Your skepticism is healthy.
These are fantastically good questions. I mean that. You have nailed the core issue that defines the world's next monetary system. I've got to go out now, but will try to get back to you tomorrow on all your points All the best
"Are you suggesting that only the euro will survive as a fiat currency and that it will be as accepted as equally as gold? If the physical gold market takes off, why on earth would anyone need the euro?"
searesponse,I'm glad you interpreted my questions as skepticism and not an attack. It was intended as a way to get some meat put on your assertions. I really would like a cogent conversation with differing viewpoints. None of us have all the answers. There have been waaaaaay too many nonproductive hurt feelings being expressed on the board lately for my tastes.
I sincerely look forward to your response! Hit the high points first and we'll go from there. I'm sure others will be as interested as I am. Expect hounds to circle.
Grover
[quote=Grover]I look forward to your response.
searesponse,
I'm glad you interpreted my questions as skepticism and not an attack. It was intended as a way to get some meat put on your assertions. I really would like a cogent conversation with differing viewpoints. None of us have all the answers. There have been waaaaaay too many nonproductive hurt feelings being expressed on the board lately for my tastes.
I sincerely look forward to your response! Hit the high points first and we'll go from there. I'm sure others will be as interested as I am. Expect hounds to circle.
Grover
[/quote]
+1 Grover and also to you searesponse for your lively yet civil discussion. I love the point/counterpoint jousting. I just wish I had some hounds to release. My intellectual capacity would limit my contribution to something more like an anklebiting Yorkie. Yap, yap, yap, yap etc. But that doesn't stop me from enjoying from the sidelines. Let the games begin!
Dicussion, openness, challenge, rejoinder, recognition, aknowledgement, admission, reflection -
Thought. The Final Frontier
http://www.youtube.com/watch?v=cWnmCu3U09w
I say, I say - let the games begin and never end!
Why is the main stream media still so far apart from articles on this site? I just finish reading about France possibly collapsing and then this guy David Bianco says in response to the DOW today, "It’s been a tough four years," said David Bianco, chief U.S. equity strategist at Deutsche Bank, "but the market has finally recovered." Bianco pointed to several factors for the recent move up on Wall Street, including a calming of the eurozone debt crisis, and acceleration in Asian economies."
I too am looking forward to the response, but it is now Thursday. : (
searesponse,
I'm sure you're busy with more important things. I want to move this forward so other Keynesians can come to your rescue.
When the banks tricked the federal government into accepting fiat money as the legal tender, the banks got control of the currency and the government got the ability to borrow and spend so the representatives could buy elections. They needed some high purpose that gave them cover. Keynes' monetary philosophy was just the ticket they needed. He single handedly made it possible for government accumulation of debt to appear noble.
To be fair to Keynes, he proposed a system that would be revenue neutral. He wanted government to stimulate when times were bad and then increase taxes when times were good to pay back the borrowed stimulus. The politicians abused the premise. The economy rarely has been good enough to pay back the borrowings. The last time the federal government had a surplus was in 1961.
To make matters worse, economists and bankers have convinced citizens that economic affairs are simply too complicated for the average person to understand. Citizens who should be the watchdog of government have been transformed into consumers of government largesse. The corn syrup sweetness of stimulus has left us obese, weak, and dependent on further stimulus. The more the politicians promise to supply and the less they make the recipients pay, the more likely they are to be elected. As a result, we have huge unfunded liabilities (social security, medicare, medicaid, etc.) that dwarf the actual cash balance deficit.
So, we find ourselves here and now. We've got peak oil driving up the price of energy and limiting our ability to grow out of the problem. We're being crushed by a debt load equivalent to many years worth of all economic activity. The demographics are aging every day with fewer contributors and more retired takers from the system. The paranoid government surveils every thing they can. The list goes on and on and …
I see it all ending in a trail of tears. The promises that can't be kept, won't be kept. The longer we fool ourselves into thinking an actual solution exists, the worse the resultant devastation will be. The sooner we admit defeat, the sooner we can rebuild from a solid foundation. That's as cheery as I can imagine it.
What I'd really like to hear is a solution of how we can escape this quagmire. I don't care if it is Keynesian based or not. I don't care if it comes from searesponse or from anyone else. If it is a Krugman type solution that requires significantly more of the same, be prepared to back up your statements. You don't need a perfectly fleshed dissertation. Just start with an idea. We'll work from there.
