PUBLIC DEBT HEADING FOR STRATOSPHERE IF NHS NOT REFORMED


NHSToday Jeremy Warner pointed out in the Daily Telegraph (link below) that unless the National Health Service is reformed, root and branch, then the UK’s national debt will hit 220% of GDP by 2062.  It won’t get to that situation, of course, because as the economist Herbert Stein once said, “If something cannot go on forever, it will stop”, aka Stein’s Law.

It’s interesting to note that at the end of the last century  – in 1998 to be precise – a little-known (arguably completely unknown) British petroleum engineer by the name of Colin Campbell rang a metaphorical alarm bell (link below).  What Mr Campbell said was that during the first couple of decades of the 21st century mankind would hit all sorts of economic and political problems associated with a disruption to, if not collapse in economic growth (few people heard Mr Campbell’s alarm bell, still less contemplated the early warning message he transmitted).  Mr Campbell argued that the root cause of this looming economic and political turmoil would be a phenomenon called ‘peak oil’, first flagged up in 1956 – to be precise again (it’s a trait of mine) – by M King Hubbert, himself a geoscientist.

Peak oil is the point at which the maximum rate of oil extraction is reached, after which the rate of production enters terminal decline, because the ‘Energy Return on Energy Invested’ fails to stack up. Put another way, peak oil is the point from whence oil starts to become unaffordable and so inconsistent with maintaining our complex ‘Oil Age’ society – because the cost of net energy (oil and oil-related products specifically) starts to consume an ever increasing proportion of the cost of our way of life.  It’s not rocket science, but it is proven science.  Have you noticed how, over the past 5 years or so, the amount of your income that you spend on energy has increased year on year (and will continue to increase year on year)? Peak oil pretty much arrived in 2005, triggered the economic madness of 2007/2008 (aka ‘the global financial crisis’) and we’re now bumbling along the peak oil plateau. Incidentally, the peak oil plateau is simply the manifestation of the oil industry’s ingenious but ultimately futile attempts to extend the life of ‘cheap oil’, ie extend the life of oil costing less than $100 per barrel.  The 150-year trend price of oil (adjusted for inflation) is around $25 per barrel, by the way.

Now, unless somebody can correct me, so far there is no sign of mankind discovering, developing and rolling out a facsimile substitute for oil that will allow us to proceed apace with doubling our wealth every 30 years or so.  Of course we’re looking real hard at how to ‘energise’ our existence going forward (nuclear, wind, solar, tidal etc).  However, right now it’s a substitute for oil that we need which will provide all the unique benefits of oil – at $25 per barrel-equivalent.  Why?  Well, because our globalised economy is, at heart, an internal-combustion-engine-economy (or, more generally, a just-in-time/transport economy) underpinned as it is by well over one billion cars, trucks, tractors and other machines that plough fields, harvest crops and generally move food and stuff about (not to mention the numbers and uses of trains and boats and ‘planes).  As James Kunstler says, we live in a madcap era of the 3,000-mile Caesar Salad.  Furthermore, the amount of oil that would be required to switch the global economy from internal combustion engines to, say, electric cars or whizzy hydrogen-powered vehicles (don’t even go there) would consume more oil to achieve such a switch than mankind has already extracted from the earth.  We’ve kind of run out of road already, so to speak. So, answers on a postcard please …

Meantime, nobody paid much attention to Colin Campbell in 1998 and, furthermore, one hell of a lot of people think that peak oil is ‘just a theory’.  Can we therefore assume that people who consider peak oil to be ‘just a theory’ perhaps have little or no scientific education or understanding; or perhaps they don’t look at the trend price of oil; or perhaps they have vested interests; or perhaps they’re just being provocative and teasing; or perhaps they’re simply Panglossian?  In any case, peak oil, when all’s said and done, is merely an example of the Second Law of Thermodynamics intruding in to our everyday lives. So, it always seems to me to be rather strange when folk argue that peak oil is ‘just a theory’ – in the same way that one might argue that gravity is ‘just a theory’.

