

Ask HN: What does HN think of economic collapse? - keizo

I'm curious what this community thinks about a possible (inevitable?) economic collapse, peak oil, end of civilization, etc..<p>Personally I am not really all that informed, but people close to me are really beginning to structure their lives around this possibility.  Moving into more rural areas, getting off the grid, setting up water-catchment, and growing more of their own food.  They are really preparing for the worst.<p>I find myself unable to really do much for myself like they are right now, so I continue to focus on my business, building luxury items that are highly dependent on petroleum products.  I love what I do, but sometimes it's concerning when these people around me are so wrapped up preparing for collapse.<p>Are you doing anything to prepare for these types of scenarios?  Are you steering your business towards sustainability?  How do you justify your path in entrepreneurship when the growth has to stop someday?
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david927
We're certainly headed for extreme economic contraction. That means political
unrest as well. Many (really, many!) wealthy people I know or know through
others are preparing for civil unrest. From bankers in The City in London
creating places in rural Montana to a billionaire who has built a "bunker"
(his word -- although it's more a heavily-secured mansion) in Switzerland,
it's definitely concerning them enough to "insure" against it.

I don't see how it _can't_ get really ugly in the next five to ten years,
including moments of martial law. The markets are set to go through the floor.
My investiment advice is: cash + gold and silver coins in your matress.
Seriously.

But I really don't think it will get worse than that. People get romantic and
think civilization as we know it will fall apart. I don't see that happening.
I do see a violent depression coming, and then after a few years, lifting.

~~~
david927
Here's someone who says it so much better than I can:

Robert Reich

<http://www.youtube.com/watch?v=KIxXZa5Fwzc>

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aufklarung
The bailouts demonstrate that climactic politico-economical collapse will
never occur.People literally will make shit up in order to prevent the
unimaginable. This is also the fundamental lesson of Hobbesian theory of state
of nature. None of that to say we aren't undergoing a process of collapse.
It's just that it's trajectory of decline is going to be very slow and
incremental. The environment will probably collapse before we legitimately
experience politico-economic collapse. Some people can see the winds of
decline and are taking the self-sustainable route since relying on government
guaranteed quality of life will kill you first (for a long time now the
governmental allowed corporations to do us physical harm). The real question
is: are you one of those people?

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toumhi
I think about it, but I'm not to the point of buying a piece of land and
building a basement and growing a vegetable garden...

There have always been risks, before it was wars, lately the cold war or
terrorism, now peak oil, economic collapse etc.

I don't see any contradiction with being entrepreneur at the moment. Physical
growth may be limited but the demand for services is not.

If you're interested in "collapse discussions", you should check out
<http://www.reddit.com/r/collapse> (not to read if you're the worrying type
though ;-))

~~~
david927
Here's how it's different now: A lot of the progress of the 20th century was
predicated on cheap oil. With a Return on Energy (ROE is like ROI but for
energy; how much energy you get vs. how much you need to get it out) of 30 to
1, crude oil essentially still gushes from the ground.

After a certain point, even for the same reserve, that ROE drops. There's
still oil, but it's harder to get out. We'll always have oil, but we won't
have it cheaply for much longer. Converting to an alternative is possible but
it will take time and pain. And that's the sticking point. America especially
relies on a JIT inventory of trucked-in goods, cars to get to work, school,
the store, etc. The switch will be ugly.

Piggybacking on that is the long, wonderful period of growth that had us
overextend. The Great Depression also came after a period of over-extension,
but back then we had yet to tap our resources and our debt. We've tapped both
out at the start of this depression that's coming. Add to it the increased
demand for resources from China, India and the rest of the world. We're out.
Bacteria is at its greatest expansion when it hits the edge of the petri dish,
and in an instant, it's over.