In the end, if you can't support your version of Keynesian religion, I hope you have the integrity to stop touting it, particularly to friends and associates who are vulnerable to its seduction. Actually, I hope you will wake up and educate your Keynesian friends.
Grover
Since we're shaking the tree, why are you all looking at the apex of monetary and poltical power for an answer at all ? Once the closure of Bretton Woods set precious metal values free to float, the stage was set for the grass roots of the market to monetize its own gold & silver in real-time. This is an ongoing process, although invisible to most. Today, you can purchase a stick of gum or a new car using fully gold backed currency, denominated in real-time weight, make exact payment with no debt and and no counter-party risk and do so in the twinkling of an eye (internet). Because of the real-time component, the elite cannot OVERTLY support this action. The shift must remain organic (bottom-up) and market driven on the basis of preventing a sudden crash in the legacy system of the USD. The USD doesn't look to have an ultimate role as a reserve currency or a currency at all. It looks like a stop gap measure to me and the role of the USD's ultimte function is really that of a real-time measure for gold weight in a real-time gold-as-money paradigm which is here and now at this very moment, although in need of scale-up. If you reverse engineer real-time gold-as-money, you'll find the FED's footprints everywhere, particulalrly the events of Bretton Woods. We must be as wise as serpents.
[quote=therooster]Since we're shaking the tree, why are you all looking at the apex of monetary and poltical power for an answer at all ? Once the closure of Bretton Woods set precious metal values free to float, the stage was set for the grass roots of the market to monetize its own gold & silver in real-time. This is an ongoing process, although invisible to most. Today, you can purchase a stick of gum or a new car using fully gold backed currency, denominated in real-time weight, make exact payment with no debt and and no counter-party risk and do so in the twinkling of an eye (internet). Because of the real-time component, the elite cannot OVERTLY support this action. The shift must remain organic (bottom-up) and market driven on the basis of preventing a sudden crash in the legacy system of the USD. The USD doesn't look to have an ultimate role as a reserve currency or a currency at all. It looks like a stop gap measure to me and the role of the USD's ultimte function is really that of a real-time measure for gold weight in a real-time gold-as-money paradigm which is here and now at this very moment, although in need of scale-up. If you reverse engineer real-time gold-as-money, you'll find the FED's footprints everywhere, particulalrly the events of Bretton Woods. We must be as wise as serpents.
[/quote]
rooster,
We're stuck in the fiat currency world until it fails. Look at the front of any FRN and you'll see that "this note is legal tender for all debts, public and private." If you don't accept one of these, you technically don't have a debt any more and have legally lost your stick of gum or new car. Your gold backed currency just converts the equivalent amount of gold into electronic FRNs and then completes the transaction. As long as the system works, it works. What happens to your money when the system fails?
I complain about Keynesianism because without the theory, there is no credibility to the unholy triumvirate (Fed, government, ignorant voters.) If we can dash Keynes' theories against the rocks and shatter its unfounded respectability, we can put it to rest with all the other "too good to be true" ideas. Honest money will then make a return to its historically rightful place. We then won't need to use "gold as money" websites because gold will be money.
I have few delusions of grandeur. My limitations prevent me from being a torch bearer, but I can be an acolyte. I wish that searesponse, Chad Brick, or any of the other Keynesians on this site would let me know where I've gone wrong. I'm open to debate and having my mind changed. Without it, I have to interpret silence as tacit agreement.
Grover
In this corner we have Grover wearing his Golden gloves, and this corner we have seare…
…The fight that never materialized…I was hoping for some sizzle and wound up with fizzle.
Grover, I enjoy reading all the past economic thinkers. The problem as I see it is that all the past models of free market capitalism depend on some type of exponential growth (printing money seems to be all we have left). In addition, there is the dichotomy between the market interests of the individual vs. the collective. Not all socialism has been bad and not all free market capitalism has been good, the same is true in reverse. How do we balance the rights of the individual against the rights of others/the collective, including the environment (which we somehow psychologically and economically separated ourselves from)? Just watched the documentary "The Unforseen." It was an interesting film on this very question.
Maybe searesponse is still jumping rope in the locker room?
Keep the gloves on, you never know when the bell might ring.
