The farmland analogon

Growth is a complex matter. Its measurement as GDP gain has given reason for debate as we now see that GDP gain alone will not define a society’s wellbeing. Herman Daly, growth critic for decades, has summarized the fallacies of growth on the casse website (second part).
Criticism of GDP growth can be summarized in the following arguments:

• To have more is certainly not beneficial if we already have enough. There is no use in having more washing machines if everybody owns one already.
• The measurement of the GDP in currency falsely implies a decoupling from physical realities, while money supply might be endless, our world is not. Production needs the physical reality. There is only so much land to grow food on.
• The future costs of growth are not calculated into the GDP. The total benfits of growth can be smaller than its costs. Waste, pollution, etc. could bind more productivity over time than is gained by wasteful production.
• Consumption of resources and common goods is counted as growth (income) even if nothing was produced but money. (Cutting down a Forest is growth, depleting fishing grounds is growth, burning oil is growth etc.).
• Production and services that do not enter the market do not add to the GDP. The people in a rural society producing their own food, the practitioners of the new urban gardening trend or people that help somomebody out of friendship or kinship do not add to the GDP growth even if they produce essential goods and services for the survival of their society.

Growth had its benefits for society in the past, this is not even disputed by growth critics, but to ignore the above "headwinds" of growth is a certain path to ruin and destruction.

These arguments above give rise to the most important questions everybody has to ask himself and the leaders he has chosen:

• How did we grow in the past?
• Can we grow this way forever?
• Are there other ways for growth?
• Do we need growth in the future?
• What growth do we need, if any?
• Who will benefit from future growth who will suffer from it?

Above fallacies of growth and open questions can be formulated as one central question:

Is our (growth capitalist) society so dependent on unsustainable growth that it will collapse if growth comes to its inevitable end?

All these open questions about growth will define our future first and foremost. As long as these questions are not answered all other discussions are moot. How we answer those questions, will affect every aspect of our life.

And yet, the economic and political leaders and our media are stonewalling this discussion. Growth economics are presented as the only possible alternative for our society to thrive.

Behind these false assumption lies the neoliberal ideology. Its mantras are: Growth is the answer to all problems of society, growth goes on forever, the invisible hand of the market will always ensure growth by inspiring innovations that deal with any obstacle to growth.

These assumptions can be falsified easily by numerous scientific studies, basic math or physics and by common sense. This does not impress our leaders at all. The growth doctrine is followed with fanatic fervor.

In the last post I presented a anthropological analysis of the findings of Robert J. Gordon. It might have helped to understand why growth had happened, and what forces drove it. I also tried to explain again why endless growth is impossible and that there is evidence that the end of growth has been reached.

Also, based on the analysis of Robert Gordons findings, I would put forward a systematic flaw in the capitalist growth economy. Growth in a capitalist system steers itself into situation where the friction between the state, the people and the capitalists interests must increase from the moment that growth can no longer keep up with capital gains (the increase of private capital by interests).

I will try to summarize my understanding of growth and to illustrate the inherent flaws of capitalist growth economy in an analogon.

The Farmland Analogon

For this analogon let us picture our society as a small village settling on a little Island. The villagers represent the society or the "state" in my analogon. The reasons for growth to happen, as described by Robert Gordon, were the industrial revolutions happening in our past.

In my analogon of the village, this is represented by the villagers reclaiming farmland on which to grow new crops. Let us say the farmers found a new well in an arid corner of the island. (Science and technology and the evolution of society open the possibility for an industrial revolution.)

Reclaiming this farmland (initiating the industrial revolution) can only be achieved by the villagers (the state) as it does not immediately produce returns (and thus is of no immediate interest to "the market"), but only opens the possibility to do so in the future. All hands have to invest work (taxes) to make the land arable.

To get returns, anybody who wants to produce on this new farmland has to have seeds to sow, and the ability to plow the field and harvest the crop.

In my analogon the seeds represent the investment that has to be made, by investors, banks or the state using "surplus from earlier harvests".

To sow and harvest the village will have to find somebody or something to do the work (The farmers, the work force of the population).

They would also need water and minerals for the crops to grow (resources like oil, ores, etc.). Without it the new farmland can’t produce yields at all.

If the village has all those things, the success of the undertaking is determined by the efficiency with which the workload is handled. It’s measured in the productivity they have invested in relation to the products returned per worker (unit labour cost).

"Governments will always play a huge part in solving big problems. They set public policy and are uniquely able to provide the resources to make sure solutions reach everyone who needs them. They also fund basic research, which is a crucial component of the innovation that improves life for everyone." Bill Gates

How market forces drive innovation (or not)

In any society, be they "capitalist" or "socialist", these steps are the same. Market mechanisms did not come into play so far. The "market forces" and the "invisible hand" make their entry when the efficiency with which the claimed new marked is exploited is determined. (increasing production per worker).

If the village has a capitalist system the "market forces" will drive the invention of new machines for more efficient plowing and harvesting or an entrepreneur might invent new ways to enhance the harvest. (Fertilizers, Pesticides etc.). In a state socialist system this might take longer as the motivations for finding new efficient ways for production are lower.

But there are restrictions. The  farmland is of a certain size that can’t be expanded and it will need water, sun and minerals to produce crops. This represents the natural boundaries of earth and the fact that resources are limited and efficiency can not exceed a maximum. So efficiency will rise steeply at first but to be more efficient will get harder with time.

Please refer to Stefan L. Eichner if you would like to know more about market forces, innovation and growth:

Thanks to S. L. Eichner for his great work explaining the
mechanisms of growth and innovation in market driven economies
(http://stefanleichnersblog.blogspot.de/)

In the long run the villagers will have optimized all ways of producing crops on this newly claimed farmland. Production will not rise anymore but stay constant, provided I have enough farmers, water and minerals and my climate is stable. (market saturation is reached)

In the end, the field will only provide the village with the same amount of crops every year if they can somehow sustainably supply all the factors that are needed.

In our current economy, the "water" we use is oil. We are taking it from a finite resource. If the villages new found well runs dry the crops will wither and die no matter how many farmers they use to plow or harvest.

To rely on the market will not help if your production depends on finite ressources. Increasing efficiency will not fight the drought or "invent" new water.

