I think this is the beginnings of an economy based on perpetual growth and fossil fuel energy running headlong into geological energy constraints. Basically I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.
Posted: Thu Apr 10, 2008 7:58 pm Post subject: Re: The Economist Has no Clothes
I was watching a Wall Street round table on cable about 2 years
ago. Someone was fretting about the foreboding deficits and
the impossible to measure leverages that were in the system.
One of the people on the table responded:
"The investors are doing well and the consumers have a
lot of unused credit available. I do not see anything
fundamentally wrong."
For me it was a snapshot of the common mindset. That somehow
the world can be managed and prosper at a transaction level
indefinitely. It was simply investors and consumers, and if the
investor owned a leveraged piece of something real and the
consumer had a leveraged means of obtaining it, all was well.
Being in the exhilarating upward phase of overshoot is very
heady and situational that way I suppose. The trend has
a lot of upward inertia and there isn't anything above us
to slam into, so I do not see anything fundamentally wrong
when I look up either. Remember not to look down.
Joined: Sep 25, 2004 Posts: 4678 Location: Boston, MA
Posted: Thu Apr 10, 2008 8:06 pm Post subject: Re: The Economist Has no Clothes
What's so bad about being a consumer?
I consume, ergo, I am a consumer.
Doesn't mean I'm not a person, it's just a descriptive term for one who does an action.
It's a neutral term. It's not a compliment or an insult.
I don't understand the objection. Our understanding of the language is fundamentally different. _________________ "www.peakoil.com is the Myspace of the Apocalypse."
Joined: Mar 12, 2007 Posts: 1008 Location: As close as I can get to the beginning of the pipe.
Posted: Fri Apr 11, 2008 12:01 am Post subject: Re: The Economist Has no Clothes
Tyler, labels reflect the culture and the transactions. For example, in the late 80s and early 90s in healthcare, during the corporatization of health care, patients got relabeled as "clients, consumers, or customers." The patients didn't like the change. They preferred the label patient. The other labels implied that they existed to buy services from "providers," rather than to be cared for while ill by physicians and nurses. That is a whole different meaning.
Notice how this language has changed in this country over the last 50 years. Corporations have spent an amazing portion of their wealth researching the best way to get you to buy more stuff, and being labeled as a consumer is one very effective method. If you identify yourself primarily as a consumer, then you will behave like an economic widget so we can all buy lots of things that people are making, and everyone can get rich!
Speaking of labels, dude looks like a lady, Seldom. _________________ "When fascism comes to America it will be wrapped in a flag and carrying a cross." --Sinclair Lewis
Posted: Fri Apr 11, 2008 11:18 pm Post subject: Re: The Economist Has no Clothes
Mastodon wrote:
For those who might like a small insight as to why the human spp is in such deep crap.
quote
Because neoclassical economics does not even acknowledge the costs of environmental problems and the limits to economic growth, it constitutes one of the greatest barriers to combating climate change and other threats to the planet
Wow, I guess you haven't heard of the subfield of environmental economics.
Paul Krugman (Princeton economics professor) once wrote something like "As an economics professor, I often read that 'economics is a fraud because economists believe... ', followed by a claim that is strange and unfamiliar to me."
Posted: Wed Apr 16, 2008 1:21 am Post subject: Re: The Economist Has no Clothes
A few basics to lay out the problems I see with the system we have:
1. Money is myth
a. Money measures human belief (I will pay what I believe is fair)
b. As far as we can ascertain everything in the known universe is controlled by the laws of physics, we are part of the universe. There is no physics equation that includes the $$ (or equivalent) sign. Money is not in any way connected to the planet on which we live.
c. All human society decisions are based on money.
d. When you abstract everything to money you lose information. Money is incapable of differentiating between $1 of oil and $1 of sawdust of $1 of legal service. There is no value on a tree in the forest, a m3 of clean air or an ecosystem. A $1 of incarceration/war/destruction has the same gdp as $1 of wheat. A kwh of electricity requires exactly the same coal/oil/ng/hydro/etc consumption whether it is produced at 2am or 6pm. This is not what the money system tells us.
e. Life is not an externality. Money is not connected to life.
2. Supply and demand, the market
a. The market can not measure the remaining amount of any resource. The market measures the fuel in the carburettor not in the fuel tank
b. How can humans reduce demand for food, water, oxygen (demand destruction)
c. There are no substitutes for our energy sources nor the existing life forms and ecosystems of this planet.( the price will increase till it is economically viable to use something else) We are out of something elses…
d. No matter what the price we are not making resources, we are making consumers…
e. Technology cannot recant the laws of physics. Over time all resources get more difficult to obtain, ie they require more energy to obtain.
3. interest
a. As soon as you charge interest you must have continuous growth
b. Continuous growth is impossible on a finite planet
c. Resource constraints mean a decreasing real economy, interest repayments cannot be made in such a condition.
4. Rational Utility maximizers
a. Humans are not rational
b. Humans are intentionally not appraised of the reality of their situation with regard to the planet they live on so their ability to make decisions for the benefit of the human race is non existent. We are taught to consume from day one. This same aspect is reflected in our problems with democracy as is the time problem.
5. Time
a. The monetary system must make return each quarter. The problems we face need planning over decades.
