[americandream]

Capitalism and mercantilism (mercantilism being trade per se) are two very different beasts. I would suggest a good understanding of what social relations characterise the two.

As I have been banging on since I joined this site, the problem is systemic, it stems from a social economy that sprung out of the ravaged Enclosure era feudal England and is utterly unsuited to a world of 7 billion plus. We cannot wish away the modernity of Reason. However, we can manage it within a communal set of social relations (communism), relations based around the satisfying of needs, not fabricated wants. Either that or eventual extinction as we sail past the planets limits and into history.

Once the denial phase is past and leaders see the new reality I think capitalism will out perform socialism in providing the most possible from the resources still available. It will become a competition of who can do more with less.

[Shaved Monkey]

Have spoken about the limits of growth with a honours student in economics and a mid ranging public servant in the finance department,basic reply was past history proves we will be alright,innovation will save us,economies can grow without resources, capitalism was the best system to improve our standard of living.
.....we are stuffed.
These guys control the ideas and the levers.

[vtsnowedin]

Have spoken about the limits of growth with a honours student in economics and a mid ranging public servant in the finance department,basic reply was past history proves we will be alright,economies can grow without resources, capitalism was the best system to improve our standard of living.
.....we are stuffed.
These guys control the ideas and the levers.

past history proves we will be alright

Past history is past. It proves nothing about the future but provides examples of possible outcomes to some future actions.

economies can grow without resources

Of course not but mental intelligence is a resource.

capitalism was the best system to improve our standard of living.

True and will be true in the future.
It is troubling that those in charge are so delusional about our current energy status and the prospects for the future.

[ralfy]

Post peak their will be few if any underutilized resources. The competition will be to use what little exists for the highest priority and at the highest efficiency.
Capitalism will out perform socialism regardless of energy supply levels or climate and environmental conditions. Capitalism rewards those that apply intelligence and effort to a problem and penalizes those who apply less of either. Socialism pretends to distribute resources equally so that those that contribute the least receive a higher return on their invested effort.
Corruptions of both systems exist of course and obscure the outcomes but socialism is flawed at it's core as it defies human nature and greed while capitalism acknowledges it and works with reality.

Capitalism doesn't involve prioritization and efficiency towards conservation but the opposite. In fact, that's how "rewards" are made possible.

[Ibon]

Capitalism doesn't involve prioritization and efficiency towards conservation but the opposite. In fact, that's how "rewards" are given.

We have only witnessed capitalism in operation with an unlimited resource base to meet demand when as you say rewards have been given most to those who practiced the least conservation.

We know this is about to end meaning the end of capitalism as we know it.

How does this system morph under such a fundamental shift?

An open question.

[Pops]

Capitalism doesn't involve prioritization and efficiency towards conservation but the opposite. In fact, that's how "rewards" are made possible.

No -ism automatically prioritizes conservation but capitalists profit on the margin between price and cost so lowering cost (increasing efficiency) is the main tool for gaining "rewards." Of course that includes transferring costs to society but that is a political question.

Likewise, since capitalism is market based (mostly), the priorities of the market are the priorities of the capitalists. Can't blame capitalists for selling what the market wants, or for inventing something the market didn't even know it wanted. And you certainly can't blame capitalists if what the market wants is the Lowest Prices Everyday.

But the author in the OP said it right up front, it isn't about our favorite -ism. Those are distractions.


I was looking around for the explanation of where growth comes from and came across this article. It takes a while but eventually gets around to Tanada's argument that innovation is the heart of growth.

Another important factor is increased use of energy. Between 1820 and 2010, global energy use increased 50-fold. This had huge impacts on the value of economic output and standards of living. Mass consumer goods, extensive air travel and abundant food production all represent expenditure of huge quantities of energy.

Today, mankind uses approximately eight exajoules (8x1018J) of energy per year just in producing nitrogenous fertiliser. This equals nearly all energy production in 1820. The area of farmland in use today feeds almost seven billion people. Without artificial fertiliser, it would feed only two billion – we would be faced with a combination of mass starvation and ploughing-up our remaining wilderness for crops (with associated environmental costs).

