In this talk from the @Google Authors Lecture Series, Dr. Jeremy Rifkin discusses the ideas in his new book The Empathic Civilization: The Race to Global Consciousness in a World in Crisis. It's a massive work of over 600 pages that looks at the emerging view in the biological and cognitive science human nature is empathic based and then recasts human history in that light.

Dr. Rifkin begins his talk with this thesis, one which I largely share:

I believe that we may be at a seminal turning point in the history of our species on this planet. Sounds melodramatic and I won't be here to see it but many of the young people in this room may be a decisive generation. Species come and go. We had two events in the last eighteen months which signal the end game of a great industrial age propelled by fossil fuels that gave us one of the great short-lived civilizations in history.

July 2008, you recall that oil hit $147 dollars a barrel on world markets. Prices soared, inflation roared. Basic items became prohibitively expensive around the world from groceries to gasoline. There were food riots in 30 countries. Purchasing power plummeted at $147 dollars a barrel all over the world. The entire economic engine of the industrial revolution turned off at $147 a barrel. That was the economic meltdown. That was the earthquake.

The collapse of the financial markets sixty days later, that was the aftershock. G-20, G-8, G-2, our world leaders have not yet come to grips with what is really happening to the global economy.

Our fossil fuel energies are sunsetting. Their S-curve is exhausted and the entire infrastructure of this civilization is embedded in the carbon deposits of the Jurassic Age. Our agricultural food is grown in petrochemical fertilizers and pesticides. Almost all of our pharmaceutical products are still fossil fuel based, most of our clothes, the entire construction infrastructure of our civilization is fossil fuel based, our power, transport, our heat, our light, our logistics, our supply chain.

What we are seeing is the sunsetting of these energies and the life-support of the infrastructure built on it. That's what we haven't yet come to grips with.

The reason that this is happening is what I call Peak Globalization [that occurred] at a $147 a barrel. There is something called peak oil per capita not to be confused with peak oil production. They are two different things.

Peak oil per capita actually occurred over thirty years ago in 1979 at the height of the second industrial revolution. In that year, if we had distributed all the oil reserves we knew had in to each person on the planet at that time fairly and equitably that would the most oil that each person could have. We have found more oil since then but population grows quicker so if we distribute all the oil we have there's less to go around per person.

There's a lot to chew on in those introductory remarks. I've started reading the book - I am only about a fifth of the way through - but it's clear that the book's clarion call that we must act now before we descend into a madness unlike any ever faced by humanity overwhelms us is a message that needs to get out.

I could take this post in a number of different directions and I suspect that I will in future return to many of the ideas that Dr. Rifkin is bringing to the floor. But for now, let me tackle his idea of peak globalization. Here's how he describes the phenomenon is his book:

We now face a new phenomenon. It's called "peak globalization" and it occurred at around $147 per barrel. Beyond this point, inflation creates a firewall to continued economic growth, pushing the global economy back down to toward zero growth. It is only with the contraction of the global economy that the price of energy falls of the result of less energy use.

The importance of "peak globalization" can't be overemphasized. The underlying assumption of globalization has been that plentiful and cheap oil allows companies to move capital to cheap labor markets, where food and manufactured goods can be produced at minimum expense and at high profit margins and then shipped abroad. This core assumption has disintegrated.

To understand how we got to this point, we need to go back and revisit 1979, the year that global oil per capita peaked, according to a study done by the British oil company BP. When China and India began their dramatic economic growth in the 1990s, their demand for oil skyrocketed. Demand began to outstrip supply and the price of oil began to climb. With less oil potentially available for every human being, efforts to bring one-third of the human race - the combined population of China and India - into an oil-based Second Industrial Revolution have come up against a limited supply of oil. In other words, demand pressure of a growing human population against finite oil reserves inevitably pushes the price up, and when oil hits $147 per barrel, inflation becomes so powerful that it acts as a drag on further economic growth and the global economy contracts.

