Moments That Shake Us Up

A Point of View
Moments That Shake Us Up
By Paul V. Montesino, PhD, MBA.

“There are historical moments when an alignment of forces causes a shift in human outlook. It happened to art and philosophy and science at the beginning of the Enlightenment. Now, in the early twentieth century, modernism was born by the breaking of the old strictures and verities. A spontaneous combustion occurred that included the works of Einstein… and dozens of other path breakers who seemed to break the bonds of classical thinking.” Einstein, his Life and Universe, Walter Isaacson ©2007.

The above statement from the book of reference covers many names not listed above who also contributed during that period. Not on the list are older names, Johannes Gutenberg, Sigmund Freud and Charles Darwin come to mind and the inventors of the Computer and Internet as well. And I am only talking about scientific and practical notions. I have left out the religious because a list, although significant at one time or another, even these days, would be too incomplete and definitely offensive to the nonbelievers of any faith mentioned by those who believe something else not mentioned . Some were inventors, like Gutenberg with his printing press, while others opened new worlds of the mind that never closed again. Einstein with his General Theory of Relativity, Freud with his Psychoanalytic wisdom, Darwin with his evolutionary Natural Selection.

What I am referring to right now is a new point reached in our contemporary history that is being played in front of our own eyes and we still cannot or don’t want to recognize. I am talking about the new world of energy resources we live in and probably will live in the near and long term future: the paradigm is shifting.
In my article of two weeks ago about recent decisions made by our United States Supreme Court regarding the death penalty for rapists of minors and also about the Second Amendment to the Constitution that guarantees our rights to bear arms, I mentioned in a humorous tone that perhaps it was time for the Supremes to declare our current energy prices unconstitutional as well. Of course, one thing is to declare them abusive and perhaps obnoxious, but being able to stop them is another thing altogether. Let’s look at the current situation and try to see where it is steering us.

I will start with a brief and simple mathematical formula. Every algebraic formula consists of two elements that must balance each other: x = y. When the left value (x) equals the right value (y) then there is balance. We have two sides to the current energy crisis formula that we must consider that have different expressions but must satisfy the same conditions of economic equality: supply = demand. If they do, there is balance as well. Unfortunately that formula is not only hard to come by these days but it is also impossible to achieve. Therein lies our problem.
A slow motion world that depended on wood for heat and cooking, domesticated animals for transportation and controlled wind velocity for crossing the oceans welcomed the advent of the energy resources that would replace them. Not only was that new technology well received, it also guaranteed that those who harnessed those replacements would succeed and prosper with high velocity beyond imagination.

Electricity, the automobile engine, aviation, to mention the most significant became the symbols of civilization. Those who used them could flourish; those who did not withered. And time and again we got used and comfortable with the idea of who was being up front or who was being left behind. The formula was, for a long time one where supply was unequal ≠ but in real economic terms looked something like this: supply > demand. In other words, supply was greater (>) than demand of those resources we so much needed and wanted and could not live without. Prices were low then.

Unfortunately for us, the world would not stop to conform with our selfish wishes forever. It was not realistic and, above all, it was not fair. The developing nations that for many years were on the supply side of the equation by giving us those cheap resources that we gobbled up economically and defined culturally as necessary for our standard and reason of living became demanding themselves and moved to the demand side of the equation until there was insufficient supply for all of us. The demand for us and them, on the other side, kept increasing. At that point we reached a new formula that has not abated for a while now and has reached critical mass: Supply < Demand. In other words, Supply is less (<) than demand. So here we are looking at the new paradigm and asking in despair: where do we go from here?

I know where we are going, and the place where we are headed does not look even remotely similar to the past where we come from and, I am afraid to add, even to the present we now enjoy. As the saying goes: the party is over. This looks more like a piñata is over.

Wait for me for my next articles about the way that place will look like and how we are going to get there.

And that is my Point of view today.