Peak Oil, Peak Population, Geopolitics, and the French Open

The Wrinkle has mentioned previously how “peak oil” is largely a myth, and that ultimately price will drive technological innovation well before oil, shale oil, oil sand deposits, or coal and gas as oil substitutes become exhausted. Water has also been promoted as the next scarce resource; however most of those arguments are predicated on continued population growth at similar rates to the last 100 years.

Let’s have a look at global population growth for a moment;

1750 – 1 billion people

1950 – 3 billion people

2000 – 6 billion people

2050 – 9 billion people (UN estimate)

For populations to grow at current life expectancy levels we need on average 2.1 children per family. This is where it starts to get interesting, again using UN estimates of the global average number of children per family.

1970 – 4.5 children

2000 – 2.7 children

2050 – 1.6 to 2.05 children depending on the assumptions

Currently the average number of children per family in developed countries is 1.6, and we all know about China’s one child policy. In developing countries the average number of children per family is 5 and this is expected to fall to 3 in 2050.

Ergo, there is a strong statistical case that the world’s population will actually peak in around forty year’s time (you can almost hear the earth sigh in relief) in 2050. Some of us might even be around then to see it happen.

The potentially falling population, the ratio of young to old, the ability to source both skilled and unskilled labour in adequate quantities for growth are some of the key premises underlying , “The Next 100 Years” according to George Friedman’s book on geopolitics.

In his view he sees the US as a “teenager” who can’t help but continue to become stronger as it matures and further cements its place as the dominant world power. The primary basis for this assertion sits with the power of the US military and it’s ability through it’s aircraft carrier fleet to both control the oceans and project it’s presence into any corner of the globe.

This point is hard to argue with, however he also sees China as being disjointed politically and with sufficient internal issues including raising its standard of living, to keep it from dominating the world stage. This point is a little harder to accept given the rise of Chinese influence throughout the global business sector and the political sphere within developing countries. Personally I’d reserve my judgment on this point.

Aside from some simmering cross border issues between the USA and Mexico, the three major potential flashpoints or projection of power considered to be viable by Mr. Friedman over the next 100 years are Poland, Turkey, and Japan.

Poland is singled out as being the strategic “meat in the sandwich” between classical Europe and the countries comprising the old USSR, and in particular it’s importance as a buffer between Europe and Russia. Turkey likewise for its geographical importance between the Middle East and Europe and ease of sea access for surrounding countries.

Japan makes the short list primarily due to its strong economic base, and strategic need to guarantee access to sufficient resources. This is seen as an unresolved issue carried over from the Second World War. When Japan entered the war it was 50/50 whether they invaded Pearl Harbour or attacked and occupied Siberia for its resources. Had the later course been taken the world could be a very different place today.

Bringing this all together it could well be that the current government’s pitch for a big Australia could have some merit. In particular the natural ageing of the population means that unless there are sufficient younger people working and paying taxes, the elderly will face a deteriorating quality of life or will use their voting power to “overburden” the younger generations coming through. This is not going to be an easy structural “tussle” for most developed countries and is already well advanced as an issue in countries like Japan.

You also don’t need to look much further than Russia in recent times to see a prime example of the sort of pain and social cost that can occur when an entire generation carries the cost of social change. The change in that country to a capitalist model saw the buying power of pensions and the standard of living for the elderly crash through the poverty line.

Admittedly it wouldn’t have been half as bad if Yeltsin hadn’t sold off state assets for “chump change” to his drinking buddies and friends of friends. So if you have an interest in what we might face in the next few decades, and can handle a “US centric” viewpoint the Wrinkle would recommend having a look at “The Next 100 Years”.

Changing pace, the old saying a picture is worth a thousand words came to mind quite strongly last night. While it was way past his bedtime, the Wrinkle managed to catch the last set and a bit of Sam Stosur’s entry into the French semi-final after beating Serena Williams. Her match form was excellent coming into the end of the second set when nerves took over letting Serena win the second set and more importantly carry the “upper hand” into the third set. This culminated in Serena getting to within one point of match point. However Sam Stosur kept her nerve, “steeled” up and went on to win, taking out two of the world’s best women players back to back.

The picture was the quiet wry smile Sam Stosur gave at the end of the game. The smile that said, “Watch out I’m now in the club, I’ve faced down the hardest in the world and I will go on to win the French Open”. So that’s my pick for this week Sam Stosur to take out the French Open, for those interested Sam is currently at $2.44 on Betfair.

Postscript: Apologies from The Wrinkle, my post was done yesterday afternoon as I’m out of the office today, and I’d assumed there would be a days break prior to the semi finals being played in France. This wasn’t the case, and I should have checked. As we all know Sam Stosur is now in the final against an even weaker opponent and should successfully complete the tournament.