On November 18, 1978 over 900 members of Jim Jones’ People’s Temple cult (men, women, and children) committed suicide at a jungle complex in Guayana. This event has been immortalized in colloquial speech; conforming with dubious group behavior is known as “drinking the Kool-Aid”- an homage to the cyanide laced sports drink used in the Jonestown Massacre. While many people can make at least a vague connection between the cliché and its historical origins, the specific ideology that drove nearly 1000 people to kill themselves that day is much less well known. While calling himself a “Reverend”, and styling his organization as a “Church”, Jones was driven not by religious ideals, but by social ones. The guise of divinity was largely to reap tax benefits, lure new disciples, and keep the feds off of his case- Jones at heart was actually a radical socialist. In his own words: “"If you're born in capitalist America, racist America, fascist America, then you're born in sin.”
Fast forward more than half a century, and Jones’ anticapitalist rhetoric finds many parallels with that of climate activist Greta Thunberg and her supporters. While Jim Jones did enjoy a little bit of local political sway in the US before heading to Guayana for his grand finale, Thunberg’s movement is thoroughly mainstream and wields tremendous political power with Western policy makers. Perilously, the public is critically undereducated in the realms of energy and economics- areas that the apocalyptic climate movement has in its crosshairs. Having grown up in a world where the lights always just turn on when you hit the switch, and any economic scares are assuaged by the money printing press when all else fails, the Western public largely takes for granted the smooth functioning of these systems. Haphazard changes to them, such as the ones Greta and her ilk promote, will bring with them second and third order effects that are incalculable. Such changes are bets that count billions of human lives as their wager. If the average level of literacy in these domains does not improve rapidly, this bet will be made, and a staggering human cost will be the consequence.
Fossil fuel protesters vandalizing art in Vancouver. Are these our stewards of cvilization?
Before I stumbled upon informative content about the energy industry, my knowledge thereof was pretty much the product of just two inputs:
Being forced to watch Al Gore’s “An Inconvenient Truth” in middle school
Knowledge that burning things makes heat and smoke, which combined with point #1 left me with a vague sense that fossil fuels were probably bad.
I believe it’s safe to say that such shallow knowledge- a couple of biased data points and assumptions- is representative of the views of a significant part of the population in the West . Since mainstream media and policy makers are heavily skewed in one direction, as they are against fossil fuels, what we now have is a biased and in this case reckless artificial consensus enabled by low information. Here are just two lesser known points that should be at the forefront of the fossil fuel debate:
b) Fossil fuels- in particular natural gas- are indispensable to the modern agriculture system. Natural gas is a key input in the production of fertilizers, and other fossil fuels power the industry in countless of ways. Creating shortages of them or rushing a transition to alternatives that basically don’t exist yet will lead to famine.
When you combine just these two facts, the consequence of abandoning fossil fuels becomes clear. That is; the population currently inhabiting earth will not be supported. Any climate activist who does not address this in their lobbying is either ignorant of the fact, or indifferent to it. In either case, the willingness to sacrifice human life for the cause draws obvious parallels to Jonestown. Those most adversely affected by energy shortages and the subsequent fallout will be the poor, mainly in what is known as the “Global South”. That rich Western “progressives” can bestow upon themselves the power to decide if poor people live or die is one HELL of a hot take coming from the political left. Furthermore, when such food and energy austerity is imposed, Russia and China have proven ready and willing to provide support to these developing nations. Thus, Western policy makers can add driving nations into the arms of their adversaries as another effect of abandoning fossil fuels prematurely.