If ignorance is bliss, then knowledge is downright depressing. I am thankful that by 2050, I won't be around to see how this all comes down but ours is a civilization built on a house of fossil fuel cards. I'm not optimistic that we will be ultimately capable of successfully maintaining human population at present levels. In fact, I suspect that a hundred years from now human population on the planet will be a fraction of our current numbers perhaps 800 to 900 million on the low end to some 3 billion or thereabouts on the high end. Given that we are nearing the 7 billion people mark, that's quite a challenge. I fear that the most probable outcome is a series of resources wars over energy but also over vital human necessities such as water. 

Economic revolutions in history have been based on the ability to tap new energy. Economic revolutions are also a population revolution. Ours began on August 27, 1859 when Colonel Edwin Drake drilled the first successful oil well in Tutusville, Pennsylvania and ushered in the Age of Oil. The Age of Oil will not endure. Already just a 150 years into it, we are seeing the endline but there is little question that oil has remade our world. That magical string of hydrocarbons allows to live on this planet in numbers otherwise not possible. If not for oil, at least 40 percent, probably more on the order of 60 to 70 percent of us would not be here. It is oil that has made our civilization possible not just in its scope but in our numbers. In 1850, the world's population was around 1.2 billion having risen by 35% over the previous century as the fruits of the first Industrial Revolution built on coal and steam power took hold. But our takeoff is highly correlated to the advent of the oil economy. In 1927, we topped 2 billion; in 1960, the year of my birth, we hit 3 billion; in 1975, we surpassed 4 billion; in 1988, we topped 5 billion; and by 1999  there was six billion of us. Humanity will top the seven billion mark sometime in 2011. There is no question that solving our energy riddle is the paramount question for the upcoming century.

Back on October 8th 2008, before I joined MyDD, I pondered the same questions that Rifkin is addressing: have we reached the end of globalization?. I wrote then:

Globalization is not an easy term to define. Globalization is a word that has several connotations today. But broadly speaking, it is a process which began around the late 1970s, by the shift in world economy from an international to a more global one. In the international economy, individuals and firms from different countries traded goods and services across national boundaries, and the trade was closely regulated by nation-states. In the global economy, goods and services are produced and marketed by an oligopolistic web of global corporate networks whose operations, although spanning several national boundaries, are only loosely regulated by nation-states. It is also a process made possible by cheap energy.

In a profound sense, I am a product of globalization and it's hard to knock something that created you. But I have never been indifferent to the rather mixed results that globalization has wrought in socio-economic terms. When it comes to globalization, I am more a critic than a fan but I do have feet in both camps. But this post isn't really about that subject because frankly that aspect of globalization might take a year or more to write. This post considers if we have reached the end of globalization as political force as the world economy tumbles.

One of the dramatic developments this weekend was the failure of Nicholas Sarkozy to get the European Union to act in concert over the spreading financial contagion in European capital and credit markets. By Monday, it was clear that member states would act in their own self-interest as Germany, the largest economy in the Eurozone, acted to save its banking system unilaterally. This is not without historical precedent. One of the lessons of the Great Crash of 1929 was that in the midst of that great economic crisis, countries generally retreated from the world economy enacting all sorts of trade barriers that ultimately prolonged the Great Depression. Lessons were learned and a system after the Second World War was put in place to ensure global dialogue and cooperation in times of economic crisis. The Breton Woods agreement, the World Bank, the IMF, the OECD, the European Union and GATT-WTO (from the Cancun to the Uruguay to the Doha rounds) are all part of this system. And this system is certainly under duress. Mention the term WTO in a leftist circle and watch the epithets flow. American conservatives aren't too fond of the WTO either seeing everything as some conspiracy towards world government. The more sane among us, of course, can point to pluses and minuses. Economics is, after all, about trade-offs.