(For explanations see my posts about the limits of growth due to finite ressources here, german only, or this one about the problems with compensating for peak oil, in english).

Even if the ressources are in endless supply the invisible hand will slow progress because it is attached to the arm of capitalism.

Why capitalism impedes innovation and growth:

When the end of growth is reached (either way) it depends very much on how the village has organized itself as a society. In western capitalist societies this land is now surely owned by some landlord. (The owner of the means of production and large capital, the capitalist in the classic sense).

Source: H.Genreith, Dead Man Walking Model (german)

This landlord is by now accustomed to the fact that his share of the yields grows every year (by the exponential effects of interest) and he thinks that this will go on forever (because he can’t see why not or does not care). His firm believe is, that he is entitled to an ever increasing share of the harvest. Many years growth only ensured the rise of his share and finally got to be the only reason why growth was needed (see here or here for scientific arguments for this development, german only).

To satisfy his greed the workers share will finally decline every year that growth did not keep up with the landlords demands (or they are laid off and less workers work overtime). The village that is raising taxes from all the workers (not the landlord) is getting poorer despite the successes of raising production for years and being the power that made reclaiming the field possible, while the landlord accumulates riches. (The neoliberal growth capitalist ideology holds to the myth that low taxation, especially low taxation of the very wealthy is benefitial to growth, this is untrue as this study shows.)

Due to the dropping taxes the impoverished village is no longer able to afford to send out a geologist (scientist) to search for a new well, even if the well should fall dry. If the village did not find a well then now it might be too late. Also, finding the next well will be harder and will proabably provide less possibilities for new growth. (productivity growth was less for every cycle of industrial revolution.)

The landlord though is not at all interested in a new patch of land reclaimed or a new well found.This new field would belong to some other landlord and his profits and power would decline. Instead he raises productivity by carelessly endangering future yields. I.e. as the soils minerals are depleted he uses lime that will bring him more yields for some time but ruin the field for years to come.

In the real world "lime" stands for the harmful byproducts of growth that last longer than its short term benefits, like fracking waste, CO2 production, radioactive waste, etc. described by Gordon as the "downwind" of growth or by Herman Daly as uneconomic growth.

Source: CASSE (steadystate.org)

It is obious today, that unchecked, the growth capitalist system will not work to the benefit of mankind. Instead of heeding the warnigs of a climate collapse and investing into renewable energy, established giants in the (i.e. oil) industry intensivate production (fracking etc.) and increase the tremendous overshoot allready existing.

These big (i.e. big oil) players in the market use their considerate power to impede the development of alternative renewable energy sources. Meanwhile oils spills, toxic waste, radioactive waste, CO2 emissions etc. will bind future productivity in an ever increasing amount, denying future generations the benefits of growth or even the standard of living we have today.

Whenever a societies consumption is higher than its carrying capacity (overshoot),
 it reacts with intensivation that decreases the future carrying capacity.
(Marvin Harris,Orna Johnson, cultural anthropology)

In the end something happens that everybody thought would never happen again when the new field was reclaimed. The harvests decline and can no longer feed the grown population. Most people might still be better off as before the new well was discovered but now they are used to a higher standard of living and are getting angry, but some even might be facing starvation and get desperate.

Here the analogon ends. How the populace of the village reacts is random and we will see what the future will bring.

Innovation Growth and Capitalism

Robert J. Gordon (Northwestern University) recently published this wonderful peace of science that was immediately and widely admired, discussed and then discarded. The reason why it has been discarded is obvious, Gordons point being:

“Since Solow’s seminal work in the 1950s, economic growth has been regarded as a continuous process that will persist forever. But there was virtually no economic growth before 1750, suggesting that the rapid progress made over the past 250 years could well be a unique episode in human history rather than a guarantee of endless future advance at the same rate.”

Of course this is not acceptable to anyone in the establishment, as growth ideology has “no alternative” in politics since the days of Thatcher, Reagan and Kohl.

To understand the patterns of growth in the past 250 years, Gordon defines three Industrial revolutions in this period of seemingly endless growth:

"The analysis links periods of slow and rapid growth to the timing of the three industrial revolutions (IR’s), that is,
IR #1 (steam, railroads) from 1750 to 1830;
IR #2 (electricity, internal combustion engine, running water, indoor toilets, communications, entertainment, chemicals, petroleum) from 1870 to 1900;
and IR #3 (computers, the web, mobile phones) from 1960 to present.

It provides evidence that IR #2 was more important than the others and was largely responsible for 80 years of relatively rapid productivity growth between 1890 and 1972. Once the spin-off inventions from IR #2 (airplanes, air conditioning, interstate highways) had run their course, productivity growth during 1972-96 was much slower than before. In contrast, IR #3 created only a short-lived growth revival between 1996 and 2004. Many of the original and spin-off inventions of IR #2 could happen only once – urbanization, transportation speed, the freedom of females from the drudgery of carrying tons of water per year, and the role of central heating and air conditioning in achieving a year-round constant temperature.”

This is very consistent with the arguments I have presented here in this blog in which I have applied the Ideas of Marvin Harris Cultural Materialism to understand our society and provide an outlook to our future.

The described Industrial revolutions have several things in common:

1. All industrial revolutions have not been initialized by market forces but are the result of infrastructural investments made by “the State”. Providing the populace with access to water, electricity, sanitation, means of transportation, health care, free access to the internet are clearly in their essence of socialist and egalitarian character. I would also add, that the basis of these revolutions has been laid by government funded research and science and also needed a social revolution and the invention of the welfare state to come to pass.
2. After the groundwork of an industrial revolution has been laid, the private sector and market mechanisms made use of it to provide the applications needed to benefit from this revolution. As households had access to water, gas and electricity the private sector could start selling them washing machines and dish washers, electrical stoves, central heating, electric light bulbs etc., freeing productivity for more and more production and thus growth.
3. All revolutions depend on each other, take away energy and the returns of transportation or information technology will be taken away also.
4.  When a saturation of the markets opened by a revolution has been reached (the moment everybody has a washing machine) further inventions in this market provide less growth until the market degenerates into a consumer market that rather satisfies status symbols than freeing additional productivity.
5. The returns of each industrial revolution, meaning the amount of freed productivity, diminish with every revolution. It is very probable that no future revolution will bring us the same returns that the beginning of the age of fossil fuels has brought us.
6. The longer the basis for the industrial revolution has been established and the markets saturated, the more the private sector gained control over the distribution of the commodities to increase their profits. As this devolution has progressed, the less the private sector has contributed to growth by providing new applications of the revolution. Today more and more people are denied the commodities that led to freeing productivity by the private sector, making the private sector itself an important reason why real growth slows in the saturated industrialized societies and worldwide.

