New board!

[Steve Cook]

+1 Steve. Seems to be quite logical to me, seemingly a boom bust cycle in social groupings based on lack of surpluses brought about by 'peak everything'. I wonder if you agree that the slave trade was one of the first manifestations of globalisation in that it facilitated the movement of 'surpluses' around the world.

I would certainly go so far as to agree that slavery enabled ruling elites to expand their territories alongside other mass exploitation of resources. Globalisation is the end result of such expansionism. However, full globalisation is largely a function of the hydrocarbon age, I feel. There just wasn't the necessary energy available to fuel globalisation before the industrial use of hydrocarbons. Which, if correct, implies that globalisation's days are numbered.

[carbonoid]

I recommend www.rdwolff.com - a website with very good economic analysis from a Marxian perspective (the video lectures are actually surprisingly entertaining).  A lot of Marxian though ties in surprisingly well with current issues of sustainablity.  Marx hit a few nails bang on the head.

[Steve Cook]

I recommend www.rdwolff.com - a website with very good economic analysis from a Marxian perspective (the video lectures are actually surprisingly entertaining).  A lot of Marxian though ties in surprisingly well with current issues of sustainablity.  Marx hit a few nails bang on the head.

yep

[huw]

I need to expand here, on a subsidiary, but very important factor. That of fractional reserve banking (FRB). FRB is a financial process whereby if I go to a bank and borrow money from them I must pay it back with the monetary fruits of my own future productive activities. The money that the domestic bank lent to me, they also borrowed from a commercial bank. The commercial bank lent that money into existence. However, they only did so on the back of knowing that they can go to the central bank, after-the-fact and make good their lendings. Thus, ultimately, central banks/commercial lenders decide how much is lent into existence to you and me based on an assumption of how much productive activity will be happening in the future such that the lending can be repaid. Of course, the reality of how the credit trickles down through the system is far more tortuous and indirect than the schematic, above. but, in principle, this is how our FRB "money" supply grows.

A few points in response to the above para.

1. I'm not sure that there's really a conceptual distinction between a "bank" and a "commercial bank" -- they're all commercial. The important distinction is between commercial banks and Central Banks. Any bank that lends you money can go directly to their Central Bank to obtain funds needed to balance their books, it's a privilege that goes with having a banking licence. They'd usually prefer to raise the money on the commercial debt markets, but they can go to the Central Bank if necessary.

2. When a commercial bank seeks funding from a Central Bank, it has to provide collateral so this ability of theirs is not, in theory, an unlimited credit-expansion machine. The Bank of England (BoE) traditionally demands collateral of the highest quality, i.e. government bonds (gilts). The Bank faced criticism for not relaxing this requirement when UK banks such as Northern Rock needed funding, but only had mortgage-backed junk to offer as collateral.

3. Other Central Banks, including the Fed, are less rigorous about the kind of collateral they will accept. The great thing about insisting on gilts is that banks can't manufacture them; there's a real cap on the amount of credit that commercial banks can obtain from the CB. As soon as the CB starts accepting other kinds of bonds, that limitation is removed, and the vulnerability of the process to feedback from asset prices back to debt-raising ability (i.e. bubbles) is obvious.

4. So how did the UK bubble happen, if the BoE wasn't handing out money willy-nilly? I suggest (based entirely on circumstantial evidence) that it was money being recycled (lent back to us) from countries with which we ran large, persistent trade deficits. So, UK commercial banks who made loans to us, were able to raise the funds from foreign commercial banks, who were glad to find a home for all the pounds they'd collected by running a trade surplus with us. Again, the dangers of feedback are obvious, since the more we borrowed, the more we spent; and the more we spent, the richer our (exporting) trading partners felt and the more money they had to lend back to us.

So ... I'm not persuaded that the debt-based banking system itself inevitably leads to disaster. All the matters I've discussed above are matters of policy, somewhere or other, and amenable to regulation (but not necessarily in a democracy).

[D.C.]

But on the other hand, there has never yet been a global empire that rules the entire planet. With all empires there have been countries that have remained free. The same would apply to economies not ruled by capitalism.

And in further support of the idea, you could argue that there is precedence for an empire to be maintained without the overt use of a foreign army. You can argue that the Western Roman empire did not collapsed but maintained power through the Roman Catholic church. Kings would not want to upset the pope because otherwise the other countries would turn on them. This lasted for centuries untill all the countries eventually rebelled together.

I'm not sure all countries rebelled together, what really did for papal authority was when the French revolutionaries decided to march on Rome, sack it and lock up the pope.

After that attempts by the Catholic church to throw it's weight around generally got met with derision or ridicule, summed up nicely in Stalin's quip, 'How many divisions does the pope have?'

