Think of this as Volume 16, Number 41 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.
You wouldn't have wanted to go there. We're talking no social safety net, people living in shantytowns, and starving. We're talking 32% unemployment at a time when women didn't work outside the home. We're talking social unrest and the almost-universal feeling that democracy was doomed (DOOMED!), that only the iron hand of the Left or the Right could save mankind from extinction. And then, of course, World War II.
Want to know what the 1930s were like? Look at Greece today. Greece was induced to follow the advice of the bankers, to practice extreme austerity in the face of impossible loan demands, and look what's happening. People are going hungry, and they're turning to a neo-Nazi party called the Golden Dawn for comfort. Not just as an electoral force, but as a social one, which is more ominous. Want to know where Hitler came from? Stuff like that.
Things could have easily gone that way for us, had John McCain been elected. What McCain was promising in the wake of a 1929-like crash was a great heaping helping of Hooverism. Instead we got the stimulus, we got some honest government, and while the problems aren't all fixed – too many bankers are still walking around loose – things are indeed getting better.
What we're left with is a situation more like the 1970s, something like stagflation. We're waiting for technology to create abundance while we're bouncing along the limits of scarcity. The scarcity today lies just where it did then, with fossil fuels. The answer then lay in a computing revolution that made our society much more efficient in its use of such fuels. The answer today lies in other technologies that will provide replacements for those fuels.
The most important renewable technologies involve efficiency. Anything that saves energy puts money into your pocket, and puts a thumb down on energy costs. We don't even have to do much inventing, although better engines are coming, and that will be important. But just insulating every house and factory, something that takes no ingenuity at all, can make a profound difference. People riding bikes for short trips improves health as it cuts the most inefficient uses of your car. Urban density helps, shortening commutes. This is an ongoing process, it's why real estate is actually coming back in some areas. The upper middle class is moving from suburbs 20-30 miles away from work to condos inside cities, nearer college campuses. What they don't fix, they build.
But true abundance comes from changing how we power our world. Ultimately it comes from changing from a carbon energy cycle, which can't be sustained, to a hydrogen energy cycle that can be. The way to do that is with abundant electricity from the Sun, from the wind, and from biofeedstocks like algae. (I'm still waiting for big breakthroughs in geothermal energy, but we're well along on these other paths.)
The key figures here are $1 and 50 cents. If you can deliver a hydrocarbon fuel for $1/gallon, from algae, you can make a lot of money. If you can deliver a powerplant for the Sun or the wind that delivers at 50 cents/watt, you can make a lot of money.
More important, once you do those two things it's a simple matter of wash, rinse, repeat – it's all about scaling. Renewable technologies that can outperform fossil fuels in the market can do for today's economy what PCs did back in the day. They can usher in a new age of abundance, an economy more like that of the 1980s, when energy prices were on the run and it was truly morning in America.
It won't be exactly the same. It never is. This decade is different from the 1970s in many important ways. But most of those differences are good ones. I like having the Internet, and I like seeing other bicyclists on the road. I don't feel strange today like I did then. And my kids are closer to me than I was to my own parents, in many important ways. I've been very fortunate.
The point is my kids will be more fortunate. Because energy abundance is the future, and while that future holds immense challenges, abundance can meet them.