After briefly mentioning FFs as feeding 70% of the world's population he then dismisses those 5 billions as having anything to do with growth!

"In the long run, knowledge and technology are what matter for growth"

http://www.worldfinance.com/home/contri ... -come-from

[Ibon]

Likewise, since capitalism is market based (mostly), the priorities of the market are the priorities of the capitalists. Can't blame capitalists for selling what the market wants, or for inventing something the market didn't even know it wanted. And you certainly can't blame capitalists if what the market wants is the Lowest Prices Everyday.

No. There is more of a symbiosis here at play. Capitalists do not only sell what the market is demanding. They directly influence demand through creating wants.

I love to bring in the most perverse examples of this in order to make my point. Hermes sells a $ 20,000 purse but you cannot buy this purse as a first time customer. You have to be invited by Hermes to have the privilage of buying this purse and you only get invited when you have built up a certain number of points through previous purchases.

So yeah, you can say that the market, through it's vanity and search for status, has set up this demand that the capitalist is simply fulfilling or you can look at this a little bit more symbiotically that the capitalist is acting as an agent to capitalize on this vanity and search for status.

This touches on values. And values are created by a culture and a society and this means that all the players, producers and consumers, would have to become subserviant to a set of rules which guides the system in terms of the limits that a capitalist can milk the craving for status as well as the limits to which a consumer can indulge in his or her search for status.

The invisible hand of the market as invisioned buy Adam Smith in other words has to be slapped. And will be. But not by a human agent.

[Ibon]

I actually just thought about this a bit more. The energy required to make a Hermes purse is minimal. If we were all chasing status symbols with discretionary income whose energy requirements where this minimal we would be doing just fine. I never knew that vanity could be so environmentally friendly

[Pops]

I know we all want to absolves ourselves but Steve Jobs didn't invent the status seeking that propels iPhone sales. He was smart but he didn't invent behavioral conditioning, he just tripped over a damn attractive bell, LOL

[Newfie]

So, that made him the chief Ding-a-Ling?

[KaiserJeep]

Growth in the correct places should not be underrated:

[americandream]

A complete understanding of human systems will undoubtedly lead one to the recognition that capitalism was a truly radical human dynamic, following hard on the heels of fuedal England. It gave birth to notions of merit and equality, which in that context, was a huge leap of reason. The social relations it created both urbanised the peasant as well as opened up access to resources that he previously could only have dreamt of. It harnassed the modernity borne out of reason and drove human creativity to the furthest corners of this globe. It was a global flourishing of trade as never seen before, putting mercantilism in the shadows.

HOWEVER, capitalism and its relentless spread across the globe, carries with it, it's own seeds of implosion. It is riven with tendencies that must destroy it and it is here that minds are called to consider whither we go, as a species.

Capitalism's initial merit basis remains largely true to it's origins. Only the fittest survive. The presence of incorporated entities as well as a disparate ownership ensures that there is always a struggle to exploit the huge wealth created within capitalism, for personal gain, and it is here that the drive to consolidate is relentless (the one percenters as some call them).

Capital's achilles heel, however, is the limits imposed by the material (nature) in terms of labour value capable of being extracted, the limits imposed by the gaseous envelope we depend for life, on as well as the resources available. All these elements act to value the accumulation which drives growth. As these elemenst are variously exhausted and debased, the accumulative basis of capitalism fails and monopolies rise to replace the competition that was previously trumpeted as capital's advantage.

In addition, the complexities of competition between behemoths gives rise, simultaneously, to deflation in some sectors and inflation in others, in other words stagflation, never ending stagflation. Within these contradictions, social relations mutate to reflect the change in consciousness of the labouring classes (the vast majority with insufficient surplus to place them in the capitalist class, including the so-called middle class). The various stages of this consciousness will be characterised by the rise of all sorts of mutations of the system as capitalists scramble to preserve the ;ast vesitges of accumulation.

HOWEVER, the material relentlessly herds the masses towards social forms that reflect it's limits. In these conditions, the relations for communism will arise. The only unknown in all of this is climate...thuse we assume that in this context, we will not have crossed an irreversible threshold.