As we can see from the above graphic, Gordon predicts growth to go on but to slow in the future.

In the near future we will need to invest more and more productivity into compensating the loss of cheap energy resources that led to this chain of industrial revolutions. Freed productivity by cheap energy will so be lost to us for a long time until we have finished compensating, if we can compensate the decrease of oil production at all.

There are no efforts under way to find a new source of cheap energy. It is very likely that growth will not only stop, once oil production declines, but we will be thrown into the greatest recession of all times.

We will also need to invest more and more into dealing with the negative effects of earlier revolutions and past growth. The effects of wasting fossil fuels will have to be faced. For this, there is no end in sight and climate change can go on to harras us for hundreds of years and bind a lot of productivity.

Dealing with these negative effects of past growth can only be achieved by a joint social effort and not by "the markets" which produced the problems we face today. Achieving the current productivity in the future without further exploitation of common ressources will require an industrial revolution itself, dealing with the climate crises another.

Benefitial innovations by "the market" will probably only deal with compensating these negative effects of past growth and not provide a new industrial revolution. These will have much less return in freed productivity, examples are energy efficiency, digitalization or automation. Most innovation though will try to cope with the ever decreasing sastisfaction of new consumer products in satuated markets by finding new excessive ways for wasteful consumption.

Economists and politicians promising endless growth do not have an answer to the arguments written here. The TINA (there is no alternative) propaganda is, of course, a lie. The assumption that only the invisible hand of the market provides the innovations we need for growth is also not only false, the neoliberal market ideology is very much opposed to real innovation.

Past growth was an interplay of investments by society and market mechanisms providing new means to free productivity based on innovations in science, social organisation and infrastructure.

Capitalism can be viewed as the part of the system that has provided individuals and companies the means to profit from the achievements of society by profiting from finding new ways of making use of these achievements or making production more efficient. As the mutual benefits of new applications of technology decline by the law of diminishing returns, capitalists seek also profits in disregard of the common good.

Today capitalism is a problem for society as profits of this interplay of society and the market accumulate in the hands of very few capitalists only. Capitalism today prohibits growth by draining ressources and productivity for wasteful production and accumulation of wealth and is not by itself able to start a new industrial revolution. Accumulated capital and power that was formed from the exploitation of achievements and ressources of society is itself wary of change as it undermines its means for profit and power.

State controlled socialism on the other side would be a problem as the benefits of this interplay for the individual and private company and thus the motivation for finding new applications are nonexistant and potential for productivity gains might not be realized. The political elite in state socialist systems is wary of change as it potentially undermines its source of wealth and power.

Corruption of the government and stagnation are the result of either of the two extreme ideologies, it seems.

This interdependence between state and markets is ignored by neoliberal economic ideology. the state is always pictured as inefficient and the private sector as the only source for innovation. Looking at Gordons analysis of growth we can only conclude that liberalisation, privatization and austerity are clearly in total opposition of what has provided us with growth in the past. It will take away freed productivity by controlling and taking away the commodities we need (water, gas, electricity, health care, education, homes). It is implemented solely for the sake of private capital gain and in disregard of the common good.

This course will inevitably lead to a new social revolution and it does so right now as many see that the chicago boys concepts are a total failure.

What social revolution the end of growth will bring us can only be guessed (the Bolivian water war could be a hint though) and I have tried to do so in this blog. I can only urge my readers to understand that endless growth is a dream and policies and ideologies that base themselves around endless growth will fail.

In short, the current policies ensure not only the end of growth but the collapse of society.

Natural Gas Liquids and infinite ressources of stupidity

According to this recent study of Harvard University, Peak Oil could indeed be delayed by some decades, due to the rapid development of Natural Gas Liquid (NGL) exploitation in the USA.

I admit, this post comes hard for me. After having tried to increase public attention to peak oil for years, it seems that the downslope is further off as I and many experts expected. The report seems to withstand closer scrutiny though.

Many will sigh a breath of relief when reading this. The exploitation of natural ressources will commence for another few decades in which we will have time to prepare for the decreasing oil production.

NGL production seems to grow fast enough to compensate the diminishing conventional oil production we face today for some time. It could even lead to a small increase of oil production if prices are high and stable.

To believe it will spur growth the same way that the exploitation of conventional oil did until recently, is expecting too much. I expect the current situation of effective stagnation of growth to continue while oil production plateaus and per capita oil production will continue to sink slowly with increased population. The current development of raking in capital gains by increasing social inequality will continue to hassle us.

If you have watched Prof Bartletts lecture about exponential growth against a finite ressource you will understand when I say: we only turned the clock back from 1 min before 12 to 1 min and 30 sec before 12.

I find it hard to believe that any western society will use this precious time we supposedly have gained before hitting the wall to prepare for a sustainable society.

The basic considerations about peak oil stay the same, the effects of wasting fossil fuels will become worse though. For future generations this news is bad indeed. As predicted by the Club of rome, CO2 emissions will inevitably increase for another few decades while we exploit these additional fossil fuels.
 

Launch: "2052: A Global Forecast for the Next Forty Years"

According to the new book by the Club of Rome the global climate collapse could happen in the second half of this century. World temperature could well reach a point soon when global warming becomes unstoppable and self enhancing. The reason is the inability of capitalism to bring about a change towards a sustainable society. If growth can be acchieved by any means capitalism will embrace it at all costs.

