318. The problem; from agriculture to banks, then climate and population

February 25, 2010 § Leave a comment

In a typical recession, even the depression, demand did not keep up with increasing production, and this drove  drove down prices till firms went bankrupt (or they went bankrupt without cutting prices). as production slowed, people lost jobs and need increased until willingness to spend and ability to produce began to reinforce each other.

Now however, demand has been rich to rich, selling stuff to other organizations. Over production has dominated and people have no jobs. The intervening is technology. Put simply, agricultural society needed ag workers to create wealth. The newer industrial society needed factor workers to crate wealth. The expanded industrial economy needed lots of middle level managers to do the complex coordination. Those managers and top skilled workers (often unionized) created a middle class that keep up the appearance of consumption.

But the technical trend has been to replace workers with cheaper machines, and to allow companies to outsource for cheaper workers (coordinated by computers and telecommunications) and generally to get profits up by cutting costs. On the side, pollution was exported. California, a low emissions state, achieves this by buying consumer goods from china where the pollution is produced.

The flooding of the economy with dollars up to (y2k insurance) and after 2000 (to help the Bush administration look good?) by Greenspan set off a need to find places that borrowed money could be invested for rapid payout. The housing bubble (and stock bubbles) were part of that. The point was that there were fewer ways to make money in a society that was overproducing while under-distributing income.

As the crash came the banks found politicians willing to support the bank profits and income (ad that of their owners). At the same time awareness (and a kind of anti-awareness) of climate issues increases rapidly. The system response has been to continue to cut costs by firing people and this has the effect of keeping incomes of the surviving participants in the economy about where they were. This is really musical chairs. The production is continually being replaced by machines, computers and cheap labor. There is no way jobs are coming back for the now marginalized 30% of the population.

This is a real mess. We have to agree with those that say the tendency in capitalism is concentration of capital, and marginalizations. One way to look at it is that the economy is part of society, and takes care of itself, not the society. Governance is supposed to balance the needs of economy with those of the society as a whole (education, health, quality of life, welfare), but in current conditions the government works for the economy. You can tell when Obama for example will speak of help for the middle class. This is hardly a worker’s government. The poor are truly without political representation.

Population has increased. Our species is a “success”. It has happened through tech, markets and medicine. But we are at the near end of that process.

I’ll be back to edit this ..


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You are currently reading 318. The problem; from agriculture to banks, then climate and population at Reflections on GardenWorld Politics Douglass Carmichael.


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