[ralfy]

No -ism automatically prioritizes conservation but capitalists profit on the margin between price and cost so lowering cost (increasing efficiency) is the main tool for gaining "rewards." Of course that includes transferring costs to society but that is a political question.

Also, increasing production.

Likewise, since capitalism is market based (mostly), the priorities of the market are the priorities of the capitalists. Can't blame capitalists for selling what the market wants, or for inventing something the market didn't even know it wanted. And you certainly can't blame capitalists if what the market wants is the Lowest Prices Everyday.

But the author in the OP said it right up front, it isn't about our favorite -ism. Those are distractions.

Consider the point that what the market "wants" is also created, and that the market is expanded through increased credit.

I was looking around for the explanation of where growth comes from and came across this article. It takes a while but eventually gets around to Tanada's argument that innovation is the heart of growth.

Another important factor is increased use of energy. Between 1820 and 2010, global energy use increased 50-fold. This had huge impacts on the value of economic output and standards of living. Mass consumer goods, extensive air travel and abundant food production all represent expenditure of huge quantities of energy.

Today, mankind uses approximately eight exajoules (8x1018J) of energy per year just in producing nitrogenous fertiliser. This equals nearly all energy production in 1820. The area of farmland in use today feeds almost seven billion people. Without artificial fertiliser, it would feed only two billion – we would be faced with a combination of mass starvation and ploughing-up our remaining wilderness for crops (with associated environmental costs).

After briefly mentioning FFs as feeding 70% of the world's population he then dismisses those 5 billions as having anything to do with growth!

"In the long run, knowledge and technology are what matter for growth"

http://www.worldfinance.com/home/contri ... -come-from

For me, it's availability of credit that allows knowledge and technology to increase production, with profits assured as the same credit plus marketing allows for more sales and consumption. The profits are re-invested, which means more credit to allow knowledge and technology to increase production, etc.

The results are peak oil, environmental damage coupled with global warming, and as credit increases readily, one financial crisis after another.

[Subjectivist]

I actually just thought about this a bit more. The energy required to make a Hermes purse is minimal. If we were all chasing status symbols with discretionary income whose energy requirements where this minimal we would be doing just fine. I never knew that vanity could be so environmentally friendly

Sure the energy to make a purse is minimal, but how many purses does a lady need? Meanwhile how many people work at jobs providing small luxuries like soda pop and salty chips at the local convenience store? Everyone loves to talk about all the non essential things modern people buy after driving a mile or two to the local mart, as if all the people who work providing those things will still have jobs if people stop buying.

Here in Ohio a resturaunt chain adopted a new wage structure. Because tipped employees are paid half the state minimum wage they set up a policy that all tips are pooled and then split between all hourly staff, and because he bussers and cooks are now tipped employees they cut heir hourly wages from regular state minimum to tipped state minimum. Basically they are stealing the tips from the wait staff and using them to cover half the wages for the cooks, bussers, host's and other not normally tipped employees. It made a splash on the news today because a state legislator is trying to get a law passed making this type of stunt illeagle in Ohio.

All the people who lose their jobs with every slight price increase squeeze mean a less robust economy, it makes us more and more suseptible to further harsh economic shocks. It doesn't matter how many cars Detroit builds if nobody can afford to buy one, nor does it matter how many bottles of beer are sitting in your local market if nobody can scrape up the cash to buy them.

[americandream]

Labour value always underwrites exchange in capitalism. Credit merely forwardises tomorrows labour value. In due course, when that value peaks and commences its descent, the forwardising of that value also peaks and deflation sets in as capitalists slit each others throats in a bid to secure market.

[Graeme]

I like Ibon's comment earlier that we have to change our economic system. I have been posting in the "circular economy" and "sustainability" threads hints of that change that has been talked about for a long time and is now gradually occurring in real life. That awareness is widespread as can be seen in the following:

Economy on the edge: seeking a world that works for the 100%

Hunter S Thompson warned: "The Edge... there is no honest way to explain it because the only people who really know where it is are the ones who have gone over.”

