Peak Car and Peak Oil?

An interesting article in Fortune Magazine (June 2018) talks about the changing technologies resulting in the so-called peak horse, peak car and possibly peak oil.

Before the dawn of the motor car, the horse was the beast of burden providing the muscles for land transport. In 1920, horses in the United states numbered around 25 million. By 1930, the number came down to 19 million. By 1960, it further dropped to 3 million, being completely replaced by the motor car. At the same time, the consumption of gasoline has increased by leaps and bounds.

Technology does not stop there but keeps on progressing. The electrification of trains in public transport has reduced the use of private cars in and between big cities. The fast growth of air transport produces the same effect for long-distance travel. In recent years, the explosion of ride-sharing makes owning a car redundant. Today, Uber handles 4 billion rides worldwide. Lyft reports that 40% of rides are shared by two or more passengers. The coming of the driverless car further reduces the cost of ride-sharing as it eliminates a major labor cost. In the United States, the number of passenger cars seemed to have peaked in 2016 with a record of 17.5 million newly registered. The number came down to 17.2 million in 2017, and is projected to dip below 17 million in 2018.

Consumer preference in America is changing at the same time led by millennials. For the age group between 20 and 24, 92% registered for driver licenses in 1983. The figure has come down significantly to 77% in 2014. The car no longer seems so cool that a young person must possess. One major reason is urbanization and the fact that the young like to live in big cities where traffic jam and parking are headaches to be avoided. The young also have a keener sense of climate change because they know they will be burdened with a polluted world that the older generation leaves behind. The arrival of peak car, besides impacting manufacturers, will reduce government revenues derived from taxes based on the car value and its annual license renewal. The budget for repairing existing roads and bridges will be squeezed if there are fewer cars on the road. Barring an increase in existing car tax, some American cities are considering adding a tax for usage, that is, the amount of distance the car is driven annually.

With the approach of peak car, what about peak oil? This is subject to debate because oil is used for aviation, manufacturing and space heating, too. A recent report from BP (formerly British Petroleum) suggests that peak oil will arrive around 2030. What are the writings on the wall that we can see? Saudi Arabia, the top oil producing countries with the biggest reserve, is investing a total of 1 trillion dollars over a few years in solar and wind in its vast deserts. So are the biggest oil companies around the world. The rise of hybrids, electric cars, and better fuel efficiency are making a dent in the current gasoline consumption around the world. In American cities, many retail gasoline stations at street corners are closing and giving way to shops and other retail outlets. Although climate deniers insist on maintaining the status quo, a rising environmental consciousness on a global scale is driving consumer preferences away from oil and other fossil fuels. Last but not least, solar and wind have now reached grid parity with oil. That means utility companies can cost-effectively switch from oil to solar or wind in the generation of electricity for their customers.

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The Royal Wedding

I have recently followed the pompous wedding of Prince Harry and Meghan Markle with interest. Like the other previous royal weddings, it gives the impression of a fairy tale that many people enjoy watching and silently wishing for themselves. It also satisfies the hunger for true love and happiness ever after that the world finds itself deficient.

The British are best in staging and presenting royal events because they have a legendary monarchy that the country can rally around for both celebration and national identity. The British monarchy has long changed from an absolute to a constitutional one where it no longer holds governing power except titles and privileges. This means image and public relations assume top importance for royal sustenance. The rest of the world also likes to watch and follow the news of the British royal family, especially for us Americans who have no royals except business tycoons who have not much to show apart from their commercial assets.

The British republicans who advocate abolishing the monarchy must think twice about the benefits that the royal family brings to the country. The benefits are not easily measured in money terms and may be priceless. How can you price national identity, culture, tradition, unity and continuity? The “sovereign grant” dedicated to maintaining the monarchy is reported by Buckingham Palace to be around $105 million per year or an average of $1.6 for every citizen. The highest estimate of the cost of the monarchy according to the TIMES reaches $468 million per year or $7.1 per capita. Even if you take the highest cost, the monarchy still looks like a good deal (How much does a hamburger meal cost today?). On the positive side, one must ask how much the monarchy has enhanced British tourism, entertainment and advertising revenues. It is widely reported that Prince Harry’s wedding has boosted national retail sales by more than $600 million.

