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head down, go to sleep to the rhythm of the war drums

Yeah, still poopy. A fascinating lecture on economic disaster from Dr. Qous (qousqous) cheered me up tremendously, though. Seriously.



I've deleted most of my dumb commentary, because I'm pretty damn useless tonight, and I think it reads better without all those interjections (most of which amounted to "I agree!"). Eventually I just stopped talking, didn't want to fuck up his flow.

Qous has posted this in his own journal, as well.

qousqous: bleh.
bobbynoah: bleh indeed
qousqous: i just hate this economy
qousqous: this economic system
qousqous: if you have a system of wild agricultural and manufacturing surplus, and yet you expect each person to generate a very high level of output... you get incredible amounts of what is basically absurd economic output
qousqous: by "absurd", i mean product that is not necessary or desired
qousqous: it's hard to blame people for "creating" desires for products
qousqous: because that's what you have to do in order to find a place in the system
qousqous: we have these small sectors of the population providing basic necessities
qousqous: food, water, shelter, heat
qousqous: yet that's not what the machinery of society primarily depends on
qousqous: sure, society couldn't fuction without those basics, but they are not enough
qousqous: the system demands that each person generate some form of economic output to obtain access to the necessities
qousqous: and so people are forced to invent new "needs" and push other people to desire them.
qousqous: and the thing i hate about the people who say "i work hard for my money, and those poor lazy bums do nothing", is...
qousqous: no one has to work hard
qousqous: for our basic level of food, water, shelter, heat, medicine, and even a certain level of enjoyable luxuries such as books, communications, travel, &c., people have to work very little
qousqous: if everyone in the country worked 15 hours per week, there would be certainly what we would by current economic standards be poverty, but by any reasonable standard of food security, health, and comfort, an extremely high standard of living
qousqous: and this isn't even about some modified communist ideology of the rich subjugating the proletariat
qousqous: it's about the basic irrelevance of proletariat and bourgeoisie alike, basically
qousqous: i want a different post-industrial society.
qousqous: yes, humans have won. we've figured out a life of abundance, prosperity, comfort, and ease. NOW LET'S FUCKING TAKE ADVANTAGE OF IT ALREADY!
qousqous: as i see it, the basic problem with the economy is that the basic economic model of the past 4000 years is collapsing
qousqous: our economic model assigned value to products and commodities based on their relative scarcity
qousqous: demand for product devided by supply equals value
qousqous: need for product multiplied by scarcity of product equals value
qousqous: when supply exceeds demand, value necessarily drops
qousqous: well, guess what! the supply of basic needs now FAR exceeds demand
qousqous: ok, fine, we have a mixed economy. farmers get subsidies, because they'll never survive otherwise.
qousqous: ok, so, now we've gotten the agricultural surplus taken care of. whew! that was a close one
qousqous: but now, uh-oh! basic material goods are now being mass-produced in such quantities that every single man woman and fucking infant on the planet can have their lovely plastic slotted spatulas, both square and round
qousqous: so now material goods have lost their value
qousqous: that's ok, we'll just ship production to third-world countries, where costs are so low that we can still sell them for a profit in the industrialized countries
qousqous: but now... what do the "industrialized" countries do?
qousqous: make useless bullshit and convince people they want it, that's what.
qousqous: create high levels of demand so that they may exceed supply.
qousqous: so the "first world" consumes a disproportionate share of the resources
qousqous: and the "third world" is left in poverty, not because there is not enough to go around, but because there is /too much/ to go around
qousqous: and you can't make money selling something there's too much of
qousqous: but if you manage to generate excess demand in the parts of the world with excess income, these basic products regain value
qousqous: the world grows plenty of food to feed everyone
qousqous: the problem is that the rich eat too much of it, and waste too much of it
qousqous: food's cheap, right?
qousqous: so, why use it carefully? what's the point?
