Capitalism, Sustainability, and the Possibility of Global Collapse

[Southsea]

Originally Posted by doodah

The thing I keep remembering about this global collapse, is that it is the collapse of nothing. Nothing. Cyber wealth. Digits. Ones and zeroes on computers. We exchange that Nothing for real stuff like food and cars. We pay back our credit card Nothing with pieces of paper that we "earn" at our jobs, or maybe we pay back the Nothing with more Nothing (direct deposit into our banks). It's quite funny if you step outside of it a little bit.

Some communities are creating their own paper money. And why not? Paper money used to be a promise to pay in gold or silver. You could take paper money to the bank and demand real physical metal in return. Then they took away the gold and silver. Now it's a promise to pay in what? Nothing. So the collapse of this system is really funny because nobody is really losing anything except all their Nothing.

How bizarre!

If we go to a grocery store and don't have any more Nothing left in our bank account or on our credit card, we can't get food. That is we don't have any Nothing to exchange for Something. This whole system has been a mass hypnosis, a mass illusion. Let it fall and none too soon.

I agree, and hope more people realise this. I wonder how the ones, to whom money was the be all and end all, will cope. It's going to be a great leveller of ego for us all.

[gwynned]

Originally Posted by doodah

The thing I keep remembering about this global collapse, is that it is the collapse of nothing. Nothing. Cyber wealth. Digits. Ones and zeroes on computers. We exchange that Nothing for real stuff like food and cars. We pay back our credit card Nothing with pieces of paper that we "earn" at our jobs, or maybe we pay back the Nothing with more Nothing (direct deposit into our banks). It's quite funny if you step outside of it a little bit.

Some communities are creating their own paper money. And why not?

Indeed. Imagine how the Chinese must feel. They've sent all kinds of real goods to the US and now they're stuck with some digits and paper that may be worthless. There's been an attempt in my community to create local currency and it's met with mixed results, though it may be an avenue to pursue in the future as the fiat dollar disintegrates.

[Merlyn]

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I think the quality (worth) of the Chinese products
reflects the quality (worth) of the USA Dollar.

Both are worthless junk.

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[gwynned]

Originally Posted by Merlyn

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I think the quality (worth) of the Chinese products
reflects the quality (worth) of the USA Dollar.

Both are worthless junk.

=
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There certainly is lot of junk coming out of China, but your comments are overly broad. There is certainly more intrinsic value in clothing, tools, computers, and furniture made in China. Further, your comments are an insult to the Chinese who in many cases have labored long hours to provide us with real items for our use. Sadly though, and as you alude to, much of their labor has gone into items of little intrinsic value, like fake santa claus's and barbie dolls. But that is the nature of the system which responds to profitable opportunities and not to people's needs.

[Merlyn]

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I should clarify my words.

My comment only reflects upon the quality of the products made by Chinese companies and other associated countries and NOT the Chinese people. Just as
the American people are NOT the Federal Reserve system that prints the USA dollar. I think the people of both countries are mostly very good and would
like to be associated with good products and good will towards each other.

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[gwynned]

Originally Posted by Merlyn

=
=

I should clarify my words.

My comment only reflects upon the quality of the products made by Chinese companies and other associated countries and NOT the Chinese people. Just as
the American people are NOT the Federal Reserve system that prints the USA dollar. I think the people of both countries are mostly very good and would
like to be associated with good products and good will towards each other.

=
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What's wrong with the quality of the Chinese products? There is certainly well constructed clothing coming out of China. And my point is not that the quality is good or bad, but that even a poorly constructed screwdriver has more intrinsic use value that a worthless piece of paper.

Well said Gwynned,

As for China and goodwill, I would say that that is the ideal, but not the reality. If I was in charge of the Chinese economy, I would be infuriated at the United States and Western Europe right now. Western underwriters of bad mortages knew what they were selling foreign investors, and China, on good faith, snapped a lot of those up - based on the deceptive packaging. The only reason they have not crashed us yet, is because we are a primary market.

