Where There Were No Doors

Follow your bliss and doors will open where there were no doors before - Joseph Campbell

Thursday, January 27, 2005

The Death of Capitalism - Part 1

We are in the final years of our civilisation. By the year 2030 the Age of The Consumer will have ended forever. The great project of global free-market capitalism and international trade will be a memory, kept alive only by the movies and books which (one hopes) will bewitch and outrage future generations in equal measure.

It's a measure of just how important the next couple of decades will be - and the decisions we make collectively during those decades - that the very existence of those future generations is yet to be guaranteed.

The end of a civilisation can be cataclysmic. And one that spans most of the globe could be particularly so. With the weapons we have at our disposal, plus our tendency towards violent and aggressive resolution of conflicts of interest, it is not difficult to visualise the next 20 years as a series of escalating wars expanding to more and more corners of the planet and employing ever more diabolical weapons. Could the human race survive a global war that saw nuclear, chemical and biological weapons deployed on a large scale?

Probably not. Especially with what we've already done to the climate and atmosphere.

But there are other options available to us. The future is as yet unwritten. There are potential solutions to the problems posed by the end of capitalism. Those solutions require us to act responsibly and with self-sacrifice, on a scale larger than we've ever done before.

And history is in fact littered with examples of entire populations making sacrifices for a greater good; indeed the outpouring of assistance for those affected by the recent tsunami is one small example of just that. All the same, history is littered with other stuff too... I wonder if my faith in humanity can stretch so far as to imagine us striding responsibly into our future of diminishing wealth. Can our civilisation be convinced to willingly end its lifestyle of profligate consumption? Or will it fight tooth and claw against each of nature's imposed limitations?

Tony Blair made a remarkable statement in a speech today to the World Economic Forum (see the World Social Forum website for more information about the issues covered by the WEF). He said this (and read the wording carefully... you can be sure it was chosen that way):
... if we put forward, as a solution to climate change, something which involves drastic cuts in growth or standards of living, it matters not how justified it is, it simply won’t be agreed to.
- Tony Blair
Let's be clear about something... Blair is not talking about the refusal of a bunch of cigar-chomping executives in dimly-lit boardrooms. He is actually - mind-bogglingly - saying this. Though in less words and without the obvious satire. He is acknowledging that even if it is justified, in fact, "it matters not how justified it is" any democratic government which implements voluntary cuts in economic growth and living standards to safeguard a future beyond the next election, will see themselves removed from power by a party promising to rescind those cuts.

I'm not entirely sure what's to be done about this serious flaw in representative democracy. Except perhaps give me supreme power to make all important global political and economic decisions. I'd sort stuff out sharpish. Mark my words

By now the more astute among you will have noticed that I've yet to provide any actual evidence that capitalism is on its death bed. I've just asserted it, and assumed that you're smart enough to have come to the same conclusion independently. How many bloggers have such faith in their readership? I know you're intelligent enough to know I'm right.

But there's always one isn't there? Some young conservative who stumbled across this website via the Total Perspective Vortex of the Next Blog button. Or perhaps one of the new breed of liberal (though they do, paradoxically, have some claim on being the original breed) who speaks in reasonable tones about the universal benefits of free trade whilst somehow managing to ignore the fact that this directly contradicts their stated aims of social progress. Neoliberalism and modern conservatism are, from a psychological perspective, two very similar strands of the same neurosis. The primary difference being that the former hates Daddy whilst the latter does not.

They both adore kooky Uncle Milton though.

The surreal World Of Milton


"Take the Nobel name off the economics prize," say relatives

by Jonathan Thompson Observer (London), 2 December, 2001

It is a name synonymous with peace. But with the centenary celebrations of the Nobel prizes beginning this week, a dispute has broken out between the custodians of Alfred Nobel's estate and members of his family.

Peter Nobel, the great-grandson of Alfred's brother Ludwig, along with three of his cousins, have questioned the legitimacy of the economics prize and demanded that the Nobel name be dropped from the award. They claim it was "never in Alfred Nobel's will and is not in the spirit of his prizes". Their stance has angered the Nobel Foundation, which administers the prizes, and threatens to overshadow the festivities.

The economics award has always been separate from the other five, which are given for outstanding contributions in the fields of literature, peace, physics, chemistry and medicine. Unlike these, economics was never mentioned specifically in Nobel's will; that prize was established in 1968 to celebrate the 300th anniversary of the Riksbank, the Swedish central bank. Peter Nobel and his cousins are now arguing that it should be named the Riksbank Prize to reflect its heritage.