Peace
That's an old zen koan. I used to have a book of zen koans when I was 19 & it had a lot of interesting brief little zen poems, puzzles to reflect on. I agree with your point, gillbilly, that we're not talking about a black and white resolution on capitalism vs socialism or keynesianism vs hard money, austerity & the austrian school. I also agree with almost all of what Grover said in "Let the Games Begin", so I'm not really a keynesian true believer, and can't be the guy "in that corner". But here we are over-committed to a system of subsidies to the general public, and I would add, subsidies to the FIRE (finance, insurance, real estate) economy as well - the banks are the first stop for all that new funny money. To me, elements of the keynesian approach - printing money, maintaining entitlements while trying to limit them and public works projects have got to be part of a transition to a more real economy to buy time and cushion the massive body blow that's already just starting to land. But the purpose can't be to return to "normal", as perhaps Krugman or others suggest.
As we know, what's missing is real acknowledgement in mainstream thought that we're not headed back towards the old normal, so we're not really seeing planning for a journey to a more realistic future - not amongst most of the keynesian types or the austrian school types, and certainly not on either side in Congress. Both paths lead no where, IMO, if they imagine the old models are a complete solution in themselves. My friend just sent me a link to this video on wealth disparity at the bottom of the linked page - I can't say I like the background music, but the piece's point is unmistakeable.
http://www.walletpop.ca/2013/03/06/video-showing-huge-gap-between-rich-and-poor-goes-viral/
The notion that austerity and free markets are, in themselves the answer to when corruption is rampant, wealth so concentrated and companies are using their cash on balance sheets to keep costs low by replacing workers with automation is a complete farce, as far as I'm concerned. The money printed out for entitlements ad infinitem is just a sop and distraction for the general public while financial concentration is in progress; it works temporarily for the rich and poor alike, and ultimately for neither. The rich who believe their world will be made secure by their financial "phantom" wealth aren't likely to find a happy ending either in a collapsed society.
Finding real answers is guesswork. My impression is that the solution is along the lines proposed by David Korten, who wrote "When Corporations Rule the World" - a gradual transition to an interlocking pattern of much more localized economies based on more hard money economics but which include some kind of community safety net. I apologize for inserting this much text, but it's from an interview transcript I can't find online:
“Well, it starts with my international experience and coming to recognize within the big picture that our economic systems were seriously failing. They were, in fact, pushing more and more people into poverty particularly in places like Asia where I was living at the time that the insights started to come. But I also realized that all around the world we were basically destroying the living systems of the earth on which our very existence depends. [eg China, the Great Global Growth Driver]
And at the same time we were increasing the wealth disparities between rich and poor and we were destroying the cultures and the fabric of community that are essential to the human health and well-being. So, it began with an inquiry into why is our existing economy failing so badly and what do we need to do to correct it. And that led in part to the recognition that they way that we designed our economic institutions is focused on creating what I call “phantom wealth” which means financial wealth.
And the waking up begins with the recognition that our money, what we call financial assets, basically just numbers on the computer hard drive and that our well-being, real prosperity depends on the real wealth of people, the health and happiness of people, of community, of the natural systems which are the foundation of all real wealth. And so that begins to lead into thinking about a wholly different framework.
One way of looking at what we’ve gotten into is we’ve created an economy that basically works in opposition to the dynamics and structure of the biosphere all in order to in a sense convert real wealth, the wealth of community, people, nature into financial assets for the richest people among us which would have to be considered an act of collective insanity, suicidal collective insanity.
So part of this is recognizing that instead of making decisions based on what I learned in business school which is maximized financial returns, we need to be asking the question “What would nature do?”
Nature has created this incredible living system of encompassing the planet that has an extraordinary capacity organizing locally everywhere to capture energy, capture water, capture nutrients and turn this all into living organisms that effectively work in the most extraordinarily cooperative systems that’s incredibly resilient, efficient all in the quest to support life of ever greater potential and complexity.
So instead of creating economies of where we convince ourselves that we’re getting richer by essentially destroying the biosphere, we need to create economies that work with the biosphere to enhance its dynamics and to maintain its vitality over generations creating ever greater possibility rather than destroying the possibility and condemning our children into lives of potential deprivation and suffering.
… we actually have two quite different essentially competing economies. We have the Wall Street economy which is organized totally around making money, around increasing financial assets, and it’s extraordinary that we have so structured our economy that virtually all of our growth now is going to the richest 1%…
Now, the Main Street economy is much more connected to localities. Properly understood, our Main Street economies are about organizing to use local resources including local labor to meet local needs. And that is basically the way the biosphere organizes. It’s local everywhere…Main Street economies that are not about maximizing returns to global financial markets but about meeting local needs and local businesses that are properly oriented, that recognize that their real purpose is to be what we might call living enterprises that function as living organisms that are part of building this community prosperity. They tend to be businesses that are locally owned by real living people who have children that the owners of the businesses would like to see have future of opportunity.”
