Tuesday, September 27, 2011

The end of global capitalism

Khrushchev pounded a shoe on a table and shouted "We will bury you!". Khrushchev was, of course, utterly wrong -- his Soviet Union got buried instead, in part because of decisions Khrushchev made which plagued the nation for the remainder of its existence.

The thing is, global capitalism, sans any existential threat forcing it to behave intelligently, appears to be in a race to the bottom right now. Note that none of this is happening because of a lack of resources -- yes, oil is a constraint, but not one we're running up against right now. Instead, it's because without any need for intelligence, our capitalist overlords have resorted to cave-man economics instead... "ugh! Me Ogg! Money good! Ogg keep money instead of investing in workers and schools and infrastructure! Ogg hit workers on head with club! Ugh!".

The problem is that cave-man economics does not work. We have another name for cave-man economics: banana republic economics. Banana republics are poor -- often ridiculously poor given the natural wealth. By preventing their people from becoming educated, by refusing to invest in infrastructure, by hoarding what little wealth exists in the country into their own greedy hands, the ruling elite in banana republics stay on top of the heap -- for a price. And that price is this: No matter how filthy rich they are by comparison to the rest of their people, they still live in a third world hellhole. They can't go on vacation inside their own country because every possible place people can grub food is being grubbed and every possible pollutant is being emitted by what little industrial infrastructure exists, turning the whole nation into a desolate wasteland of poisoned landscapes, corporate plantations and scorched earth. And all it takes to overthrow them is a single brigade of soldiers from any modern army complete with supporting attack helicopters, fighter-bombers, etc., because as rich as they are, they still cannot afford sufficient mercenaries to hold off real troops (and their own people certainly aren't going to fight to defend them).

In short, cave-man economics is a recipe to poverty and economic failure. But that's the predominant economic theory in the world today. Which means that capitalism is well on its way to eating itself up.

The problem.... the problem, though, is that capitalism, when properly regulated, is also the best mechanism for matching supply and demand that has ever been devised. What happens when capitalism collapses? Nothing good. Nothing good. But as long as cave-man economics is the general rule amongst our ruling elites, I have a sad feeling we're going to find out the hard way.

-- Badtux the Capitalist Penguin
(But a *SMART* capitalist, not a cave-man capitalist).


  1. Thanks, Tux, for ruining my day (though I expect you're right, as usual.)

  2. There is an amusing story floating around about some genetic specialists in virology. They could not figure out some twist in why something happened, so they designed an internet game and released it. Three weeks later, the gamers had pretty well solved the problem.

    Now what occurred to me was: Why can't an economic model called Total Capitalism be made into a free on line game and then find out what theories of economics are totally invalid.

    Throw in all economic theories - good, bad or indifferent. Then let the gamers decide how to proceed.

    I suspect that a game would show that all economic theories will end up with one person owning everything, but it could refine a lot of loose economics.

  3. Thing is, we pretty much have already worked out this game, multiple times. We know what makes an economy prosper, we know what makes an economy shrivel into a third-world hell-hole. The problem is that there is no motivation to actually implement anything that needs doing, because cave-man economics works for enriching the power elite, and they never look beyond cave man "me Ogg, me rich, you not" to go further because there's nothing *forcing* them to look beyond that, the way that global communism or the threat of socialist revolutions forced them to advance beyond "me Ogg" thinking prior to the collapse of the Soviet Union in the late 70's. (Yes, the Soviet Union actually collapse in the late 70's, not in the early 1990's, it just took a while for both them and the world to notice).

    -- Badtux the Motivational Penguin

  4. There is a new twist to this, though, and I think this is without historical precident - the morphing of capitalism into trans-national mega-corporations.

    These corporations infiltrate and thus control governments. So - ultimately, they don't need to worry about being attacked by real armies either.

    This is the new feudalism.


  5. Jazz,

    I think this wildly successful technique is what's killing off the viability of capitalism. Capitalism won't survive ALL the money flowing into a few hands. What's left will be feudalism.

    What might be interesting is, when corporations realize that, once and for all, and we have a conflict between corporations and the elite princes who own corporations.

    Geez, my verification word is "eumszqg." Really?

  6. That is exactly how I feel although I am not very good at expressing it so I just end up muttering "Sweden, Sweden" under my breath a lot ;)

  7. Jazz, the thing is, these mega-corporations depend upon modern militaries to survive. Without a modern military to send into Saudi Arabia and Kuwait after Saddam's invasion in '91, for example, there would be a Greater Iraq down there controlling a huge percentage of the world's oil with commensurate power to cripple global capitalism. But the "starve the beast" ideology of cave-man economics -- "me ogg, me get all" -- means that in the future, nation-states that have sold their soul to global capitalism are going to end up at the mercy of those nation-states that have *not* sold their soul to global capitalism. We might laugh at the notion of a Chinese invasion of America today. We won't be laughing 20 years from now, when the U.S. government is reduced to a few figureheads rattling around in the Capitol Building and the U.S. military has a few dozen planes and ships total because global capitalism has forced them to pay $50 billion apiece for them. (And lest you think I'm joking there, look at how the F-35 fiasco is turning out -- the price of each F-35 could have bought twenty F-16's. Yes, it really is that bad).

    Nan, yes, feudalism. Look at Russia today for that, Russia is well on the way down the road to the New Feudalism. The megacorporations in Russia are personal fiefdoms of various rich and powerful individuals, and the purpose of the government, such as it exists, is to serve those rich and powerful individuals. International megacorporations have tried to enter Russia but end up losing their biscuits doing so. In short, in places we *already* have conflict between corporations and the elite princes who own corporations -- and the elite princes have won, at least in Russia's case.

    - Badtux the Prognostics Penguin

  8. Global capitalism has turned into not just a death cult, but a collective suicide cult. The bastards at the top want to kill or enslave us all. But as they do so, they're sucking up all the oil and water, eating all the fish, stinking up all the air, droughting up the land and hotting up the air. They're emitting toxic farts in the very elevator they're stuck in. My fondest hope is to live long enough to see some of those fuckers dying first.

  9. I think this wildly successful technique is what's killing off the viability of capitalism. Capitalism won't survive ALL the money flowing into a few hands. What's left will be feudalism.

    What you clearly fail to understand, Nang., is that you so-called "feudalism" will be the New Capitalism, the True Capitalism, the Very Best Expression of Human Liberty Ever. And anyone who says differently will not only be anti-American, but probably deranged and in need of a loony bin.

    I can practically write the Tom Freidman column now...


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