Climate crusaders when they decrease national security, starve poor people in faraway countries, and strengthen the diplomatic prestige of their geopolitical rivals
In order to achieve any drastic change to how we harness and consume energy without leaving billions of people behind, significant breakthroughs will need to be made. This is what makes Greta’s remarks on capitalism so confounding- capitalism is unrivaled in solving large, complex problems. Celebrated economist Milton Friedman puts it best here:
“The great achievements of civilization have not come from government bureaus. Einstein didn’t construct his theory under order from a bureaucrat. Henry Ford didn’t revolutionize the automobile industry that way. In the only cases in which the masses have escaped from the kind of grinding poverty you’re talking about, the only cases in recorded history, are where they have had capitalism and largely free trade. If you want to know where the masses are worse off, worst off, it’s exactly in the kinds of societies that depart from that. So that the record of history is absolutely crystal clear, that there is no alternative way so far discovered of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by the free-enterprise system.”
Aside from incentivizing the creativity needed to solve the most difficult problems, the free market is also the best system yet discovered at lowering poverty rates. The term “capitalism” to some conjures images of greedy Monopoly man-esque industrialists pillaging the earth and exploiting the poor. Capilalism is certainly far from perfect, but such a caricature is a crude oversimplification- attempts at capitalism have actually done the most to raise the living standards of the poor of the world than any other means. In an ironic twist, the Chinese Communist Party provides us with a recent example of this phenomenon. Between 1980 and the early 2000’s, they managed to lift the better part of a billion people out of poverty by allowing free market dynamics to guide their production rather than strict central planning. Another big win for capitalism was the Cold War. In many ways, that conflict was a race between superpowers in extracting productivity from their respective subjects. In the end, the West won because of the innovation and efficiency of a free market system. Considering the fact that the West is now engaged in a hybrid war with many of their old Cold War foes, it would be a rather inopportune time to abandon the system that allowed us to prevail last time, to say the least.
While Greta’s remarks about capitalism are completely misguided, she may be onto something in a very roundabout way. Socialists love to claim that the reason communism has always had such poor outcomes (understatement of the century- hundreds of millions dead) is that it has never really been implemented as Marx meant it to be. Such a case can actually be made for what we call “capitalism” today in the era of central banking and fiat currencies. The term “crony capitalism” gets thrown around, and to be fair, it fits. Free markets depend on competition to truly function and bring out the best in production. With the existence of central banks and bailouts, political connections undercut hard work and stifle the process of creative destruction in which bad decision making leads to being wiped out and capital flowing to the deserving winners. Consider the fact that only one person went to jail in the wake of the Great Financial Crisis of 2008. The GFC ruined countless lives, nobody was held to account, and the finance bros responsible for it kept their jobs- this is not capitalism. In a rather perverse plot development, the UK’s current Prime Minister Rishi Sunak cut his teeth at Goldman Sachs- an institution who were neck deep in the Mortgage Backed Security products that precipitated the GFC. With great hubris considering the track record of his former employer, Sunak is an open advocate for programmable Central Bank Digital Currencies, which would allow for unprecedented centralized control of the economy. Such centralization of control is a fundamental characteristic of communism. This trend of centralization is rampant across the West, so it is unclear what “capitalism” it is exactly that Greta wants to overthrow.
One of the cultlike characteristics of the apocalyptic climate movement is their lack of practical solutions and reliance upon platitudes as answers to complex problems. Bitcoin presents a possible solution to problems at the confluence of topics covered in this article (energy use, free market bottlenecks, climate change). A quick examination of how it might help can also provide an example of the quality of discussions that should surround such important topics, yet are glaringly absent at almost all levels.
A pretty critical fact that is largely unknown to the masses is the relationship between energy availability and the economic growth needed to keep the current system from collapsing. In a nutshell; as long as nominal GDP growth exceeds the interest rates on national debt, everything keeps working. Problem is, the most easily accessed energy gets consumed first. That means energy is getting more expensive, which makes the necessary growth that much harder to achieve, as energy is the fundamental input for virtually all economic activity. Exacerbating this stress is additional supply constraints resulting from the lobbying efforts of anti fossil fuel + nuclear activist groups. Further aggravating this is geopolitical tension with the world’s biggest energy producer, Russia, and the sabotage of the Nordstream 1+2 pipelines that were Europe’s main artery for cheap, readily available natural gas. When you put all of these factors together, it is undeniable that something has to give sooner or later. As the pseudonymous group of commentators known as Doomberg (@DoombergT on twitter) point out; economic failure on this level will spark political backlash. The pendulum may very well swing back to the right very hard, and there may not even be opportunity for another attempt at decarbonization of the economy.