Chinese goods rate as acceptable in terms of quality, and it should be remembered that the massive influx of American goods that flooded Europe in the aftermath of WWII were not always of the best quality either. "American made" serves as a patriotic meme more than an index of quality.

[doodah]

[QUOTE=historycircus;47612]

If I was in charge of the Chinese economy, I would be infuriated at the United States and Western Europe right now. QUOTE]

If I were in charge of the Chinese economy I would be beating myself over the head, and perhaps dying from shame, wondering how I got so disconnected from the wisdom of my ancestors. The Chinese, which have traditionally been thought of as "wise and inscrutable," (not including Mao and 20th century politics), somehow stepped off the wisdom platform and into the swamp of modern economics.

Surely they knew the game they were entering. But somehow they fell for it, more's the pity. Let's jump on this modern bandwagon, go global. Let's make our air unbreathable, let's poison our rivers. Let's get in this game. How foolish. What happened to the wisdom?

(I know that's a cliche and a stereotype, but it was a good one, and had some basis in fact.)

Doodah,

I don't think we can safely assume that China, starting in the late 1990s, did completely understand what they were buying. They were well acquainted with Capitalist theory, but not practical operation. Who were/are they gonna' ask for advice? Russia - a nation experiencing its own learning curve? The United States - a proclaimed enemy for over a half century? I'm not so sure that they did know the game.

But they have learned well. Our economic futures really rest in China's hands - at least as long as global concerns and forces dominate everyday economic activity.

[Rocky_Shorz]

Originally Posted by Merlyn

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I should clarify my words.

My comment only reflects upon the quality of the products made by Chinese companies...
=

the floor mats in my car were recalled for lead paint...

Is the count really up over 40,000 babies that are sick from the poison they put in the milk?

Did China really say that though they could help the worlds banking system from collapsing, they have decided not to?

[doodah]

historycircus -- I think I understand why you say what you've said, and I suppose China might not have understood the emptiness of the dollar. Perhaps.

But the real physical effects of globalized industry, that they surely must have understood. After all, the US has demonstrated the results of modern industrial processes for over 50 years. So China went ahead anyway, with the same processes. I'm not aware that they've done anything differently, and the effects are the same -- polluted air, poisoned water. I've never understood why they did that.

As to the monetary stuff, it's true that nobody understands modern finance, including all the people who talk about it.

Here's a very interesting analysis of modern economics:

Economic Models explained with cows...

TRADITIONAL CAPITALISM
You have two cows.
You sell one and buy a bull.
Your herd multiplies, and the economy grows.
You sell them and retire on the income.

SOCIALISM
You have two cows.
You give one to your neighbor who has none.

COMMUNISM
You have two cows.
The State takes both and gives you some milk.

FASCISM
You have two cows.
The State takes both and sells you some milk.

NAZISM
You have two cows.
The State takes both and shoots you.

BUREAUCRATISM
You have two cows.
The State takes both, shoots one, milks the other, and then throws the milk away.

SURREALISM
You have two giraffes.
The government requires you to take harmonica lessons.

AN AMERICAN CORPORATION
You have two cows.
You sell one, and force the other to produce the milk of four cows.
Later, you hire a consultant to analyze why the cow has dropped dead.

THE ANDERSEN MODEL
You have two cows.
You shred them.

A FRENCH CORPORATION
You have two cows.
You go on strike, organize a riot, and block the roads, because you want three cows.

A JAPANESE CORPORATION
You have two cows.
You redesign them so they are one-tenth the size of an ordinary cow and produce twenty times the milk.
You then create a clever cow cartoon image called 'Cowkimon' and market it worldwide.

A GERMAN CORPORATION
You have two cows.
You re-engineer them so they live for 100 years, eat once a month, and milk themselves.

AN ITALIAN CORPORATION
You have two cows, but you don't know where they are.
You decide to have lunch.

A RUSSIAN CORPORATION
You have two cows.
You count them and learn you have five cows.
You count them again and learn you have 42 cows.
You count them again and learn you have 2 cows.
You stop counting cows and open another bottle of vodka.

A SWISS CORPORATION
You have 5000 cows. None of them belong to you.
You charge the owners for storing them.