It’s also interesting to note that one member of the peak oil community (of which I am myself a member) suggested at the beginning of this century that the first developed world casualty of peak oil would be health services.  The fellow I’m referring to is John Michael Greer and he pointed out that the nature of health services in advanced economies is so complex, so expensive and so unsustainable that as peak oil bites in to the realities of our lives, healthcare would be one the first great public services to succumb.  Michael Greer coins this as simply “declining public health” (link below).  As with Colin Campbell nobody really paid or, indeed, today pays much attention to John Michael Greer nor to people of their ilk – people like Richard Heinberg, Chris Martenson, James Kunstler, Gail Tverberg, Jeff Rubins, Jeremy Leggett, Michael C Ruppert, Nate Hagens, Matt Simmons, David Strahan et al.

However, it’s clear to me – as a card-carrying member of the peak oil community – that the NHS as it is currently organised and funded will indeed go to the wall long before 2062; the NHS will never, ever become an outfit that drives the national debt to 220% of GDP … because “if something cannot go on forever, it will stop.”  The interesting question is how will a complex society like ours meet the expectations of its citizens as the National Health Service disintegrates?  What does “stop” look like when it comes to the winding-down if not termination of universal healthcare, free at the point of use?

Meantime, the British political class will conduct the mother-of-all internecine battles where the outward message to the public will be “Trust the Labour/Liberal/Conservative Party – the NHS is safe with us.”  Ignore them; they’ll be talking bollocks; the NHS, certainly as we’ve known it this past 30 years, is finished.  So, let’s try a prediction on the basis of this post:

Over the next 3 years two of the most frequently aired topics in the mainstream media will be the rising cost of energy (of all types, whether it be that which heats and lights your home or your place of work, or fuels your car, or keeps airlines operating) and the travails of the NHS as politicians grapple with its inherent unsustainability.  Just as the likes of Campbell, Michael Greer, Kunstler, Martenson, Heinberg et al have been warning for almost a decade now; voices in the wilderness.  To be fair, the BBC is obsessed with the NHS anyway, but it’ll be interesting to see how the corporation presents the NHS’s predicament over the coming years.  My guess is that the BBC’s subconscious ‘newspeak’ theme will be “the political class must chuck more money at the NHS”, bearing in mind that the BBC itself operates in an economic ‘Alice in Wonderland’.

PS I must declare an interest; I’ve an inside track on this topic.  Mrs Moraymint is a hospital doctor and I get the day-to-day low-down on the disintegration of the NHS direct from the trenches, so to speak; generally it’s not pleasant.

PPS  According to James Kunstler, aside from the disintegration of institutionalised health services as a (disguised) consequence of peak oil and a global energy crisis generally, another indicator of peak oil will be the collapse of omnipresent aviation services; or, to put it another way, the end of cheap flying. Over the coming years commercial flying will increasingly become the preserve of the wealthiest in society; just like when commercial flying started.  What goes around, comes around, eh?

PPPS  The title of my next post is “What Are We Supposed To Do About All This?”  Stay tuned.

———–

‘Official: public debt heading for stratosphere without further root and branch NHS reform’: http://tinyurl.com/nkgd9bk

‘The End of Cheap Oil’: http://tinyurl.com/dyok8bt

‘The Long Descent’: http://tinyurl.com/bjxmact 

11 comments

  1. Xabier · ·

    Another nail hit firmly on the head, Moraymint!

    We just need to think outside the usual parameters in order to deal with this great change of gear downwards: NHS and advanced medicine impossible to fund as it is – Disaster! ?

    Not at all!

    The greatest health benefit to the greatest number of people is derived from: 1/ Adequate and varied nutrition; 2/ Drinking water that doesn’t kill you; 3/ Good personal hygiene (linked obviously to availability of water; 4/ As unpolluted an environment as possible. In the climate of the UK, one would also add adequate heating, as this damp climate kills.

    Satisfy these criteria, but cut back on many treatments due to cost constraints, and the mortality rate would certainly rise very sharply indeed, but the general health of the population would be far higher than in the industrial smog-ridden Britain of, say, 1930, when people out of work might also be half- starved, and very much less worse than in 1830, when even the very wealthy died from drinking contaminated water and proper hygiene was as yet just another theory.

    Another sector which will have to collapse is mass higher education: another instance of ever-diminishing returns on a very high investment. The greatest value for the greatest number of people is derived from first-class primary education, and that is proportionately much less expensive.

