Jeff Rubin's Why Your World is About to Get a Whole Lot Smaller: Oil and the End of Globalization won Canada's 2010 National Book Award on Wednesday. The award was established in 1985 to recognize the outstanding talent in Canadian business writing. The $20,000 prize is sponsored by PricewaterhouseCoopers, BMO Financial Group and media partner The Globe and Mail.
Mr. Rubin, former chief economist at CIBC World Markets, is well-known for challenging economic orthodoxies. His book argues that North American consumers who rely on low-cost goods and services from around the world should gear up for significant changes in the way they live their lives as the supply of cheap, easy-to access oil diminishes.
Mr. Rubin argues that rising oil prices were the main cause of the recent global recession, not the crisis in subprime mortgage lending. In analyzing the longer-term impacts of rising oil costs, he turns globalization on its head, and contends that interests and policy will shift towards regional and local economies and environmentally sustainable enterprise.
Mr. Rubin also writes a blog for ReportonBusiness.com called Jeff Rubin's Smaller World.
His first book was published in May, 2009, and since then has been published in more than 15 countries.
The Globe and Mail caught up with Mr. Rubin shortly after he won the award.
How does it feel to have won?
It was great even to be nominated, and it's even better to have won.
It's nice to have won an award for your only book, so it's probably good to stop here.
Will you stop here?
I don't know, I have a paperback version of the book coming out later and of course it's still being published in various places. For example, I just came back from Portugal where my book has just been published. It's been published in Spain, Latin America, Italy, Germany, and soon China, so I'm still in the process of publishing it.
What have you learned since your book was published a year ago?
What I've learned is that a lot of the concerns, particularly about the need to go back to a local economy, are pretty well felt everywhere I go. And that there's sort of a notion, as strong in places like Barcelona or Lisbon, where I've recently been, about the unsustainability of globalization, as there is in Toronto. This is particularly strong in Europe, because the euro is in some sense a vestige of the global economy, and it's a small microcosm of that global economy coming apart at the seems.
Have any of your views changed since your book came out?
I don't think any of my views have changed. I think that in some sense, the issues that I talk about, like scraping the bottom of the barrel and where we're going with the world's oil supply, have a greater sense of urgency given the rupture of the Macondo well in the Gulf of Mexico. This is potentially the equivalent of Three Mile Island for the offshore drilling industry, and if that is indeed the case, then world oil supply is going to shrink a lot sooner and at a lot more rapid rate than I had thought a year ago.
Deep water oil has accounted for almost half the increase in world oil supply over the last 10 years, so if anything, I think it underscores how desperate we've become and how problematic, not just from a dollars and cents economic standpoint, but also from an environmental standpoint, how problematic the new sources of supply are. In my blog , I wrote about how the deepwater disaster doesn't make the tar sands green, but it's a poignant reminder of the times when tar sands operators are all of a sudden extolling their ecological virtues against the backdrop of the disaster in the gulf of Mexico.
The other thing that's top of mind is not so much the disaster because that pertains to supply, but particularly in my trips to Europe, Spain and Portugal, the so called PIGS, is that the legacy of our first encounter with triple-digit oil prices has been these huge colossal deficits, and not only does that preclude the possibility of using fiscal stimulus the next time we hit triple-digit oil prices, but it means that probably the next time we hit triple-digit oil prices, yesterday's bailouts will be tomorrow's cutbacks. And that this will be in the face of huge fiscal restraint, which I think only will underscore the necessity of re-engineering our economy.
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