The royal family is like any other regular family. They are special because the British people and the rest of the world want to consider and treat them special. Imagine the pressure they take on upon themselves to satisfy this worldwide audience even though they want to do it. As long as the royal members can keep and play their mystique, the British taxpayers will be willing to pay for their maintenance. In return, they have an extraordinary job to do, enjoyable or not, mostly in ceremonious events or goodwill visits to foreign countries. Like any other family, the royals have their own share of scandals, infidelity and breakups. Because they are scrutinized intensely by the press, their mistakes are magnified and publicized to a great extent.

The real danger for any monarchy is of course the bad behaviors of the royal members. Because they are forced to live in a bubble for the public to see, the royals can easily stray out of touch with the outside world, thus rendering them irrelevant. The British monarchy has gone through some crises such as the breakup of Prince Charles’ marriage, the death of Princess Diana, and King Edward VIII’s abdication in order to marry an American divorcee. In recent years, things seem to have turned for the better as young Princes William and Harry took on more worldly responsibilities. Both have injected new blood into the royal family by marrying commoners like Catherine Middleton and Meghan Markle respectively. Besides being a commoner, Meghan is a black American divorcee from the entertainment industry, which might not have been acceptable a few decades earlier. In addition, the Queen has done her part by staying in touch with British popular culture. She has conferred titles to the Beatles, Elton John, Mick Jagger and other entertainers. This is a nice way to recognize their career achievements. Although entertainers have weird habits and tend to have a brush with the law, their monetary contribution to the British economy far exceeds those of famous scientists and academics.

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The Flat-Earth Concept

To see the round earth, there is no need to rocket out to space. You can see the earth’s curvature anywhere by looking out to sea, down from a hillside, or across a big flat plain. When you gaze at the sky, everything appears round — the moon, the sun, other planets, distant stars, and even solar and lunar eclipses. What made our early ancestors think that the earth was flat? Why had they failed to see this great truth for so long? Did they possess any common sense at all?

Human history can be traced by the fossil of a skeleton to about 200,000 years old. By the same way, modern civilization is thought to begin around 6000 years ago. The concept of the spherical earth is traced to ancient Greek philosophy around 2600 years old when astronomy also began. Nevertheless, the round-earth concept did not gain popular acceptance until only 500 years ago when Magellan circumnavigated the earth. Why had the flat-earth concept lasted for so long?

Considering human progress from the beginning age of the caveman to the modern scientific exploration of Mars, I think the human mind has much greater capacity than for survival only. It is also able to understand the universe and unlock its secrets, gradually in the ancient era but exponentially in modern times due to the explosion of scientific knowledge. I believe that some tribes of our ancient ancestors had already figured out that the earth was round well before the Greeks 2600 years ago, which is officially known as the beginning of the round-earth concept. Although I cannot prove it, let me give you the reasons why:

First, some tribes somewhere might have carved a spherical earth on a piece of stone waiting to be unearthed, just like a fossil has been unearthed to show that the oldest human form existed about 200,000 years ago. There will always be more secrets to be unearthed later.

Second, communications between different ancient tribes were difficult or non-existent even though they lived close to each other. As a result, the round-earth concept stayed within the isolated tribe for a long time.

Third, tribes were led by a chief or elder who had absolute power. It is human nature that a ruler rules either by physical strength or intellectual power. In ancient times, intellectual power means being able to invent and propagate myths that the rest did not understand but must follow. The empirical round-earth concept ran counter to all ancient myths and so must be rejected or suppressed. The round-earth concept was not important in ancient times because the tribes rarely traveled long distances, thus it was easily suppressed. Other empirical concepts like gravity, the changing seasons, growing crops and domesticating animals were much more important because they related to life and death. Likewise, the positions of the stars were more important for worshipping,  navigational and timing purposes.

The suppression of new ideas to preserve the old myths continued for a long time in the feudal societies that developed from the ancient tribes until the Industrial Revolution around 1700 A.D. shook up the entire system. Before that time, people who discovered new things that contradicted with established doctrines were banished as lunatics and even executed for their believing in the truth.