"It is unlikely that governments will pass necessary regulation to force the markets to allocate more money into climate-friendly solutions, and (we) must not assume that markets will work for the benefit of humankind," (Club Of Rome)

I was more optimistic concerning global warming than the Club of Rome. Until now there seemed to be a tight race between global warming and oil depletion that I thought would lead to future CO2 emissions well below the forecasts the Club of Rome worked with (due to the inevitable end of growth and its consequences that would bring the end of growth capitalism).

So I had had hopes that humans would be saved from their own stupidity and the global climate collapse by luck, but if there is one ressource to be counted on to be infinite its human stupidity.

To produce Oil from unconventional ressources will increase CO2 emissions drastically. Unconventional ressources are well below the EROEI (Energy Return On Energy Invested) of 20:1 that conventional crude oil offers and range between 2:1 for tar sands to about 5:1 for NGLs. By exploiting NGL we will produce huge amounts of CO2 only to burn this expensively won energy to waste it for useless consumption, again.

Unconventional hydrocarbon ressources come with another price. The industry has yet to prove that this technology is safe for the environment and that they are able to recycle the huge amounts of contaminated water they are producing. Actually, I could not find evidence that recycling the contaminated water would not bring down the EROEI to below 1:1, as most of the millions of tons of water are contaminated with saline ingredients that can only be extracted by investing huge amounts of energy. Currently most of the contaminated water is dumped into rivers, pressed into the drilled holes or just dumped on waste disposal sites.

Btw: The recycling that has been implemented so far does not actually restore the water quality but makes parts of it reusable for more fracking while concentrating most of the unwanted chemicals in higher solutions that have to be disposed as toxic waste.

So even without adding the costs for many accidents that have happened, the hidden additional costs for society are high. Just like with nuclear energy, in the end the public sector will probably be made responsible to get rid of the waste that hydraulic fracking and tar sand minig will have produced.

I would also expect the competition for making NGL exploitation cheaper to lead to more sloppiness and an increased chance of accidents and widespread pollution by fracking chemicals.

The lecture, that growth capitalism brings about ruin to mankind will hit us later but harder.

The urgency to take action is higher than ever before. If you are expecting to still live in the year 2075 or if you care for your children enough you will have to actively bring about a change today, Its in your hands now.

(See also George Monbiot in the guardian )

Odious Debts

The first recorded word for ‘freedom’ in any human language is the Sumerian amargi, a word for debt-freedom. (David Graeber)

Debt has always been used to suppress and enslave people and many revolutions in the history of mankind have been about the cancellation of debts.

It is thus not surprising that the legality of debts have also concerned legal thinkers for a long time. 1927, legal theorist Alexander Nahum Sack formulated an international doctrine that describes what debts by countries should not be legaly binding in international law:

"When a despotic regime contracts a debt, not for the needs or in the interests of the state, but rather to strengthen itself, to suppress a popular insurrection, etc, this debt is odious for the people of the entire state. This debt does not bind the nation; it is a debt of the regime, a personal debt contracted by the ruler, and consequently it falls with the demise of the regime.

The reason why these odious debts cannot attach to the territory of the state is that they do not fulfil one of the conditions determining the lawfulness of State debts, namely that State debts must be incurred, and the proceeds used, for the needs and in the interests of the State.

Odious debts, contracted and utilised for purposes which, to the lenders' knowledge, are contrary to the needs and the interests of the nation, are not binding on the nation – when it succeeds in overthrowing the government that contracted them – unless the debt is within the limits of real advantages that these debts might have afforded.

The lenders have committed a hostile act against the people, they cannot expect a nation which has freed itself of a despotic regime to assume these odious debts, which are the personal debts of the ruler" (Source Wikipedia)

This doctrine has been frequently used in the past to argue for the cancelation of debts that preceding governments imposed on their successors.

It was invoked by the USA in 2003 after the fall of Saddam Hussein, when the USA declared that the Iraky people should not be responsible for the debts of Saddam Hussein.

2008 Raffael Correa succesfully installed an international audit for the legality of Ecuadorian debts that freed Ecuador of a very large portion of their international obligations.

The Syriza Party in Greece demanded just such an audit for the debts that Greece has accumulated in the past. The relief that has been expressed in the EU about the victory of Nea Democracia probably resulted from the fact that this audit will not happen for one more legislative period (or until ND/PASOK are forced to resign).

The Greece documentary DEBTOCRACY looks into just a view of the debts that now serve as an excuse to crush Greece, and finds some that would be very inconvenient for the new rulers of greece and the troica.

The makers of DEBTOCRACY have recently finished another documentary called CATASTROICA that concerns itself with the privatisation measures that are imposed on Greece by the troica. Privatisation always follows after a country has accumulated ilegal debts that economic hit men have successfully "negotiated".

Both movies can be found online at www.dailymotion.com

I myself also have doubts, that the debts that have been amounted in the crisis to "save" the international financial institutions are legitimate. Reading the above definition, the debts, that we as the tax payers are asked to pay, are very odious to my nose, as they are obviously very much "contrary to the needs and the interests of the nation".

Addendum: there is one obvious criteria I would definetly add to the above definition of odious debts.

"If a loan has been signed after the contractor of the debt has been influenced by the creditor with private advantages that have been offered by the creditor or third parties with the intend to corrupt the contractor, or if the contractor has been influenced by blackmail or force, the public should not be obliged to pay these debts."

I would guess that most of the current national debts could be argued to fall under this criteria.

The paradox faith in science

There is one argument often coming up in discussion with self proclaimed optimists when talking about the upcoming energy crisis or climate collapse:

"Science, innovation and technology will take care of our problems; I have faith in our ingenuity."

Whenever I hear this, I usually give up all hope of reaching this person with logical arguments and try to change the subject. It is a paradox of religious proportions that requires blind faith and a life of indoctrination to accept. We have come to point in our history when (honest) scientists across most fields of natural sciences will tell you something like:

"Our scientific research shows that mankind has some grave problems and with these problems, we can’t help you anymore, there are physical limits to what technological progress can acchieve, you as a member of society and as a individual are the only one that can help you now."

But these honest scientists will be ignored and dismissed as doomsayers by the same persons that in the next sentence will praise the ingenuity of scientific progress.

In case of peak oil, it’s the geologists, the engineers, the physicists, the anthropologists, the chemists etc. that point out the limits of growth since more than 50 years. In the case of climate change it’s the IPCC that is made up of over 1200 climate scientists surveyed by 2500 peer reviewers that verified their results.

