Monday
Mar162009
Let it Die
Monday, March 16, 2009 at 12:21PM
Just posted this essay on the Arthur Magazine website.
With any luck, the economy will never recover.
In a perfect world, the stock market would decline another 70 or 80 percent along with the shuttering of about that fraction of our nation’s banks. Yes, unemployment would rise as hundreds of thousands of formerly well-paid brokers and bankers lost their jobs; but at least they would no longer be extracting wealth at our expense. They would need to be fed, but that would be a lot cheaper than keeping them in the luxurious conditions they’re enjoying now. Even Bernie Madoff costs us less in jail than he does on Park Avenue.
Alas, I’m not being sarcastic. If you had spent the last decade, as I have, reviewing the way a centralized economic plan ravaged the real world over the past 500 years, you would appreciate the current financial meltdown for what it is: a comeuppance. This is the sound of the other shoe dropping; it’s what happens when the chickens come home to roost; it’s justice, equilibrium reasserting itself, and ultimately a good thing.
more...
With any luck, the economy will never recover.
In a perfect world, the stock market would decline another 70 or 80 percent along with the shuttering of about that fraction of our nation’s banks. Yes, unemployment would rise as hundreds of thousands of formerly well-paid brokers and bankers lost their jobs; but at least they would no longer be extracting wealth at our expense. They would need to be fed, but that would be a lot cheaper than keeping them in the luxurious conditions they’re enjoying now. Even Bernie Madoff costs us less in jail than he does on Park Avenue.
Alas, I’m not being sarcastic. If you had spent the last decade, as I have, reviewing the way a centralized economic plan ravaged the real world over the past 500 years, you would appreciate the current financial meltdown for what it is: a comeuppance. This is the sound of the other shoe dropping; it’s what happens when the chickens come home to roost; it’s justice, equilibrium reasserting itself, and ultimately a good thing.
more...
Reader Comments (22)
Once upon a time I would have hailed this with a hearty "hear hear". But it's apparent that the system you have (I am Australian) is only set up to let the rich surf a wave of success to the beach and when it hits the shore (or in this case, when the shit hits the fan), everyone gets wet.
Tom
So then why do you want it to continue?
Since hearing your speech given for the Institute of General Semantics, I've been doing a lot of thinking about this "let it die" attitude. I agree that the current Ponzi Sceme is unsustainable and must be abandoned. And, for the most part, I completely agree that the best thing might be for the economy to never recover. But, while maybe I'm just feeling paranoid, I'm beginning to wonder if we can be so blithely optimistic about letting it die.
"And while it may be temporarily uncomfortable for the rich, and even temporarily devastating for the poor, it may be the fastest and least violent way to dismantle a system[...]"
I'm wondering what "least violent" means. Is a certain amount of violence/death inevitable? What bothers me is that, as you point out in the quote, it's quite possible/probable that the poor will bear a disproportionate amount of the suffering. Must we tacitly accept this? What does it say about we-the-middle-class to silently accept their sacrifice?
I also wonder if the suffering will, in fact, be temporary. I'm thinking of stages three and four in Dmitry Orlov's five-stage model of collapse. If/when political and social institutions collapse, who will fill the vacuum of power? I know too many asshole cops that would be more than willing to step in and assume control. How do we prevent the situation in which we all find ourself caught up in a protection racket? As we implement new forms of CSA and local currency, how do we maintain independence from a new generation of would-be Great Pirates?
This is a decidedly pessimistic reality-tunnel; I find myself wondering what R.A. Wilson would be telling us all right now, if he were with us. How do we maintain optimism? Doug, how do you maintain optimism?
Typo: you need a "no" in here: "If an urban elite parent realizes he can **** longer pay private school tuition for his kids"
About the essay itself: I had no idea your views were this radical. Do you see us heading into a James-Kunstler-esque "Long Emergency"? Would technology continue to develop? What about "cyberia", and self-replicating-nano-whatevers, and post-scarcity-thinking? Are we just going to go back to being friendly, communal farmers, as millions starve? Or can we keep advancing into "the future" without the fake speculative economy?