    Like

  2. sam vimes · ·

    Hi MM
    I was really amused by the section about the BBC. Since everyone feels that preserving a “free” HS is a top priority, those who run the BBC ought to be prescient enough to see that their organisation will be one of the first to disappear as the necessary savings are desperately sought. Do they imagine spending billions on a state broadcaster will take precedence over health care? Of course they do at the moment! But that’s because we are currently living in a fantasy world. I estimate that world will end sometime in the next few months, perhaps weeks.

    Like

  3. Glad to see you are back on track.
    I was not happy with Carlos’s flippant reference to infinite – as one with a scientific background, you should understand that.
    Fact remains: to continue to destroy/burn fossil fuels is madness. They are simply not renewable.
    Is that so hard to understand?

    Like

    1. Carlos · ·

      Hi p-g. I could resist responding to your accusation of flippancy regarding my reference to infinite (growth on a finite planet). I admit I was lazy leaving all the heavy lifting to Tim Worstall his excellent article for which I provided a link. If you haven’t done yet I do recommend you read his piece. TW seldom fails to make his point anything less than compelling. I will myself try to explain my own thinking when I have time (the one resource that is, alas, truly finite). But please don’t mistake my prose style for lack of seriousness. And I really don’t get ‘Peak Oil’ or ‘Peak’ anything else. Just Peak Time. Best wishes!

      Like

      1. Thank you for pointing out the reference to Tim Worstall’s link – most worthwhile, as also the DT comments on it by Moraymint etc.

        All well and fine, but I guess old age has drawn me to the conclusion that homo sapiens is just not sufficiently sapiens!

        Like

  4. Brilliant
    nice to see your back
    Yours friends carlos, His blog as much as i wish it true
    Cannot account for what is truly in front of us
    Keep up the good work

    Like

  5. Thanks Moraymint, a great read. I shall read Warner’s piece as well.

    I’d be interested to read your take on the article yesterday claiming the UK needs 140,000 immigrants per year and wonder if and when people might start thinking about how our economy is a ponzi scheme, reliant on ever increasing numbers of consumers and participants. Again, that can’t go on forever and the expansion of the population is inextricably linked to the woes of the NHS and indeed the UK as a whole.

    The other question is – how does one place oneself in order to be insulated or even isolated from the looming maelstrom?

    Like

  6. mark deacon · ·

    I think peak oil is an issue, but in the context cheap energy is needed to fuel the society we have created. On expanding shale gas, may mean it will be a decade more before peak oil (peak cheap energy) hits but eventually it does.

    Moraymint, What do you think is the best alternative though?

    I can only see two that will provide a continued high enough energy flow, tidal and the dreaded nuclear. After that wind and solar for the UK the price per unit of energy will be too dear and will not support the industrial society that demands cheap energy.

    If it was me I would go tidal, avoiding the consequences of nuclear where possible. Cynically 60 million people living on a little island is a big energy demand however you want to look at it. Half the population, half the energy demand.

    Like

  7. Bickers · ·

    MM, energy costs have risen over the last 5 years mainly because of the West’s idiotic dance with uneconomic renewables which have hovered up billions in subsidies. Once we recognise that the claims that CO2 is a dangerous gas are wildly overstated we can get back to a more sane energy policy. Look at the way shale gas is transforming the US economy. We need to start fracking ASAP & be much more drastic in scaling back the suze & role of the State.

    Like

    1. moraymint · ·

      Bickers

      Thank you very much for your comment. I understand your point entirely, but we need to be very, very careful about assuming that shale gas and shale oil are the answers to all our prayers. Here’s what I mean: http://tinyurl.com/aqj6kqg

      Like

      1. Jason · ·

        Hi Moray

        Agree 100% with all of your blog (the final nail for me was the BBC running a piece on why it was not true and the US would match Saudi’s output so basically telling the sheeple ‘nothing to see here move along)

        I simply cannot see anybody I know either understanding or more importantly accepting that this is coming and the changes we are going to go through.

        Living in Scotland as you do I am beginning to think the whole independence issue has at its root the hoarding of oil resources (plus the hope that England will collapse by a few more of the extreme nationalists irrespective of the disaster that will cause all of the British Isles) in the face of the coming denouement

        Like

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