Ilargi: All The Plans We Make For Our Futures Are Delusions

Yves here. While I agree with the general thrust of Ilargi’s argument, some small caveats are in order. First, the idea of progress, which is the foundation of the internalized belief in rising incomes and improving living standards, is a child of the Industrial Revolution. And that is despite the fact that the first generation, in fact, nearly two generations of the Industrial Revolution brought worse living standards for ordinary people in England (see here for details).

Second, we’ve had considerable periods even in the modern era where living standards have stagnated and people didn’t have good reason to be optimistic about the future. Consider the 1920s in England and Europe through the reconstruction after World War II. The UK didn’t get fully off WWII rationing for well more than a decade after the war ended. The US didn’t get whacked by the post Great War malaise, but the period from 1929 to 1945 was no party, and the later half of the 19th century had America going from the Civil War into the Long Depression. So the idea of more or less continuous improvement in living standards is an artifact of the 1980s and 1990s (and a lesser degree the first few years of the new century, although I’d argue that was projecting previous experience onto deteriorating fundamentals) projected backwards (the 1970s were an economically lousy, anxious decade, until you compare it to our current malaise).

By Raúl Ilargi Meijer, editor-in-chief of The Automatic Earth, Cross posted from

What worries me most about the world today, in the last weeks before Christmas and New Year’s Day 2014, is that all the plans we make for our futures and more importantly our children’s futures are DOA. This is because nobody has a clue what the future will bring, and that’s more than just some general statement. Is the future going to be like the past or present? We really don’t know. But we do exclusively plan for such a future. And that’s not for a lack of warning signs.

One might argue that in the western world over the past 50 years or so, we’ve not only gotten what we hoped and planned for, but we’ve even been to a large extent pleasantly surprised. In a narrow, personal, material sense, at least, we’ve mostly gotten wealthier. And we think this, in one shape or another, will go on into infinity and beyond. With some ups and downs, but still.

While that may be understandable and relatively easy to explain, given the way our brains are structured, it should also provide food for thought. But because of that same structure it very rarely does.

The only future we allow ourselves to think about and plan for is one in which our economies will grow and our lives will be better (i.e. materially richer) than they are now, and our children’s will be even better than ours. If that doesn’t come to be, we will be lost. Completely lost. And so will our children.

The ability of the common (wo)man to think about the consequences of a future that doesn’t include perpetual growth and perpetually improving lives (whatever that may mean), is taken away from her/him on a daily basis by ruling politicians and “successful” businessmen and experts, as well as the media that convey their messages. It’s all the same one-dimensional message all the time, even though we may allow for a distinction between on the one hand proposals, and their authors, that are false flags, in that their true goal is not what is pretended, and on the other hand ones that mean well but accomplish the same goals, just unintended.

This all leads to a nearly complete disconnect from reality, and that is going to hurt us even more that reality itself.

We extrapolate the things we prefer to focus on in today’s world, with our brains geared for optimism, into our expectations for the future. But what we prefer to focus on is, by definition, just an illusion, or at best a partial reality. We don’t KNOW that there will be continuing economic growth, or continuing sufficient energy supplies, or continuing plenty food. Still, it’s all we plan for. Not every single individual, of course, but by far most of us.

The last generation in the western world old enough to live through WWII fully aware, i.e. the last who knew true hardship – as a group -, is now 75 or older. Everyone younger than 70 or so have lived their entire lives through a time of optimism, growth and prosperity. That this could now be over is therefore something the vast majority of them either fail to recognize or refuse to.

They stick to their acquired possessions and wealth, which they view wholly as entitlements, and fail to see even the risk that they can continue to do so only by preying on their children, their children’s children, and the weaker members of the societies they live in. That notion may be tough to understand, even tougher to process mentally, and for that reason provoke a lot of resistance and denial, no doubt about it, but that doesn’t make it less true. The more wealth you want to retire with, the less your children and grandchildren will have to retire with, and even to live on prior to retirement. That is because there is a solid chance that the pie is simply no longer getting bigger.

As societies we must find a way to deal with these issues as best we can, or our societies will implode. If trends from the immediate past continue, then, when the entire baby boomer generation has retired, 10-15 years from now, income and wealth disparities between generations will have become so extreme that younger people will simply no longer accept the situation.

That is what should arguably be the number one theme in all of our planning and deliberations. It is not; indeed, there is nobody at all who talks about it in anything resembling a realistic sense. Every single proposal to deal with our weakened economies, whether they address housing markets, budget deficits, overall federal and personal debt, or pensions systems, is geared towards the same idea: a return to growth. It doesn’t seem to matter how real or likely it is, we all simply accept it as a given: there will be growth. It is as close to a religion as most of us get.

And while it may be true that in finance and politics the arsonists are running the fire station and the lunatics the asylum, we too are arsonists and loonies as long as we have eyes for growth only. That doesn’t mean we should let Jamie Dimon and his ilk continue what they do with impunity, it means that dealing with them will not solve the bigger issue: our own illusions and expectations.

We allow the decisions for our future to be made by those people who have the present system to thank for their leading positions in our societies, and we should really not expect them to bite the hand that has fed them their positions. But that does mean that we, and our children, are not being prepared for the future; we’re only being prepared, through media and education systems, for a sequel of the past, or at best the present. That might work if the future were just an extrapolation of the past, but not if it’s substantially different.

If there is less wealth to go around, much less wealth, in the future, what do we do? How do we, and how do our children, organize our societies, our private lives, and our dealings with other societies? Whom amongst us is prepared to deal with a situation like that? Whom amongst our children is today being educated to deal with it? The answer to either question is never absolute zero, but it certainly does approach it.

Obviously, you may argue that we don’t know either that the future will be so different from the past. But that is only as true as the fact that neither can we be sure that it will not. So why do we base our entire projections of the future on just one side of the coin, the idea that we will have more of the same – and then some more -, without giving any thought to what will be needed when more of the same will not be available? That looks a lot like the “everything on red” behavioral pattern of a gambling addict. But who amongst us is ready to admit they’re gambling with their children’s future?

I see the future as completely different than a mere continuation from the 20th century past and the 21st century present. I even see the latter as very different from the former, since all we’ve really done in the new millennium is seek ways to hide our debts instead of restructuring them. You can throw a few thousand people out of their homes, but if you label the by far biggest debtors, the banks, as too big to fail, and hence untouchable, nothing significant is restructured. But that doesn’t mean it’s going to go away by itself, the by far biggest debt in the history of mankind. At some point it must hit us in the form of a massive steamroller of dissolving and disappearing credit. In a world that can’t function without it.

And if we refuse to consider even the possibility that the debt will crush us under its immense weight, and profoundly change our societies when it does, then we will be left unprepared. And lost. That should perhaps scare us into action, not denial. Denial simply doesn’t seem very useful. Is there a risk that business as usual will no longer be available? Yes, and that risk is considerable. But we plan our futures as if it’s non-existent. That is a huge gamble. Not to mention the worst possible kind of risk assessment.

The best, or most, that people seem to be able to think of doing, even if they feel queasy about their economic prospects, is to stuff as much manna as they can into their pockets. That is the sort of approach that may have worked in the past, but it offers no guarantees for the future. It’s just another gamble.

We love to tell ourselves how smart we are. It’s time we walk that talk.

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83 comments

  1. JGordon

    “We don’t KNOW that there will be continuing economic growth, or continuing sufficient energy supplies, or continuing plenty food. Still, it’s all we plan for.”

    And here I had someone telling me only a few months that there was no point in stockpiling food because you could always walk down to the local grocery store and buy some. What a very naive thing to say. I wonder if that person would be so cavalier about things today.

    Regardless I am happy to see posts coming from the Automatic Earth appearing on NC. I remember when I first started reading this site that nothing to intelligent and reality-based ever made it on to here. But I suppose part of being a successful adult means being able to dispense with fallacious ideas and being willing to adopt new ways of thinking.

    1. susan the other

      You and I come from opposite ends of reality. When I first started reading NC I did so because no other blog offered such clear and focused language and from that language NC has evolved consistently with a better vision of how things really are. Bad. NC (Yves) has pointed out more than once that she doesn’t think vacuous optimism will get us to a better place. It is simply true, imo, that we live in a tragic world, like Kunstler says and all the ancient Greeks. But life goes on.

  2. bob goodwin

    Debasing the dollar is certain, with inflation.
    We are not done with the industrial revolution trend line. Information age growth is not yet half complete, and then afterwards their will another bout of growth from robotics. I am not saying we will get smooth growth, as Yves said our recent past has been far more consistent than should be expected. But wealth comes from output. Maybe America will get less of this growth, or more. But I am believer that productivity growth will continue, and will only be limited by our desires.

