The theft of perfectly functional manufactured goods for scrap value has become a serious issue over the past decade. The number of stories of small to medium scale theft, primarily of copper, has gone from rarity to ubiquitous. The United States Federal Bureau of Investigation has declared copper theft a critical threat to infrastructure. The size of the problem has grown because the recovered value of many easily recycled raw materials is exceeds the risk of getting caught.
This can be generalized. If raw materials aren’t cheap relative to wages, civilization collapses by dismantling itself. This is a grave matter, and I find the implications profound.
I consider myself an environmentalist. I’ve always believed that one way to build a more environmentally responsible economy was to factor in the “true” cost of extracting resources from the natural environment — despite never having come up with any practical ideas as to how such a cost could be established. Under such a scheme, all raw materials would be significantly more expensive. But the baseline for measuring “expensive” has to be wages. So there’s a deeply fundamental flaw in my belief, namely that it leads to the self destruction of civilization. My simplistic prescription is now completely trashed and a new model is required, because the status quo doesn’t work either.
On the other hand I have always been at odds with much of the environmental movement, in that I grudgingly advocate nuclear power. Not because I think it’s clean and wonderful and cheap, but because it looks like the only way we can bridge from fossil fuels to something sustainable without the catastrophic collapse of civilization.1
I mention energy here because it is a big factor in the cost of production and distribution of raw materials. As time passes, we need to go farther, dig deeper, and expend more energy to extract them, so energy is not only a significant cost factor but rising faster relative to other costs. Mining is one of those places where nuclear seems problematic. Having some mining company build a reactor in a remote part of a third world country just to operate a mine seems foolish at best, and a formula for either future environmental disasters or the proliferation of nuclear weapons at worst.
Even in politically stable populated areas, building a couple of hundred nuclear reactors is a much less adequate “bridge solution” than I had hoped. To put it bluntly, there’s no point in having a few terawatt hours of nuclear energy available if someone keeps tearing down the transmission lines for scrap. For that matter it won’t matter if that power is generated by the cleanest imaginable source. If infrastructure is constantly under attack, reliable energy could easily mean small scale generation in well defended fiefdoms.
I wish I had a solution for this one, even one that’s overly simplistic. 2010 should go down in history as the year dire predictions of the cost of climate change started to swing rapidly from radical wing-nut environmentalist overstatements to brutally underestimated realities. It would be nice if 2011 was marked as the year policy makers started to get a grasp of the magnitude of the threats posed by more costly energy and moved urgently to address the problem. We should now be on the equivalent of a war footing, dedicating the bulk of our fiscal, intellectual, and physical resources to solve these problems. Inexpensive energy is axiomatic to the current structure of our society. If we fail to find a way to generate it, our social structures will undergo major upheaval. Major upheaval is never good.
Instead, we remain complacent. The probability of defeat rises with each day; the cost of victory increases exponentially. It is a time for activism. Call your local politician and remind him or her that there are no elections in feudal societies.
1. For the record I don’t particularly enjoy doom-saying by sticking “collapse” and “civilization” together. I just happen to think that the problem is that serious.
Good post. Very much enjoyed it. As you can see, Paul and I have been digging into this subject over the past few weeks, and we published the results today. There’s an array of very-large issues at play here. One irony: the historic belief in substitution, material upgrading, innovation, and transition to other natural resources (and energy resources) as a result of the price trigger is not as smooth, or as reliable, as may have been assumed. As you no doubt understand, things work smoothly in the economist’s textbook but in the real world Copper has few substitutes that scale, and the powerful energy-density of oil is impossible to “replace.”
You seem to have quickly and efficiently gone right to the heart of these matters. Enjoyed it.