Humanity is learning the hard way. We are exceeding the planetary boundaries that define the edge of our planet’s capacity to support us. At the same time, we remain below the edge of what people need to live within a just, safe, and prosperous operating space, what Kate Raworth has called doughnut economics.

The global economy stands on the precipice, with 85 individuals having as much wealth as the bottom 3.5 billion of the world’s poorest. This leaves most of us living on a precarious edge of one form or another, as the "tower economy" accretes to itself ever-greater wealth.

How do we deal with edges? Pessimists and the careless jump or stumble off them. Visionaries sketch idyllic futures, but we need a strategy of change we can implement, an economy for the rest of us.

When standing on a crumbling cliff, the smart move is to back up and turn around. When we do, we see what had previously been left behind in our headlong dash to the edge - what is left of intact nature and of human community. Turning, we see the remnants of our beautiful world and the ancient wisdom we forgot.

Edges are also interesting. Diversity and abundance are found at the intersection of two ecosystems.

theguardian

And this video from 350.org:

A new economic paradigm is not only possible, but plausible

Our dominant, extractive economy harms people and the planet. But around the world, communities are organizing to put people and the planet before profit. Here’s a short film that looks at how we live, and how we can do it better

[americandream]

Any approach to rewriting social economy MUST be devoid of nostalgia and sentimentality as the very act will be revolutionary and involve confrontation. Anything else that waffles on about saving the planet and placing people first will fall by the wayside as we are not engaged in saving the planet (the planet is a dispassionate inorganic cosmic body and may exist full of life or as a dead body). We are engaged in reinventing ourselves so as we may continue to breed and evolve as nature dictates of those specimens it brings to a living state.

The sooner we adopt the language of revolution, the better for us.

[AirlinePilot]

The success of global economies of the past 100 years can be very directly traced to one thing. The fact that the abundant and cheap resources to allow GROWTH to occur existed. Primary in this epic of global growth has been the story of both CHEAP and ABUNDANT crude oil supplies.

Most of the larger global economies monetary systems are now Fiat based. Fiat based money exists and works ONLY with a promise of growth. The troubles of the last 8-10 years are IMHO an outgrowth and a warning sign that WITHOUT cheap and abundant resources..chiefly Crude Oil....the growth part of the equation becomes problematic at best and impossible at worse case.

Without the promise of growth these Fiat money systems break down. I believe that what we are presently witnessing is the death throes of growth based economies and the money systems which support them. It will take a while, but unless and until some cheap, abundant replacement for oil hurries along, the press for BAU will fail.

Mankind isn't good at voluntary transitions, especially when it involves sacrifices. Moving from a growth based paradigm to one which is sustainable does not fit the present thinking of global political or economic leaders. It involves the shutdown of growth based money systems and a shift in standards of living which will not be well received.

IMHO this transition will be an involuntary one. The changes will not come from debate, planning, and action by economic and political powers to recognize the true nature of what is occurring. Change will only occur as our money systems fail and we begin to actually pursue large scale alternatives to oil due to price constraints. WAITING for this scenario to unfold is just another typical and sad misstep humanity will make. The lesson is going to be a hard one. Without some form of almost miracle fuel replacement soon, the possibility of a soft landing or gradual transition is waning. It's not a doomer scenario I perceive, but more of a constant stair stepping down in economic activity which at some point finds an equilibrium at a sustainable level. How long it takes, or to what levels we must go to reach a sustainable point is really anyone's guess at the moment. One can hope for the best, but only being a smarter version of an ape I have my concerns.

[copious.abundance]

Once again .... Silly doomers.

>>> CLICK HERE <<<

Then to top it off read the first link in my sig.

[AirlinePilot]

"A useful way of thinking about technological advance is that it offers us either better ways of doing old things or the opportunity to do entirely new things. Either of which can also be described as the ability to add more value. Which leads us to the conclusion that as long as technology keeps advancing then we can continue to add more value and thus we can continue to have more economic growth."

Ahh yes..the technology will save us mantra. Keep right on believing that one Oily. There is a complete failure in that logic, but I doubt you will see it even though it is staring you right in the face.