    1. DakotabornKansan

      “productivity growth will continue and will only be limited by our desires”

      The continuing paradox of poverty in the midst of plenty? Limited only by our “job creators” desires to invest?

      Where has all the productivity growth gone so far?

      The productivity of an economy is a measure of the efficiency with which that economy uses its resources—such as its labor and investments in capital—to produce valuable goods and services. Productivity is important because growth in the amount of goods and services produced for a given amount of labor and capital is the ultimate determinant of growth in living standards in an economy over time.

      “When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done” – John Maynard Keynes

      Where has all the productivity growth gone? It is two-thirds inequality, reflecting the shift of income from labor to capital and, within that, a shift of labor income to the top one percent and away from the middle class. Labor’s incomes would be 30 or 40 percent higher than they are if were not for the soaring inequality.

      “Productivity growth has frequently been labeled the source of our ability to raise living standards. This is sometimes what is meant by the call to improve our “competitiveness.” In fact, higher productivity is an important goal, but it only establishes the potential for higher living standards, as the experience of the last 30 or more years has shown. Productivity in the economy grew by 80.4 percent between 1973 and 2011 but the growth of real hourly compensation of the median worker grew by far less, just 10.7 percent, and nearly all of that growth occurred in a short window in the late 1990s. The pattern was very different from 1948 to 1973, when the hourly compensation of a typical worker grew in tandem with productivity. Reestablishing the link between productivity and pay of the typical worker is an essential component of any effort to provide shared prosperity and, in fact, may be necessary for obtaining robust growth without relying on asset bubbles and increased household debt. It is hard to see how reestablishing a link between productivity and pay can occur without restoring decent and improved labor standards, restoring the minimum wage to a level corresponding to half the average wage (as it was in the late 1960s), and making real the ability of workers to obtain and practice collective bargaining.” – Lawrence Mishel, “The wedges between productivity and median compensation growth,”

      “A wealthy community will have to discover much ampler opportunities for investment if the saving propensities of its wealthier members are to be compatible with the employment of its poorer members. If in a potentially wealthy community the inducement to invest is weak, then, in spite of its potential wealth, the working of the principle of effective demand will compel it to reduce its actual output, until, in spite of its potential wealth, it has become so poor that its sur over its consumption is sufficiently diminished to correspond to the weakness of the inducement to invest.” – Keynes

      Workers of the world unite! We have nothing to lose but our gains.

      1. Banger

        To be brutally simplistic, productivity growth did not go to labor because labor is less valuable–particularly low-skilled labor. We have to face this fact because the value of labor will continue to go down as robots and expert systems gradually take over more and more functions. We are facing less of a crisis in labor and more of a crisis in meaning. In the 1950’s people who understood systems theory and cybernetics understood that we face a future that could make many jobs obsolete and that perhaps we ought to expand our view of life to include happiness rather than nose-to-the-grindstone work. While this pleased a few visionaries the idea was considered toxic by most people, particularly those in power. For a variety of reasons we chose to turn our backs on facing our higher human potential and we are now faced with a philosophy of life that does not match reality as much as we try to torture reality to fit into the current paradigm of “hard work” as the only true reason for living.

        1. Antifa

          Indeed, it is perfectly rational to predict a world by 2100 where humans doing labor of any kind is a matter of choice, not need. Some people will want to grow food in dirt, worms and manure because it’s fun, while most will be very happy with their super tasty algae-based protein-enhanced roughage-balanced recycled chewy food stuff from the nutrition robot spigot on the wall. Two cold squirts for breakfast and you’re good for the day. Yum!

          But the real crunch of this century will be admitting there are too damn many of us to take decent care of us all, and knowingly reducing our population drastically, over a couple generations at the most. Getting down to 3 billion well educated humans is the hat trick. Keeping 12 billion or more half starved, functionally illiterate humans raping the planet for morsels to eat isn’t decent.

          Our far future inevitably becomes one where every molecule from every source without exception is recycled if possible. This is a spaceship, after all, and until we can go to other planets to consume other resources, we have to live with what is here.

          1. Banger

            I’m not with you on population. We can manage current population levels if we want to–but with the current models we have for living a decent human life you are right.

            1. Yves Smith Post author

              Huh?

              EO Wilson said as of the early 1990s that humans were consuming 20% to 40% of the food energy of the ENTIRE PLANET. The global population has grown since then and people in developing economies want to eat more like people in advanced economies, which means more animal protein, which means way more food energy cost (in simple terms, each step up the food chain takes 10X eating at the next level down, although there is a lot of variability. Chickens are very efficient users of corn inputs, cows are terrible).

              Moreover, go read Jared Diamond. More intensive farming and/or farming of more marginal land is generally unsustainable (as in much more vulnerable to changes in weather and climate, and are are a precursor of collapse in all the societies he studied).

              1. bob goodwin

                I have read collapse and guns&steel, He is very good writer and has good facts. I will agree that we cannot 50 billion people with cows, that does not mean that protein cannot be harvested in far more efficient ways on less land with technology and energy. I am both and optimist and a pessimist, but I have a hard time not seeing growth in output for a century unless there is war. That means in a century, their poorest will live far better than they do today.

                The risk is the continued capture of our institutions, and the permanency of armed corporatism, unless there is war.

              2. Banger

                I have read Diamond.

                We have the technology to provide adequate food for the world population at present in my view. There are numerous methods from urban farming if you hang out with people who have developed models of sustainable technology. I don’t buy into the Malthusian view that we need to dramatically decrease population.

          2. Benjamin

            Kino’s Journey Episode 5 Summary:
            05 “Three Men Along the Rails -On the Rails-”
            “Rēru no Ue no Sannin no Otoko” (レールの上の三人の男) May 13, 2003
            As she makes her way along an old railroad, Kino runs into a man who has been polishing the tracks for some fifty years. Stopping for a break, Kino entertains the man with a story of a land where the people no longer have to work, but choose to subject themselves to meaningless and stressful tasks anyway. It may seem foolish to the old man, but little does he realise that his own work is just as pointless, for, as Kino is about to discover, there are two more men working on the railroad, each undoing the work done by the others.

            Well worth watching, though if you want to see online you’ll have to settle for the english dub, which isn’t particularly great.

        2. michael

          i remember someone telling me in 69 that the biggest problem we would have in the future was what to do with all that leisure time. he could have phrased it as ” what we will do with all the people who don’t have lucrative employment”, the message is almost the same.

          the answer to the question lies in front of our noses… it’s what we’d do if we didn’t have to work, ergo play. this includes playful work, hobbies, passions etc. cyber-geekery and tinkering in the shed will replace yuppies chasing digi-zeros on screens.

          music, chess, vidgames, the anticulture of mammon will give way to a world where peeps will value cultural wealth above any other, and humanity will finally attain maturity, after our long crawl out of the slime.

      2. bluntobj

        Also, quoting Keynes as the solution to the problem is doubly ironic, seeing as how Keynes other economic ideas were used to put us in this position in the first place…

    2. James Levy

      I don’t see all the “growth” generated by computers–I see systems made both more efficient and more vulnerable to supply chain collapses that boost profits but not, as I see it, standards of living for the vast majority. I also see computers and robots deskilling jobs or replacing people, driving down or stagnating standards of living for the many. I can see how the Green Revolution helped people, but computers and robots, not so much. think people in general, and economists specifically, confuse improved efficiency with a rising standard of living. They could be related, but they certainly don’t have to be. And both computers and robots need energy inputs whose long-term availability at modest prices is suspect. They are also dependent on vast energy and transport infrastructures that may prove too expensive in the future to maintain at even current standards. So the idea that computers and robots will bring forth “growth” that will help our teeming masses strikes me as wishful thinking.

      1. Banger

        The negative effects of technology exist for political rather than economic reasons. We could have a much higher standard of living and work less and enjoy life more if that is what we wanted–but that idea is too threatening for most people to face.

  3. The Dork of Cork

    Much of Europes (Europe is the true center & cause of deflation in its geographical sphere and inflation elsewhere on the planet) problems is because of Protestant type forces of accumulation forced down our throats…but we cannot all be protestant in the asset / capital hoarding aspect of its character as the entire remaining rational parts of the Industrial system jams up.
    So trade must extend beyond market town , beyond national borders , beyond continents.
    Eventually the system begins to serve assets and not people as can be seen most strikingly in Ireland where we export our wealth “to the core” and all we get in return is dud assets from which we must again trade (now with external pirates who have been given letters of Marque by the CBs)

    The most striking thing about travel in western Europe be it France or Italy is the decline of the village /market town and consequently local & later national production / consumption chains.
    My question is why are these villages tourist cul de sacs and not centers of life.
    You don’t need a car in these places to live.
    All you need is enough fiat for bread , cheese and table wine.
    But not enough fiat is available as we need the stuff to create yet more double entry toys …but why ?
    Is it out of habit or is it a method of control ?

