Three Years Ago I Predicted Europe's Collapse. I Was Right.

How the energy crisis and bad policy decisions destroyed the European industrial competitiveness.

This book of mine is turning out to have been prophetic for many things. I can only hope that the title itself will not become a fulfilled prophecy!

In 2022, I published a series of posts that later became the basic structure of my book The Age of Exterminations (2024). Below, you can find one of them, which I think is worth republishing here. Written more than three years ago, it turned out to be remarkably prophetic. It described how the clash with Russia was going to destroy the international competitiveness of the European industry. It has happened, as I described in a recent post of mine on the collapse of the German industrial system.

It was a good prediction, not because I have the gift of prophecy as ancient seers did. It was a straightforward application of the basic principles of ecological economics. The main one is that energy is the basis of the economy. Without energy, there cannot be an economy, but it is also true that with expensive energy, the economy suffers as well, and may collapse completely. That may well be the future of the European industrial system.

Note also that I didn’t predict that the European leaders would considerably worsen the situation by destroying the remaining European resources to embark on a mad race to rearm. But that’s happening, too, and can only hasten the collapse. I could have predicted it: it is another consequence of the principles of ecological economics. If energy costs more, then your products will cost more, and will not be competitive in a free market. So, the logical thing to do is to produce for the military market, where there is no competition: your enemies are not normally interested in selling tanks to you, so you buy them from the national industry.

The 2022 post also predicted famines to come to Europe. That hasn’t happened. So far.

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Sunday, May 29, 2022

How to Destroy Western Europe

(republished with some minor edits)

US Secretary of the Treasury, Henry Morgenthau Jr. (1891-1967). He was the proposer of the “Morgenthau Plan” that would have turned post-war Germany into a purely agricultural region, exterminating tens of millions of Germans in the process. It was approved by President Roosevelt, but fortunately, was never put into practice.

After Germany surrendered in 1945, the general attitude of the Allies was that the Germans deserved to be punished. One of the results was that the Allies deliberately limited the supply of food to Germany. As an illustration of this attitude, in the book titled The Death and Life of Germany” (1959), Eugene Davidson reports how the US military authorities explicitly ordered the American servicemen in Germany, and their wives, to destroy the leftovers of their meals. They wanted to be sure that nothing would be left for their German maids and their families.

This attitude of the Allies predated the German defeat. In 1944, Henry Morgenthau Jr., Secretary of the Treasury of the United States, proposed the plan that would take his name, the “Morgenthau Plan.” The plan called for the complete destruction of Germany’s industrial infrastructure and the transformation of Germany into a purely agricultural society at a nearly medieval technology level. As a consequence, Germany wouldn’t have been able to import food from abroad, and that would have resulted in the death of tens of millions of Germans. The Morgenthau Plan was initially approved by President Roosevelt, and it was even publicly disseminated in the press. Fortunately for the Germans, it was then abandoned by President Truman, but it remained active as a practical set of guidelines for the Allied policies in Germany until 1948. As a result, untold numbers of Germans died as a consequence of starvation. Some people speak of at least one million victims (or several million) of famine during the period from 1945 to 1948, but we’ll never know the exact number.

As we all know, the Germans were far from being innocent in this worldwide extermination game. Apart from the Shoah and the extermination of other ethnic groups, including German citizens judged to be a burden for society, in 1942, the German government had developed the “Generalplan Ost” (General Plan for the East) that foresaw the extermination of tens of millions of Slavs in Eastern Europe. The survivors would be used as servants and laborers for the German “master race” (Herrenvolk).

It is impressive for us to remember how, less than a century ago, Western governments were engaged in planning exterminations involving tens of millions of Europeans. Could these dark times return? It is said that civilization is just three hot meals away from barbarism, and we could rephrase this old saying as “society is just one defeat away from extermination.” The events of the past few months saw Western Europe close to inflicting a terminal defeat on itself by abandoning its main source of energy: Russian oil and gas. Fortunately, it seems that, after all, Europe won’t commit economic suicide. Russian gas keeps flowing into Europe and the lights are still on in Europe, although it cannot be said for how long.