I have a serious question for you; What does capitalism have to do with the underlying money system?You said;
The problem as I see it is that all the past models of free market capitalism depend on some type of exponential growth (printing money seems to be all we have left). In addition, there is the dichotomy between the market interests of the individual vs. the collective.As I see it, and as CM teaches it, the dependence on exponential growth is a function of the debt-based, fiat money system. Simply put, I don't understand what it is about capitalism that would drive the need for exponential growth, nor why capitalism needs to be tied to any particular kind of money system. From capitalism.org;
What is Capitalism? Capitalism is a social system based on the principle of individual rights. Politically, it is the system of laissez-faire (freedom). Legally it is a system of objective laws (rule of law as opposed to rule of man). Economically, when such freedom is applied to the sphere of production its’ result is the free-market.Again.. nothing about the form of money. BTW, I don't agree with that the Ayn Rand, totally unregulated form of capitalism is appropriate.. I believe that there needs to be regulation to restrain corporations from destroying the environment (which includes sending production overseas to places where destroying the environment is OK.. this would be controlled by imposing tariffs to create a level playing field)... as well as other evils, etc., etc... but the point of my post is not to try to propose what I think is the right flavor of capitalism.. .rather it is to pose the point that the root of the problem when it comes to the motivation for exponential growth is the money system, and that capitalism is an idea that does not dictate any one money system. One could have freemarket capitalism with Bitcoins... right?
Kelvinator, wonderful post. I agree whole-heartedly with Keton, and I've seen that video. My favorite line out of your post is this:
So part of this is recognizing that instead of making decisions based on what I learned in business school which is maximized financial returns, we need to be asking the question “What would nature do?”We have to ask this question of ourselves every day.
Jim,
It's a good question, but I tend to see and ask it in reverse…what does the underlying money system have to do with capitalism? Money systems have changed over time as capitalism has evolved. I guess I should also state upfront that I don't believe the civilized world has ever seen "free-market" capitalism. Just like democracy, I think the ideal is something we strive for at varying levels throughout history but never reach. I personally see our globalized world right now as more of a collection of oligarchies.
The definition of capitalism you supplied is one among many. I think it is correct when it states that it is "based on the rights of individuals." The social narrative has stressed the individual for so long at the expense of the collective (which includes nature) that our experience is telling us this isn't sustainable. Money/currency is just a socially agreed upon transaction for debt clearing or exchanging goods and services. I think that the social narrative or ideal (capitalism) in this case sits above the implementation of that transaction. As the narrative changes, money will be adapted to that change.
The short answer to your question is yes, I think anything could become a currency, including bitcoin if that's where the narrative takes us and people can have faith in that transaction (not be susceptible to corruption). It may explain why bitcoin is gaining ground, i.e. it is a reaction to the narrative being questioned and evaluated, but I don't think it's the other way around.
Therefore, I understand the mining and built-in scarcity of the bitcoin (similar to PM), but I don't think returning to a gold standard or any manifestation of it is going correct our predicaments. I don't think the narrative of exponential growth is limited to fiat money, but rather that fiat money is one mechanism within that narrative. What I hear CM teaching us first and foremost is that the narrative has to change (which includes the concept of individual rights), then all else will follow.
I should not have invoked Bitcoin in my post… it really had nothing to do with Bitcoin. I also agree that we have not had free market capitalism for the most part. I am still looking for insight into your comment on exponential growth… you said above;
The social narrative has stressed the individual for so long at the expense of the collective (which includes nature) that our experience is telling us this isn't sustainable. Money/currency is just a socially agreed upon transaction for debt clearing or exchanging goods and services. I think that the social narrative or ideal (capitalism) in this case sits above the implementation of that transaction. As the narrative changes, money will be adapted to that change.I see where capitalism stresses the individual..but I am still not clear on why you make the case that this drives the need for exponential growth? I am contending that it's debt based money that drives exponential growth. Let me not assume that you have ever really thought about this.. I will explain as I understand it;
Money is created as debt; A loan is made to an individual, a town, a company, a State, or the USA (as treasury debt). That money is now spent into the system… and ends up deposited in banks. The easiest way to think of this is that you get a car loan, get a check from the bank, and trade it to the dealer for the car. You drive away and they deposit the check… and… the bank that got the deposit now has the new money and can re-loan most of it our via fractional reserve lending. One little thing is missing in this picture… and that is the interest you pay on the loan. The principle was created… but not the extra increment of money that will eventually be needed to pay it back plus interest. Where does the interest come from in the system? How is there enough money to pay back loans + interest? Growth! Exponential growth. As long as the hampster wheel of new loans keeps happening… the system is healthy, and most banks will remain solvent. If no loans are made… no new money is made. As loans are paid off, money is destroyed. If there were no new loans… eventually there would be no money (save for the little bit of paper money that exists) and all banks would die.