    1. Moneta

      My 90 year-old grandmother who is still alive today grew up in an era where one did not consume everything today. They would can their harvests and made sure they had enough to get through the winter. She’s a devout catholic but I suspect that is a form of what you call protestant hoarding. Today’s saving and investor is the extension of this practice. However, we now invest in securities instead of stocking our pantry.

      I don’t see anything wrong with it unless one is hoarding more than they need in order to enslave others.

      1. The Dork of Cork

        @moneta
        Please , I am agnostic about things of a religious nature…..but read Bellocs history of the Tudor times.
        His arguments center on the corruption and decay of Parliamentary governance .

        It has been proven true yet again in Ireland and elsewhere in Europe.
        The Parliament simply wish to hold on to their “Assets” (think of it as relative wealth disparity rather then true claims on wealth)
        However The parliament is not in control of the monetary system and indeed wishes to outsource its power so that it can continue to hold its “Assets” with clean hands.
        Modern Kings of England are also in a junior position of power as their wealth is tied up in “Assets”

        The system needs a fiat king not concerned with land and other material pleasures – there is simply no other way around this problem.
        Waiting for socialists to manage the system or a collective Parliament to enact laws against their own narrow sectional interests will be a long long ..long wait , it fact it will never happen.

        The system will decay in a sudden violent manner before this event somehow comes about.
        I am afraid history is on my side here.

        1. bluntobj

          I agree with your conclusion.

          One point to note:

          “Waiting for socialists to manage the system…”

          Replace the word “Assets” in your argument with “Power”, and you would have the operative motive of socialists in that selfsame government.

          1. The Dork of Cork

            No – I disagree with the use of that term power – holding money claims is not power in its true sense – making the money is power.

            People would depend on others to inflate their assets are simply not driving the car however vast their assets.

            In conditions of extreme stress you can see who is behind the system – for instance in Ireland during the height of the crisis the CB gov overruled the nominal figurehead on live state TV – the figurehead resigned soon after.
            Therefore the CB gov became the true leader of the jurisdiction.

            The nominal separation of powers has clearly no meaning and perhaps never had.
            Political expediency came first and when I talk of politics I am not talking about the rituals of democracy.
            The people who rule us have organisations which they do not call political but are manifestly political in nature.
            This is now a proven fact.

  4. David Lentini

    I agree with Yves about the “general thrust”, but I think the caveats are quite a bit larger.

    First, the comments are probably directly mostly at those who follow the MSM, especially the talking heads and TV economists; so most everyone who reads this and similar ‘blogs and media. But the media, like the philosophers of the Industrial Age who built on the teleology of the Enlightenment that we were on an ever-upward path of development (otherwise, we’d still be fallen from the Garden), reflect only the views of those who have it good and want to maintain the status quo.

    Second, those who really remember the Second World War and the privations it caused are far older than 75, i.e., those born in 1938 and were only seven years old when the war ended. To really have experienced the war, you would have to have been born around 1930 to have reliable memories and feelings of Pearl Harbor or the Blitz or Barbarossa, which is getting to the narrower end of the population curve.
    Instead, I think Ilargi’s argument illustrates and interesting sociological-psychological phenomenon: Many of us tend to overestimate our memories of past events. I was born in 1963, which makes me far too young to remember anything of real detail of the ’60s; yet I often catch myself thinking and speaking as if was about 10 years older. I’d say the same for my parents who were born in the second half of the 1930s and often talk of living through the “war”, which is only true is a rather literal sense. I think we subconsciously incorporate the stories we hear from our parents and other adults as “memories”, when in fact we really remember their experiences as told to us or others in our presence. For those of my parents generation, that means many of the details and fears the recall are second-hand at best. I expect what they really remember is the propaganda from newsreels and television.

    Finally, I think the idea of endless growth is joined at the hip with the notion of “greed is good”. The élites can only justify their greed by arguing that everyone can “get theirs” if they only work hard (like, supposedly, the élites). So, the pie, like the old American frontier, has to be an ever-growing expanse free for the taking. Of course that’s not true. But for generations raised on the notion of “do what feels good”, what J.K. Galbraith called the “Culture of Contentment”, the concept of limits and real shortages creates a lot of cognitive dissonance.

    1. David Lentini

      Oops! Looks like I mangled the opening of the second paragraph; here’s what I meant:

      First, the comments are probably directed mostly at those who follow the MSM, especially the talking heads and TV economists; so most everyone who reads this and similar ‘blogs and media is outside this group.

    2. Moneta

      I f you lost your father in the war, that is experiencing the negative impact of war.

      If your parents are tormented by what they lived in the war and you live their torment, you are experiencing the negative impact of war.

      So you could have been born between 1939-1950 and have been greatly impacted by the war.

  5. Moneta

    When I entered the workforce in the early 90s, I was surrounded by a few women in their forties who were extremely frustrated. They actually went out of their way to hinder me because I had the education they did not get. That shaped my life philosophy. I would never let myself get bitter due to unrealized expectations or bad twists of fate.

    I am one of those who sees a different future. I am pessimistic about out future material wealth but I am optimistic about life. I don’t believe you have to have Mcmansions and expensive cars to have a good life.

    In the last decade, when I started denouncing the greed and gross generalised mismanagement based on a false reality or unrealistic expectations I ended up getting marginalized. And I could sense bitterness taking over. That was the trigger so I changed my life.

    If I am sure of one thing it’s that there will be a lot of bitterness out there over the next couple of decades and my number one goal in life is to avoid it. My material and inner lives are built around that goal.

    1. MikeNY

      We already see the bitterness — at least in the partisan rancor of politics, which is, in large part, ascribable to BOTH parties’ lack of coherent strategies for addressing flagging growth, and the popular perception of diminished economic prospects.

      And we see desperation in the Fed’s quixotic and dangerous efforts to conjure up a lost era of growth.

      I agree with you that infinite consumption will not buy infinite happiness. If the future brings slower growth, that does not necessarily mean that society cannot improve, or that people can’t be happier than they are today. But we have to learn to share.

    2. Carla

      Good for you, Moneta.

      It cannot be said too often: a life of material excess all too seldom equals a good or even happy life. So thank you for saying that, and more.

  6. The Dork of Cork

    Belloc
    “The Servile State”

    “How did such a catastrophe come about ? Why
    was it permitted, and upon what historical process did the evil batten ? What turned an England eco- nomically free into the England which we know to- day, of which at least one-third is indigent, of which
    nineteen-twentieths are dispossessed of capital and
    of land, and of which the whole industry and national
    life is controlled upon its economic side by a few
    chance directors of millions, a few masters of unsocial and irresponsible monopolies ?

    The answer most usually given to this fundamental
    question in our history, and the one most readily ac- cepted, is that this misfortune came about through a
    material process known as the Industrial Revolution. The use of expensive machinery, the concentration
    of industry and of its implements are imagined to have enslaved, in some blind way, apart from the human will, the action of English mankind.
    The explanation is wholly false. No such material cause determined the degradation from which we
    suffer.
    It was the deliberate action of men, evil will in a few and apathy of will among the many, which pro- duced a catastrophe as human in its causes and in- ception as in its vile effect. Capitalism was not the growth of the industrial movement, nor of chance material discoveries. A
    little acquaintance with history and a little straight- forwardness in the teaching of it would be enough
    to prove that. ”

    The Industrial System was a growth proceeding
    from Capitalism, not its cause. Capitalism was here
    in England before the Industrial System came in and of the concentration of the implements of production in the great towns.to being ;before the use of coal and the new expensive machinery

    It was not machinery
    that lost us our freedom ; it was the loss of a free mind.”

    @Yves
    Chapter 4(SECTION THE FOURTH HOW
    THE DISTRIBUTIVE STATE FAILED) is worth reading……..what we were thought in School by the Catholic monks was not all buggery & the holy trinity …..a gut feeling about Tudor exploitation carried through until the socialists with a mission to wipe out our collective knowledge and hurt about those evil times have come to power.

    1. Yves Said,

      “Capitalism was here
      in England before the Industrial System came in”

      I would refine the above statement and make it more precise. It is USURY that is the cause of money and growth becoming a GOD over all else (by far). Industrialization just allows the money supply to grow much faster and the impact of usury to be much bigger under our usurious economic/banking systems.

      God has already experienced eternity! He has perfect and complete knowledge of everything. He knows what is best for us. He forbade usury for a very good reason.

      Within the next five years I expect the global banking system to completely collapse unless the extreme form of usury it is based on (interest based currency issuance) is abandoned. We will most likely have a hyper-deflationary collapse of the global banking system and mass global starvation if this extreme form of usury (interest based currency issuance) is not abandoned soon.

      At this point it is humanity vs. the bankers and the usurers (i.e., the creditor class). I pray every day that God guide humanity so we may remove the evil of usury from our economic affairs.