My own view is that globalization is ultimately tied to energy. If we can't solve our energy crisis then it is likely not going to be a model going forward simply because it can't. To move what we what we move across the global simply requires cheap energy. And corporations who have fashioned a global supply chain are likely to reconsider that move as energy costs surpass labour costs. I don't think we have reached that point and I'm not sure we will in my lifetime but I am pretty sure that the peak oil phemonenon will lead to a new economic paradigm, one more based on regionalism than on globalism, a continental shift if you will. And it's quite possible that the profound economic changes as yet unleashed will recreate the political map of the world. Paul Saffo, a Professor at Stanford and a futurist, for example argues that there is a one in two chance in that by 2050 the United States will no longer exist as a unified political entity having broken up to supra-regional city-states.

I've been meaning to write a post on the global risks for 2010. I've been struck by the views of several economists and geo-political observers that seem to be concurring around two points. The first is the return of global oil prices to over $100 a barrel. While Dr. Rifkin talks about the $147 mark in his chat and his book, that level was the high water mark. The reality is that the stress to the global system, if one takes inflationary pressures as a warning sign, began earlier. Though many economists now seem to fear $100 barrel mark, I suspect that the level is more around $80-$85 a barrel. That's when inflationary pressures seem to have gotten ignited.

Oil crossed the $100 per barrel threshold in January 2008 but by then inflationary pressures were already evident. The clearest indication of early trouble came in the developing world where food inflation lead to food riots. Between 2006 and 2008 average world prices for rice rose by 217 percent, wheat by 136 percent, corn by 125 percent and soybeans by 107 percent. Food riots were reported in the Indian state of West Bengal in November 2007 over shortages of food when oil began to creep above $90.

The price of oil today climbed toward $75 a barrel. Now here's what worries me: there has been a spike in food inflation in India. Overall, food prices in India in December 2009 climbed 7.3 percent but an index measuring wholesale prices of lentils, rice, vegetables and other food articles compiled by the Indian Commerce Ministry increased 17.56 percent in the week to Jan. 23 from a year earlier, following a 17.4 percent gain the previous week. Food inflation reached 19.95 percent in the week to Dec. 5, the fastest pace since December 1998. My sense is the Indian food inflation is a leading global economic indicator.

The second global risk that is increasingly mentioned with great trepidation is the growing political paralysis of the United States. Oddly enough, the World Economic Forum 2010 Global Risks, which is published in advance of the conference, did not mention it. But it was the talk of the Davos 2010 forum. Here is he who thought the world was flat in an act of a partial mea culpa:

As a political barometer, the Davos World Economic Forum usually offers up some revealing indicators of the global mood, and this year is no exception. I heard of a phrase being bandied about here by non-Americans — about the United States — that I can honestly say I’ve never heard before: “political instability.”

“Political instability” was a phrase normally reserved for countries like Russia or Iran or Honduras. But now, an American businessman here remarked to me, “people ask me about ‘political instability’ in the U.S. We’ve become unpredictable to the world.”

Mind you, people at international conferences love to criticize America, poke fun at America and complain about America. It is the only global sport more popular than soccer. But in the past, it was always done knowing that America was this global bedrock that could always be counted upon to lead. But this year is different. This year, Asians and Europeans, in particular, pull you aside and ask you some version of: “Tell me, what’s going on in your country?”

We’re making people nervous.

At a time when American leadership is sorely needed, American politics has descended into a cauldron of partisanship. Not that there is ever a good time to throw the equivalent of a political hissy fit, but now is clearly not the time.

@Google Notes
The Empathic Civilization is the first book to explore how empathetic consciousness restructures the ways we organize our personal lives, approach knowledge, pursue science and technology, conduct commerce and governance, and orchestrate civil society. The development of this empathetic consciousness is essential to creating a future where we think and behave like the whole world matter.

Jeremy Rifkin is president of the Foundation on Economic Trends and the author of seventeen bestselling books on the impact of scientific and technological changes on the economy, the workforce, society, and the environment. One of the most popular social thinkers of our time, Rifkin is the bestselling author of The European Dream, The Hydrogen Economy, The Age of Access, The Biotech Century, and The End of Work.

This talk is part of the @Google Lecture Series. It took place on January 25, 2010.

I'm also curious to see what people know or assume about global trade patterns. Please take a moment and answer the question below.