Book Review: Chris Martenson’s “Crash Course”

The first thing to understand about Chris Martenson, the respected financial consultant and commentator, is that he’s a PhD in pathology who is, as a result, very comfortable with complex, technical ideas. He’s also a clear, concise writer. In Crash Course: The Unsustainable Future Of Our Economy, Energy, And Environment he’ll toss off sentences like “Money is a tertiary abstraction that gets its meaning from real forms of wealth,” and by the time a reader sees this, the meaning is both clear and profound because Martenson has done such a good job of laying out the necessary building blocks.

The “gloom and doom” genre is pretty crowded, of course, beginning with Robert Prechter’s Conquer the Crash and running through heavyweights like Peter Schiff, Jim Rogers and James Turk, all critiquing basically the same financial train wreck. For a book to join this list it has to present new information in a highly engaging way. Martenson pulls this off. His chapter on the myriad lies the US government is telling us is, by itself, worth the price of the book. One tidbit: 35% of US GDP is fictitious, thanks to statistical tricks like hedonic adjustments and “owners equivalent rent.”

His take on energy covers the obligatory Peak Oil but also lays out a Peak Coal thesis that isn’t yet common knowledge. Turns out that just as we’re running out of cheap oil, we’ve already mined the best coal and are now working our way through the less desirable grades. So despite rising volumes of coal mined, the total amount of energy the US is getting from coal has plateaued. He also explains how fossil fuels produced such a radical change in developed country lifestyles in less than a century: Gasoline is such a concentrated form of energy that one gallon is equivalent to 350-500 hours of human labor. A middle class American family thus owns an army of “energy slaves” that dwarfs the resources of the richest ancient kings.

Another surprisingly useful chapter covers the power of exponential growth. Pretty much every half-serious investor thinks they already understand compounding (I certainly thought I did), but Martenson’s rigorous, data-rich analysis held my attention. Did you know, for instance, that when something is compounding at a steady rate each doubling produces not just twice the previous total, but more than all previous doublings combined?

The power — and destructiveness — of this final doubling is the book’s underlying theme. Debt, of course, is growing exponentially and this alone could destroy the world as we know it. But the problem goes far beyond debt. The US money supply, global population and energy use, the depletion of topsoil and fisheries are all heading into final, catastrophic doublings. This convergence of crises could, says Martenson, produce more than a financial crash. We’re looking at the end of exponential growth — while living in societies built on the premise that exponential growth will never end. Here’s the Amazon link.

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