Wednesday, March 18, 2009

So what's the endgame?

So how do we exit the current economic crisis? We could have a massive war that required the full efforts of all Americans to build a vast war machine capable of arming the world, I suppose, but massive wars in an era of nuclear weapons tend to get rather... radioactive... so forgive me if I don't think that's really a viable option.

Then there's the option of resuming American consumer culture in its full glory. But the problem is, as some commentators have noted, the world is simply running out of resources to support Americans in the lifestyle to which they aspire.

Right now I am seeing two possibilities:

  1. Mexico North, where there is a small and insanely wealthy oligarchy that owns everything and everybody else lives in abject poverty eking out a meagre living on whatever crumbs the oligarchs throw out their way, or
  2. something a bit more socialist than what a lot of Americans feel comfortable with.
Option #1 is not acceptable for reasons that should become clearer as I continue here. The basic problem, as I've pointed out before, is that idle hands are the Devil's workshop. The purpose of an economy is a) to keep people employed doing something other than plotting trouble (i.e., you want to maintain as close to full employment as is practical in an economy that retains labor mobility), b) optimize the production and distribution of goods within that economy, and c) optimize investment into future innovations that can make life for the people within that economy easier. The ultimate goal of any economic system is not the blind worship of Communism or socialism or capitalism or whatever, but to get the best life for the most people. In other words, the outcome -- a good life for most people -- is what's important here, not the ideology being pushed by various groups of religious ideologues.

Unfortunately, (b) and (c) are to a certain extent incompatible with (a). Communist systems have perpetual labor shortages (and thus perpetual full employment) because they are so inefficient at (b) and (c), but we've rendered a large portion of our population redundant by being so good at (b) and (c), meaning that they've spent the past thirty years selling real estate to one another when not selling each other burger and fries or pretending that they're day traders. It takes less longshoremen to operate the Port of Oakland today (or let's say last year, when the port was operating at full capacity) than it took forty years ago when the Port handled far less tonnage of cargo, because most of the cargo today is containerized and basically gets plucked off the ship by a crane, plopped down on a railroad flatcar, and hauled off to its final destination with very little human intervention.

So while our system is pretty good at (b) and (c), we have to do something about (a). As I've pointed out elsewhere, we can't simply ask our surplused population to starve to death for our pleasure. People don't willingly starve to death. They find a scapegoat for their problems and go kill him. And as one of those potential scapegoats (especially after my recent promotion and pay hike), I value my neck too much. And putting them on the dole, as some countries do, simply isn't a viable option -- they're idle hands, they're not contributing *anything* not even sandwich artistry or real estate salesmanship in that case, and it merely papers over the problem rather than putting them to work doing something at least somewhat useful.

So in the end, I believe we're going to have to introduce some deliberate "socialistic" inefficiencies into our economy to keep everybody employed. Which is going to give our oligarchs a real cardiac problem, and the stupid ones will fight against it tooth and nail, trying to turn the USA into Mexico North. But there simply isn't much alternative if we want to prevent a bloody revolution by the people that our modern high-tech economy has rendered useless. I believe that we're going to end up with a lower overall standard of living because of this and because of the higher taxes needed to pay for it all, but the good news is that we might end up more like Europe -- more irrelevant to the world, but where people are happier with less "stuff" because their "socialist" governments give them more work-place protections and more paid vacation time.

So what are these "socialist" things that might be done? I'm still thinking on that. In the meantime, go study the German economy and try to figure out how they manage to give their workers six weeks of paid vacation per year yet still be quite competitive in the world market...

-- Badtux the Sombre Economics Penguin


  1. Funny you should mention " idle hands " etc. My wife and I were just discussing how we might start to see stuff along the lines of the " French Revolution " soon if the corperations don't wise up and act responsably . It won't be the government dragged out into the streets but the executives . Maybe the government is helpless , but every where I go , people are pissed and Vocal about it . Kinda reminds me of the 60's and the youth movement , except this is in the grocery stores not coffeehouses . Maybe it's time to bring back the guillitoine ?
    an also pissed off w3ski

  2. You nave made a number of very logical points.
    The oligarchy in this country has much less to fear from some form of European socialism then they do from the alternative, which may very well happen if the oligarchy does not sit up and take notice.
    I, for one, would rather not see an armed insurrection, but it may have to come to that. If that is what it is going to take to change things, then so be it.

  3. The problem with armed insurrections is that they rarely turn out well. They reward the most violent, not those with the best vision for the country, and the general end result is typically tragic and bloody.

    I would prefer to avoid that, thank you very much. Anybody with any kind of common sense would want to avoid that. But people simply refuse to starve to death upon command, regardless of how much you say it's their moral duty to do so. So if things keep going the way they're going and our oligarchs try to turn the USA into full-scale Mexico North... ick. Just ick.

    - Badtux the Apocalyptic Penguin

  4. While I do not encourage " armed insurection " I do admit it would be good for the nation to see a few " Traders " drawn and quartered .

  5. I'd prefer to see them branded with a "F" for "Fail" on their forehead then reduced to living under bridges and scavenging in dumpsters for food and clothing, myself. I.e., the same fate to which they would relegate the rest of us if they had their way.

    Death is too good for them.

    - Badtux the Vicious Penguin

  6. On our Nation’s stage, only the scenery has changed. The cast, intrigue and machinations remain the same… today, the principal actors hide behind the curtain where they manipulate with ease those who act the parts before your eyes. Most of these actors have already disappeared, so new ones have appeared to play the same roles. [The revolution will never succeed] … when the lower classes are left alone to struggle against the upper classes. Sure, at the moment of insurrection, the people will smash everything down by sheer numbers; but whatever advantage they may gain at first, they will always end up by caving in for since they find themselves bereft of intelligence, culture, wealth, arms, leaders and strategies, they have no means of defence against those magicians full of cunning, craft and artifice. If the educated men, the well off, and the crafty ones of the lower classes, first sided against the despot, it was only to turn against the people after they had wormed their way into their confidence and used the people’s strength to set themselves up in the place of the privileged orders that they proscribed. Thus it is that the revolution has been made and sustained by the lowest classes of society –the workers, the artisans, the little tradesmen, the farmers, by those unfortunates whom the shameless rich call scum and whom Roman insolence called proletarians. But who would ever have imagined that it would only end up helping small landowners, lawyers and con men… Today, after three years of endless speeches from patriotic societies and a deluge of writings… the people are even further from knowing what they should do to resist their oppressors than they were on the very first day of the revolution. At that time they followed their instincts… Now, look at them, chained in the name of the law and tyrannized in the name of justice, they have become constitutional slaves!


  7. Health care reform.
    The stimulus from that would be tremendous, and it is sorely needed if we honestly believe that basic healthcare is a right.

    Just my contribution for the list of things to move towards socialization.


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