A CHINESE CORPORATION
You have two cows.
You have 300 people milking them.
You claim that you have full employment, and high bovine productivity.
You arrest the newsman who reported the real situation.

AN INDIAN CORPORATION
You have two cows.
You worship them.

A BRITISH CORPORATION
You have two cows.
Both are mad.

AN IRAQI CORPORATION
Everyone thinks you have lots of cows.
You tell them that you have none.
No-one believes you, so they bomb you and invade your country.
You still have no cows, but at least now you are a Democracy.

A NEW ZEALAND CORPORATION
You have two cows.
Business seems pretty good.
You close the office and go for a few beers to celebrate.

AN AUSTRALIAN CORPORATION
You have two cows.
The one on the left looks very attractive.

ENRON VENTURE CAPITALISM
You have two cows.
You sell three of them to your publicly listed company, using letters of
credit opened by your brother-in-law at the bank, then execute a
debt/equity swap with an associated general offer so that you get all
four cows back, with a tax exemption for five cows.
The milk rights of the six cows are transferred via an intermediary to a
Cayman Island Company secretly owned by the majority shareholder who
sells the rights to all seven cows back to your listed company.
The annual report says the company owns eight cows, with an option on
one more.
You sell one cow to buy a new president of the United States, leaving you with nine cows.
No balance sheet provided with the release.
The public then buys your bull.

I saw the size of that post and said oh no, what is this. I was dreading poetry. That was hilarious, and will share accordingly.

Thanks!

[doodah]

History - Your dread of poetry is quite understandable. I should have said that the above Economic Models Explained with Cows was sent to me by Bill Ryan about a year ago. He had received it from someone else. I have no idea who wrote it, but it is hilarious.

My point was, I think, in response to your previous post that maybe China didn't know what it was getting into. Actually, they entered the picture at the Enron Venture Capitalist stage of the game, so yeah, maybe they didn't really understand it! Apparently nobody does.

[Rocky_Shorz]

I thought the World Bank meeting was rushed here just in the nick of time for the world financial crisis...

nope

They had it scheduled by their last meeting - Sunday, April 13, 2008

[gwynned]

Originally Posted by doodah

My point was, I think, in response to your previous post that maybe China didn't know what it was getting into. Actually, they entered the picture at the Enron Venture Capitalist stage of the game, so yeah, maybe they didn't really understand it! Apparently nobody does.

Not sure China didn't know or just couldn't stop throwing good money after bad. Here's a comprehensive analysis of why we (in the US) are in the state we're in. Given our circumstances, I don't see how Obama will be able to react much differently. After all, if a vehicle is broken, it doesn't matter who drives it.

http://www.wsws.org/articles/2008/oc...bgr1-o13.shtml

The so-called financialization of American capitalism continued and accelerated in the Clinton and George W. Bush years. Amidst waves of corporate downsizing, financial speculation played an ever-greater role in economic life and assumed new and more parasitic forms. One speculative bubble succeeded another: the East Asian collapse was followed by the rise and fall of the dot.com bubble, and was quickly replaced by the subprime mortgage bubble. Securitization of debt became the new model of American banking, based on the conception that high-risk and high-yield investments, sustained by an exponential growth of debt, could continue to expand without limit, since the banks could offload much of the debt to other investors around the world.

The indices of the growth of financial speculation in the US economy are staggering: In 1982, the profits of US financial companies accounted for 5 percent of total after-tax corporate profits. In 2007, they made up 41 percent of corporate profits. (emphasis added) Between 1983 and 2007, the share of the financial sector’s profits in US gross domestic product rose six-fold. The United States, by far the world’s largest debtor nation, with a current account deficit of nearly $800 billion, is today sustained by the importation of $1 trillion in foreign capital every year, or over $4 billion every working day.

Hi gwynned,

The article by Gray was interesting - for me, from a historical perspective, there is a lot to disagree with him about. I'll spare you that, however, and say that I think his big-picture analysis identifies problem.