[Daniel Stallion]

I would say that what we have lived through is a Western/European Anglo-Saxon empire and capitalism has simply been one of the primary economic/political tools of that empire. However, as we have seen on a number of occassions, when politics/economic policies fail, brute force has always been on the table as an option.

"Capitalism" is merely the pursuit of self-interest of ruling elites by other means. In other words, capitalism has been a new means to a very anchient end.

Perhaps capitalism is what the British empire transformed into in the same way that the Roman empire transformed into a religion.

Capitalism is the modern day equivalent of religion!

Precisely.

Capitalism has been the primary religion of the hydrocarbon age

As long as there is the phenomenon we know as "civilisation" we will have what we have always had under this particular organisational structure of human existence. Namely, the subjugation and exploitation of the many by the few. It started when we "invented" farming at the end of the last ice age and so created the first surpluses. A few unscrupulous humans took over by creaming off the surplus of others. The reason they got away with it is because most people would rather lose 10% of their surplus than risk losing their life trying to defend it. However, 10% from everyone else adds up and soon enough, those few unscrupulous humans had vast resources at their disposal. Pretty soon we got armies, judiciary, formalised systems of taxation , roads, pyramids etc etc. The rest is history.

Those people have been in charge ever since.

They have justified and legitimised their rule with various creation myths including, the Word of God, the divinity of kings, communism, capitalism etc etc. Different bullsh*t, same areseholes.

However, it [civilisation] is inherently unsustainable and has ended in collapse on every occasion it has risen. As I have said, it is fundamentally born of the existence of surpluses. It inevitably overshoots and then dies on the back of the collapse of those surpluses. To the above extent, the coming collapse of our own civilisation is no different to all previous collapses. The big difference this time, though, is that our civilisation is global and the collapse will be global. This time, there is nowhere left for it to rise again. This is the largest and the greatest civilisation mankind has ever known. Some might say it represents the pinnacle of our species. Others might argue it is the ultimate expression of our biologic urge to self-destruct. In any event, we will never see its like again.

As for what will replace it, it seems to me that as long as there are surpluses to be had, there will be a small number of ruthless people who will cream off the surplus of others. However, from now on the surpluses will be smaller which will mean, in turn, the capacity of elites to rule over transnational territories will be reduced and so the nature of their rule will inevitably revert to a more local and more ancient methodology. A world that will be less industrial in its brutality to be sure. But, on a smaller scale, a world probably far more brutal than it has been of late for those few of us lucky enough to call ourselves Westerners.

The only way we would, as a species, get to live in a manner that is both more peaceful and also is more attuned to our true nature would be in some kind of pre-civilisation, hunter-gatherer existence. I suspect that, at heart, most humans are communalists by nature. That is to say, inherently "free marketeers" (for want of a better term) within the socially transparent, self-regulatory confines of a small groups of no more than a few hundred. The worst excesses of individualistic human greed are limited under such conditions due to the transparency of trade in such a small economy. Thus, no one gets too rich and no one gets too poor relative to anyone else (at least not if they don't want their throat cut by their neighbours). At some point in our deep future, this may indeed be the final destiny of our species. A kind of full circle if you like.

The end of civilisation = the end of all ideologies.

How do you suspect limitless, wireless electrical power would impact, what you believe is, our inevitable plight?

I'm not predicting its imminent arrival by the way, I have just always been very intrigued by the (alleged) work of Tesla, Marconi, Grindell-Matthews etc on the subject. Tesla, it seems, believed that it could free humanity.

Obviously there is an extraordinary amount of debate regarding the truths and myths of both the science and the associated stories, but if you indulge me for a moment and imagine that; Tesla was right and the frequencies of the earth itself could be used to produce unlimited, wireless power, and the technology to capture and store that energy became 'open source' and simple. What impact could this have?

I have my own view (best, worse and most likely scenario), I'd be intrigued to hear yours.  

[D.C.]

Abundant, cheap energy in any form would mean more of what we have now.

Whenever we have come across an environmental challenge we have overcome it by throwing energy at it, it is the human way.

Some animals respond to winter by hibernating, we cut down trees and burn them.

Can't grow enough food?

Use energy to make fertilisers and tractors to increase yields per acre.

If you massively reduce the cost of energy from current levels, we carry on doing what we are doing now until we hit new buffers.

For example if you can't produce enough food on your one acre, the application of lots of energy means you can build a 100 storey building on the site and grow food under artificial lighting.

[carbonoid]

Yep, 1+1=2.  Doesn't matter how we rephrase the equation.  Totally agreed that if the mindset is not changed it won't matter a damn.