So… I contend… this embedded need for exponential growth in our current money system is the culprit. I don't see any reason why capitalism should be to blame for this particular ill of our system… although I would readily admit that it is responsible for other ills, at least as currenctly practiced. Indeed, in an ideal free market system, the motivation would be to not overly exploit resources, because they would simply become too expensive… that old thing about supply vs. demand.
Jim,
I thought the bitcoin was a good example. In response to the growing lack of faith in fiat currency, the bitcoin is being seen as a viable alternative. I still have a lot of questions about bitcoin and it's still new to the world. The issue that was raised on another thread of historical significance is valid. It ultimately rests on the faith of the collective for a currency to work and there is no substitute for time.
At the heart of capitalism is the profit motive, which I believe, at its core, resides in the narrative of "individual potential." Profit is both capitalism's pro and con. No business can permanently maintain its profit above its costs. A business must grow, or it dies. Technology plays a vital role in this growth, but in the end growth is a necessity. Take that and apply it on a global scale, and you wind up with what we have now. The costs of energy are rising, making profits more difficult, this puts pressure on the entire system to grow in some capacity. This is why I believe fiat currency is the effect, not the cause.
I have to go back to Marx the economist, not the Marxist, on this one (Galbraith would probably agree). Marx's analysis professes that capitalism will eventually collapse (as it has in many countries), not because of economic reasons, but rather social ones. He saw it as socially impossible for governments to right the intellectual, ideological, and emotional wrongs that would be inherent in capitalism. Particularly, he saw it impossible for those in governments to rise above the interest of one class, and free themselves from the constraints of their own economic interests. It's hard for me to argue with this under our current conditions. I don't see smaller or larger government as being the answer since in capitalism a government is required for it to work properly, and size doesn't necessarily equate to less or more power.
What do you think? Am I off base here? Thanks for challenging me on this. It's got me thinking!
Hey G
Apologies. This is my busiest time of the year in my work, and that has been my only recent priority.
Not sure where you got the idea I support Keynes (i don't), but I will try to make time to give some worthwhile arguements soon.
Best
Thank you as well for the challenging discussion… if there is anything we have lost in the US… it is the ability to think critically. As an aside… I just saw this today, and it really drilled the point home… longish but worth it. One of the things she says is that at the University of Delft, PhD graduates must pick five topics to defend… any five topics. It's not just about what you know… but your ability to explain the logic behind it as well;http://www.youtube.com/watch?v=PY_kd46RfVE
So, I agree with you that growth is a necessity… but again, I contend that it is all about the money. I believe that you blame all ills on capitalism, while trivializing the role that money plays. What do you think this famous quote is speaking to?
"Give me control of a nation's money and I care not who makes it's laws" — Mayer Amschel Bauer RothschildYou said,
. A business must grow, or it dies.Let me be frank.. this is clearly not true. Sure, if a business is not increasing its profits.. the stock market will punish it and it will suffer a lower P/E.. but this does not mean it dies. This especially does not mean it dies if it is a private company.. which can trundle along in a happy state of stasis, assuming it is profitable, essentially forever. This is not to say that businesses don't have to evolve.. they generally do. .in order to stay profitable.. but that is different than growth. I suggest that you are so enamored with the beauty of a theory that you state things that are just not true. A business does not have to grow to stay alive.. though it probably does need to be profitable to survive, unless you have a very good accountant : ) Again, I am not arguing for capitalism.. although I think that the benefits of capitalism outweigh the disadvantages.. when proper regulation is in place. I am just addressing the question of the imperative for exponential growth. Why? I say money system.. and you have still not given me an actual mechanistic argument for why capitalism would be at the core of this.. just the argument that, "A business must grow, or it dies", which for me is like saying, "It just does!" Baton back to you my friend (and I mean that).
[quote=searesponse]Hey G
Apologies. This is my busiest time of the year in my work, and that has been my only recent priority.
