May 2, 2009

From financial crisis to global catastrophe

Posted by in categories: economics, existential risks

From financial crisis to global catastrophe

Financial crisis which manifested in the 2008 (but started much earlier) has led to discussion in alarmists circles — is this crisis the beginning of the final sunset of mankind? In this article we will not consider the view that the crisis will suddenly disappear and everything returns to its own as trivial and in my opinion false. Transition of the crisis into the global catastrophe emerged the following perspective:
1) The crisis is the beginning of long slump (E. Yudkowsky term), which gradually lead mankind to a new Middle Ages. This point of view is supported by proponents of Peak Oil theory, who believe that recently was passed peak of production of liquid fuels, and since that time, the number of oil production begins to drop a few percent each year, according to bell curve, and that fossil fuel is a necessary resource for the existence of modern civilization, which will not be able to switch to alternative energy sources. They see the current financial crisis as a direct consequence of high oil prices, which brace immoderate consumption. The maintenance is the point of view is the of «The peak all theory», which shows that not only oil but also the other half of the required resources of modern civilization will be exhausted in the next quarter of century. (Note that the possibility of replacing some of resources with other leads to that peaks of each resource flag to one moment in time.) Finally, there is a theory of the «peak demand» — namely, that in circumstances where the goods produced more then effective demand, the production in general is not fit, which includes the deflationary spiral that could last indefinitely.
2) Another view is that the financial crisis will inevitably lead to a geopolitical crisis, and then to nuclear war. This view can be reinforced by the analogy between the Great Depression and novadays. The Great Depression ended with the start of the Second World War. But this view is considering nuclear war as the inevitable end of human existence, which is not necessarily true.
3) In the article “Scaling law of the biological evolution and the hypothesis of the self-consistent Galaxy origin of life”. (Advances in Space Research V.36 (2005), P.220–225” http://dec1.sinp.msu.ru/~panov/ASR_Panov_Life.pdf) Russian scientist A. D. Panov showed that the crises in the history of humanity became more frequent in curse of history. Each crisis is linked with the destruction of some old political system, and with the creation principle technological innovation at the exit from the crisis. 1830 technological revolution lead to industrial world (but peak of crisis was of course near 1815 – Waterloo, eruption of Tambora, Byron on the Geneva lake create new genre with Shelly and her Frankeshtain.) One such crisis happened in 1945 (dated 1950 in Panov’s paper – as a date of not the beginning of the crisis, but a date of exit from it and creation of new reality) when the collapse of fascism occurred and arose computers, rockets and atomic bomb, and bipolar world. An important feature of these crises is that they follow a simple law: namely, the next crisis is separated from the preceding interval of time to 2.67+/- 0.15 shorter. The last such crisis occurred in the vicinity of 1991 (1994 if use Panov’s formula from the article), when the USSR broke up and began the march of the Internet. However, the schedule of crisis lies on the hyperbole that comes to the singularity in the region in 2020 (Panov gave estimate 2004+/-15, but information about 1991 crisis allows to sharpen the estimate). If this trend continues to operate, the next crisis must come after 17 years from 1991 , in 2008, and another- even after 6.5 years in 2014 and then the next in 2016 and so on. Naturally it is desirable to compare the Panov’s forecast and the current financial crisis.
Current crisis seems to change world politically and technologically, so it fit to Panov’s theory which predict it with high accuracy long before. (At least at 2005 – but as I now Panov do not compare this crisis with his theory.) But if we agree with Panov’s theory we should not expect global catastrophe now, but only near 2020. So we have long way to it with many crisises which will be painful but not final.
The beginning of the current economic crisis is accompanied by talks about the need to reform the present political system, one line of these ideas is that this system should be more global (the idea of issuing the world money) and a «socialist» (i.e., with higher levels of state control, care about poor people and limits to the free market).
Another trend is the growth of creeping protectionism and hostility of all nations in all, and the loss of the role of sole superpower of United States. As a result, there may be a «multi-polar world», where all are against all, there is no single center, as the currency is gold, but a manifold of unstable blocks, each of whom claimed to be in the club of «poles» (and develops appropriate attributes – i.e. nuclear weapons: Iran, etc.) Some people think that the world looked such near the beginning of the World War I.
Finally, it could be a world in which interactions are not public, but networking.
Thus, you can see three future world orders: the socialist world, a world-anarchist (multipolar) and the network. You can also assume that if one of them is implemented now, the other will appear after 2018 Panov’s crisis or vice versa.
I have already expressed the view that the way out of this crisis is possible only through the growth of some new technologies and consumption. There is no sense in America to revive the construction and automobile – the amount of already built homes and cars is enough for next 10 years, even if completely halt production. That is why the old economy cannot be restarted.
New technologies mean new areas of consumption, that is, demand will start with them: it must be something in which there is a real need for and the production of which can take the whole industry. First of all, it should call the market of medical implants (eg, fully autonomous hearts Abiocor) and medicine in general — the health and lives of people is enormous pent-up demand. Necessary medical technology has matured, but is artificially constrained by long timelines and approval of new hardware devices and the lack of advertising. (But swine flu could change it.)
Another possible market is that market of household robot servants — but it is still more remote, because the AI system to control such robots are not yet quite mature.