Be aware that I would not urge you to believe anything these scientists say, at least not before having doubted them and checked their methods, their motivations and their results.For science, more than anything needs doubt. Doubt is the driving force behind human ingenuity and the only true source of knowledge. Having faith in science is as much an untenable contradiction as proving the existence of God.

But after having (at least by some estimates) checked scientific results, (and only then), blind faith is replaced by knowledge.

But the self proclaimed optimists and believers in scientific progress arrive in this blissful state of delusion by "intuition" only, usually without any real knowledge and ignoring proof they could see with their own eyes.

If they would, just for a minute, use the methods of scientific heuristics to gather knowledge by observing nature, instead of relying to being passively fed the half truths and regurgitated lies on TV, they might see the paradox they are caught up in.

Today, our media seems more successful in making people accept untenable contradictions than the Catholic Church ever was. It is if as we have lost all common sense we had since Aristotle has formulated the "law of non-contradiction" over 2000 years ago.

So, please, just as Albert A. Bartlett says in his famous lecture, recheck whatever I say, don’t trust me on faith, but more important, don’t trust yourself. We, as humans often lie to ourselves much more than anyone else ever does. The only cure to delusion and the trappings of our mind are the tools that science has invented.

If you want to have faith in something have faith, that in using these tools you will acquire knowledge, and knowledge you have gained in this way is something you can put your trust in.

Why cant innovation save us in the face of peak oil? Read here.

Part 2, the struggle for a future

As mentioned in the first part, the generations that have thrived in the 20th century have left us an unsolvable mess at our doorstep. They have amassed astronomical riches by wasting the following generations (our) resources and demand that the next generations will clean up the mess.

The most mind boggling thing is that the capitalists see it just the other way round. In the capitalist thinking we are indebted and are supposed to pay them interest for the riches they have raked in by greedily and stupidly wasting the resources for no other reason than being richer than the next man.

Please think about this once again. This generation that has been bereft of their part of the riches of this planet by the previous generations capitalist is now asked by the thieves them self’s to pay them interest as if we were indebted to them? This is far beyond sanity.

As growth comes to a halt the amount of interest in relation to the GDP will skyrocket. The global amount of liquidity (that is of course balanced out by a similar amount of debts) is today ten times the global GDP. 90 % of these riches are in the hand of us-americans, and most of it is owned by the top one percent.

How could the rich get that rich? How could they accumulate that much power? One of the reason is that it seems socialism failed us. As mentioned in the previous post, this power and money was not earned by the working class or the farmers, it was accumulated by exploiting the natural ressources of the planet while the socialists were bought off just enough to be content to let it happen.

We can not blame it on the left though, the sad truth is, that all members of society seemed to be content to adjust to capitalism if the “benefits” of growth would to some degree trickle down to them. In capitalism the future generation painfully lacks a lobby. Most people were content with “enough” and didn’t bother that some accumulated riches of astronomical magnitudes, not thinking that these riches would amount also in debts and interests to be paid.

The GDP, limited by services and goods produced and therefore by energy, will stop growing as the oil production peaks. No, it has already stopped growing 2006 when peak crude oil was reached. Growth as (ostensibly) happened afterwards happened in the virtual world of financial industry and was, by all means, a sham.

For the amount of interest people around the world have to pay alone, when considering a rate of 5%, half of the global GDP will be needed! This means, 50% of the time we work will be for paying for the interests of the rich without ever having the remotest chance to paying these imagined debts back and while the interest will rise every year because the amounted liquidity will rise exponentially.

This is the future we are presented with from a monetary side, if (or while) capitalism is not overcome. While the demands of the rich will rise, our means of living will diminish drastically. Without enough oil we will not be able to produce the same amount of food and famines will spread around the world.

Oil is the basis for all products we make, especially in the chemical industry. Oil is needed to get to or exploit every other resource while these will also get rare, harder to find and further to transport. Transportation, logistics and personal mobility will be more and more of a problem.(see i.e. Hirsch report)

Al these problems are not insurmountable with enough time and resources, but the time we had was wasted with accumulating riches instead preparing for a steady state economy. The people these riches belong to fail to see these problems, ignore them or choose to not care about them.

In order to have any chance to successfully transition into a steady state economy we will have to wrest the future from the hands of those that have stolen it. This is not a class struggle, but the most vicious conflict between generations this world has ever seen.

It is also struggle for which we almost have no energy left because of the weight of the ostensible debts for which we are supposed to pay interest, a struggle against an enemy that is more powerful than any power in the world has ever been. We would need all our abilities and what is left of the resources to solve all of the overwhelming problems caused by the diminishing oil resources.

Instead we will have to use all of our energy to topple the corrupt governments that side up with the rich old men that give a rats ass about our future. This is why young people ”see no future”, these are the hurdles we have to take, and I did not even mention global warming that is left to us as a special gift from the 20th century.

Read on in Part 3

Wett-bewerb 2040 oder die Folgen der Bundesliga-liberalisierung

Auf Grund der schlechten Zuschauerzahlen und Einschaltqouten im Jahr 2039 fordert der Vorstand der GWin AG Josef Feldmann heute rigide Sparmassnahmen vom FC Schalke 04 und eine weitere Erhöhung der Eintrittspreise.

Zur Erinnerung: vor 15 Jahren setzte sich auch im Fussball die Überzeugung durch, dass jedwede Regulierung des "Wett"-bewerbs schädlich für den Sport ist. "Das Spiel Regelt alles", so damals die Worte des Vorstands der GWin AG.

Die Liberalisierung des Glückspielmarktes im Jahre 2015 hatte dazu geführt, dass immer mehr Vereine in Deutschland von großen Wettanbietern gekauft werden konnten, bis schliesslich ein Zusammenschluss der Wettanbieter (Liga AG) die Ausrichtung der Deutsche Fussballbundesliga (DFL) vom DFB übernahm.