qousqous: anyhow, if your typical food production and consumption methods lead to large amounts of waste, that increases demand, and thus helps support the value of food at a minimum level
qousqous: though, still, if it weren't for food subsidies, i'm sure that the food distribution system would collapse
qousqous: but you see where i'm going with this.
qousqous: in short, our economic system is founded on the concept of scarcity, so the system must enforce scarcity to succeed.
qousqous: and what scarcity results in, by whatever artificial means are used to produce it, is the inability of those at the bottom to obtain the scarce item.
qousqous: people keep talking about the wonderful wealth-generating power of capitalism
qousqous: but the fact is that capitalism enforces scarcity
qousqous: people say, "look at the US! even the poor in the US are well-off!" and while that is mostly true (though there are ample glaring exceptions, the US and other industrialized generally capitalistic countries are pretty much much better off than the rest of the world in terms of providing basic needs to people), what it does not take into account is that these countries are not closed systems.
qousqous: the economy has become globalized. don't tell me that china doesn't participate in the world capitalist economic system. look at the label on my shirt and my telephone and my computer and my pen and my fucking spatula and tell me that china isn't part of the system.
qousqous: so if we look at the world economic system as a whole, we can easily see it as a drastic failure in terms of providing basic services to most people.
qousqous: the US alone is /not/ an adequate economic model.
qousqous: if every country in the world had an economy like the US, we'd have a serious problem.
qousqous: where would our clothes be made? who would grow our food? our alien slaves on mars?
qousqous: i'll tell you why people don't buy clothing made in the US. it's not just because cheaper clothing can be made elsewhere... it's because the US cannot produce adequate quantities of clothing at prices that people can afford while still paying its workers enough to live.
qousqous: i begin to ramble here a bit, perhaps, partly because i haven't made the final scheme of my great understanding of the world, and partly because i lack a full understanding of economic theory
qousqous: but basically, the way i see it, the system is collapsing.
qousqous: take a look at Japan
qousqous: a highly educated workforce
qousqous: a very strong, driven work ethic
qousqous: extensive modernization, outstanding industrial production in terms of both quantity and efficiency
qousqous: a capitalistic, primarily laissez-faire system, no?
qousqous: and on top of that, a huge entertainment industry
qousqous: among the consumer society, whimsical demands for large amounts of unneeded products. on the supply side, ample production thereof, and wild and highly effective generation of new desires.
qousqous: enormous, ultra-efficient megacorporations.
qousqous: large amounts of production of low-level, basic products farmed out to other, cheaper industrializing countries
qousqous: sound about right?
qousqous: this should lead to a magical post-industrial paradise, n'est-ce pas?
qousqous: and while, certainly, this is somewhat true in that most japanese people have all their needs met...
qousqous: ...in traditional economic terms, Japan is collapsing
qousqous: the economy is basically stalled
qousqous: they've run out of growth to grow, you could say. Japan's economy is done. They've reached the pinnacle and, well, there's nothing above the pinnacle.
qousqous: So unemployment rises, inflation rises, basic needs increase in price, while earnings do not increase.
qousqous: Economists are very seriously worried about Japan. What happens next? How can Japan succeed? What will happen if the economic system continues to decay?
qousqous: And now, I think, the U.S. is beginning to approach that state.
qousqous: One of the most deeply disturbing things I have ever read about the US goes roughly thus:
qousqous: The US markets have been somewhat in the doldrums in the past few years, but this is just a hiccup, right? The economic fundamentals of the country are strong. We have a very large level of production and there is significant demand for this. The dollar is strong and the world has confidence in the US economy, right?
qousqous: The answer? Nope.
qousqous: Industrial production in the US has been farmed out to other countries. We have a huge trade deficit, and import far more than we export. How can we maintain this? Why does the dollar not lose its value?
qousqous: What's keeping the dollar up is the huge amounts of foreign investment in the US. US markets are some of the strongest and most stable in the world, and the same can be said for the dollar. Why are they so strong? Because not only do the American people invest in the markets, but so do large numbers of foreigners. They buy US dollars and stock in US markets. Why do they do this? Because the dollar and the markets are so strong. And why are they so strong?