There is a way forward out of this 500 year mess. It could take as long again, yes 500 years, to complete the job, but there actually is a way to make everyone on this planet better off over that period of time. It could be done in maybe 50 to 100 years, it certainly can't be done quickly.
***
The only thing that can be done quickly is to make it worse, but if we adopt this particular plan then things could start getting better quite soon, in the next decade or so, and little of real value need be lost.
***
If you want to know my thinking you'll find some of it by googling my name or my email plus vegan. Those that can be bothered will find some stuff maybe worth reading. Let me know how you get on.
Bob
***
Reforming Financial Systems
With respect to the "nature of wealth", I think that the "quality of life" paradigm in lieu of the "standard of living" paradigm needs to be stressed.
"Quality of life" includes personal happiness for self, family, friends, neighbors, and all others. It includes ownership opportunities for all and everybuddy having the things they need, including health, healthy and loving relations with family, friends, neighbors, and all the people of the world. It includes peace on earth, and it includes a future for all the children of the world.
"Standard of living" implies maximizing the consumption of things.
The current Capitalist dominated system is dysfunctional both from an equity/fairness and economic and natural resource sustainability perspective.
The dominant paradigm in Capitalist financial business operations uses something called the discount rate which assumes that money will be worth less (eventually worthless) in the future, thus creating a necessity to extract profits exceeding a "hurdle" rate leading to unfair and unwise exploitation of workers, borrowers, and natural resources, and to rampant inflation.
The use of credit is not a good business or personal practice. In business, it should be discouraged because creditors have first claims on net revenues and hold liens on real property and capital assets. For "consumers", the use of credit is unwise because the system is set up to extract profits from interest thus assuring that when consumers use credit that they are losing money relative to inflation. Certainly the current foreclosure crisis in the USA is ample evidence of the inflation and the unfairness and unhealthiness of the mortgage lien process.
Credit Unions and Mutual Insurance companies are in theory attempts to institute non-profit economic democracies for their respective industries. However, because of the need to compete for customers, both of these relatively progressive financial service organization types are forced to play the same game that is basically destructive to individuals, families, communities, and the natural environment. Ideally, credit should only be used as a last resort, much more preferably not at all. We should replace all aspects of the extant financial system with an Equity Union. In some ways, a mutual insurance company is similar to an equity union. However, because such companies are required to realize profits in order to compete for "policy holders" (really investors), the companies that comprise the portfolios of the mutual insurance firms cannot be not-for-profit, can not be mutual organizations themselves.
In a not-for profit Equity Union financial services system based on principles of mutuality working in concert with ethical, wise, knowledgeable, and intelligent community, inter-community, inter-regional, and worldwide planning there would certainly be an important role for financial service workers.
A major impediment to such an Equity Union would be the competitive advantage of the current financial sector and the fear of the friction of change to those individuals and organizations. Dealing with this sector of "the" economy, it would be more feasible with regards to Capitalist resistance and more humane, to orderly and peacefully transition to an Equity Union, coordinated with ecologically sound economic planning.
I am writing and talking about transitioning slowly, methodically, and with the minimum amount of friction and hardship from a dysfunctional financial system, based on self-interest, to one designed to benefit everybuddy.
At risk of understatement, it will take a huge amount of work to educate folks to the need and benefits of such change and to communicate the basic Plan. Transition Planning will also be a very difficult process, but I see no alternative to the current, impending and worsening global economic, political, social, and natural environmental collapse.
The Peoples' Equity Union concept is designed to be a grass roots, popular choice "movement". I am organizing with individuals, workers, and shopkeepers in my neighborhood, adjoining neighborhoods, and through the inter-net to whomever I can attract an interest in the concept.
The focus is primarily local, yet global at the same time. It is my dream, not a hope yet, to encourage a critical mass of people to organize locally around a unifying mission, unifying principles, unifying strategies, and unifying tactics in order to minimize the amount of executive administration at the regional and global levels.
