ourfiniteworld | The energy problem behind Trump’s election is not the one people have
been looking for. Instead, it is an energy problem that leads to low
wages for many workers in the US, and high unemployment rates in the
European Union. (The different outcomes reflect different minimum wage
laws. Higher minimum wages tend to lead to higher unemployment rates;
lower minimum wages tend to lead to higher employment, but
unsatisfactory wages levels for many.) The energy problem is also
reflected as low prices of oil and other commodities.
To try to solve the energy problem, we use approaches that involve
increasing complexity, including new technology and globalization. As we
add more and more complexity, these approaches tend to work less and
less well. In fact, they can become a problem in themselves, because
they tend to redistribute wealth toward the top of the employment
hierarchy, and they increase “overhead” for the economy as a whole.
In this material, I explain how inadequate energy supplies can appear as either low wages or as high prices.
Basically, if energy supplies are inadequate, workers tend to be less
productive because they have fewer or less advanced tools to work with.
Their lower wages reflect lower productivity (Slide 20). Slide 6 offers
some additional insights.
Trump’s election seems to reflect the cooling effect that our energy
problems are having on the economy as a whole. Citizens are increasingly
unhappy with their wage situation, and want a major change. Trump’s
election may at least temporarily have a beneficial effect, since it may
work in the direction of reducing complexity.
Long term, however, it is hard to see that the policies of any
elected official will be able to fix our underlying energy problems.