The numbers you give here on corporate profits are scary, and I think they underscore the unsustainability of the system as is. Isn't it funny that Democrats in the United States are billed as the economic wizards, and the trillion dollar surplus of 99' is always trotted out (Bam-Bam did it in the debate last Tuesday)? But, as you succinctly put it, that balance and surplus was directly dependent upon the acceleration of speculative venture capitalism. Clinton gets the white wash treatment in history simply because it didn't fall apart on his watch, and as sour and unpleasant as the following words are for me to type, Bush Jr. simply inherited - did not create - the situation we have today (ok, after that last sentence, I need a shower). That being said, the Enron debacle and market crash of 2001 right after 9/11, should have been an eye opener for the White House and Congress, but the Bush administration did nothing, and as adherents to the supply side philosophy (the Laffer curve is no laugher) used the Clintonian mechanisms of high risk market speculation to justify our unprecedented national debt.

Considering all of that, I still think the global economic crisis is the result of bungling and mistakes, not an orchestrated crash. I don't want to dismiss the NWO/Illuminatti crowd who believe that the crash is engineered to bring down tighter control, but, as noted in this thread, I disagree with that scenario. I am more concerned about the way the PTB will try to keep the wounded beast alive, not what they will replace it with.

[droid56]

I know almost nothing about economics, and many of you clearly do know quite a lot about it.

I googled the word "depression", and arrived at a 2005 article that predicted a global depression was coming. In the article, the author said there are 2 kinds of depression, deflationary depression (such as the depression in the 1930's), and hyperinflationary depression (which he said happened in Germany earlier than the Great Depression).

If he is correct that there are 2 kinds of depression, which type might be coming our way? Since the American and other governments are throwing an obscene amount of money at various failing financial institutions, is it safe to assume that this money is not backed by anything real, and that the hyperinflationary type of depression is the only kind of depression that could result from their actions?

Hi droid,

Glad to have you on-board; feel free to offer your two cents on any of the many topics in this thread.

I am not familiar with the German model at all, and I think the deflationary trend of 1929 and 1930s might not be applicable to our current situation. Back then, industrial leaders and their sources of capital seem to have been taken by surprise (in the sense that stocks on margin were a known gamble, just one that they expected to win); today, however, it is hard for me to believe that educated executives and highly trained economists did not see what was coming. It was deception, not over speculation, that led to recent declines in world markets. They sold a car lot full of lemons, and then sold the dealership before anyone got wise to them.

I think, however, that WE now will experience a dramatic rise in inflation. I have a big family, and I know a lot of people just trying to scrape by. Our paychecks were not stretching like they used to long before the credit card crisis, housing crash, and global banking debacle. That is what happens when you spend billions of dollars a month that you don't have fighting wars that destabilze energy markets. I have noticed a rapid decline in purchasing power beginning with the invasion of Iraq.

That 700 billion certainly will not come from the slashing of social programs or reduced military spending - it will simply be a digital entry on the part of the U.S. Treasury. That means that prices will adjust in market systems (i.e., rise), and we will ultimately pay more for our goods. Never, ever, not once, in the history of the United States and Great Britain, has printing more currency been a successful approach to economic decline - it has only served to make poor people poorer.

[Myra]

Originally Posted by historycircus

I have some thoughts on the economy that I would love to get some responses to:

First: Capitalism (and I'm using a narrow, economic definition: a market system subject to the laws of supply and demand) was born out of colonialism. The death knell of fuedalistic mercantilism was the "discovery" of two continents; one filled with gold, the other with abundant naval resources, and both with potential sources of labor. Capitalism was born through the physical exapansion of nations and resource exploitation.

Second: The very expansion that gave rise to the market systems now practiced globally is required to sustain this particular economic system. Capitalism is unsustainable without continued growth. The economist Keynes understood this very well, and his views drove the expansion of global Capitalism in the last half of the 20th century - despite the weakness of Keynesian economics exposed by the abusrdities of "Regeanomics" in the 1980s. "Rising tides lift all boats" thinking has limped along regardless - for whatever reason (insert illuminati theories here if you wish) - and expansion still means the acquisition of more resources, more territory, etc. What do most economists, politicians, and CEOs agree will spark most of the wars in the 21st Century? Natural resources - primarily fossil fuels and arable land. Capitalism does not necessarily mandate conquest, but that is how it came to be, how it exists today, and is predicted by most involved to continue.