The theory is that neighborhood locales, the neighborhood community/worker hybrid association will have maximum autonomy and will be guided only, in their inter-community and inter-economic sector relationships by regional Planning Boards and a Global Policy Committee.
We must replace the current equity trading systems, corporate conglomerate corporations, insurance companies, and usurious banking systems of the Capitalist status quo with a worldwide Peoples' Equity Union with branches in every community/neighborhood.
The goal is to be a true economic democracy: of, for, and by the people.
"Are we just going to go back to being friendly, communal farmers, as millions starve? "
I don't think there's too much choice involved with this. 1 of 2 things are going to happen: a) the corporatist elite will succeed, gain near absolute control of all critical resources, and hoarde it for themselves and deliberately starve of (b)millions to control the remaining few; b)they fail, and hence, their system fails and the walmarts are no longer able to stock GM crops brought in from all over the world and the unfortunate masses who have come to depend on them suffer and possibly starve. Then we are forced to adopt a community based economy.
What we can do about both situations is the same. Raise awareness, boycott the assholes running the show, PREPARE, PREPARE, PREPARE.
So, are we going "allow millions to starve?", it's not up to us directly and it's going to happen one way or the other.
I can't speak for Doug, but I see it like this... Could you still get to work if there were no cars? Of course! Maybe you'd have to catch a bus, or maybe you'd move to within cycling distance of your work, but your hardly going to sit around on your front porch eating your home grown vegies all day (although that has its appeal). The world will carry on without "for profit" corporations, and most likely in a more healthy direction.
The conundrum I see is that while corporations themselves are a hierarchical drain on wealth, many people within corporations actually contribute to humanity's wealth, if only a minority.
However, the large scale operations cause people to become specialized. A lot of specific people will have to find each other and band together if they continue to create wealth as they know how.
(Even bicycles require industrial processes; how is one going to produce the steel bars? How do you create a shovel to garden with?)
Can such requirements be fulfilled from the ground up? I guess it's not that much different than a bunch of people doing specific things in open source software.
I don't know, some issue is in the back of my mind that I can't quite bring out.
Eddie: yeah, it's feasible - but I first got into Doug based on his "kids raised on the internet and anime and skateboarding will break out of linear, dominator models and co-create the hi-tech participatory fractal future" spiel: sort of a conservative Timothy Leary. Think of the ending of Testament.
But this essay sounds like it's from a conservative peak-oil-guy. A defensible position, but I didn't know Doug had publicly changed his views to that extent.
Was all that nonlinear evolutionary thinking he wrote about in the 90s just to prepare us for the disappointing crash back into a medieval world - this time lacking the raw materials to go beyond the horse-and-carriage ever again? Or am I misreading this - is the speculative economy he wants dead just a parasite on the real driving force of evolving technological/social structures?
In brief, will the future be better than, worse than, or the same as the past?
Mr. R?
Guess I'll have to wait for that book I preordered ...
"Are we just going to go back to being friendly, communal farmers, as millions starve? Or can we keep advancing into “the future” without the fake speculative economy?"
I think that's a false choice. If we went back to being friedly communal farmers, there'd be less starving people. The starving are not starving because Big Agra is hampered in its ability to dominate world farming. They are starving, largely, because of the ravages of four centuries of corporatism and colonialism.
It's interesting, though- people (especially over on Metafilter) think I'm arguing for a return to pre-renaissance era technology, or some hunter-gatherer denial of technology and urban life. Quite the contrary. I'm arguing for a true Cyberian, Buckminster Fuller-inspired push *through* to lighter, smarter, better-designed technology. The stuff we have now is not designed for people to use, it is designed to generate revenue to pay back bank loans. It is designed to increase GNP.
What if the first focus in technology design was to create solutions for the starving folks you're talking about? What if our money and time were used not to extract wealth from the poor? The first step towards that end is to stop outsourcing our investment, savings, and borrowing to Wall Street banks.