      Usury (debt base money/currency) has caused extreme imbalance in income across the globe for the past 150 years. Usury has greatly amplified poverty on earth. Usury was responsible for the great depression in America and Europe in the 1930s. The two world wars were instigated by bankers and the creditor class.

      Extreme Imbalance in money concentration caused by usury leads to worship of money. Money has become a false god in our lives because we are mis-using this tool. If money/currency had been issued by the government rather then the private bankers the fruits of the industrial revolution would have spread more evenly and equitably as explained by economist Clifford H. Douglas in 1924.

      Usury is an example of something all abrahamanic religions (Judaism, Christianity and islam) forbid. We (humans) are learning the wisdom behind prohibition of interest based economic system (our usury based current global banking system) via experience (the truth that we already knew via revelation).

      Mansoor H. Khan

      1. The Dork of Cork

        Belloc said , not Yves.

        Coal was traded via Scotland in the middle ages but coal fired machines came about after the rape of Hibernia and the transfer of our sur (energy / food) goods toward England.

        Imagine capitalism as a Giant spinning vortice…if its comes into with the ground it will dissipate into much smaller eddies.

        The last 400 years of extreme corporate power has been much like the Giant red spot of Jupiter – it will not stop until it runs out of energy via some external something (solid ground)

        The birth of modern derivatives about 1970 ~ ish was to prevent the system touching the ground …this was also about the time when England first started to import coal.
        ????

  7. Ilargi

    Yves,

    I limited myself to two overlapping time slots. First: the past 50 years, i.e. 2 generations, not least because that’s what it takes to make people forget lessons from the past, and second: the period after WWII, baby boomer time: “Everyone younger than 70 or so have lived their entire lives through a time of optimism, growth and prosperity.”

    .. the idea of progress, which is the foundation of the internalized belief in rising incomes and improving living standards, is a child of the Industrial Revolution.”

    As an idea, yeah, perhaps, but then reality kept biting like a rabid dog for a long time.

    … the idea of more or less continuous improvement in living standards is an artifact of the 1980s and 1990s

    No, I wouldn’t say so, that’s been going on since the 1950’s. And for most people it’s worked out. Many of those born in 1920 or so first had 3 decades of mayhem, which fully belied the notion of progress, but after 1950 arrived, and they were 30, things boomed and they never looked back if they could help it. Still, they’re not the really complacent ones, they know things can turn on a rainy day’s dime. It’s their kids that first lost sight of the rearview mirror.

    … (and a lesser degree the first few years of the new century, although I’d argue that was projecting previous experience onto deteriorating fundamentals)
    My take: “all we’ve really done in the new millennium is seek ways to hide our debts instead of restructuring them”.

    … projected backwards (the 1970s were an economically lousy, anxious decade, until you compare it to our current malaise)
    For most people the 1970s were great, though they’re arguably also the time the road stopped rising with us (it’s just that many never noticed). I’d say overall economic numbers would point to the late seventies as the zenith of wealth and riches, as well as of “fairness” in the distribution of it. After that, we started borrowing our way into the future, and in the late 90s we began injecting steroids into that. A surefire way to rising inequality.

    And since there’s a limit to borrowing one’s future, and the debt load from that borrowing has grown exponentially to heights we can’t even truly comprehend, we’re in for the biggest crash in a very long time, eat your heart out Kondratieff. The disappearance of credit, inevitable at these heights of debt, will devastate a world so addicted to it. Like we went from the nice buzz of grass to the scorched earth of crack cocaine.

    PS: I had the Mandela show on a TV in a corner of the room, and I realized that I couldn’t think of even one of those world “leaders” who wouldn’t have gladly let Mandela rot in prison if their careers would have benefited from it.

    1. JEHR

      Yes, the world leaders making the big speeches at Mandela’s celebration show the heights to which unintended hypocrisy can rise. The only leader of a country (that I know of) who really stood by Mandela while he was in prison was Brian Mulroney and he was in the audience but not asked to speak.
      See:

      1. econ

        Too true the comment of the hypocrisy of world leaders…in fact Reagan and Thatcher were too afraid of the Communist Menace to allow justice to be allowed to remove apartheid. What horrors continue in the present state of the world in response to other menaces real and otherwise.

    2. Calgacus

      IMHO, Yves periodization and claims are a bit odd, more than Ilargi’s.

      Here’s my take:
      In the USA, The really big change, the turning point, was 1972-1982, when things reached their zenith, plateaued, followed by the Great Moderation = Great Stagnation = the worst thirty years for economic progress, for living standards for the ordinary person, since colonial times. (Seen an econometric paper on this, can’t remember where.) Which was on the heels of the best, the postwar era. One saw the (re)appearance of homelessness. 1920 – 1950 was not so bad progress-wise. You only had 4 years of 1929-1932, which was followed by the great achievements of the first New Deal, etc. There’s been an academic industry to belittle them since the 50s.

      Science and technology, while ever advancing, slowed its rate of advance in the last few decades after the 70s turning point, in great part due to the diminution of government support.. (One way to tell is how often the reverse is claimed.) The reason for the Great Stagnation was because elites decided to have the crappy economies of the last few decades. Nothing else. Cf Victor Quirk’s retrospective work, and Josef Steindl & Herbert Marcuse, who as far as I can tell were the clearest thinkers – who by the early 70s saw what was happening / about to happen.

      The idea of continuous improvements – particularly in the sense of one’s children’s lives being “better” – is as American as apple pie, and centuries old. The 80s & 90s (& late 70s) were when it began dying, not when it arose..

      1. Yves Smith Post author

        You’ve got a really sanitized account of the Great Depression. The US did not get out of it until after WWII, period. Any decent account will confirm that. There was some clawing back of ground in 1935 and more growth in 1936 but not even close to former levels of employment (and remember, many people had been completely wiped out due to bank failures, one set of my grandparents had money in 3 banks, all of which failed. They got back 3 cents on the dollar and lost their home as a result too). The New Deal was a lot like throwing shit desperately at a wall, some of which stuck and ware extremely good, but a lot of the programs were bombs. We went back into the Depression in 1937 when TPTB decided to tighten the budget.

        Depicting going to a war economy, with rationing, forced savings, millions of young men sent to fight (and many dying or coming home crippled) and women mobilized to man factories on a mass basis as some sort of good time is perverse, even though it did have the effect of finally getting us out of the Depression.

        And I’m a student of the history and literature of the modern era, the Industrial Revolution to the end of WWII. It was my major in college. The idea of progress is most assuredly in history and literature a modern era idea. Tell me where you find it, for instance, in Shakespeare and Marlowe.

        1. Calgacus

          The US did not get out of it until after WWII, period. Any decent account will confirm that. . Well, there is no decent account. Galbraith didn’t listen to his friend Schlesinger and write one. The usual unemployment figures are of course false, and depicting the first New Deal, the best peacetime growth the USA has ever seen the way it usually is, is wrong. Almost all the programs succeeded very well, which is why so many wrote nonsense about them. They didn’t need to have been all that much bigger to have completely succeeded in eradicating the Depression.

          As Marshall Auerback says, even the liberal pro-Roosevelt historians paint a picture unfair to the New Deal; he says the Depression ended in by 1936, I do not go that far. The Roosevelt Recession was more complicated and unexpected than a TPTB act; the best account I am aware of is Lauchlin Currie’s memorandum on it to FDR, which I have linked to here at times, and which ably refutes work like Romer’s or Brown’s long before they were written. What I meant was in generational terms – there is no fair way to pick any thirty year period in US & colonial history that had less progress for the average living person, comparing the beginning to the end, than the stagnant past few decades. Of course the war was a tragedy; the deaths were an unquantifiable tragedy. But I think most of the Americans who died in uniform thought they were dying for something, and I think they were right, too.

          Depicting going to a war economy, with rationing, forced savings, millions of young men sent to fight (and many dying or coming home crippled) and women mobilized to man factories on a mass basis as some sort of good time is perverse. Well, it is sort of how most people felt at the time, judging from literature, from talking to people who experienced it. Nothing wrong with a war economy. It’s having wars that is bad. I didn’t even really mention the war above, by the way.

          Tell me where you find it, for instance, in Shakespeare and Marlowe. Tell me where you don’t in Bacon or Galileo. I should probably look at Nisbet’s book on it, which I have forgotten the gist of, but I think he traces it to ancient times. Dating it later than the Renaissance is strange to my eyes. Thinking that the USA has not been imbued with it, intoxicated by it, for its entire existence, that there is any place you can’t find it in US history or literature, the idea of continual improvement, and thinking that is recent – when it has begun to diminish, after centuries – astonishes me.