Third: If we were to wake up tomorrow, and all the mechanisms of Capitalism were forever gone, would that really be a bad thing? So what if the dollar collapses? So what if the power goes out and grocery stores run out of food? Such a chaotic event would certainly lead to immediate wide-spread death and destruction on the planet, but is that really any worse than the orderly, well planned death and destruction we have today? The "economic collapse" as spoken of in the mainstream and alternative media is not deserving of the panic it commands.

Just some thoughts - let me know what you think.

It sounds like at this present point in time that Capitalism is an insatiable beast and the World is much too small for it's too ravenous appetite.

Welcome to the thread Myra,

In my opinion investment Capitalism, industrial Capitalism, is indeed a ravenous beast. It needn't be that way, but that is what it has become.

Given the bounce in the markets today (Oct. 13, 2008), I am convinced that "free markets" will be our ticket to ultimate slavery. They are anything but "free." As I said earlier, I am more concerned about the attempts to keep our economic system limping along more than I am about some superimposed system out of nowhere.

How will safe/radiant zones in the future - with a couple of hundred people to feed and clothe - efficiently and fairly produce and distribute goods, avoiding the pitfalls of Capitalism? Are we headed to the rebirth of the exchange economy?

[gwynned]

Originally Posted by historycircus

Hi gwynned,

The article by Gray was interesting - for me, from a historical perspective, there is a lot to disagree with him about. I'll spare you that, however, and say that I think his big-picture analysis identifies problem.

The numbers you give here on corporate profits are scary, and I think they underscore the unsustainability of the system as is. Isn't it funny that Democrats in the United States are billed as the economic wizards, and the trillion dollar surplus of 99' is always trotted out (Bam-Bam did it in the debate last Tuesday)? But, as you succinctly put it, that balance and surplus was directly dependent upon the acceleration of speculative venture capitalism. Clinton gets the white wash treatment in history simply because it didn't fall apart on his watch, and as sour and unpleasant as the following words are for me to type, Bush Jr. simply inherited - did not create - the situation we have today (ok, after that last sentence, I need a shower). That being said, the Enron debacle and market crash of 2001 right after 9/11, should have been an eye opener for the White House and Congress, but the Bush administration did nothing, and as adherents to the supply side philosophy (the Laffer curve is no laugher) used the Clintonian mechanisms of high risk market speculation to justify our unprecedented national debt.

Considering all of that, I still think the global economic crisis is the result of bungling and mistakes, not an orchestrated crash. I don't want to dismiss the NWO/Illuminatti crowd who believe that the crash is engineered to bring down tighter control, but, as noted in this thread, I disagree with that scenario. I am more concerned about the way the PTB will try to keep the wounded beast alive, not what they will replace it with.

Totally agree on Clinton. I'm not suggesting that the crash was orchestrated (though I might agree there have been attempts to direct the decline), nor would I agree that the current situation is the result of bumbling. The real question in my mind is whether or not Marx was right in that, because of the inherent contradictions within the system itself (such as the tendency for profit to decline over time) and because now raw materials come at an increasing cost, is it inevitable that the system will periodically go through convulsions which lead to depressions and which lead to wars. Because if this is true it is pointless to talk about good capitalism or bad capitalism, as 'good' capitalism will inevitably resolve into 'bad' capitalism once the contradictions reach a crescendo and the gloves come off.

g,

I totally agree - I think that "good" and "bad" are poor distinctions to make; there is no either/or in my mind anymore.

Capitalism is what it is. Forget Marx - right or wrong, and whether he was so on this or that point - we are seeing today that Capitalism is not self-sustaining. It devolves into war, or collapses in on itself - raping its very lifeblood (labor) in hard times. I think that the radiant/safe zones of our future - isolated pockets or the gradual evolution of what we know now - will have to ultimately reject Capitalism if the desire is to avoid war and poverty.