In a nutshell: we are driving a vehicle, the controls do not do what we think, the gauges do not show what we think, we have no idea where we are going and of course the land is surrounded by serious pitfalls. And I feel we are over the edge of a rather nasty one right now.. how many survive the crash as we careen down the cliff is the only question
And for those interested, a very interesting paper try this pdf file _________________ "At some point in the not too distant future, mother nature will initiate bankruptcy proceedings against the standing crop of human flesh". Catton Overshoot
Joined: Sep 25, 2004 Posts: 4678 Location: Boston, MA
Posted: Wed Apr 16, 2008 11:25 am Post subject: Re: The Economist Has no Clothes
1. We already discussed externalities. They have to be included or else the market is inefficient. Perfect information is a requirement of the perfectly competitive outcome. Hence the rarity of perfect market.
2. Money is a measure of time. We assign values to various goods/services in order to figure out how much time we should spend working to acquire them.
3. Money is not a myth. Without money, we would be incapable of making complex decisions. Should you work at the hospital or the lumberyard? Without money, how would you know which is the better option?
4. They can't reduce demand for food but they can substitute chicken for beef or soy for chicken. That's demand destruction because we end up consuming fewer food resources in total. Also, Americans consume 100-200 billion more calories per day than is necessary for healthy survival. Water can be recycled and waste can be cut down dramatically. Do Americans really need 160 gallons per DAY? _________________ "www.peakoil.com is the Myspace of the Apocalypse."
Posted: Wed Apr 16, 2008 7:59 pm Post subject: Re: The Economist Has no Clothes
Tyler_JC wrote:
1. We already discussed externalities. They have to be included or else the market is inefficient. Perfect information is a requirement of the perfectly competitive outcome. Hence the rarity of perfect market.
2. Money is a measure of time. We assign values to various goods/services in order to figure out how much time we should spend working to acquire them.
3. Money is not a myth. Without money, we would be incapable of making complex decisions. Should you work at the hospital or the lumberyard? Without money, how would you know which is the better option?
4. They can't reduce demand for food but they can substitute chicken for beef or soy for chicken. That's demand destruction because we end up consuming fewer food resources in total. Also, Americans consume 100-200 billion more calories per day than is necessary for healthy survival. Water can be recycled and waste can be cut down dramatically. Do Americans really need 160 gallons per DAY?
Please tyler, think for yourself, read the pdf and even read this pdf file (1.3mb) then read carefully what you wrote above and tell me honestly that you see no issues with the things you say.
In all honesty I don't expect you to grasp it, your wetware is not arranged to do so. Do you work at all with your hands?? _________________ "At some point in the not too distant future, mother nature will initiate bankruptcy proceedings against the standing crop of human flesh". Catton Overshoot
Posted: Thu Apr 17, 2008 12:43 am Post subject: Re: The Economist Has no Clothes
Mastodon wrote:
Please tyler, think for yourself, read the pdf and even read this pdf file (1.3mb) then read carefully what you wrote above and tell me honestly that you see no issues with the things you say.
Hmmm... Definitely a vague paper, and I can't say that it's wrong or right, however there is one part that I wonder about...
Quote:
It is also true, however, that the solution to the population problem, that of increasing incomes leading to decreasing fertility, has been one of the main accelerants in the other problem, that of providing energy resources.
According to recent stats, European population has declined slightly, while American population has grown, even though people in the US use about three to four times more energy per person than people in Europe. At the very least, an increasing energy income does not always reduce population growth, and since this is likely a much more complex sociological situation, I imagine population decline is likely also linked to social policy, among other things. That being said, I agree about the behavior of corporations for the most part, and IMO this is nothing new, simply greed in yet another form, or as MrBill would say, BIC syndrome. It is up to us to deal with this however we feel is fit. _________________
Joined: Sep 25, 2004 Posts: 4678 Location: Boston, MA
Posted: Thu Apr 17, 2008 1:05 am Post subject: Re: The Economist Has no Clothes
I don't disagree with the paper.
I think a carbon tax (and all reasonable pollution taxes) is a great alternative to government mandates and arbitrary quotas.
Another good idea would be a MPG tax.
Tax = (100-MPG)2
Want to drive a Hummer getting 10MPG? Pay a $8,100/year tax. 30MPG Honda Civic? $4,900.
50MPG Prius? $2,500 per year.
Or the harsher version:
Tax = (50-MPG)3
That Hummer now costs $64,000 per year.
The Honda Civic $8,000 per year.
And the Prius is tax free.
Use this revenue to cut payroll taxes and everybody wins.
The Market is the way the world works for the time being and it is far more useful to try to work within the existing framework in order solve a problem rather than create a brand new controversial framework. _________________ "www.peakoil.com is the Myspace of the Apocalypse."
Posted: Thu Apr 17, 2008 3:05 am Post subject: Re: The Economist Has no Clothes
Tyler_JC wrote:
The Market is the way the world works for the time being and it is far more useful to try to work within the existing framework in order solve a problem rather than create a brand new controversial framework.
Tyler, we are causing the 6th great extinction, we have overshot the carrying capacity of this planet by at least a factor of 3, we are hitting the limits of soooo many things that it begins to look like systemic failure and dieoff is beginning to exhibit now. This was all achieved under the auspices of "the market" and you want to keep it??? Read the first pdf file about economics vs chrematistics, its pretty good.
Again do you work with your hands?? _________________ "At some point in the not too distant future, mother nature will initiate bankruptcy proceedings against the standing crop of human flesh". Catton Overshoot
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