"Reinventing Collapse" author's perceptive comments

The invaluable EnergyBulletin.net has a nice piece by Dmitry Orlov, author of "Reinventing Collapse," an important book for our future. A choice excerpt:

"You compare the US to the Soviet Union, but didn't the Soviet Union fail because of its backward Communist system? We have the free market, we can innovate and solve our problems in ways that they just couldn't even imagine!"

"The central planning system in the Soviet Union was quite inflexible and inefficient, and caused hoarding and black market trading. It directly allocated resources to things like central heating for entire neighborhoods, public transportation and government services. Market psychology had nothing to do with it: these were all physical flows of energy. Our system is certainly better during normal times, but when key resources become scarce, it suddenly becomes much worse: people are priced out of the markets for the things they need to survive, hoarding and profiteering become the norm, municipalities are driven into bankruptcy while oil companies make record profits and find nothing better to do with them than buy back their own stock, and so forth."

"But still, can't we innovate our way out of this? I was shopping for a new car yesterday, and there are all kinds of new hybrids and electric cars appearing on the market... when there is a crisis, the free market system responds, and gives us products that solve the problem!"

"The idea that the problem of too many cars and too much car dependence can be solved by making more cars is preposterous. What makes the problem insolvable is that Americans have been conditioned to treat access to private automobile as a birthright, and taking away their cars is about as advisable as trying to take away their guns. The most commonsense thing to do would be to ban the manufacture, import, and sale of new vehicles, except for some specific fleet vehicles used for public services, as was done during World War II. But this problem will work itself out to some extent: it takes a lot of energy to make a car, and new cars are still affordable only because the new oil prices haven't percolated through the entire economy yet."

"Some people are concerned about the falling dollar and what the Federal Reserve is doing. What do you make of their policies?"

"They are making a strenuous effort to make insolvent financial institutions look solvent by lending them bushels of newly printed dollars. The effect is ever more US dollars chasing after same or smaller quantities of key commodities, such as oil and food, causing huge run-ups in prices. This is what the start of hyperinflation looks like. Eventually, this will ruin our ability to continue borrowing and financing our huge trade and budget deficits. It will also cut off our access to key imports, such as two-thirds of the oil we use, because nobody will want to continue stockpiling our worthless dollars. If that happens, the US economy will go into a state of severe shock.

"The economists have suddenly been thrust into a world they can't understand. They are used to thinking of energy in terms of money, and in terms of driving economic growth. They can't possibly be expected to turn around and learn to think of money in terms of energy, and of driving a gradual powering-down of the economy in ways that will provide the population with the essentials and avoid needless suffering. What it means to the rest of us is that we should stop looking to the economists for answers. There would be too much retraining involved to make them into competent practitioners of this new discipline."