank you for your prayers although it may well be that God will not help those who caused their own ruin. But I wish that God will help you and the other farmers who wisely keep the seed of the present harvest for the future harvest.



Below, the announcement of the play.

The Seneca Ruin of the Dinosaurs - a Report from Berlin

The death of the dinosaurs as shown in the 1940 movie "Fantasia" by Walt Disney. An incredibly powerful and moving scene - a true Seneca ruin for the poor creatures walking in a hot and dry landscape. This scene is also reasonably realistic: at that time it was already clear that heat had caused the mass extinction that killed the dinosaurs (although a branch of the group survived in the form of birds). The same threat that we face nowadays: global warming generated by an enhanced greehouse effect.

I was in Berlin on March 26th to present my book, "The Seneca Effect" to the Urania Scientific Society. It was not a presentation for scientists but for the general public and I decided to have some fun by presenting an assorted series of catastrophes. That included the demise of the dinosaurs, showing a scene from Disney's "Fantasia" movie, and the nearly obligatory scene of the collapse of the towers of the world trade center.

Of course, my talk was not just a list of collapses, one after the other. I tried to highlight the physical reasons behind the catastrophes, how the collapse of complex systems tends to follow some laws, although it cannot be described in terms of simple mathematical equations. The basic theme of the book is that there is a common core in all these cases and that the collapse of social systems, such as the Roman Empire, can be described in terms similar to those of the blowing up of a balloon.

Not everybody agrees with me on this point, some people say that humans are different, they are masters of their destiny, and that human ingenuity can overcome the laws of physics - at least in some cases. I agree that it is a controversial point, but I noted that my talk was well received by an audience of nearly 100 persons - not bad for a Monday evening (and they had to pay a ticket, too!). Germany is one of the few countries in the world where you can still discuss matters such as mineral depletion and the concept of resource overexploitation. With the exception of France, in the rest of the Western world it seems to me that these matters are by now taboo. Not really forbidden, but actively marginalized and ignored.

There was also a lively discussion after my talk. It is always a pleasure to note how Germany has maintained at least something of the inheritance of a great man as Alexander Von Humboldt, today nearly forgotten everywhere else in the world. But Humboldt had caught not only the infinite variety but also the beauty of complex, natural systems.

Berlin is also a lively city and I found the time for a rapid visit to the aquarium. I've always loved aquariums, but I went there also for professional reasons. As you know, we have been studying the overexploitation of fisheries as examples of the collapse of economic systems and it was curious to note how the ongoing destruction of the fisheries is having consequences also on what's being shown in aquariums. Here is a picture of me looking at a tank of jellyfish.

I was amazed: it was the first time I saw live jellyfish in a tank. I don't think they were shown in aquariums until recent times, but now their population has exploded as the result of the destruction of their predators, fish. So, they seem to be appearing also in aquariums. From the viewpoint of jellyfish, humans must look like benevolent deities, even though that doesn't save us from being stung when we swim in the sea.

Jellyfish are eerie, beautiful creatures, but also the prototypical image of the "alien". They are not yet big enough that they can attack submarines but, if things keep going the way they have been going, who knows? The world seems to be changing faster and faster, and this may not be a good thing.

To conclude, a little satori on my part, when I saw this sign on the door of the bathroom of my hotel room, in Berlin. After seeing this n-th invitation (all hotels have it) to save the world by having my towels washed a little less often, I concluded that we'll never make it. Humboldt, Jellyfish, Seneca, dinosaurs, or whatever, it is always greenwashing that wins.

The Soft Belly of The Oil Industry: an Upcoming Seneca Collapse?

Ugo Bardi explains his idea of an impending "Seneca Collapse" of the world's oil industry at the session on climate change of the meeting of the Club of Rome in Vienna, on 10 Nov 2017. What follows are not the exact words said, but a text which maintains the gist of this brief comment. It was focused on the concept that the oil industry has a "soft belly" in the fact that it produces mainly fuel for engines used for transportation. If this market were reduced by the introduction of electric vehicles and other transportation innovations, the whole industry could collapse. That would be a good thing for the earth's ecosystem and for humankind in general.

Dear colleagues, we are having an interesting discussion on how to stop climate change and I think I could add some thoughts of mine on the basis of my recent work that I published in the form of the book titled "The Seneca Effect". 