Trotz massiver Korruptionsvorwürfe aus Reihen innerhalb des DFB verliefen die Ermittlungen der Staatsanwaltschaft gegen das DFB Präsidium ins Leere. Verschiedene DFB Präsidiumsmitglieder sitzen heute im Aufsichtsrat der Liga AG oder Arbeiten als Berater für die Vereine oder die Liga AG selbst.

Da die Renditen der Wettanbieter in den folgenden Jahren auf bis zu 40% stiegen, wurde dieser Schritt als großer Erfolg gefeiert. Obwohl die Quoten der Wetten immer größer wurden und die Anzahl der Fußballwetten immer mehr zunahm, blieben die Auszahlungen auf konstanten Niveau und gingen häufig sogar zurück. Für viele führten die hohen Gewinnversprechungen der Wettanbieter in die Armut. Die Spiele der Fussballbundesliga endeten ertaunlicherweise immer mit dem für die Wettanbieter besten Ergebnissen. "Glück ist eben kein Zufall" sagte dazu der WinWin AG Vorstand Maschmüller.

Die Liga AG übernahm unter anderem auch die Ausbildung und Bezahlung der Schiedsrichter. Bedenken über die fehlende Unabhängigkeit der Schiedsrichter wurden zurück gewiesen. Man verwies auf die Unabhängigkeit des DFB der als Demokratisches Organ den ordnungsgemässen Ablauf der Spiele garantiere.

Inzwischen allerdings hat sich Widerstand geregt. Immer mehr Fussballfans verweigerten sich den erhöhten Eintrittspreisen und warfen den Wettanbietern Manipulation der Spiele vor. Experten verwiesen darauf, dass die Manipulation der Spiele keinen Einfluss auf die Ergebnisse haben könnten, da ja alle die gleichen Möglichkeiten der Manipulation hätten.

Vorletzes Jahr kam es schliesslich zur Großen "Vereinskrise". Inzwischen sind 7 Vereine der ehemaligen DFL in den Konkurs gegangen während der FC St. Pauli sich unter Protest auflöste. Die Eintrittspreise sind im Durchschnitt um 176% gestiegen während die Zuschauerzahlen um 45% zurück gingen.

Mit einer rigorosen Sparpolitik und einer Erhöhung der Eintrittspreise wollen die Investoren der Liga diese aus der Krise führen. "Wie sind sicher, dass wir bald wieder Renditen von 25% und mehr erwirtschaften können." Sagte dazu Josef Feldmann in der ARD. "Möglicherweise werden wir dazu die Liga vermehrt im Ausland vermarkten und Spiele international ausrichten. Warum soll das Bundesligaspiel Dortmund gegen Bayern nicht auch mal in Peking stattfinden? Inzwischen haben die Vereine mehr Anhänger in Asien als bei uns."

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Anm: Wir alle kennen Wettbewerb, jedes Schulkind hat im Sportunterricht einen 100m Lauf bestritten oder ein Fußballspiel. Jeder Grundschüler weiss, Wettbewerb braucht Regeln damit er Fair ist. Ich darf meinem Mitschüler nicht einfach ein Bein stellen um zu gewinnen.

Die absurde Behauptung, dass der liberale Markt sich selber Regeln würde bleibt dagegen weiterhin die Maxime. Der Markt wird von den Investmentbanken kontrolliert. Wir haben damit buchstäblich den Wettbüros die Macht über das Spiel überlassen und wundern uns jetzt warum wir immer verlieren.

Das Spiel ist getürkt, die Schiedsrichter sind bestochen und die demokratischen Organe gekauft. Dabei wird uns gleichzeitig immer wieder eingebläut, dass das Spiel ohne die Wettbüros nicht funktioniert. Wie lange noch?

Einstein: "Why Socialism"

This (mostly unknown) Essay from Albert Einstein is as valid in its fundamental critique on capitalism as it has been 1949 when it first appeared in the "Monthly Review".

It is from a time when socialism as an idea and as a word, has not been discredited by decades of anticomunist propaganda and its abuse by totalitarian demagogues i.e. in the soviet union or china.

My guess is that this aspect of Einsteins personality as a vocal follower of socialism was (and still is) embarrassing for the ruling elites that made use of his mind and celebrated his genius. His brilliant mind did not limit itself to solving the mysteries of nature but, of corse, was riddled by the complexities of human societies also. Especially this paragraph describes exactly the problem that we are facing in all western democracies today:

"Private capital tends to become concentrated in few hands, partly because of competition among the capitalists, and partly because technological development and the increasing division of labor encourage the formation of larger units of production at the expense of smaller ones. The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society. This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists who, for all practical purposes, separate the electorate from the legislature. The consequence is that the representatives of the people do not in fact sufficiently protect the interests of the underprivileged sections of the population. Moreover, under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education). It is thus extremely difficult, and indeed in most cases quite impossible, for the individual citizen to come to objective conclusions and to make intelligent use of his political rights."
Albert Einstein

Die Anthropologie der Krise

Was können uns die Anthropologen über die Krise sagen, was vorher kein anderer geäussert hat? Darum geht es in dem Blog von Paul Jorion.

Paul Jorion hat unter anderem eine neue (anthropologische) Preistheorie geschaffen und hat eine wöchentliche Kolumne in "Le Monde". Er stellt hier in seinem Blog die These auf, dass der "Klassenkampf" in den 70ern mit der Einführung der "Stock Options" endgültig zu Gunsten des Kapitals entschieden wurde (Kapital = "Das Geld das man nicht hat aber dennoch braucht").

Die Kapitalkonzentration erreichte zu dieser Zeit ein so großes Ausmaß, dass der Zinsanteil der Produkte für die Wirtschaft ein Bürde wurde und die Reichtumskonzentration von nun an in der Historie ungekannte Ausmaße annehmen konnte.

Aktuell fordert er die Neuordnung des Kapitalismus.

"More than three years have passed since the Toulon address and, apart from rather disorganized anti-capitalist protests in various parts of the world, individual initiatives aimed at restructuring capitalism have proved inadequate.

Valuable time has thus been lost, but it is not too late, the problems with which we are faced, and which have become more serious everywhere, having become clearer in consequence of this.