qousqous: ... because people buy them.
qousqous: So... if our economy is strong because foreigners buy into it because our economy is strong because...
qousqous: this is when the "OH SHIT" part comes in.
qousqous: the economy has no basis other than its own supposed strength.
qousqous: Eventually, there's not enough input (somewhere... not sure where) to keep the cycle going
qousqous: and it all collapses.
qousqous: That collapse... may be relatively imminent.
qousqous: our recent difficulties in the stock have basically been simply a bubble
qousqous: bubbles happen, they pop, things return to normal
qousqous: but economists are starting to worry.
qousqous: i don't remember exactly how it went, but... we see the dollar falling right now, right?
qousqous: this is good for economy, because it increases exports.
qousqous: except, wait, we don't export, we import.
qousqous: so it's bad for the economy, because it encourages inflation.
qousqous: temporary weakness encourages investment in the US, true, because our stocks and our currency are now seen as a bargain.
qousqous: yet, a forecast of long-term weakness discourages investment, because who wants to buy a crappy 20-year-old olive green spatula, even if it is so cheap, if it's not going to get more expensive later?
qousqous: so, in the short term, our weak dollar will encourage foreign investment
qousqous: but, as we already established, this is basically unsustainable.
qousqous: so once they figure out that the dollar is going to be weak for the forseeable future and that the markets are stalled, there is no desire to invest in the US.
qousqous: dollar falls further. imports get more expensive. inflation increases. basic necessities become unreachable.
qousqous: industrial production and exports could increase, except that's not what our economy is based on.
qousqous: people snap up cheap american products, but there aren't enough american products being produced to produce jobs.
qousqous: unemployment rises, inflation continues, GDP stalls or falls.
qousqous: and we turn into Japan
qousqous: we tread water
qousqous: for a while
bobbynoah: yeah, honestly, i think i'm ready to be future-japan
qousqous: but ... what is the eventual solution? there is no solution.
qousqous: the other problem is that things won't be as nice as in japan, as we don't have the same sort of high levels of education and extreme modernization.
qousqous: the US is by many measures the richest country in the world
qousqous: but you know why this is? it's because of the artificial strength of the dollar, and because of excess products of value concentrated in the homes of the well-off.
qousqous: go to much of western Europe, probably go to Japan, walk around, and see what you see
qousqous: these places feel incredibly much richer than the US
qousqous: there's a higher level of investment in public space, people have more leisure time, and go around shopping and eating out and generally acting rich
qousqous: i'm not entirely sure where I'm going with this
qousqous: there's a certain difference in the implementation of the post-industrial world here
qousqous: the other industrialized countries went for a wider distribution of resources and a higher level of public investment
qousqous: perhaps this lead to a certain higher level of absolute economic efficiency, and perhaps this is accelerating the decline into eventual post-industrial stalling out
qousqous: but the end story is that the US is just as bad off as these countries, it's just that it hasn't quite hit yet. it's about to hit.
qousqous: once it really hits the US... the world economy stalls.
qousqous: the "first world" goes into severe recession
qousqous: the "developing world" has a momentary surge again, as they take over where the "first world" left off
qousqous: but they have no one to sell to, so they stall out too
qousqous: and the "third world" continues to be ignored and plagued by chaos, corruption, and uncertainty.
qousqous: this part ... everything since you said that you're ready to be future-japan, is what i'm most unsure of.
qousqous: but in the end, it's clear to me that the basic, most dire problem threatening the world economy is the end of scarcity in a system that requires it.
bobbynoah: well, perhaps scarcity will be reintroduced into the system after the collapse
qousqous: perhaps
qousqous: the thing is, there is excess manufacturing power
qousqous: what i see is that ... there will be no motivation to produce
qousqous: ok, yeah, people need shoes
qousqous: so you can make some shoes and make a buc
qousqous: except, you and your shoe-making competitors can produce 25 pair of shoes per world inhabitant in a year, say.