I won't plant a garden or buy a gun -- I don't think it will ever be so bad --
but for a while, during the process of converting to alternate energies and
transportation mechanisms, it won't be fun.

~~~
toumhi
True. I'm not denying the fact the risks are different from past risks, the
situation is a new one indeed.

I was pointing out that there have been risks (of a different type) and there
are risks now. I still think investing in yourself by learning, pursuing
business interests is justifiable even in light of these risks.

In terms of adapting to a changing world as an individual, I think being
either self-reliant or being close to major population centres (access to
jobs, public transportation etc) are both good strategies. It might be good to
learn some martial arts, how to defend yourself, learn to live with less etc.

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tjansen
I don't think that there will be any kind of collapse, sudden peak oil or any
other sudden and drastic change of civilization. Some people are bored with
their life and want to believe in such things, but it's unrealistic to expect
that this will actually happen.

There will be, of course, change. For example, at some point we may (slowly!)
run out of oil, which would mean that oil prices will go up. But this will be
a process that runs over a decade or more. And by then there will be
alternatives, like electric cars, that allow you to live a similar life.

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davidw
Selling to survivalists is probably a great business. Doom! Gloom! Gold! Guns!
With anything sort of cultish like that, once you hook people, it's easy to
steer them further and further away from the rest of the world.

This stuff came and went in the 80ies, too. This film is a funny portrayal of
that particular brand of it:
<http://en.wikipedia.org/wiki/The_Survivors_%281983_film%29>

~~~
david927
And they can pay for it from their gold which nearly doubled in the last year
alone because everyone else is buying too.

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Mz
My dad grew up in The Great Depression and fought in both WWII and Vietnam. My
mom grew up in Germany during WWII and it's aftermath. I've done a lot of
reading and thinking on "economic collapse" type stuff. And I'm an
environmental studies major and have had a couple of classes that covered peak
oil.

First of all, even in a depression, people still need food, shelter and
clothing. The shallow end of the pool empties first. So luxury items may be an
issue but, for example, clothing didn't take as big a hit during The Great
Depression as most people would think.

Second, even during The Great Depression, there were businesses that boomed.
Second hand stores boomed. Bicycles boomed (people couldn't afford cars but
still had to get to work). Some company began selling frozen french fries (and
I want to say dehydrated onions) in supermarkets and eventually made a mint
(because they were cheaper for the end user at a time when every penny counted
-- ie they had real value for the consumer). I read his story (the founder's
story) and it was fascinating.

When he was a kid (teen), there was a glut of pigs on the market, so farmer's
were killing piglets. It wasn't worth raising them. He went around and offered
to take piglets off their hands for free and got a bunch of piglets for free.
He had no resources so he would go hunting for wild horses or whatever to feed
them. He managed to make it through the few months it took to raise them -- he
managed to keep them all fed somehow. And the next year, low and behold, there
was a pig shortage. Why? Because the farmers had all been killing their
piglets the year before. So he made a lot of money for a kid because he got
the pigs for free, worked to feed them (rather than spending money to feed
them) and sold at a premium. And he later went into business.

I believe in peak oil and I think it's a serious issue. But I don't think it's
an end of the world issue. It's just an end of our current culture issue.
(Favorite song line: "It's the end of the world as we know it. And I feel
fine.") Current culture is constantly in the process of "dying" -- and
something else is constantly in the process of being born to replace it. I
wish people would quit wigging out about that.

I have given up my car, in part because I believe in peak oil but mostly I
couldn't afford both my rent and my car and I decided I would rather walk to
work than live out of my car or move back in with family. I don't expect to go
back to owning a car, which is rooted in health issues that have benefited
tremendously from being carless. So I basically think, yeah, we could all
stand to make some lifestyle changes which will be more peak-oil-friendly. But
those lifestyle changes should be ones that make sense for us as individuals,
not driven by fear. My choice to be carless and remain carless is in line with
my belief that peak oil is an issue but it is not driven by that. It was
driven by real issues in my own life -- which is as it should be. So I don't
think that making decisions to solve your own problems in a way that takes
into account the whole peak oil thing actually means we all need to move out
to the country, buy a shot gun, stock gold, and start a garden. My future may
well include a more rural location and a garden. If living in a rural location
makes having a shot gun a logical thing to do, it might even include a shot
gun. So my future might resemble some of those details, but not in a
hysterical "head for the hills, the martians are coming" sort of manner.

Well, I have to go get ready for work. So my editing is done, whether the post
is polished or not.

Later.

~~~
hga
The guy with the great story of bootstraping himself with pigs and whatever he
could feed them and then eventually becoming the frozen french fry king (an
important secret to McDonald's success, his were consistent)is J. R. Simplot:
<http://en.wikipedia.org/wiki/J._R._Simplot> ; George Gilder celebrates him in
a book where he ends up being one of the Micron investors.

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paulcapelli
Any scenario in any year is unlikely, but if you aggregate a bunch of long-
tail scenarios and take a 40-year time horizon, it becomes worth dealing with.

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qubit
For a fascinating take on the subject, I recommend "Industrial Society and its
Future" by Ted Kaczynski.

