The Great Simplification with Nate Hagens - Weakest Links: Depletion, Supply Chains, and Trust | Frankly 71

Episode Date: September 20, 2024

(Recorded September 18 2024) Over past decades, abundance and peace have become the prevailing narratives in modern societies. The reality, as usual, is both more nuanced and more complex. Today, our financial and material wealth exists in parallel with declines in natural and social capital. Similarly, recent decades have caused us to become uber dependent on global 'just-in-time' supply chains.  The unexpected exploding pager incident in Lebanon earlier this week throws the durability of, and trust in global supply chains in a new light.  The benefits we've enjoyed from the 'guns and butter comparative advantage' of globalized trade, might also be at risk of decline - and is suddenly something we shouldn't take for granted. In today's Frankly, Nate reflects on 7 key aspects of our socio-economic system which are in decline, with a main focus on the pager implication for globalization. What are the weakest links underpinning the status quo, and how close are they to breaking? Could it be that, just like the stability of our planet and social fabric, trust in global supply chains and globalization be areas of decline too?   Show Notes and More Watch video episode on YouTube  --- Support The Institute for the Study of Energy and Our Future Join our Substack newsletter Join our Discord channel and connect with other listeners  

Greetings. I've been traveling a lot, so I have not had time to record any of these Franklies. And now I must, because it's late Wednesday, and I've just learned of some things and had some ideas. So this is going to come out Friday, and then I'm traveling again. I'll be in New York City for Climate Week next week. We'll see some of you there. I am also an exculpatory clause recording this under the influence of Zizol, which is an anihistamine, because I have terrible ragweed allergies. There was a black swan that potentially happened in the last couple days with respect to the four horsemen of the 2020s, which I often talk about.

And this is the Israeli use of pagers in the war against Hezbollah in the Middle East. I'm going to couch that in a broader overview of seven things that are very important to our lives that are depleting or disappearing or in recede mode. And that's going to be the topic of today's brief, frankly, the first of many coming in coming months I have like a list of 37 more that I somehow need to find a time to record. Okay, so very quickly, viewers of this program know that I don't look at the future by extrapolating the current situation forward in time because we can look two or three steps ahead and infer some of the challenges, some of the roadblocks, some of the dead ends that we face.

So here are seven things that are declining, maybe out of our site, but they're declining nonetheless, and they're going to have big implications for our future. The first one, of course, is oil. When we drill an oil field, we get a lot of production out and then a big tail that lasts sometimes for decades. We've drilled, you know, so many oil wells around the world. We've drilled more in the United States than the rest of the world combined. And these decline.

If you average all the decline of all the oil wells drilled in the world, it runs at around 15% a year. This is a new report out by ExxonMobil last week. So we have to drill faster and faster and have new technology, new fields, better extraction percentages in order to offset that 15% decline. Big story for coming generations. Number two, which should really be number one for all of us, is the decline of the stability of the biosphere that we came used to in the hollow. This is not just climate change. Climate is one of six planetary thresholds that we are exceeding, including biosphere integrity, novel entities like endocrine disruptors and plastics, land system change, freshwater change,

and biogeochemical flows like the phosphorus and nitrogen cycles. The stability of what the planet experienced, what our ancestors experienced, during the Pleistocene and the Holocene is depleting. The third is the value of our money. At least in the United States, we're issuing a trillion dollars worth of new debt every three months. Our budget deficit is higher this year than it was in COVID, which was like a recession slash depression.

So we keep printing more money to pay for things today. And so the value of our money is declining. Fourth is trust. The trust that we have in institutions, the trust we have in each other, the trust we have in the rules and the frameworks and the ways that we interact with other is in decline, especially in the media, which is one reason I started this channel. Fifth and related is civility. The kind of give and take tolerance of others. We don't start from an ambivalent state where we don't judge. Increasingly, we're not willing to give the benefit of the doubt to our fellow countrymen and women in conversations.

And so the civil contract, the social contract, which itself is one of the four horsemen, is in decline. Sixth, and these are really in no particular order, I just like to do the number seven sometimes, is the stability of our parasympathetic nervous system. We increasingly spend a lot of time in sympathetic mode, including even watching these Franklies, which I'm well aware of, and it bothers me a little bit, yet I still feel compelled from a reasonably good nervous system state today to share this information with you all. But as we head into these events where there's going to be international, macroeconomic, geopolitical whackamol every day, our nervous systems become more and more activated. And as that happens, we're less able to think clearly to respond

from a place of equanimity. So our nervous systems are in depletion. Number one, which is the reason for today's conversation is the stability of global supply chains and globalization. One could argue that what happened a couple days ago when these pagers exploded with mostly Hezbollah operatives in Lebanon, but not all. There were doctors and other people, and I don't have all the up-to-date information on this. still unfolding. There's rumors it's happening with walkie-talkies and other devices. I think because of this globalization itself has potentially become weaponized. COVID called our attention to the fragility of international just-in-time supply chains.

But that was an external force. It was a virus. Now these pages, and beyond are something that happened due to malice, due to an internal decision. And so if you recall a couple times on Franklies, I've talked about the evolutionary game theory matrix, the payoff grid, where there's cooperation, you and I do something together for the benefit of both of us. There's selfishness. I do something for me at a cost to you. There's altruism where we both do something that helps the other person.

person, and then there's spite, which is doing something at a cost to yourself, but a greater cost to your competitor. And spite is only a valid option when you have no other recourse. And I think Israel is indicating that they're so desperate that they would do this to have these explosives inside of pagers and all of the downstream implications of that. This is going to change many things in the world, I fear. Everyone's focused right now on the casualties in Lebanon and some children died and there's injuries. And what does this mean for the war between Israel and Hezbollah?

And I'm not focused on that. That's been going on for a thousand years and it's horrible. And I could see arguments on both sides. And I don't even want to touch that. But I think this has a big implication for trust in global supply chains. who is going to buy things, technology from an Israeli company in the global south? And who extending that, who's going to buy from the United Kingdom and the United States supply chain collaborations with Israel companies around the world?

And beyond that, I had people in my social media feeds yesterday in New York City watching events on their phones with their kids and like, do I want to even be on these devices when the possibility that they might explode or something? I think that's a little far-fetched. But is it? I mean, what are the repercussions as we crest the carbon pulse and spite becomes more and more of a viable choice for nations or individuals, boy, this really, really talks to the great simplification, to resilience, to nearshoring, to making sure that you know the horizontals and verticals of your own supply chain. There's very few countries that do that, Russia being one. What does this portend for?

for the trust in global supply chains. I think this is going to be a developing feeling that's going to unfold. I might be wrong, but that was my initial reaction to seeing what's going on in Lebanon today. Lots more ahead. Please watch Roman Krasnarek's podcast next week.

It's excellent on learning from past civilizations on what we can do in times of, conflict creatively and in collaboration. Many more frankly's to come. I hope you're all well. Thanks.