They claim that Alfred Nobel, an idealist and inventor who has no direct descendants of his own, was highly sceptical of economics, and the existence of this award is an insult to his legacy.

The Nobel Foundation has sided with the Riksbank. "This is a non-issue," said Michael Sohlman, executive director of the foundation. "It is surprising because Peter Nobel is claiming that the family never agreed to this award, but I have very clear documentary evidence from 1968 showing that they did."

Mr Nobel said: "I am going to ask Mr Sohlman to produce these documents. I have never heard of their existence before and I would like to see the wording before I make any decision. The most important thing is to make a distinction between this economics award and the Nobel prizes."



Milton Friedman won the Nobel/Riksbank Prize for Economics in 1976. As one of the world's most well-respected free-market economists, and certainly the best known of them, Friedman has become - in many ways - an intellectual figurehead of modern free-market capitalism. This is why so many economists get all arsey and defensive when you poke fun at the silly man and his silly ideas.
Ecological values can find their natural space in the market, like any other consumer demand. The problems of the environment, like any other problem, can be resolved through price mechanisms, through transactions between producer and consumer, each with his own interests.
- Milton Friedman
(p.32, Economists and the Environment, Carla Ravaioli; Zed, 1995)
Back in the days when humourless rightwing economist and blogger Oliver Kamm still allowed comments on his site, I referred to Milton Friedman as a "kook" in a discussion with Oliver on a completely different website. As a result I was instantly banned from ever commenting on Oliver's site again. Needless to say, this pleased me immensely.
Of course. Take oil, for example. Everyone says it's a limited resource: physically it may be, but economically we don't know. Economically there is more oil today than there was a hundred years ago.
- Milton Friedman
That's as may be Milton; but - once you make two or three logical jumps - what that statement is really telling us is that economists should never be allowed make important decisions. When the physical wellbeing of our civilisation depends entirely upon a plentiful supply of cheap fossil-fuel energy, then it makes sense to listen to the geologists, who tell us that there's a little over 2.1 trillion barrels of the stuff less now than there was 100 years ago; rather than listening to the economists who tell us there's more of it about.

Because when it comes to what really matters... our physical wellbeing and that of our environment... the economists simply don't have the faintest idea what they're talking about. Not a sausage. Devoid of anything remotely resembling an idea in fact.

Economics is a map of past human behaviour. That's all. And none of the equations that get thrown into economics textbooks can change that. It's not a predictive science like physics or geology. Economics can tell us nothing about the future unless the future is guaranteed to be a lot like the past.

And in reality, it's guaranteed not to be.


(Tune in soon(ish) for Part 2, in which Jim rants a bit more about economics and then explains what the future holds by outlining the physics and geology behind why global capitalism is about to come to a grinding halt. In Part 3... if he's feeling nice... Jim tells the world what's to be done about it all).

2 Comments:

Blogger john b said...

Oh, are you the geologist who utterly fucked Kamm in the discussion about oil reserves? Even more respect than before, if so...

27/1/05 23:04  
Blogger Jim Bliss said...

john: Well, I'm not a geologist by trade, but petroleum geology and global energy resource management have been my passions for a number of years now (which is why I get so many dates). I was one of those annoying kids at school who got straight-A's without really trying very hard. And to this day, when I actually get passionate about something I tend to end up really knowing my shit.

In the discussion you're referring to Oliver never really got his head around the fact that I was making a point about "physical systems". And no amount of economic theory, however opaque the terminology used to express it, can impact the rules of resource depletion in a closed physical system.

Before I became an obsessive amateur energy analyst I spent 5 years in the engineering industry analysing, streamlining and, eventually, designing some of the most complex industrial systems imaginable.

Oliver knows everything there is to know about economics I'm sure, but still failed to realise that the point I was making wasn't an economic one. I was criticising Friedman from the perspective of a discipline in which I was versed and he was not. I believe this became apparent to him early on but he dug himself further and further into a pit with ever more comical demands for me to read a dizzying array of sources before I was "qualified" to discuss Friedman's views on resource management.

He's a very silly and very humourless man is our Oliver. But, y'know, there's a part of me that thinks perhaps he and Peter Cuthbertson are actually a pair of discordians. And the whole thing is being done for shits and giggles.

28/1/05 21:29  

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