Third market is arms market. In the case of aggravation of the situation in the world, especially in the transition to a multipolar world, the demand for weapons will increase. Finally, will appear market of new technologies of energy production. Their development depends on the will of Obama and oil prices.
From the perspective of a new technology that allows for this technological breakthrough, I expect from the crisis of 2010 the following emergence of pre-threshold artificial intelligence. These systems will not be able neither to self-evolving nor to pass Turing test, but they will be able to understand much of human speech and navigate in the outside world. Harbinger of such systems is Wolfram Alpha, the Laura from Microsoft, etc. In the field of nanotechnology, I look forward to creating microrobots with use of standard technology i.e. like manufacture of chips (lithograph) — but not able to self-replication, and having size of the order of less than 1 millimeter. In the medical field, you can expect a powerful system of diagnostic blood on a chip, equipped with powerful computer analysis, which can give an accurate diagnosis, regardless of the identity of the doctor, cheap genomes reading, primitive artificial life, autonomous artificial organs. There could be breakthroughs in non-traditional nuclear fusion.
More important is the question what will become a key technology that will become a banner of the era, and that will naturally evolve — as the internet has become the banner of the ages of 1990 and 2000. This should be something that could impress the imagination of people and open up fundamentally new opportunities. One such discovery could be a possible technology of recording night dreams from the brain, which will be of great importance in the entertainment industry, and the study of human psyche (for example, we could virtually explore different religious vision — that can have significant political consequences). Another option is a possible huge opening — confirmation of contacts with UFOs, or the explosive growth of quantum computers, the confirmation of human capabilities and animal telepathy.
So, if we follow the Panov’s model, the current economic crisis should be replaced by a new phase of growth (though, in terms of nominal GDP and the prices of homes the decline could continue) and even the relatively stable plateau on which civilization will stay for about 6 years.
New growth is possible in two cases – first is if the crisis peacefully reach its bottom, what should be destroyed, will burn, and the new needs and technologies will create new economy on the ruins of the old. This, of course, is the best scenario. It probably corresponds to the creation of «World Socialism» (but without truly world state), but only with the world economy regulations. But this socialism hamper rapid combustion of the crisis, as not allow bust of inherently unprofitable business.
Another scenario of growth I would call the «feverish growth». It is not a healthy recovery, but an increase in temperature, «reviving» a patient. It is linked with the growth of the military orders in a rapid deterioration in the foreign policy situation. A major terrorist attack or sudden accidental war, for example, in Korea or in Iran, could spill the world over to this side of development. Height differences over who should be blamed for the economic crisis and who should pay in case of large defaults, the easing of world trade, increasing fight for the role of world leader in case of clear weakening of the current leader, and the desire to manage financial flows through fomenting wars in strange lands — all this could lead to sharply increase the arms race. (And now we should add global fight with flu pandemic – race of creating vaccine, producing masks, antivirals etc.)
In doing so, I just want to reject a peaceful scenarios of world fading. Even if all the resources have been exhausted, someone they countries will have higher levels of them than the other, and that would be unfair. So, even the exhaustion of resources should lead to an arms race. And this race will consume resources that could be spent on the creation of renewable energy sources.
It is even possible that the crisis would lead to World War and even to nuclear war. However, I believe that even if this may be true, thus paving the way from the financial crisis to global catastrophe, the main source of danger is the arms race itself. The point is that the arms race is always ahead to it in the early goal. No one in the beginning of work on nuclear bomb strived to create Doomsday machine. However, the creation of the atomic bomb opened the way to hydrogen bomb, and then appeared clear opportunity to create cobalt bomb, capable to infect entire continents and even lead to contaminated of all the Earth. From the beginning of the crisis in 1929 to the explosion of the Tsar bomb in Russia in 1961 had passed 32 years.
Similarly, now advances in the creation of military nanotechnology — that is fighting microrobots — put the world on the brink of sustainability, since the nano arms race is fundamentally unstable: first mover has advantage, and the strike can be anonymous. This distinguishes the nano-race from the nuclear race, where was a factor of mutual assured destruction (MAD).
The only version of the implementation of the doctrine of MAD in the new era is the creation of Doomsday machine — a universal defensive weapon capable of destroying the entire planet, the technical realization of which is available on different principles (biological, for example – think about mix of weaponised birds flu – which said to be created in North Korea — and smallpox). No one will attack a country possessing such weapons, and moreover, it can dictate the terms to other countries if there is a will to take risks. But this creates the conditions for intractable conflicts, where there are several parties which have a Doomsday machine and make contradicting requirements.
Another version of events, which can lead to disaster, is that the arms race or even a civil progress make weapons of mass destruction available to small terrorist groups.
So, my conclusion is that we should not fear the depletion of resources and a new world war, but unintended consequences of deploying new arms race in the world of rapidly evolving technologies.
This present crisis is clearly a point of breakthrough in the development of civilization, not death, but the peak of its development, after which the destructive trends are beginning to take precedence over creative. But the destructive tendencies may take the form not of slowing down, but of the rapid growth (for example, the number of contaminated or hazardous technological breakthroughs with unknown consequences). All the same, I do not expect the final death in the next few years, although are possible horrific catastrophe like series* of pandemic influenza and nuclear war.