Therefore, my conclusion is that for a truth (big or small) to come out, it must overcome the coverup and suppression imposed by the establishment if it runs counter to their own interest. The establishment may be a government, a religion, a powerful organization or a big private company. In the modern era, although the truth cannot be suppressed by brute force as in the old times, it can easily be covered up by a maze of invented technical details that few people understand (as shown by all the financial scams). Furthermore, a truth can remain hidden for a long time if the public want to be blind followers and do not try to question the status quo.

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What Makes a Superpower (3)

Over the previous two centuries, we have seen the rise of three superpowers and two of them have already fallen. What made those two rise and fall? The British Empire and the Soviet Union have been discussed in Part One and Two respectively. Let’s now turn to the United States of America, the only superpower left today:

The US fulfills at least two pre-conditions of becoming a superpower: a big population and a continental country protected by two oceans east and west. You may ask why not Canada and Australia? They have chosen to be part of the Commonwealth, a remnant of the fallen British Empire, whereas the US rebelled against the mother country and declared itself totally independent. More importantly, the US has a liberal immigration policy that attracts talents from all over the world, turning a sparsely populated frontier land to a “melting pot” of 326 million people.

The human resource of the US cannot be underestimated. It develops out of the proclamation that “All men are created equal” in the Declaration of Independence of 1776. This was followed by the US Constitution enacted in 1787 and its later Amendments guaranteeing freedom, democracy, equal rights and equal opportunities. These are the ideals well articulated and understood that make the US system a magnet and a model for the world to emulate, even though serious contradictions exist such as slavery up to 1865 and government sanctioned racial discrimination in the south until 1966 after the passage of the Civil Rights Acts.

Like the Soviet Union, the rise of the United States as a superpower coincides with the end of the two World Wars, in both of which the US finally overcame its traditional isolationism and sent troops to assist its European Allies. After World War II when Europe and Japan lay in ruins, the US assisted in the reconstruction of Europe with the Marshall Plan, and the molding of Japan into a non-militarist democracy through its occupation lasting seven years. During the Cold War running from the end of World War II in 1945 to the collapse of the Soviet Union in 1989, the US headed the capitalist camp and led NATO against the Warsaw Pact led by the USSR in the communist camp. In addition, the US maintains a ring of military bases around the world in a stated effort to maintain peace but in fact to contain its adversaries.

The US has shown leadership in creating the post-War framework of peace and commerce by spawning the United Nations, the World Bank and the World Trade Organization (WTO, formerly known as GATT). Besides military power, the US possesses plenty of soft power as shown by its advanced technologies, high industrial production, huge consumer markets, and popular culture like movies and music. Despite these, American soft power may not be welcome overseas. Many countries worry about bad American influences on their own cultures and values.

A superpower does not mean it will always do the right thing. The tragic wars in Vietnam, Iraq and Afghanistan show that military misadventures can lead a superpower into a quagmire that will be hard to extricate, thus weakening its military strength and national resolve.

It should be noted that all the powers of a country are derived from its human resources, in other words, its own people. In economic terms, the strength of the middle class represents the state of a country’s human resources. As you know, the American middle class has been subject to all kinds of squeeze over the last three decades including rising oil prices, housing costs, and runaway inflation in health care and college tuition. These are in addition to job loss and stagnant wages due to foreign competition and company outsourcing. The weakening of the middle class signifies internal trouble and instability that will threaten its superpower status. Already we have seen the US government incurring over a trillion dollars of deficit and huge amounts of national debts. It is increasingly reluctant to commit itself to the maintenance of world peace. It blames other countries for causing its economic woes and imposes import tariffs instead of advocating free and fair trade. These are the harbingers of a superpower losing its balance or resolve. Let’s see what will happen in the next few years.

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What Makes a Superpower (2)

Over the previous two centuries, we have seen the rise of three superpowers and two of them have already fallen today. What made them rise and fall? The British Empire has been discussed in Part One. Let’s now turn to the Soviet Union in Part Two.