qousqous: the inhabitants don't want that many shoes, because they have no money to buy more than one pair with.
qousqous: so means of production are left idle, and the bare minimum of shoes are produced.
qousqous: because there is always some cost to producing and distributing a shoe
qousqous: even though it's trivial, no one has a way to cover it.
qousqous: no one has a way to cover it because there are no jobs because no one is producing because no one is buying.
qousqous: it's a very very strange problem where excess capability of production leads to collapse in value leads to no motivation to produce leads to scarity.
qousqous: but any time someone tries to take advantage of the scarcity to make some money, they run into two problems
qousqous: one is that there is very little money out there in the first place, and the second is that if they start selling at a profit, someone else can come in and sell for less and undercut them.
qousqous: so.
qousqous: i think i'm done.
qousqous: does it all make sense?
bobbynoah: so it would either give us the opportunity to change the global economy, or return thing to the economic state of...i don't know, fifty years ago?
qousqous: oh, no no no
bobbynoah: yes, it does make sense
bobbynoah: i think
qousqous: it's a totally new economic state
qousqous: maybe it will plunge the world into a basic subsistence-based agricultural society
qousqous: because no one has enough money to buy food, but everyone can stake out some land and some water and find a way to grow food and feed itself
bobbynoah: you think so? all those shoemakers have to do is convince people that they should buy THEIR shoes instead of anyone else's, and we're starting over again
bobbynoah: ah hmm, i guess it depends on how bad it gets
qousqous: i dunno... i think it can go through several cycles like that
qousqous: but in the end, money is worth something because there isn't enough of it
qousqous: things are worth a certain amount of money because there aren't enough of them
qousqous: eventually, as we reach excess production, values plummet and the money supply dries up.
qousqous: we can escape this
qousqous: because, clearly, we can produce plenty to make everone provided with their needs
qousqous: the problem is... we need a totally different economic system
qousqous: and with the greed the way it is in this world, and with the ever increasing concentration of wealth in few, and with the large benefits that the system brings to a relatively large number of people, those who have the power to change things, don't have the motivation to.
qousqous: so... unless that changes
qousqous: the system is just gonna run itself out, and collapse.
qousqous: and then we can create the new system.
bobbynoah: sounds like a good life to me
qousqous: except, we'll be in such a condition of chaos and despair that there will be no way to reach a consensus
qousqous: maybe.
bobbynoah: i think there are a lot a lot a lot of people who would welcome something like this
bobbynoah: remember everyone who was so "afraid" (excited) about y2k?
qousqous: maybe the desperate fight for resources which are so easy to produce that there is no way to come by them leads to mass warfare
qousqous: everone fighting each other in a post-apocalyptic nightmare world of fend for yourself, except without the apocalypse
qousqous: or maybe... just maybe... people realize that we don't need money anymore
qousqous: we've established that money represents, essentially, scarcity.
qousqous: which has ceased.
qousqous: so farmers grow huge amounts of food, feed themselves, and give the rest away.
qousqous: people start doing things because they need to get done, not because they will get something out of it.
qousqous: stores still exist, but most products are free for the taking
qousqous: do that now, and people will take all they can and chaos ensues, because this is not the usual way of things
bobbynoah: and everyone gathers each october to watch the leprechauns and unicorns frolic amidst the autumn leaves.
qousqous: but really, if you can go to the spatula center and pick out your favorite spatula and walk away for it without turning anything over at any time, what reason do you have to take seventy spatulas? to hoard? oh yeah, you're gonna need all them spatulas.
qousqous: to sell? oh, yeah, that'll work, because, you know, it's not like everyone else can go out and grab seventy spatulas off the shelf. oh, wait, right, they can.
qousqous: the problem here is, what drives people to do the basic grunt work needed to get these spatulas out?