          With sincere admiration. C

    3. Yves Smith Post author

      Sorry, I was around in the 1970s. It may look great with the benefit of hindsight, but the economy sucked, unemployment was high, inflation was killing savers and investments and the recession of 1980-1981 was really nasty, the worst until the GFC. Did you miss “stagflation”?

      Go read the business press of that era. It is pessimistic. People so didn’t believe in America’s economic future that Business Week ran a cover in 1979 titled “The Death of Equities.” The reason Carter backed deregulation (which he did, BTW) was he was desperate for any idea that would fix the economy.

      And just around 1976 was when businesses stopped sharing productivity gains with workers. The decline of business fortunes led them to start stomping on workers, a trend that has only intensified over time.

      1. John Yard

        I started working in 1971 , and I have to admit being somewhat nostalgic about the 1970’s . My first jobs were very well paid factory work , making the equivalent today of + $70k. I was able to take classes in programming , and got an entry level job. I shortly worked my way into systems engineering.
        This was possible in the 1970’s , but certainly the ability to obtain rewarding work , and to change careers and thrive without an advanced degree ( I got a BA in 1971 ) seems much more limited in the last twenty years, if possible at all.

        1. Yves Smith Post author

          That I agree with.

          One of my brothers didn’t finish his BA and got his first job in the early 1980s. Union job in a paper mill that was world class efficient, should have seen him through an entire career.

          It may still, and he’s done well for a blue collar worker but Cerberus bought the mill and totally screwed it up and is now squeezing the workers to cover for a series of overpaid, useless CEOs and self-inflicted wounds. Rinse and repeat over much of manufacturing America.

      2. The Dork of Cork

        @Yves
        In the 1970s free banking increased in intensity ……as economies were more closed back then fiscal authorities increased money production to balance the loss of capital from this free banking and thus maintain the production / distribution / consumption loop.

        Inflation is really no different from the deflation of the more open economy of today.
        A increase in tax on something / Labour or a loss of income to pay for the losses in free banking appears to be much like inflation to the average worker……..because it is.

        Inflation / deflation – whats the difference ? ………..it just effects different people at different times of their life stage – but its the same phenomena.
        A loss of wealth.

        The western scarcity machine is on its last legs – it can no longer provide the useless goods needed to sustain the illusion that it is going somewhere.

      3. Abe, NYC

        1970s are a bit of a mystery to me. I agree with Ilargi, there are reasons to believe that Carter years were in many ways a golden era. The Viet Nam war was over. The Great Society programs were bringing real benefits. The government was arguably the most accountable ever in the wake of Watergate. Real incomes were rising despite high inflation. Science and technology were developing rapidly. Year after year brought another half-dozen or more rock-n-roll classics (I can only dream of that now). The arch-enemy, USSR, was increasingly running out of steam and launched a predictably disastrous war in Afghanistan.

        Of course there was the oil crisis, high crime, high inflation, relatively high unemployment. But in hindsight, yes, 1970s were pretty good. It’s very difficult for me to understand what it was like to live through 1970s here in the US, but it looks like things seemed much worse than they actually were, especially compared to the past decade.

  8. The Dork of Cork

    “In order to appreciate why this is so, let us recall the definition of the Capitalist State : “A society in which the ownership of the means of production is confined to a body of free (economic) citizens not large enough to make up properly a general character of that society , while the rest are dispossessed of the means of production and are therefore proletarian , we call capitalist ”
    Belloc

    Notice what happened in Ireland.
    At any real physical cost to the economy the people with the mortgages were not given the physical house and keys to do so as they see fit…..they are forced to live under a double entry system of toil.
    Even if it means the destruction of that society and its economy.

    We can see clearly now that the true role of capitalism is not to provide goods and services as is so often falsely observed.
    Ireland as always makes the situation very clear to anyone who is not blind.

    A great mass of men politically free but economically impotent is the fundamental characteristic of our modern society…..now as the riches double entry assets are decaying they wish to impose martial law on previously “free” people.

    The mask has been removed as so often happens it times of entropy.

    1. Dan Kervick

      Yes, the growth path of the economy is determined by the choices of that portion of the population that owns the economy. There is no guarantee that the ownership class will collectively choose patterns of investment that result in the employment of all people outside the ownership class. Nor, even if the ownership class does the likely thing and chooses a path that succeeds in increasing the average wealth of the owners does it follow that they will succeed in incrasing the average wealth of the population as a whole.

  9. Dan Kervick

    This piece is riddled with economic fallacies, especially the insipid notion that there is some kind of zero-sum struggle between generations:

    “The more wealth you want to retire with, the less your children and grandchildren will have to retire with, and even to live on prior to retirement..”

    In a society that is building its wealth and managing its affairs intelligently, both retirees and working people can grow richer. Also, the nightmarish debt calamity and world of “disappearing credit” imagined at the end is silly. Debts that can’t be repaid aren’t repaid. They are liquidated and the society moves on. The temporary disruptions can be offset by a temporarily increased state role in economic investment and consumption.

    Progress is always a social choice. It requires work, investment, intelligence and organization. There are choices to be made both about how the work should be organized and shared and how the fruits of that work should be distributed. Also, not all wealth creation come in the form of incremental additions to private personal or household wealth. Some comes in the form of public goods and common goods.

    The fact that people these days look to the future and see a big blank cloud of mystery is itself a psychological symptom of the disempowerment. that results from neoliberal and laissez faire approaches to life. The first stage in building a better future is imagining one. When people deliberate about the future they want to build, they can then coordinate their activities to build one.

    While decadent and mopey western intellectuals wallow in one species of of dystopian misery after another, hungrier and more optimistic developing countries will continue to get busy building their futures. As they eventually kick our asses and blow past us, they will shrug as they explain that they never got the memo about the impossibility of progress, about unavoidable “secular stagnation” etc. Since they will inherit the leadership role on the planet, they will also be the ones who make the key choices about the global future as well.

    1. The Dork of Cork

      @Dan
      You miss one vital point.
      The physical world around us is built on the banking system scaling up to a unimaginable size.

      For example Englands physical economy and psychological makeup has changed in a quite profound manner post Tudor times.
      In terms of the physical economy after the war it has changed again from a country which had a relatively closed coal / production loop to a major deficit country of external primary goods now exposed by North Sea depletion.

      It has been successful so far by giving letters of Marque to various pirates so as to accumulate the last bits of energy towards the base of operations but it has no real internal economy.

      The Elizabethan corporate system is over – however before it passes it will drag us all down with it.

    2. Malmo

      “When people deliberate about the future they want to build, they can then coordinate their activities to build one.”

      Wow, it’s just that simple? Did it ever occur to you that the future desired by the billions who populate the earth might not resemble the workerist, essentially fundamentalist (think in religious terms) future you desire? You think it’s easy for billions or even millions to form a consensus on where we should go as a collective? Your vision is your vision when it comes to so called progress, not mine nor others. All those bantering on the fanciful and nebulous “social purpose” meme as somehow the majority report among earth’s inhabitants, fail to take into account their narrow cultural biases that inform their dreams of so called progress. But let me be frank, your social purpose doesn’t have a snowball’s chance in Hell of being enacted, other than by brute force. America alone is much too balkanized politically, religiously and ethnically to form the consensus you desire. You can spend all your time demonizing all those common folk who don’t see it your way. Of course if you can somehow do away with all those who disagree with your vision you might have a chance, I suppose. Count me out if you want greater centralization of power. Count me out if your new power structure is formed by technocratic elites filled with experts and gurus deciding how we should best live.

      1. Dan Kervick

        We can deliberate and decide on a future democratically. It’s not a question of what kind of future I want personally.

        But making progress of any kind is hopeless if people succumb to pessimistic doctrines that teach that progress is hopeless, or a historical anomaly, or that we are in some other way doomed, doomed, doomed.

        1. Dan Kervick

          And if you personally want to go live on a beach and live on driftwood and mollusks, there is nothing stopping you.

          1. The Dork of Cork

            @Dan
            Well I can’t do that Dan – I don’t have the bushmans skills – Industrial society has taken that away from me.

            If I go backpacking in Scotland for 3 months or whatever I can add to my calories via seashore Mussels , Mackerel and such but if I start shooting Deer I will be shot myself !!!

            If I want a beer in the old forge I will need Sterling tokens……….

            I am a captured citizen with no skin in the game other then survival in a post “Get Carter” universe.

        2. Malmo

          Dan,

          We are already deliberating on our future democratically, however, I doubt it will shake out pleasing to either you or I.

          As for “making progress”, I’m not sure what that even means? One man’s progress might be another man’s regress. The democratic process is very messy and isn’t a surefire way to get said progress, or at least the kind you or I might desire. No matter, I for one don’t think we are doomed, and have never implied otherwise. On the other hand there are many legitimate reasons to be concerned about the future without having to carry the invective label of being a doomer. If you don’t get YOUR desired future, your social purpose codified, how sanguine will you be going forward? You obviously want a better way than what we have going now, no? At the very least will you inch over to being a realist rather than an eternal optimist? At least you won’t have to be labeled a doomer.

