Yet Rubin's talk of peak oil and depleting supply isn't really new. In some ways, most of this book has been written dozens of times already. No serious economist would deny the premise of “peak oil” or, at the very least, that “plateau oil” is upon us, save for the vested interests in the energy patch with share prices to protect.
The book's more valuable contribution is in the description of how the depletion of cheap energy will make our world smaller. (Actually, I think he's got the analogy wrong; rather than getting smaller, our world is about to get much, much bigger. China will seem much further away. Grapes imported all the way from Chile will be an extravagance. If globalization made the world smaller, costly oil is about to make it bigger once again. But this is a quibble.)
It's unfortunate that Rubin reserves only the last 56 pages for a discussion of how the local economy is about to make a big comeback, since this is the more interesting and unique part of the book. Is there hope for North American manufacturing after all? Will local agricultural production reverse its downward trend? He argues that a locally based economy could be revived in an era of ever-rising energy prices, but it's too bad he doesn't play up a bit more the potential benefits of local versus global.
For example, while North American consumers have enjoyed lower prices on goods from China over the past few decades, are we really better off? Children's toys are a good example. Anyone with children, nieces or nephews can attest to the fact that we've absolutely buried our kids in an avalanche of cheap toys. Most of us baby boomers or Gen Xers are still shackled with the mentality that more is better. But heaping more cheap (sometimes poisonous) toys on kids than they could possibly play with in one childhood is definitely not better.
Rubin is spot-on with his conclusion that we had better brace ourselves for some changes in the way we eat, the way we travel and the way we take for granted the ever-increasing abundance of inexpensive consumer goods. Using less energy will simply not be an option. And one gets the impression he actually believes that our society will be better off for it. But it would have been nice to hear that case made more forcefully and optimistically from this not-so-dismal economist.
Todd Hirsch is the senior economist for ATB Financial, a full-service Alberta-based financial institution, a writer for the Calgary Herald and The Globe and Mail, and teaches economics at the University of Calgary.