But what to replace it with? How do we move beyond the "buy and sell" mentality. What do we replace Capitalism with, in a world of billions of people? Even enemies of Capitalism with the resources to fight it have given into it. I guess I'm asking, "where do we go from here?"

Your thoughts, and dreams, are welcome.

[Zynox]

Wow, I take a few days away in the woods and return to engaging tangents, all wonderful dialog to digest!

I have resolved upon the following script that feels right, to me -

1) As with most aspects of my observations of discernible facts, we have within this economic environment, an orchestrated plan that has been nudged onto a new path through the elements of chance, luck and/or chaos. We have entered a window, a portal, a stargate or a black-hole (choose whatever analogy resonates) of OPPORTUNITY.

2) Original 'plan' by some was to allow industrialism in the US to be sacrificed to new a profit model, based upon economic wizardry, resulting from increased global competition in the markets of manufacturing. From a strict profit centric motivation, this was rational as sustainability of the US population was not a heavily weighted factor in the equation.

3) The entire country and populous could be abandoned to fend for itself / themselves, as long as a secure fiscal center and conglomerate was left unfettered to perform anarchistic economic wizardry. Most of the US fiscal conglomerate is totally unregulated with the caveat that there is just enough lower level regulation in play to ensure there is a near monopoly and tight control of the top tiers by a few interested parties. Evidence of this is surfacing as smaller local banks are allowed to fail, one just this past week 20 miles from my home (Main Street Bank in Northville, MI), while the networked and connected controlling entities write fiscal policy and coerce the token US government to adhere.

4) The fiscal conglomerate does not care much if the Chinese, or others swoop in and buy prime property with infinite dollar reserves and absorbs the excess underutilized manufacturing capital and facilities in the US. The interested controlling parties are the financiers of it all, they don't have much concern who lives, dies, resides or runs the tool and die business, it is immaterial on most levels as they feel they have transcended production.

5) As long as these parties keep a secure environment in NY, which they feel they have secured via 911 and US Executive Order revisions to the rules of the game (constitution and laws), all feels ok in the realm, to the financiers.

6) At the top, there is incestuous squabbles and power struggles that ensure an element of chaos interlopes into the machinations, as there is no single king or tyrant. Under slower flows, these groups work out their differences and realign and come back to relative harmony, but this current environment went a little different than planned, and chaos may not be fully modeled.

7) The universe is not fully understood by any individual, group, organization, nation, government or the 'illuminati', so, further exterior chaos shows up in the model and begins a sequence of unintended consequence.

8) We shall see, I have enormous hope that a combination of various energies take this situation into amazing realms of paradigm imploding and exploding states, as I feel we are coming close to anarchy for all, which as I stated in many posts, will open up incredible vistas in sovereignty, progressive energy, community and human to human relationship / spiritual potentials. The top has been holding genuine anarchy as a coveted secret and the greatest fear they have is loss of control.

Never underestimate the chaos factor of creation!

Never underestimate the ingenuity and capacity for compassion of sovereign individuals!

Never underestimate the butterfly effect and impact of your alignment and the influence of the projections of your emotions and thoughts!

Are you ready to create and radiate, are you ready to love, are you ready to shift into empowerment and responsibility, as you dis-empower through disengagement with old models and energies?

In one single act, withdraw of all funds from all fiscal institutions, each individual could remove an approximate 9 to 1 vapor paper amplification factor from the fiscal elite. Does each have the courage to create their own economy, based upon their own ethics and virtues, abandoning the moral hazard?

Can we separate a desire for a past cozy complicit agreement that has been demonstrated to be unsustainable? Can we quit living off the backs of others, step into our power and be creators?

~ namaste and love ~

[THE PEACEFUL WARRIOR]

Hey Zynox,

Great post buddy..AGREED..nuff said!

Keep the pedal to the metal coz were already locked in for the ride!

PEACE OUT

[Brinty]

Australia's prime minister, Kevin Rudd has announced a finance package that among other things offers new home buyers a grant of AU$14,000 and if the owner chooses to build a new home rather than buy an existing one, this grant will increase to AU$21,000. That's got to be good news in anyone's language.