Let us demand that the powers that be immediately engage in a debate on the restructuring of capitalism and that unchallengeable authorities on financial, economic and moral questions be brought together (rather than economic and financial ‘experts’ who are associated with an accumulation of embarrassing failures) and that they be given the task of drawing up a schedule for this (addressing structural and institutional questions, of course, as distinct from short-term tactics aimed at nothing more than gaining time in the face of a collapse which has become unavoidable)."

Die Nachdenkseiten veröffentlichten heute eine Übersetzung seiner Kolumne in der Monde.

Daraus:

"Die Disparitäten bei der Einkommens- und Vermögensverteilung sollten nicht als simpel-kuriose Nebensächlichkeit abgetan werden. Die exzessive Konzentration des Reichtums kann Wirtschaftskreisläufe über zwei kombinierte Effekte ins Stocken bis zum Stillstand bringen.

Einerseits zwingt sinkende Kaufkraft den Großteil der Bevölkerung zu vermehrtem Rückgriff auf Kredite. Das bringt für den Finanzsektor ein erhöhtes Insolvenz-Risiko und schwächt ihn im Zeitablauf.

Andererseits werden die in der obersten Etage der Sozialpyramide angesammelten Kapitalsummen mangels realer Investitions-möglichkeiten in spekulative Aktivitäten platziert, wodurch marktwirtschaftliche Preisbildungsmechanismen durcheinander gebracht bzw. außer Kraft gesetzt werden.

Schlussfolgerung:
Solange der in Gang befindliche Reichtumskonzentrationsprozess nicht umgekehrt wird, kann der Wirtschaftsmotor nicht wirklich wieder in Gang kommen. Daher ist eine Einkommens-Disparitäten weiter verstärkende Austeritätspolitik die schlechteste aller möglichen Politikvarianten!"

Seinen englischsprachigen Blog wird man ab heute auch meiner Linkliste finden können.

Geschönte Verteilungsrechnung

In meinem Beitrag Wachstum revisited 01 habe ich darüber spekuliert, dass die Verteilungsrechnung des BIP nicht ganz aufgeht und in den Angaben des statistischen Bundesamtes einiges unklar bleibt. Meine Vermutung war, dass die Verteilungsrechnung des statistischen Bundesamtes die Unternehmensgewinne und Vermögenseinkommen seit Jahren zu niedrig berechnet.

Jetzt gab es zu dieser Vermutung eine Bestätigung. Das Statistische Bundesamt veröffentlichte vor einigen Tagen neue Zahlen, in denen die Unternehmens und Vermögensgewinne nach oben Korrigiert wurden. Noch lange nicht genug meine ich.

Die hessische Steuerfahnder Affäre macht deutlich, dass die südlichen Bundesländer, Bayern, BW, und Hessen, kein Interesse an einer Erhebung und Besteuerung der Vermögenseinkommen haben. Die gigantischen Vermögenseinkommen, die an der Steuer und damit am Statistischen Bundesamt vorbei erwirtschaftet wurden, bleiben weiterhin ein Schätzwert.

In meiner groben Schätzung gehe ich von bis zu 400 weiteren Milliarden aus die in der Verteilungsrechnung möglicherweise nicht auftauchen. Wie das funktioniert stellt Christof Süß von Quer hier anschaulich dar.

Die Größenordnungen beziehe ich aus der Einschätzung der OECD.

Noch Fragen wer für unsere sog. "Finanzkrise" verantwortlich ist und wo das Geld bleibt?

Siehe hierzu auch dieses Interview mit dem OECD Steuerexperten Jeffrey Owens.

Nicht nur Kriminelle Steuerhinterziehung wird hier gedeckt, viele dieser Gelder sind zudem Illegal erwirtschaftet. Deutschland ist das Paradies für Steuerhinterziehung, Geldwäsche und Organisierte Kriminalität.

Ein Schelm wer einen Zusammenhang zwischen dem mangelnden Handlungswillen der Politik und verbrecherischen Organisationen unterstellt. Wer will kann sich dazu durch die Artikel von Korruptionsexperten Hauptkommissar Uwe Dolatas Klicken oder seinen Auftritt bei Erwin Pelzig ansehen.

Gerne wird die Steuerflucht der Griechen mit lauten nationalistischen Tönen bemängelt. In Sachen Korruption, Steuerflucht und organisierter Kriminalität kann sich Griechenland noch einiges von Deutschland abgucken.

Die Krise der Ökonomie, die Krise der Politik

Ökonomen sind seit der Wirtschaftskrise überall in gewisse Bedrängnis geraten. Ihre Modelle erwiesen sich als völlig unzureichend die Krise Vorherzusagen. Für eine Wissenschaft ist die mangelnde Fähigkeit die Realität in Modellen abzubilden eigentlich das Todesurteil. Nicht so in der Ökonomie. Mit religiösem Eifer werden die Wachstumsmodelle der Neoklassik für Konjunkturprognosen weiter unverändert herangezogen.

Mit den gleichen Modellen die vor der Krise so jämmerlich versagten prophezeien uns die "Wirtschaftsweisen" neue Höhenflüge der Konjunktur. Ein Umdenken hat weder in den Instituten noch der Politik stattgefunden. Die Krise kam und ging, aber trotz der Lippenbekenntnisse der Politiker kam es zu keinen nennenswerten Regulierungen. Kritische Stimmen werden zwar immer lauter kommen aber gegen den Chor der Neoklassiker und Deregulierer nicht an. Dieser Chor wird vor allem bestimmt durch die größte Vereinigung von Ökonomen Weltweit, der AEA.

Die AEA (American Economics Association), mit ihren 22 000 nicht nur US-Amerikanischen Mitgliedern, bestimmt Global den wissenschaftlichen Mainstream. Die AEA gibt 7 Journale heraus die Global die wichtigsten  wissenschaftlichen Veröffentlichungen in der Ökonomie darstellen.

Eine gegenteilige Meinung zu diesem wissenschaftlichen Mainstream zu veröffentlichen ist in anderen wissenschaftlichen Zeitschriften und in den restlichen Medien nicht möglich, oder zumindest sehr schwierig (so höre ich).

Natürlich sind die großen Ivy league Universitäten diejenigen die in diesen Journalen die entscheidenden Veröffentlichungen platzieren.