* We should not expect that there will be only one pandemic of flu (even within each there are a few waves of a pandemic, that is, different mutations of the virus with different characteristics). The number of pandemics of influenza in a sense is determined by simple combinatorics. It depends on the number of bioreactors in which the synthesis of new viruses is happen (ie, pigs — in this sense, the idea altogether slain all pigs on the planet seems reasonable), and the number of different sorts of viruses. From the latter dependence is factorial that is very fast growing. (And after each pandemic amount of sorts of viruses suitable for further recombination, IMHO, will become larger). The population of pigs is also growing very rapidly, as it is relatively cheap meat for the developing countries. (This is my opinion based on reading flutrackers forum.)

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Comments — comments are now closed.

  1. Humans says:

    Mega Disasters simulates how our modern cities might hold up in the face of some very old global catastrophes. Humans

  2. Sean Taylor says:

    Very interesting post…I would like to add that if we look at how much the world changed from 1939 to 1945, or even if we go all the way back to the end of the last Ice Age and the beginning of agriculture, it seems that periods of great upheaval and conflict transform human civilization much more dramatically than periods of relative stability.

    If we project forward and imagine what might happen if there is another World War, when many of the technologies you mention are unleashed and ethical restraints are lifted, we could see changes in our world that are difficult to even imagine now. Perhaps the outcome would be some kind of Singularity, evolutionary leap or cultural revolution. My feeling is that emerging technologies such as nanotech, biotech and robotics/AI are so non-linear and destabilizing that they could bring about the end of technological civilization or even life on earth, giving us the solution to Fermi’s paradox in our time.

  3. Lifeboats are important! The analysis below is for the USA, but it’s the same for Europe and the rest of the world.

    I specialize in information about lifeboats for Peak Oil. I guesstimate that the last power blackout will come about 2020 for the USA.

    Global oil production peaked in 2008 and is now declining terminally.

    Within a year or two, it is likely that oil prices will skyrocket as supply falls below demand.

    Independent studies indicate that global crude oil production is now declining from 74 million barrels per day to 60 million barrels per day by 2015. During the same time, demand will increase. Oil supplies will be even tighter for the U.S. As oil producing nations consume more and more oil domestically they will export less and less. Because demand is high in China, India, the Middle East, and other oil producing nations, once global oil production begins to decline, demand will always be higher than supply. And since the U.S. represents one fourth of global oil demand, whatever oil we conserve will be consumed elsewhere. Thus, conservation in the U.S. will not slow oil depletion rates significantly.

    Alternatives will not even begin to fill the gap. There is no plan nor capital for a so-called electric economy. And most alternatives yield electric power, but we need liquid fuels for tractors/combines, 18 wheel trucks, trains, ships, and mining equipment. The independent scientists of the Energy Watch Group conclude in a 2007 report titled: “Peak Oil Could Trigger Meltdown of Society:”

    “By 2020, and even more by 2030, global oil supply will be dramatically lower. This will create a supply gap which can hardly be closed by growing contributions from other fossil, nuclear or alternative energy sources in this time frame.”

    With increasing costs for gasoline and diesel, along with declining taxes and declining gasoline tax revenues, states and local governments will eventually have to cut staff and curtail highway maintenance. Eventually, gasoline stations will close, and state and local highway workers won’t be able to get to work. We are facing the collapse of the highways that depend on diesel and gasoline powered trucks for bridge maintenance, culvert cleaning to avoid road washouts, snow plowing, and roadbed and surface repair. When the highways fail, so will the power grid, as highways carry the parts, large transformers, steel for pylons, and high tension cables from great distances. With the highways out, there will be no food coming from far away, and without the power grid virtually nothing modern works, including home heating, pumping of gasoline and diesel, airports, communications, water supply, waste water treatment, and automated building systems.

    Documented here:

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