As identified in a declassified CIA intelligence memorandum in 1977 entitled 'The Coming Soviet Oil Crisis' the Soviet union would, by the end of the 1980s, experience a shortage of hard currency, with serious economic ramifications, due to a peaking, and sharp decline of it's oil production. A similar thing has already occurred in the UK, but sterling has held strength thanks to the sheer inertia of the triple A credit rating that has allowed us to propped up the economy through international subsidy, and the relative weakness of our economic partners. As observed on this blog more than a year ago, the global economic recovery would peter out, and this would be widely blamed on the Eurozone crisis. Currently, things seem to be going as expected. The corruption of the corporate press empire has been revealed by the News of the World hacking scandal, and gradually details are emerging to the effect that it is revealed that this spans beyond the Murdoch realm. Whilst in the Soviet union, it was politburo issued decree that kept the likes of Pravda in line with the party ideology, censorship in the west is obscured by the illusion of 'competition' in both the political and business arena's. However, it is obvious that there is no economic incentive to admit the scale and causes of the crisis, so the corporate media continue to obfuscate and distract, as well as their allies in the Labour party, who seem to genuinely believe that by stimulating the demand side of the economy in the worshipped fashion of neo-Keynesian 'fiscal stimulus' will actually solve the problem.
However, they probably know better. Tim Jackson's seminal 'Prosperity Without Growth' was the one "economics book" if you can generalise like that, on Ed Miliband's reading list last summer. Surely he chose that for a reason? Furthermore, Miliband must be aware of the connection between peak oil (the big issue of the 'Transition Towns' movement) because he has engaged in - reluctant - public discussion on that very issue (link). Not many people know that, since it's generally a taboo topic for political coverage in the popular media. Osborne even went so far as declaring that his budget "seeks to repair the disastrous model of growth that created those (government) debts". Whilst it's probably fair to say that the Conservatives are generally still content with build up of debt in the private sector, in accordance with their convoluted faith in 'sustainable growth in the real economy', as if the public sector is somehow a 'fake' economy; it would at least appear that the are beginning to associate growth with debt.
The fact that Osborne specifically blamed the difficult economic circumstances on the high oil price is even more promising. There is even an 'all party parliamentary group on peak oil'. Do they actually know what's going on!? More than 20 of them seem to have at least some interest in the issue (click here for a membership list). Strangely when we search Hansard (the complete official record of all that is said in parliament), it appears that the issue of Peak Oil has not been materially debated in years. One of the big differences between the Soviet situation in 1986 and our situation in 2012 is the clear lack of transparency (what Gorbachev called 'Glasnost'). Now admittedly, Soviet authorities did not frequently discuss oil production issues - suffering from the same apparent fear of discussing actual production levels that their western equivalents share today - but they were prepared to discuss the 'crisis' in the context of declining export revenues - perhaps because of the financial emphasis of the word 'revenues' being not too heavily rooted in the real world. Former Labour party environment secretary and member of the all party parliamentary group on Peak Oil, Michael Meacher has gone on record stating that the cabinet is 'very well informed about such things' sic (see the documentary Oil, Smoke, and Mirrors). Perhaps they should decide to share that information with the public.