Unter ihnen die bekanntesten verfechter totaler Deregulierung wie Lawrence Summers (Präsident der Harvard University seit 2001) oder Glenn Hubbard (Director der Columbia University Graduate School of Business). Summers und Hubbard waren als wissenschaftliche Berater die Hauptverantwortlichen für den Deregulierungskurs der Bush Regierung. Summers war bis 2011 auch wichtigster wissenschaftlicher Berater der Obama Regierung.

Sowohl Summers als auch Hubbard wurden für ihr Eintreten für diesen Deregulierungskurs von den großen Investmentbanken reich belohnt.

Während es in allen anderen Wissenschaftsbereichen erforderlich ist die Quellen der Forschungsgelder zu benennen und etwaige Interessenskonflikte aufzuzeigen, kann in der US Amerikanischen Ökonomie jegliche Veröffentlichung reich entlohnt werden ohne, dass dies auf der Veröffentlichung erwähnt werden muss. Hubbard und Summers sind beide inzwischen Multimillionäre.

Natürlich sind Hubbard und Summers besonders prominente Vertreter der gekauften Ökonomie, aber sicherlich keine Ausnahme. Diese beiden Beispiele zeigen auch, wie gut die Drehtüren zwischen Wirtschaft, Politik und Wissenschaft inzwischen in den USA funktionieren. Wissenschaftler wechseln in die Finanzindustrie oder die Politik und andersherum.

Die Lobbygruppen der Finanzindustrie tun ihr übriges dazu um die Parlamente und öffentlichen Ämter in ihrem Sinne zu besetzen. Die Durchdringung ist inzwischen absolut. Ich denke, keiner kann mehr sagen wo in den USA die Wirtschaft anfängt und die Politik aufhört und die Wissenschaft ist dabei mitten drin.

Die Handlungsunfähigkeit Obamas bei der Regulierung der Finanzmärkte ist total. Ich gehe davon aus, dass er persönlich die versprochenen Regulierungen durchsetzen wollte, aber angesichts des Widerstandes der Abgeordneten/Senatoren beider Parteien und beider Häuser, die längst tief in der Tasche der Finanzindustrie sind, nicht durchsetzen konnte.

Viele dieser Erkenntnisse verdanke ich der großartigen Dokumentation "Inside Job". Auf der DVD sind neben dem eigentlichen Film auch zahlreiche weitere Interviews zu finden.

Unter anderem Ausschnitte aus einem Interview mit Dominic Strauss Kahn. Auf die Frage ob DSK der Aussage zustimmen würde, dass das Weisse Haus fest in der Hand der Finanzindustrie ist, ist seine Antwort :"Ja, im weitesten Sinne".Gerade angesichts der jüngsten Ereignisse um die Person DSK halte ich dies für eine sehr bemerkenswerte Äusserung.

Dies sind also die Zustände in den USA. Wissenschaft, Politik und Medien sind fest in der Hand der großen fünf Investmentbanken und werden es bleiben.

Wie sieht es in Europa und dem rest der Welt aus?

Europäische Wissenschaftler sind nicht ganz so frei darin sich für ihre Veröffentlchungen von den Investmentbanken bezahlen zu lassen. Da aber die AEA bestimmt wer wann was Veröffentlicht, bestimmt der amerikanische Mainstream auch über den Werdegang europäischer Ökonomen. Unsere Politik wird von einer ausgewählten Schar von Ökonomen beraten die innerhalb dieser Konstellation Karriere machen konnten.

Die größe des Einflußes der Investmentbanken und (ihrer) politischen Berater auf die europäischen Politiker wird uns in der (nicht)bewältigung der Euro Krise(?) wieder deutlich vor Augen geführt. Auch in Deutschland ist die Regierung gegenüber der Deutschen Bank vollkommen handlungsunfähig. Herr Ackermann bestimmt über die Politik, nicht umgekehrt.


Inzwischen regt sich Unmut über diese Konstellation unter den Ökonomen die gerne Wissenschaft betreiben würden. Diese Ökonomen gibt es durchaus zu genüge auf der Welt, aber sie haben bisher keine Stimme. Aus diesem Grund gründeten Ökonomen aus der ganzen Welt die WEA (World Economics Association). Diese scheint großen Zulauf zu haben und bemüht sich um Unabhängigkeit.

Wie auch immer diese Entwicklung weitergeht, folgende Überzeugungen habe ich aus der Beschäftigung mit der Politik der Wirtschaftswissenschaften mitgenommen:

1. Den wissenschaftlichen Institutionen der Ökonomie ist nicht zu trauen.
2. Keiner Veröffentlichung in der (Mainstream) Ökonomie ist daher zu Trauen
3. Ökonomie ist daher keine Wissenschaft
4. Ökonomie ist Politik.
5. Ökonomie ist gekauft vom Kapital (Investmentbanken, Fonds etc.).
6. Politik ist daher gekauft vom Kapital.
7. Ökonomie soll in den Augen des Kapitals einzig die Legitimation der skrupellosen Bereicherung liefern.
8. Wirtschaftspolitik richtet sich daher immer gegen das Gemeinwohl.

Nachtrag: hier ein Beitragvon dem US Amerikanischen Wirtschaftsjournalisten  Robert Scheer. "Geithner and Goldman, Thick as Thieves" (Truth Dig 31.05.2011).

“The Guys From ‘Government Sachs’ ”

"Geithner’s priorities were all too obvious from his days in the Clinton administration’s Treasury Department when he worked first under former Goldman honcho Robert Rubin and then Lawrence Summers, who took six-figure speaking fees from Goldman and other banks while he was an adviser to candidate Obama. It was the recommendation of Rubin and Summers that landed Geithner the job as president of the New York Fed, where he faithfully followed the policy lead of Goldman-CEO-turned-Treasury-Secretary Henry Paulson."

Auch Timothy Geithners Karriere wechselt munter zwischen Wissenschaft, Politik und Wirtschaft hin und her, genau wie die von Henry (Hank) Poulson (US-Finanzminister/früher CEO von Goldmann Sachs), genau wie Robert Rubin...

Siehe hierzu auch diesen Bericht von Lobby Control.

Guter Artikel dazu bei "Real World Economics".