And I don't see this as a switch of sentiment at all. DIY is the core cyberpunk ethos. That's all I'm saying. Don't let them do your money. We should do our own. Their money is programmed. It's Microsoft.
Our money is Linux. Bottom up.
Brad Wrote: "The conundrum I see is that while corporations themselves are a hierarchical drain on wealth, many people within corporations actually contribute to humanity’s wealth, if only a minority."
Many of these people could create a lot more value (not wealth) for humanity if their goal was to actually create value for humanity, instead of create wealth for the shareholders. They'd probably be a lot less stressed at the same time.
"I’m arguing for a true Cyberian, Buckminster Fuller-inspired push *through* to lighter, smarter, better-designed technology."
Mr. R: Thanks for clarifying.
I guess I was thinking that our "fake"/speculative financial system had more to do with the technological/productive processes of civilisation than you're saying it does. But - if a big enough chunk of all the engineers/miners/programmers go back to raising corn, would we really keep pushing for the Buckminster Fuller Future? Isn't large-scale division of labour what keeps enough people who are so inclined from *having* to spend their lifetimes on the raising of corn?
Anyway - of course, I hope you're right.
And if you're wondering why people assume you're arguing for a technological/civilisational rollback - in my case, it was because a) you used language similar to those who do, and b) you didn't explicitly clarify that you weren't.
Also: why did you say this was a false choice: “Are we just going to go back to being friendly, communal farmers, as millions starve? Or can we keep advancing into “the future” withOUT the fake speculative economy?”
I thought you chose the second one?
irish37: your views here (similar, I think, to Derrick Jensen, James Howard Kunstler, the "What A Way To Go" documentary ... ) are exactly, point for point, what I thought Doug was espousing - and which he's just clarified that he's not.
Of course, you could still be right - but I hope you're not - and I hope you hope so, too.
"if a big enough chunk of all the engineers/miners/programmers go back to raising corn"
I would hope that it's the ex-advertisers/lawyers/brokers/bureaucrats that raise the corn.
Uh - never mind that question about the false choice: I think you (sort of) answered it here:
"This doesn’t necessarily mean the global economy has to go away—just that it be balanced by local activity ... We can still work in big groups making really complex stuff ... It would be a much more efficient economy, by virtue of being one that would require people to create real value ... there are many different things people can do to create value for one another. And a few people can still be bankers and brokers. Just not so many of them. "
But ... how will engineers/programmers/manufacturers find another 15 hours per day to potato farm? Doesn't more "localisation" mean more survival gruntwork for everybody? Or is this the misinformed misconception you'll explode in your *next* next book?
Eddie: "I would hope that it’s the ex-advertisers/lawyers/brokers/bureaucrats that raise the corn."
I hope it's machines.
We might have to do more real work.
And way up there where I say the transition to a fairer economy may be painful for the poor, I think the alternatives would be more painful.
I think a lot of you are missing the point. This is not an idictment of capitalism, but of corporatism. Private companies can continue business, but they would have to remain relatively small and rely only on producing some product or service that is useful. The internet will continue to work, The progression of technology will continue and capitalism will function correctly (for once).
Removing corporations from power will not force us into some kind of agrarian society! Large corporations are not innovative, and they give little wealth back to the communities that support them. You know all that wealth they have been harvesting from the world for so long? The communities that produce it will now be able to invest it in what they deem important, not on mergers and increasing profit margins.
Indeed.
All I'm saying is that business might better be based on supply and demand of goods and services rather than supply and demand of currency.
There is a big difference, but those who believe corporatism is a prerequisite for advanced technology or even giant companies are very wrong.
"This is not an indictment of capitalism, but of corporatism ... those who believe corporatism is a prerequisite for advanced technology or even giant companies are very wrong."
Yeah, that's the distinction I - and apparently most of metafilter - was missing.
(thanks for clarifying.)