The Soviet Union had all the pre-conditions of becoming a superpower: a huge continental country and a large population, which meant plenty of resources to project power overseas, especially to neighboring states. The rise of the Soviet Union coincided with the end of both world wars. In February 1917 toward the end of World War One, the Russian Imperial Parliament (the Duma) took over control and deposed Emperor Nicholas II. The tired Russian army failed to intervene due to setbacks in the war that saw no end in sight. Later in October of that year, Vladimir Lenin led the Bolsheviks supported by peasants, workers and soldiers in an armed resurrection that overthrew the government. This was known as the world’s first communist revolution because of the ideology of the Bolsheviks that pledged, among other things, redistribution of land to the peasants. A period of civil war ensued until the Bolsheviks and their “red” supporters finally subdued the “counter-revolutionaries”. In 1922, the Soviet Union (USSR) was established and the Bolsheviks monopolized control as the ruling Communist Party.

Although under the new communist rule, the Soviet Union remained a less-developed state compared with the West due to endless power struggles within the Communist Party, in particular, the political purges initiated by Joseph Stalin after he took over in 1924. Hitler noticed the Soviet weakness and thought that Germany could swallow the whole Soviet Union in a decisive blow. In June 1941, Germany invaded the USSR in the biggest battle of World War Two. The German invasion did not work out because the defeated Soviets withdrew thousands of miles inland and burned their crops and properties, making it very difficult for the occupiers to sustain in the conquered barren land. The particularly harsh winter of 1941 aggravated things even further for the occupiers. This bought precious time for the Soviet army to regroup and launch a counter attack. By May 1945, Soviet troops marched all the way to Berlin and occupied almost half of Germany, which later became communist East Germany (GDR). After victory in World War Two, the Soviet Union had a large army installed in each of the countries liberated from German control, such as Poland, Czechoslovakia and Hungary. They formed a collection of Soviet satellite states known as communist Eastern Europe. That was the Soviet Union at its peak.

The fact that countries called themselves communists in the Soviet camp did not mean that they were united. They had their own national interests to look after. Hungary revolted in 1956 and Czechoslovakia in 1968. Both necessitated Soviet troops to quell the rebellion. The biggest split occurred with communist China in the mid 1960’s which almost led to an all-out war sparked by small border conflicts. Only a few countries depended on Soviet aids such as Egypt (the Aswan Dam), Syria (military hardware), Cuba (missiles and everything else), and communist insurgency groups in Africa and South America.

At the military level, the Soviet Union was able to project significant power overseas: stationing a large number of troops in Eastern Europe, attempting to install missiles in Cuba until being blockaded by the US Navy, supplying North Vietnam with war materials, and its nuclear submarines silently plying the world’s oceans. In addition, it possessed thousands of nuclear warheads and intercontinental ballistic missiles in an arms race with the US. Obviously, Soviet power was basically military-nature and not much else. It was a military superpower with an empty shell because it had no viable economy to back it up. All the Soviet satellite states remained in economic stagnation and required Soviet aids to pop up their communist governments.

If one looks at other areas such as people’s standard of living, consumer goods production, and non-military technology, the Soviet Union fell behind all the developed countries of the world. You will be hard pressed to name a significant non-military product exported by the Soviet Union. While Soviet citizens lined up in the streets to buy consumer necessities, the country kept on producing large quantities of military hardware as dictated by the Communist Party. The Soviet economy remained in stagnation for a long time under communist rule because its enormous resources were being misdirected for military use. Finally in 1989, the Soviet Union imploded without a bullet being fired by its enemies. It was a system based on military force that could not sustain. The Soviet case was different from that of the British Empire. The former must spend its resources to maintain its empire by military force, while the latter managed to create a stream of revenues flowing in despite limited resources at home.

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What Makes a Superpower (1)

Over the previous two centuries, we have seen the rise of three superpowers and two of them have already fallen today. What made them rise and fall? Let’s take a look at the British Empire in Part 1, and the USSR in Part 2.

By necessity, a superpower needs to have a large landmass, a large population, and a large
modern military force that is able to project its power overseas. The island nation of Great Britain does not possess any of the above fundamental attributes. However, there exist three important factors that more than compensate for its handicaps.

First, the industrial revolution originated in Great Britain around 1760. By 1860, its industrial development had enabled the building of a colonial empire around the world in North America, the West Indies, Australia, and parts of Africa, India and Asia, hence the name of “the empire where the sun never sets”. The steam engine played a major role in empire building because it mechanized the sailboats. With big guns installed on warships powered by steam engines, the Royal Navy became a mighty weapon on the high seas. Furthermore, it could reach faraway lands to protect the British merchant fleet engaging in trade with other countries.