          BTW, If you know of any affordable beachfront property please let me know? This pale look of mine is depressing.

          1. The Dork of Cork

            That would be Peanmeanach Bothy although I have never seen Bikini girls on the beech.
            A great place to get wind burn and perhaps mild frost bite.
            Its free if you can haul your ass and backpack for a few hours.

            1. Malmo

              Nice. Then I’d proceed to live like the Mexican fisherman:

              If that fails then I’d like to reside where there’s no rat race and the wine flows freely and you live a longer more fulfilling life among a small eclectic community, not the abstract community of a giant nation given us by economists:

          2. hunkerdown

            Perhaps the error is in the religious dedication to progress? It’s a particularly galling sign of the times that basic needs — which do extend beyond food, clothing and shelter, well into the psychological and personal — are seen as something toward which to “progress” rather than as a rock-bottom human right.

      2. Calgacus

        Wow, it’s just that simple?
        Yup. That is a omnipresent characteristic of recent thought in many areas- the IMHO baseless rejection of the idea that things can be simple. Coupled with the ignorant belief that trivial, simple things are obvious, easy to understand and discover.

        Did it ever occur to you that the future desired by the billions who populate the earth might not resemble the workerist, essentially fundamentalist (think in religious terms) future you desire? What about the reverse? That the future desired by billions might resemble in details Dan’s more than yours, especially regarding execution, means to common ends? That the common folk might want a JG, a permanent, absolute, inalienable right to a real job, rather than work-sharing, a handout, a fairy tale, a sick joke even if it works out for a few years? That the common folk understand things better than sadly, the apparent majority of the nakedcapitalism blogcommentariat? That a JG will create the desired society, while a BIG without a JG will just pretend to, and will foster an intense reaction after inevitable failure.

        You think it’s easy for billions or even millions to form a consensus on where we should go as a collective? Yes, it is very easy. The consensus exists. Basically everybody has the same views. Yours, mine, Dan’s visions are the same in the important respects. There is a tiny minority who disagrees with the 99.9% worldwide consensus. They are the people running things and stifling the energies, crushing the lives of the 99.9% – and even crushing their own, their chance to be more than mindless parasites, to do something real with their lives.

        Count me out if your new power structure is formed by technocratic elites filled with experts and gurus deciding how we should best live. But that is precisely what the JG is not. That is precisely what foolish ideas like the BIG are. Only the JG puts decisions in the hands of the common folk as much as possible. The other ideas like the BIG put the decisions squarely in the hands of elites, bureaucracies, “experts” who “know better”. The apparent majority here & elsewhere who think the opposite are adding 2 and 2 and getting a negative number.

        In my experience, and it took me some time to grow up and understand this, to discard childish BIG-type illusions – the people who think straight are the common folk, the poor, who laugh at laughable things like the BIG as it is usually proposed. The other ones who think straight are the fraction of the .1% who want to remain “on top”. They know that full employment, the JG, the right to a real job is the death of their stranglehold, and they fear and hate it like nothing else. And every time another sucker falls for the BIG or similar quackery, these billionaire parasites break out the champagne, even better champagne than when they sell another shipment of napalm, cluster bombs or drones.

        1. Malmo

          I’m not sure where you came up with the BIG vs JG comparison, at least regarding what I posted above. I’ve stated my views in the past on both, but it really isn’t germane to what I was driving at above. My implicit point is that the way we organize our daily lives around jobs–hours, conditions, compensation, etc–is outdated at best, and destructive not only to our inner environment but the outer environment as well. Planning for a society that essentially keeps the status quo of endless growth in place repulses me. Planning for a society that doesn’t count work–selling ones labor to survive in an inequitable manner–as the sine qua non of existence would be much more humane and just.

          There are other alternatives to living not predicated on a 60 hour work week. Progress does not mean spending 50 years of one’s life wage laboring 60 hours per week for someone else. Progress doesn’t entail being on the hamster wheel day in and day out for those 50 years. Most of us are conditioned by our experiences to unquestionably accept what exists now as axiomatic to everyday life, but in reality there are other ways to live day to day that don’t entail spending most of one’s waking hours devoted to producing shit, and common people–the masses–can see past the sophistry of the capitalist system.

          The so called doomers get this idea more than most trained economists do. They see the strains put on people and the environment by this engineered hyper-activity. Many say why not slow down the goddamn machine. They aren’t saying to stop producing things, but they are saying, and I think reasonably so, endless growth, all day laboring and central planning of our every movement is a Frankenstein monster that quite likely will doom mother-ship earth and its inhabitants in due course.

          Oh, and none of what I said above should be misconstrued as ending work/production. I am saying, however, that we can do a lot less work and still live rich and full lives, same as the folks in Ikaria have been doing for decades. Less can be more.

  10. denim

    It seems to me that mankind has always been at war with itself. In 1776 it was common Americans against a globalized imperial dynasty, mostly British and its allies. In 1932, it was common Americans and small businesses against a globalized economic dynasty run most notably by wealthy Americans and Europeans. Rare insight to this ever repeating war is delineated in Franklin D Roosevelt’s 1936 acceptance speech. “There is a mysterious cycle in human events. To some generations much is given. Of other generations much is expected. This generation of Americans has a rendezvous with destiny.” … So fa the recent destiny seems to be to happily accept the serf’s role for what the Roman Juvenal called bread and circuses … which now days would be fast food, media video extravaganzas, music, and sports.

    1. hunkerdown

      I think that people have lost their connection with nature. In particular, meat is an unconscionable, horrific thing to think about — if one prefers to deny the nasty realities of predation and its one-two effect of lessening pressure on the commons both by providing food and removing an eater.

      Do fat elites in whatever size pasture make good hamburger meat, how many of our own will we reluctantly eat along the way to finding out, and will that reluctance be genuine or just for show like it is now?

  11. The Dork of Cork

    “This spiritual thesis is of far greater gravity than
    the narrow materialism of a generation now passing
    might imagine. Spiritual conflict is more fruitful of
    instability in the State than conflict of any other
    kind, and there is acute spiritual conflict, conflict in every man’s conscience and ill-ease throughout the commonwealth when the realities of society are di- vorced from the moral base of its institution”
    Belloc

  12. If you want to make God laugh, tell Her your plans…

    On the up side, it might well be that the “disasters” we’re so concerned about now might turn out to be just what the doctor ordered, in the long term. Who’s to say that we even know what is good for us? I’m not prepared to make that statement, personally.

    I remember when my first girlfriend broke up with me…I thought it was the end of the world. Then I did a bunch of stuff that I never would have done if things had “worked out” between her and I. In retrospect, things did work out for the best, it just took awhile to see it. Maintaining current consumption levels and patterns might seem like a good thing now, but a little economic collapse might actually be good for us. Whenever things in my life seem to be going wrong I try to keep that in mind: in general, I have no idea what is actually good for me. That might be true on the societal level as well.

  13. Banger

    This all leads to a nearly complete disconnect from reality, and that is going to hurt us even more that reality itself.

    This is what I’ve been trying to say for a long time. Once the United States was the home of pragmatism and “yes, we can” which was turned into a cynical slogan by the Obama marketing campaign. If we have any pragmatic solution to a societal problem it is automatically discarded by the authorities who are now so narrowly focused on their own career and wealth they have little interest in the common good. This fact alone would begin to wake up the populace and, in limited ways, that process may be starting. But it is an uphill battle because every day the propaganda organs (both entertainment and “news”) give us contrary messages.

    The paradigm we worked under has been an extraordinary success if you describe “success” as dynamic and an increase in scientific knowledge, population, life-span and so on. The problem now is that we have reached the law of diminishing returns and this path not only will not work but it cannot work no matter how you slice it. The next challenge is spiritual/psychic growth not endless consumption of mass-quantities of everything. We crave fantasies because we still lack spiritual direction–once we understand that there is a deeper aspect of life we will begin to live there and qualities like compassion and caring will emerge–there would then be no question of whether or not to address climate change and other environmental issues (we are now avoiding virtually all of them) and there would be no need to cage millions in cages or kill them because they have a different view of life.

  14. Terry Mock

    How do we build a sustainable civilization?

    The 21st century will overturn many of our previously-held assumptions about civilization. The challenges and opportunities land development stakeholders now face – to fulfill the needs of society and achieve a favorable return on investment without harming the environment – have vast implications on the sustainability of our communities around the world…..

  15. Eureka Springs

    The idea of progress is rarely if ever a possibility/concern for the vast majority (the 85 percent shrinking middle and all who struggle with less than middle class standards). While I do appreciate the fact Illargi, lambert and Yves take the big picture into consideration far more than most who discuss economic issues… economic discussions are rarely about US, including most who read or comment here.