The problem we have been discussing is how to limit emissions and we saw that it needs to be done fast and even drastically if we want to avoid the worse effects of climate change. Obviously, it is not easy. (image from Skeptical Science) 

Most of what has been said today was based on a "top-down" approach, which I may also describe as supply-limiting. That is, we are speaking of a carbon tax, of emission limits, and the like; measures that governments should take in order to limit the production of fossil fuels. I don't have to tell you that it is an effort that has been ongoing for several years and yet emissions keep growing. It doesn't seem to work

So,  can we take the opposite approach? That is, look at the demand side in a "bottom-up" approach? 

To discuss this point, let me introduce the concept of the "Seneca Effect" or the "Seneca Cliff." Here is the shape of the Seneca curve. 

You know that I use the term of "Seneca Effect" taking inspiration from something that the Roman philosopher Seneca said long ago; "growth is sluggish but ruin is rapid". And you see how the curve looks like the projections for emission reductions we have been seeing here. 

So, the question is, what causes the collapse we see in the Seneca Curve in complex systems? Well, we can use system dynamics to model the collapse and we know it is not a "top-down" effect, nobody from outside forces the system to collapse. It is a very general phenomenon caused by the interactions of the various elements that compose the system which cooperate to bring it down. And that's a trick that can be exploited: as I say in my book, "The Seneca Effect", collapse is not a bug, it is a feature. 

Let me see to explain it using the oil industry as an example: see the figure drawn on the board. 

Now, you see the segmented line I drew, it keeps going up. It is what the oil companies expect for the future. Their projections, by Exxon for instance, say this: given sufficient investments, we can keep growing the oil production for a number of years, maybe a decade or more. 

That's what they have been doing; despite various dire warnings, the oil industry has been able to keep production growing. It is true that conventional oil ("crude") peaked at some moment between 2005 and 2010, but it didn't really decline. Then, the production of "all liquids" kept growing by exploiting other sources such as shale oil. 

Of course, the problem is that if the industry continues to make an all-out effort to increase, or at least maintain, production, all we were saying about the need of reducing emissions goes out of the smokestack. Forget about keeping warming below 2 degrees. It would be a disaster. 

But look at the Seneca curve in the graph. It would generate more or less the kind of rapidly declining production curve we need for our future survival.

The oil industry doesn't predict anything like that, but it is vulnerable, very vulnerable. The industry has a "soft belly:" the collapse of the demand. That is, we don't need governments to enact draconian regulations: if the market for a product disappears, then the industry producing it will disappear. Can it happen? Yes, it can.

The key point of the oil industry's vulnerability is in the need of large investments to keep the whole thing moving. Facing increasing production costs, they have been able to survive by growing and exploiting economies of scale. This has been possible because investors thought they were investing in a growing industry. 

But things have been changing and the market of the oil industry is at risk. Consider that typically a good 50% of the oil industry production is gasoline. To this, you may add about 20% of diesel fuel and the result is that some 70% of the output of the industry is for internal combustion engines used for transportation. 

So far, this has been a growing market, but the electric transportation revolution is coming, and not just that. There is a whole systemic change under the concept of "Transportation as a Service" (TAAS). The combination of the diffusion of electric vehicles and the optimization of the system may rapidly reduce the demand for gasoline and diesel fuel.

We don't need a large reduction in the demand for transportation fuels to generate a spiral of decline for the oil industry. Less demand means less production, less production means the loss of economies of scale, and the loss of the economies of scale means higher costs that translate into higher prices which also depress the demand. And so it goes until it reaches the bottom. 

As Lucius Annaeus Seneca said, long ago, "ruin is rapid". And the ruin of the oil industry is not a bad thing for the earth's ecosystem and for us all. 

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Notes: 

- According to this interpretation, Elon Musk is the most subversive person in the world. Also, the most subversive thing you can do, nowadays, is to buy an electric car. In my case, I drive an electric motorcycle although I must confess that I still have and drive an old hybrid, not yet a fully electric car. I hope to be able to do better in the near future.

- Did you ever ask yourself why Elon Musk and his company, Tesla, are so ferociously and continuously attacked everywhere? Well, read the note above and you'll understand. 

- The "soft belly" phenomenon described here is relative to the oil industry, but it doesn't apply to the other two sectors of the fossil fuel production: coal and gas, which produce mainly electricity, not fuel. At least, it could avoid the true catastrophe that would occur if someone were to decide to move toward technologies such as "coal to liquids" and "gas to liquids."

- A similar concept to the one discussed here, demand management ("bottom-up) as superior to supply management ("top-down") has been described by Carolyn Hansen and Raj Thamotheram in a recent draft article which appeared on linkedin.