So where does bitcoin come in? Aside from the peak cheap energy dynamics that has the sovereign debt system on the ropes, the advent of new technologies and in particular AI are powerful deflationary forces. Pundits across the board are forecasting massive job losses in the coming years to automation, and the forces of technology are inherently deflationary. While prices coming down are in theory good for consumers, we are trapped in a system that demands growth, or it will cease to function. Until we choose to switch to an alternative, we will be faced with artificially higher prices driven by consumption of more and more difficult to extract energy, and failure to satisfy these conditions will lead to system collapse. With its fixed supply and immutability, bitcoin is inherently deflationary and is the only digital currency that is not subject to the monetary policy shenanigans that we now need to escape from.
Unsurprisingly, the climate movement is overwhelmingly anti-bitcoin, due to the misconceptions about its energy usage. In reality, the only way bitcoin miners can compete at scale is to consume energy that would be otherwise wasted. Additionally, miners can make renewables economically viable in many instances where they may otherwise not be. Intermittency is one of the main pitfalls of renewables like wind and solar. If the wind doesn’t blow and the sun doesn’t shine, they don’t produce any energy. Conversely, if they produce a surplus of power when they are active, there is no means to store that extra energy. By stepping in as a buyer of last resort for this stranded energy, bitcoin miners can help renewables make a lot more sense from an economic perspective. Additionally, excess natural gas can be used to power generators at well sites. This incentivizes natural producers not to flare the extra gas- a win win.
The solution bitcoin offers certainly has its pros and cons, as do the different energy mixes we can choose to use, as does capitalism. There is no obvious solution to any of these problems. What there is an obvious solution for, though, is improving the level of discourse around these topics. With the availability of high quality educational content even just in podcasts, a couple hours of attention can drastically improve anyone’s energy and economic literacy. Censorship of opposition is yet another way in which the cultlike nature of Greta’s movement often reveals itself. With pejoratives like “denier” (read: heretic) attached to anyone who dare question the narrative, doing so has become something of a cancellable offense in the public eye. Hopefully the stakes of getting whatever transition happens wrong has been made clear here (see: famine and violent revolution), and with that in mind cooler heads can push back against the People’s Temple of Net Zero.
So what does drinking the Kool -Aid look like here in 2022 at the People’s Temple of Net Zero? This movement is not some fringe cult in a central American jungle commune like Jim Jones’ was. It is mainstream and in the halls of governance of the most developed nations on earth. The Kool-Aid comes in many forms. Drinking it could very well make the 900 lives lost at Jonestown look like rookie numbers.
Taking a position in the energy debate without doing some independent research? Kool Aid.
Allowing outrage to determine who holds the moral high ground? Kool-Aid.
Mainstream media as sole source of information on climate and energy? Kool-Aid.
Printing money to offset shortages in food and energy brought about by bad policy? Kool-Aid.
Thinking the India, China, and Russia will go along with Net Zero, even if they say they will? Kool-Aid.
The idea that the wealth gap is unique to capitalism? Kool-Aid.
No awareness of communism’s track record? Kool-Aid.
No understanding of the tradeoffs of nuclear power? Kool-Aid.
Allowing the people who keep causing financial crises to implement Central Bank Digital Currencies? Kool Aid.
Dismissing Bitcoin because of price volatility? Kool Aid.
We stand at a remarkable point in history where changes for the better can easily be made with technologies that already exist. Alternatively, we can let misanthropic culture warriors throw away decades or even centuries of progress at great human cost. My advice? Don’t drink the Kool-Aid.
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The People's Temple of Net Zero
Great piece and totally agree.