    The idea of progress is always defined by marketing in neoliberal terms. It is so rarely about quality, because in so many cases quality would kill quantity. And that alone is far more anti-neoliberal, anti-growth as they would define/market progress than a socialist boogie man.

    Under neoliberalism virtually all economic/progress terms and discussions, even when trying to get out of that box doesn’t allow rest, pause, contentment. Pause, non growth contentment is at best regressive under their terms. There is no plateau. Progress doesn’t doesn’t allow for peace.

    Clearly in the US progress would be slowing population growth. Jubilee! Reducing if not entirely eliminating the FIRE sector and the defense/spook sector. Conserving energy while working harder than the manhattan project on clean energy would demonstrate intent.

    Progress would be establishing very affordable highest in world speed fiber internet to every home in the land who has either existing hard line electric or phone now. Progress would be an open source government without secret law, secret courts, secret police and military, secret budgets, without secrets for our own good at all! Killing the bribe based political and electoral process, while guaranteeing health, education, quality food and water. The lowest incarceration rate in the world would be progress. Progress would be rewarding and appreciating inactivity because human beings have this awful propensity for destruction often due to the fact they must look busy so they can at least look like they are part of progress. Give a man 40 acres of beautiful Ozark clear spring laden forrest and most will go out and cut most of the trees down, level the rest, even if they don’t intend to sell the lumber or raise grazing animals, just because a clear field of grass, only grass, is progress. That’s the mindset which needs rethinking as much as the neoliberal parasitical growth for growth sake mindset.

    Progress should be establishing /maintaining maximum sustainable quality standards before worrying about the progress of the .01 to 20 percent. This will be impossible as long as we reward growth which markets planned obsolescence, planned bubble bursting, I mean planned looting.

    Auto makers will never make the best cars as long as they must sell you a new one in a few years time for their “progress”. Apple just sent me their annual holiday shop shop shop gimmick email… and their progress for several years running now is to engrave your new i-electronics. If that’s all they can do/progress (while stealing your fingerprints) over several years time then their prices should have at long last dropped significantly under any free market description of progress.

    Note to lambert and other regular (sunday) readers… This is how you sell MMT, Bill Mitchell. Prove it can work/progress this way and how/why for all. At least prove intent in simple terms. Make a deal, offer the masses a deal/platform they can’t refuse. Quit selling it to NPR mock turtlenecks and the FIRE bugs who got us here with better sneer/ Lakoff /sneer talking points.

  16. The Dork of Cork

    The true difficulties of a social credit system ( although of course it is not a true fiat social credit in Europe or anywhere for that matter) can be seen in the Languedoc

    In places such as England and France we have seen a white flight to the country and former market towns(these are now suburbs) as the banks needed more external people (assets) to throw into their growing Industrial vortex starting with the Irish.

    These misinformed people (seen in the above video)will blame the local Arabs street urchins rather then the Banks and the landed aristocracy for creating such a absurd & atomized society in the first place.

    Although many people can & should return to deserted agrarian villages in France and other rich agricultural areas the population is now possibly too large & urban minded to sustain a 18th century way of life.

    Europe is on the brink of total collapse – the game now is merely about distributing the losses of the Tudor corportist experiment.

    As Belloc asks : its ok to transfer a natural monopoly to local city control where the profits back into the local system but even under pre 1970s Ireland state utilities were not really state utilities.

    What actually happened in “free state” Ireland was the state took direct control over private monopolies which previously charged perhaps the equivalent of 3% for the privilege.

    So after “Independence ” we put green paint on the letterboxes etc etc and payed 5% for the money to run “our” internal systems…..
    As the money leaked from Ireland it flowed to Dublin to pay the wages of civil servants and to London to pay the rent….consequently Labour followed this interest bearing money …….further concentrating capital and people for no other reason then the nature of the present money system.

    But the physical structure of the economy has been altered in a fundamental manner – it cannot be changed …….there is a inertia in the system……….the Titanic cannot be stopped.

    In Ireland (which despite the biggest population rise per capita seen in Euro land Europe) we still have more internal resources then the average British resident.
    However Irish people think it somehow natural to go to the four corners of the world in search of scarce tokens – Ireland is a example of what 400 years of monetary abstraction has done – it has created the most absurd economy in the known universe.

    1. The Dork of Cork said,

      “But the physical structure of the economy has been altered in a fundamental manner – it cannot be changed …….there is a inertia in the system……….the Titanic cannot be stopped.”

      We don’t know if the Titanic cannot be stopped for sure. If we are properly guided with proper understanding of reality all around we can re-arrange our systems as suggested by Eureka Springs in the comments on this blogpost and many other commentators on Cfdtrade generally.

      We certainly should try our best that is what our creator (God) wants from us. Just to do our best in our short time on earth.

      Mansoor H. Khan

      1. The Dork of Cork

        @Mansoor
        Imagine what happens to the British Isles if global rent flows cease ?

        There is plans to have another 10 million people live in London over the next few decades……….

        In France more people can be serviced by their local hinterland if they return to the old market towns…….much of Northern England is a bog…..Northern Scotland is wasteland as a result of the destruction of the agrarian highland Cattle economy…..the Scots Pine were cut down and replaced by sheep…now the sheep are gone.

        Contrary to what you may think I kind of like the English .
        They just don’t know their own history too well.

        1. The Dork of Cork,

          So what is your point? We should not even try.

          Ok maybe the odds are not very good. But our attitude will certainly affect our odds. We need to persevere and keep a good and hopeful positive attitude and try to build a global vision of how we want to/how we can live with less and with more equitable distribution of stuff.

          At least for me per my faith I can get a “E” for effort and possibly gain entry into heaven just for trying.

          Mansoor H. khan

          1. The Dork of Cork

            Whats really sad about our time is that there is no we…..

            People have no control over their local city nevermind their country …..everything is overly centralized via distant corporate bodies so as to manage the interest bearing vortex so you get taxation without representation , a letter in the post from the gestapo and such……

            Just imagine Ireland was just about getting its head around the old dastardly union when they decided to impose a even greater malice (union) on us.

            The guys in charge maintain relative power through the imposition of a constant flux on society.
            As people are dependent on the Industrial system for almost everything they cannot rebel against central authority like in the past when people came from a agrarian base.
            The situation is hopeless.

            1. The Dork of Cork said:
              “The situation is hopeless.”

              Nah. Not Hopeless at all. The real chess player and power broker is the creator of universe. Partial reason for the creation to exist (per Islam) is that Allah wants to glorify the prophets and de-glorify those who refuse to follow his prophets.

              All of creation (things, animals, plants, humans, laws of physics, laws of biology, laws of compound math and laws of economics) are his instruments.

              I can see the de-glorifcation/humiliation of the userers/bankers/creditor class coming soon. Stay tuned. I expect 100 years of worth change to occur in the next 10 to 20 yrears.

              More at:

              Mansoor H. Khan

  17. JEHR

    One thing that the article does not touch on are the people who have decided not to contribute to the increase of the population, i.e., those who have remained childless. Whether from some kind of unconscious prompting or not, my three children have not married and have not brought children into the world and they are in their 40s and 50s. There was a time when childless couples were considered “unnatural.” Now, I hope that being childless will become acceptable or maybe even the new norm.

    1. hunkerdown

      Except that the state has determined that managing its citizens’ fertility is within its prerogative, and could see fit to manage it in the other direction just as capriciously (a la A Handmaid’s Tale) in the interest of that percentage of economic “growth” attributable to that fertility, or simply to produce inequality.

      Field surgery at home could become a survival skill.

  18. financial matters

    I liked this comment by Randy Wray which briefly outlines Keynes’ ideas of wanting to preserve capitalism from both the extreme right and the extreme left.. Keynes was in favor of governmental budget sures if they were needed to draw money out of the economy to tame inflation as much as he was for governmental budget deficits to inject money into the economy if unemployment and lack of demand were the problem.

    LRWray | December 8, 2013 at 7:49 pm | Reply
    Tyler: eliminating payroll tax is desirable for a number of reasons. It is a regressive tax. It continues the conservative “I paid for it therefore I deserve it” ideology. It raises the cost of USA labor vs rest of world. and it depresses demand. So far, 4 strikes and you are out. Whether or not it would move us to “full emp” at a point in time if we eliminated it, that by no means ensures continuous full emp. We need the JG.
    Golfer: it amazes me that conservatives who supposedly love “freedom of choice” are so quick to try to FORCE people to work for welfare. All humans deserve 2 fundamental rights: the right to adequate food, clothing, healthcare, and shelter and the right to a job. I do not care how lazy people are or how bad the choices they have made might be, they deserve to be treated at least as well as our dog lovers want pets to be treated. We must take care of our own. No matter what. And beyond that, anyone who wants to work should be guaranteed a job at a living wage. These are separate but obviously complementary human rights. The neocons hate the JG but love to reduce the status of the poor to neo-slavery, mandatory working for the dole. That is not “free to choose”. Mandatory work for adequate food, clothing, healthcare, and shelter is repulsive. All humans deserve this minimum. We can argue about what that minimum is, and about the best way to supply it. Work for the dole is a violation of human rights.