Yet, Europe continues planning for defeating itself, as we can read in the recently published “REpowerEU” plan. The plan is mostly greenwashing, recommending such things as hydrogen, bioenergy, and the like. But the substance of the plan is in calling for huge investments in new regasification facilities that will allow importing large amounts of liquefied gas from the US, much more expensive (and also more polluting) than Russian gas.

If applied, the REpowerEU plan could lead Western Europe to a situation similar to what the Morgenthau Plan foresaw for Germany in 1945: de-industrialization. For this to happen, it is not necessary for Europe to go dark. It is sufficient to increase the cost of energy to such a level to make European industrial products not any more competitive in the world market. That would generate a spiral of decline that would rapidly strangle the European economy until Europe would become unable to import a sufficient amount of food for its population. Famines would necessarily follow. A new Morgenthau plan, this time Europe-wide.

Is that possible? As usual, history does not really repeat, but it rhymes. The events of World War II are not so remote from us that we can exclude that they would be repeated in some forms — including widespread famines and exterminations in Europe. Below, you can find an interpretation of the current situation by Michael McGarrity — who comments on the Facebook group “The Seneca Effect.” This text is reproduced with his kind permission.

Medieval EU: Plant Oats, Raise Goats.

By Michael McGarrity 23 May 2022

How many years will it take for Russia to adapt and stabilize to a new level of sanctions? Probably not long but, in the meantime, I believe that Europe will deindustrialize as plentiful, reasonably priced, Russian energy and food now sanctioned must be substituted by some yet to be identified source. Today, the German Prime Minister was “hopeful” that in 2023 Energy Production in Senegal may be ramped up to provide additional energy for Germany. This is highly irrational. Siemens, a great German technology company that requires large quantities of energy to produce its products, is now scrambling to find new sources.

It is likely that many countries will be buying Russian energy through third-party countries such as India. Germany may now buy Russian energy from India at greatly increased prices, it will be rebranded as Indian, not Russian energy while companies such as Siemens lose competitive advantage in the world markets due to greatly increased energy production costs. Over the long term, a general reduction in global energy supplies will harm those who have to pay the highest prices. By this winter, the EU faces significant risks of energy and food shortages. The domino effect on energy will have lag times in the EU. They are not yet evident, but they are already operating.

As European energy and food stores deplete, likely by this winter, the EU economy will become medieval. Russia is self-sufficient in terms of energy and food, but there is not a sufficient supply of energy and food in the world to replace the sanctioned Russian sources in the coming years. The die is cast. The EU is due for a minimum of two years of deindustrialization. Russian Arctic natural gas facilities can’t be switched on and off like a light switch. Grain that is not planted can’t be harvested. Fertilizer that doesn’t exist can’t fertilize crops. Some yet to be implemented substitute energy sources such as Senegal will take years to be realized. China, India, and Mexico will quickly take over markets held by great German companies like Siemens. The cake is baked for the EU in terms of rapid deindustrialization, which may be permanent.

All this is part of the delusional thinking underlying the sanctions on Russia, yet to be realized in terms of impact. The reality is that 440 Million EU Citizens are on a fast track to a dystopian Medieval life and there is no turning back due to the scale of the problem, which is related to physical, not ideological constraints. The Russian economy might be destroyed by the sanctions, but no Russian will go hungry or cold. Russia may evolve a self-sufficient standard of living similar to that of the mid-1990s, while Europe goes back to the 1400s: goat carts and bearskin clothes.

I’m no expert in Geopolitics or Finance. I’m an expert in large-scale disaster recovery testing. Nothing theoretical, all practical exercises timed to the minute of what it takes to restore systems, supply chains and such. Politicians such as the German Prime Minister, touting notions of instant natural gas production in Senegal are delusional. It’s time for EU citizens to start planting oats and raising goats.