qousqous: the systems necessary to maintain our current levels of production are so anonymous, abstracted, and impersonal, that people just hate participating in them
qousqous: the only reason they do is because they have to.
qousqous: sure, there will be craftsmen who just love making tables all the time and giving them away and will be pleased by all their lovey neighbors giving them tons of food because they love the excellent nice tables so much
qousqous: that's the idea behind the anarcho-syndicalist brand of gift economy, if i understand it properly.
qousqous: problem is, no one loves stocking spatulas.
qousqous: no one loves cleaning public toilets.
qousqous: no one loves the basic icky grunt work that keeps society going
qousqous: so... what now?
qousqous: are robots the answer? hahaha
qousqous: it sounds absurd, but i mean it, almost
qousqous: i, for one, welcome our shiny new robot masters
qousqous: &c.
qousqous: this is where it all really breaks down in my mind. i don't know how to rebuild the economy.
qousqous: it's clear that the old paradigm is irrelevant, yet we can't figure out a new one.
qousqous: at least, i can't
qousqous: my hope... is that this collapse will come sooner than later, and do a minimum amount of damage
qousqous: bring desperation but not utter chaos
qousqous: leave some basic societal machinery intact, so that some sort of new consensus can be reached
qousqous: the longer it takes for the collapse, the sharper the fall for those on the top, and the more people you have at the bottom, increasingly desperate, and full of anger and desire for revenge
qousqous: it's a huge opportunity... utopia is possible
qousqous: it's just hard to figure out how to make people want to do what is necessary for it.
qousqous: i could be very, very wrong
qousqous: but, i think, the system is on the edge, just waiting for something to topple it, or for it to eventually finally burn out
qousqous: and the closer it gets to burning out, the more fragile it is and the less something will take to burn it out
qousqous: er, topple it, that is
qousqous: and now i think i'm really out of things to say. i don't know where to go next. the world doesn't.
qousqous: i also want to say that i'm certainly drastically wrong about a number of things. prognosticators always are.
qousqous: the one thing we have seen about predicting the future is that the future is always predicted by someone, it's just that for every one who gets it right, there are thousands of others with what turn out to be ludicrous fantasies.
qousqous: there is so much that people don't know, that people fail to think about, that cannot be known.
qousqous: i think i'm right about the problems i've identified. what i have said is to come of them is a reasonable supposition, given what we know.
qousqous: but if you think about all the huge inconcievable things that have happened and changed the world dramatically... these will continue to happen. they always will.
qousqous: some are slow, some are sudden
qousqous: but ultimately... the key aspect of this whole puzzle that eventually sets the world firmly on its course, is yet to be seen.
qousqous: it's an exciting and extremely terrifying time to be alive.
qousqous: i guess, let's enjoy it while we can.

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  • 5 comments
That is all mostly true.

I think perhaps the changes won't sink in until we have a generation that was raised with surplus as a fact of life.
Definitely. Also, hard core cryptographically secure reputation systems. Reputation becomes the new money. And in a stunning turnaround, the new rich are those who are nicest to other people.
is that it requires a highly interconnected world, and we're soon going to turn away from that. "It struck me forcefully (again) that the more 'richly connected' we make our world the more vulnerable we make it. Empowerment cuts both ways: as the complexity of things increases, so does the ability of an increasingly minute people to destabilize it. This, it strikes me, is the real limit on development—that we will accept the threat of terrorism as a limit on how complex we make things. So the Utopian techie vision of a richly connected future will not happen—not because we can't (technically) do it, but because we will recognize its vulnerability and shy away from it." - Brian Eno, A Year With Swollen Appendices
It's possible. However it seems to me that we've been highly interconnected for at least a century. If we turn away from that, what are we turning to?

One could make the highly interconnected system argument about any human society of reasonable size, with attendant dire warnings of its fragility (for example, the Black Death). That didn't stop us, we just developed immunities and moved on.