  19. Jim

    Llargi states:

    “The ability of the common (wo)man to think about the consequences of a future that doesn’t include perpetual growth and perpetually improving lives (whatever this may mean), is taken from her/him on a daily basis by ruling politicians and successfully “businessmen” and experts as well as the media that conveys their message.”

    From my perspective, Llargi is possibly beginning to launch a critique of the inadequacy of the entire progressive tradition in the U.S. The genius of the progressive perspective was its belief and confidence in our collective ability to “progress” beyond any sense of traditional limits (on both an economic and cultural level).

    But this very same belief is why progressive thought deteriorated so easily into a support for industrial and then later financial capitalism– with both of these structures of power supporting the idea of fixed, insatiable appetites leading to the unending material improvement of life.

    In American history, populism was seen as an alternative to progressive thinking. Populism tended to support a producer ethic which was anti-capitalist but not socialist or social democratic. It also tended to support craftsmen and farmers and opposed the emerging class of public creditors as well as the machinery of modern finance. Finally, the American populism of the late 19th century was opposed to wage labor but held on to the idea of small business ownership as being necessary for some degree of financial independence from Big Capital, Big State and Big Bank.

    Probably the last successful populist movement in the US was the early civil rights movement in the South which was able to speak directly to local/regional traditions and was able to use some local business structures and the black churches for a material basis of support.

    However, in 2013, this populist tradition seems as exhausted as progressive thinking.

    Perhaps the populist impulse that believes that democracy works best when men and women do things for themselves with the help of friends and neighbors without dependence on Big Capital, Big State and Big Bank needs to somehow incorporate the more radical practices on the Axial age (running from around 800 to 200 BC) which attempted to mobilize the individual to overcome bad habits and passivity.

  20. Fiver

    We must distinguish the elements of our current plight that relate to our diminished “expectations” for the future due to immersion in a culture of completely corrupted capitalist looting and mayhem from the much larger, much more threatening awareness relating to our civilization’s devastating impact on the planetary environment and the current and prospective “resource” (including un-poisoned water, land, etc.) wars we are courting.

    We have indeed had relatively long periods of purely economic, or economic/military disruption leading to a general malaise for “the future”, but never anything like this, even during the worst of the “nuclear war” fears (note: efforts to hyper-dramatize the Cuban Missile Crisis aside, it was evident then and now that nobody is stupid enough to attack a nuclear power). In fact, the US economy was humming for most of that period, and people were generally “optimistic”. While that may seem to contradict my earlier assertion, the difference is that we’ve now watched for 60 years at least, knowing we were creating an existential crisis for ourselves via the very things we’ve been taught to adore, idolize, desire etc., ie., material wealth, powerful technology, and a God that blesses Them.

    That which we have pursued for 2 centuries is exactly the wrong solution for what ails us today – and we know it. We may wish we didn’t, but we do. And that is what is preventing, and will prevent any meaningful “recovery” worthy of the name. The tens of trillions spent to regain our position have been utterly wasted. We’ve no more time failed thinking. None.

  21. Dan Kervick

    For what it’s worth, as much of a grouch as I sometimes am, I personally don’t have diminished expectations about the future or about the potential for progress.

  22. Greg Kaiser

    Elite Optimism

    I think of finance like Roosevelt E. Roosevelt thinks of Vietnam’s weather. “It’s hot! It was hot yesterday! It’s hot today! It’s going to be damn hot tomorrow!” For profit finance burned us in the past. It’s burning us now and it will burn us in the future. Privately owned banking, insurance and investment can only concentrate wealth exponentially, accelerated by compound interest, while they inflate the money supply by adding cost to every material transaction and service. Finance [perpetual motion of money in the vision of the “best and brightest” who must be very dim to see so poorly why this lie can never work.] is an everything tax on our existence and a threat to our survival. It is, always was and always will be a scam invented by the powerful to enrich themselves and keep themselves rich, at the expense of the community. Meanwhile the greatest part of that community, we the people, remain virtual slaves in their debt. Moses and others of his age knew this. We’ve apparently devolved our intelligence in the 3500 years since.

    “. . . Apparently the global billionaire population has reached a record 2,170 people in 2013 with an average net worth of US$3 billion.

    “Combined, these billionaires are worth of US$6.5 trillion. That’s enough to fund the United States budget deficit until 2024 . . .” Yet instead of taxing the parasites we say we must cut Social Security, Medicare and Food Stamps so the masters may keep their excess. And the Dow closed at 15973 on Tuesday, 12/10/13. Wake up America!

    All money flows to the elites in the scheme they invented and control. In debt is the only way most of us can live. Yeah, some rise to the level of parasite in “competition” (or more likely in league) with them, while others get ahead in their service, like CEOs and politicians. But what are the odds? Winning the lottery or becoming a sports or movie star offer greater probabilities of success for most of the community. There are thousands of the latter type of winners and only 442 billionaires. How many can be Fortune 500 CEOs? [yes dear, that’s what we call a rhetorical question.] And yet the masters remain as willfully obtuse as Marie Antoinette and confident in the fiction that most people think this thing works and are diligently planning their financial futures. If everybody skims from the material economy and real workers starve . . .

  23. Rising living standards should mean a rising sense of well being, not an increase in stuff you possess.

    George Monbiot has expressed this:

  24. Abe, NYC

    I imagine pessimistic zeitgeist pieces like this were common in late 1800s, 1930s, and other times of protracted economic stagnation. To counter, there are several reasons for optimism:

    1. Population pressures are receding, see e.g. Hans Rosling’s This is a distinctly new historical development.
    2. The looming consumption crisis is ultimately all about energy. If a cheap, clean, and abundant energy source was discovered, that would solve many problems at once: climate, water, environment, even consumption of commodities to a large extent. There are several developments that could bring cheap energy: new nuclear technologies (thorium, traveling wave, thermonuclear), renewables, algae and bacteria. This is all far from certain of course but the planet receives more energy from the Sun than humans could ever use, it’s reasonable to believe that sooner or later efficient ways to harvest it will be found.

    3. In any case, I can’t imagine Westerners will be inclined to consume even more physical goods than now, and at least in the case of USA there’s a lot of room to dramatically reduce that without materially affecting the standards of living (and that’s already happening). In addition the consumption is increasingly shifting into virtual goods, with a much smaller environmental footprint.

    But of course there are reasons for pessimism, too, in addition to those mentioned by Ilargi. The biggest is that wars were pretty common in the Industrial era, and who says we’re not going to have another major war? In 1913 most of the elites were convinced a big war in Europe was impossible. Also, Marx could be more right than we know in his predictions, one of which was eventual collapse of capitalist society under the burden of debt. That seems distinctly possible now, while Marx’s subsequent paradise does not.

    But I agree, the blind assumption that growth, expressed as production of physical goods, is natural and will always persist, is terribly wrong. It’s even wronger that there are so few attempts to analyze how societies can function in that environment. My point is, it’s possible that in the end the society would do fine, and even with stable production people could have pretty satisfying lives by today’s standards.

  25. Roland

    World population has already turned the corner. World population looks like it will peak at a level significantly below even the lowest projections anyone dared to make a generation ago.

    It’s the same story almost everywhere: plummeting fertility rates, rising population age, and a trend to sub-replacement. Rich countries, poor countries, educated, uneducated, high status of women, low status of women, basically none of it matters nearly as much as was commonly thought. Fertility rates are dropping almost everywhere, and everywhere faster than expected.

    All major demographic theories have been unmercifully pummeled by actual events. No expert in the field–not one–predicted what we are seeing right now. All the research I ever did as a student of demography in the ’80’s and 90’s has been overtaken by the facts.

    Overall, we should not have a problem ing 9-10 billion at an adequate nutritional level. The problem is not people in general. The real problem is rich people. The correct questions to ask are: “How many rich people can the biosphere sustain? At what point does the sustainability of a given number of rich people compromise the sustainability of a given number of other people?”

    Even if the overall number of people were easily sustainable, that does not necessarily mean that a given sort of world political order will permit people to be sustained. The problem has less to do with the overall resources available, and more to do with how available resources might be allocated, denied, or misallocated.

    While I think the demographic outlook as such is quite favourable, I regard the political outlook as much less so. The people of the world are more likely to encounter a hard political limit to their sustainability than a hard resource limit.

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