We are living in times of crisis. Several crises are interconnected. The climate crisis and the environmental crisis have a strong relationship with the use of fossil fuels and, as a result, there is an energy crisis. The moment we switch to sun and wind, the marginal costs of energy go to zero. After all, the sun and wind are free. This means that in the future it will be possible to have an energy subscription for a fixed amount, comparable to a mobile subscription that allows you to make unlimited calls. There will undoubtedly be a fair-use policy attached to this, but with free energy, we can, in theory, also produce enough clean water and food. After all, there is plenty of saltwater, but it takes a lot of energy to turn it into clean fresh water. Food, too, is perhaps 60% or 70% energy. So with all that energy, we are also solving the food and water crisis. Solving all these crises means that everyone in the world will have sufficient clean water, food and energy in a clean and stable environment. That will reduce inequality in the world and increase stability. The need to flee to the United States or Europe decreases. No more refugee crisis and no more income crisis. The cake becomes a lot bigger, which makes it a lot easier for politicians to redistribute.
The big question is how to achieve this utopia. A smooth transition is not likely. The crises will first cause unrest in various parts of the world. The Romans already knew what would keep the people happy: bread and circuses. In 71 B.C. they started distributing free bread in Rome because the cost of living in Rome was far too high and famine was threatening. Hunger is an excellent basis for a revolution. The French queen Marie-Antoinette tried to appease the starving French population with brioche, but it cost her her life. Between the two Russian revolutions of 1917, there was a lot of hunger as a result of the war misery, which allowed the Bolsheviks to take over. The Versailles dictate caused a famine that killed more than 100,000 German citizens and allowed the Nazis to come to power. During the Great Leap Forward, Mao even used food as a weapon. In 1988, failed price reforms in China led to soaring food prices, a year later there was the uprising in Tiananmen Square. The Arab Spring would not have been possible without soaring food prices. The Mexican government was still able to prevent a revolution in 2007 through the Tortilla Price Stabilisation Pact. Hunger and revolutions go hand in hand.
Rising food prices are almost always caused by a supply-side problem. In recent decades, global warming has meant that, on balance, harvests have been better than ever. Plants thrive in higher temperatures and grow better with more CO2 in the atmosphere. There have been years when the harvest was disappointing, but this was always compensated by a year of record harvests. If you look a little further back in the past, you will see that there are sometimes multi-year periods when harvests are disappointing. The Little Ice Age of 1586 to 1587 caused a migration to the city, which stimulated trade and spurred on innovation and an economic revolution. In the 1930s, dust storms and droughts in the United States caused migration to California. This Dust Bowl exacerbated the Great Depression. The year 2021 will not be a good year for food production. Weather records are broken almost continuously. For example, first there was an unprecedented cold spell in the United States, as far away as Texas. Now there is another drought and extreme heat in the Northwest of the US. As a result, the price of spring wheat and rapeseed is skyrocketing. The smog from the forest fires in Oregon reaches as far as New York City. In several places in the world, there is also unprecedented rainfall in a short period of time, because warm air can contain more water than cold air. We have seen this in Europe, but also in China the underground flooded. Warm air is also a booster for tropical storms and hurricanes, the season has started early this year. Coffee prices have risen sharply in recent days due to unprecedented frost in Brazil after an earlier drought. Three-quarters of the world’s population spend a large part of their disposable income on food. This is often unprocessed food, where rising prices are passed on a one-to-one. With processed food, the raw material costs are often only a small part of the total price. Unfortunately, we must assume that these extreme weather conditions will not disappear overnight. Further rising food prices will cause more social unrest, possibly even new revolutions.
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