Second, you may think that a large number of British troops need be sent overseas to maintain the colonies. Not necessarily. The two biggest colonies, North America and Australia, were frontier lands sparsely populated by indigenous people. The other colonies might require more troops to subdue the natives. The British knew how to economize their empire building by adopting the strategy of “divide and conquer” especially in India. That means allying with some local tribes to fight against the others. Native fighting regiments were employed by the British army to supplement their numbers there. The colonies were able to sustain themselves relying on local resources. In addition, they provided a constant stream of profits in the form of raw materials and money. A medium-size country like Britain could never afford a foreign colony with a negative profit flow.

Third, the colonized natives at that time did not possess a national consciousness. For instance, a large country like India was fragmented by small kingdoms or tribes at each other’s throats. It was a perfect condition for the British conquerors to employ “divide and conquer” until the whole country finally came under British control. In fact, the British did not have sufficient manpower to rule most of its colonies which were bigger in land and population. They ruled by supporting the strongest native ruler and getting a percentage of the benefits in return.

In 1776, the United States declared independence from Britain. In 1901, Australia became independent. Note that the English settlers in these two biggest colonies rebelled against the mother country. After the Second World War, things changed dramatically largely due to the rise in national consciousness of the native people in other colonies. The people of India finally rose up in unity against British domination. India and Pakistan gained independence in 1947. This is followed later by a host of other colonies. By 1980, the British Empire could boast only a few small island colonies. In 1997, the most successful and lucrative colony of Hong Kong was handed back to China without a fight.

In conclusion, it seems that the British Colonial Empire rose and fell like a commercial project where the governing and commercial elites partnered together without much public participation. As a result, all the spoils of the colonial period went to that small segment of the British people without being shared by the general public. This is probably true with other European colonial powers like Spain, Portugal and the Netherlands.

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Compassion For Others

“Survival of the fittest” neatly defines the natural selection process showing how species evolve and procreate. In the ocean, big fish eat small fish. On land, the strong bully and consume the weak. You may wonder, in this cruel world where are fairness and justice for the small and the weak?

They do exist, and are also provided by Nature. First, aging guarantees that all things must pass and be subject to renewal. When a ferocious lion passes its prime age, it will fulfill its life cycle of being consumed by other animals. Second, number compensates for size. Although the whale swallows hundreds of small fish in a gulp, the small fish won’t go extinct because they reproduce by the millions. Third, evolution guarantees adaptation and flexibility in order to survive smartly despite inherent weaknesses. Fourth, it is natural instinct for the strong members of a family to care for the young and weak as observed in the animal kingdom.

These four forces of Nature enable the natural world to maintain a delicate balance for millions of years until humans came onstage. Reining at the top of the animal kingdom, humans are increasingly disrupting the delicate balance of Nature. The tools being employed are technology and a system of laws and traditions to preserve the status quo.

Technology opens an entirely new world but carries a double edge that can do both good and evil. If applied with narrow selfishness, technology will do great harm such as environmental pollution and destruction of natural habitats. Similarly, this applies to laws and traditions in human society. Doing good means being fair and just guided by compassion. Otherwise, good cannot triumph over evil.

Among the four balancing forces mentioned above, the first two have been severely disrupted by humans. First, strength in number makes little sense in human society. Throughout history, the poor masses seldom have a chance to break out and leverage their number strength. Their big numbers are marginalized because of systemic social and economic deprivation. As a consequence, the poor are less educated, less skilled, misinformed, manipulated and exploited. In other words, they have been reduced to a disorganized subjugated mass.

Second, although aging dooms a ferocious lion, it does not doom a person’s physical assets. In human society, wealth and power routinely pass down the family line through traditions or laws. In ancient times, a dying king passed his absolute power to the crown prince. In modern days, a wealthy aging person passes his assets to the descendants. This is also a double-edge sword. The bad thing is: Ill-obtained wealth and power, and all the exploiting schemes may unfairly be made legal and permanent.

In order to maintain a natural balance, human society needs a higher standard than just “survival for the fittest” that applies to the lower layers of the animal kingdom. Human society requires fairness and justice driven by compassion, which is also provided by Nature but can easily be blinded by material lusts.

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