The revenge of the material economy: The future belongs to manufacturers, energy suppliers and farmers.


America’s narrow escape last week from a major rail-worker strike brought home an important truth: people who make and ship real things – let’s call them material workers – now hold the whip hand over our supposedly ‘post-industrial’ economy. Firms trading non-tangibles – currency, bits and bots – may still hoard the most cash. But when it comes to eating, staying warm and, for many, making a living, the material economy is what matters most…

The biggest threat to the material economy is likely to be the green agenda. Even before Russia’s invasion of Ukraine and the global energy crisis, problems with often unreliable and expensive renewable energy were accelerating the deindustrialisation of the UK and much of the EU – including Germany, which had long been an industrial powerhouse. Energy rationing could be on the horizon in Europe this winter. Globally, energy-price inflation threatens to drive far more bankruptcies than the 2008 financial crisis. And food inflation, which in some countries has been driven by green agricultural policies, has led the percentage of people worldwide experiencing food insecurity to double since 2019.

Good material jobs cannot easily co-exist with Net Zero policies, which are aimed at wiping out fossil fuels in the near term. Trillions of dollars have been spent on global power generated by green energy over the past 20 years, but the percentage of fossil fuels has barely declined. The bulk of greenhouse-gas reductions in recent years has come from switching from coal to natural gas. Yet the negative consequences of trying to eliminate fossil fuels and nuclear power have been profound, both for companies and consumers. Thanks to Germany’s much vaunted ‘energy transition’, German consumers had to endure the highest electricity prices in the world, even before Russia’s invasion of Ukraine. In uber-green California, residents pay up to 80 per cent above the US national average for electricity.

The elites’ turn against the material economy has been going on for at least half a century. It surfaced prominently in the 1972 book, The Limits to Growth, which argued that natural resources were diminishing rapidly and so the world needed to transition to a less materially based economy with slower growth. This mentality has persisted and even grown, even though many green assertions dating back to that period – including warnings of mass starvation in much of the world – turned out to be exaggerated or plain wrong.

R&I .. TxPAT

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