Not sure where you got the idea I support Keynes (i don't), but I will try to make time to give some worthwhile arguements soon.
Best
[/quote]
searesponse,
I just figured you were too busy to respond. That is okay.
I'm sorry for assuming you were a Keynesian. It was Chad Brick who penned that. Several of us were chiding him for his firebomb and you got splattered with the shrapnel when you said that Alisdair has it wrong. Thanks for clarifying. I would like to hear your arguments as to where Alisdair has it wrong concerning Europe's future.
Grover
Hi Jim,I watched the video. I agree with what she has to say on collaboration. Combining many disciplines to look at an issue that has major impacts on a society is what is needed. Looking at any societal issue strictly through the lens of one disciplinary silo in my opinion is also partly to blame for our current situation. It is interesting that she is using an example that lies in science where there is more predictability in behavior. I also agree that collaboration should happen more before the doctoral level, since by that time the level of speciality is high and ingrained. I don't know about you, but I'm guilty as charged in my dissertation, although it does incorporate two disciplines.
I don't think I trivialize the role of money and I agree with you that it is a huge problem. It is as they say the "root of all evil." But what does that mean? To me, it's a moral statement that asks the question why does man create money at all? Not what effect does money have on man. The currency itself is not evil, it is how humans create and use it. I see the creation of money itself as both positive and negative. It can motivate individuals, but can also corrupt through excessive greed and the thirst for power. Where is that line between healthy motivation and excessive greed? I would guess it depends on the individual, but also it has to be balanced through eyes of society and our natural world.
You write that the example I give "a business must grow, or it dies" as not true. This statement, as I stated, lies within the narrative, and I never said narratives are true. Most often they are not. They are belief systems that move a society in a particular direction. That statement has been used within the narrative of capitalism for centuries, it doesn't have to be supported with "facts." Logic isn't always found in narratives, so when you ask for a logical support for the argument, you might be left disappointed. People don't always and often do not act logically, which is why science will always have a devil of a time trying to study human behavior and economics.
Anecdotally, our declaration of independence is great example of the struggle to create new narratives within the political sphere. How do we logically reconcile Jefferson's "ideals" (he was trying to build new narratives) with the realitly of the man himself? He saw slaves as lesser people and yet wrote "all men are created equal." Historians have tried to rationalize it away. Personally, I think he couldn't bring himself to face the fact that not only was he not living up to his own ideals, but the people he was enslaving created the conditions for him to be able to write those ideals in the first place. Reading of his sensitive nature, it was probably too much for him to bear. I don't think he would have had the time to write the DoI if he had had to look after Montecello himself. So, the DoI was literally written off the backs of slaves, i.e. the inequality of man. A sad but interesting contradiction!
You ask for a mechanistic example of the necessity of growth, but why? Your example of buying a car is completely mechanistic and factors out all the human messiness of motive. There is no context as to why the person needs a car. Is it to get to work to support the family? Is it to buy a sportscar to satisfy ego? Is it both? In my opinion, these questions are more important than the mechanisms that we create to support the belief structures. The value placed on the car and the nature of the transaction changes in relation to the motives. In my opinion, changing the mechanism without changing the narratives will result in the creation of a new mechanism that supports that same belief structure. Maybe we moved to a fiat currency for the right reasons at the time, maybe they don't hold true anymore.
I hear the narrative messages constantly bombarding us on a daily basic…Growth, growth, growth, efficincy, profitability, productivity…and science and technology are the only things that will save us. Are these not the mainstream messages we recieve? If I'm wrong, please correct me. That is all the proof you should need. I'm not saying that one can't point to numerous examples of people/corps. who are not fully engaged in this narrative, but to me at least, it looks as though the global society continues to move in this direction. The misconception is interpreting that I think these things have to go away to correct our ills. I don't blame capitalism for all our ills ( I did say it has pros and cons), but I do think there is a paradox of progress (progress…yet another concept built into the narrative). Are we progressing? Where is the line between enough progress and too much? I think the narratives are slowly beginning to change which will bring changes in our mechanisms. The past 40 years has people questioning the motives of our economic theories. I question all of them. So, I'm not enamored with any one theory. I bring up Marx only because most economic theorists go back to his concepts and analysis of capitalism as a foundation for the narratives. I think Marx missed on a lot of things, the emergence of a large middle-class after he died for one…although the current disappearing of the middle class fits into his analysis. A lot of his analysis boils down to class conflict, and this is what I'm seeing now.
Wow, this is turning into a book. If you have made it this far then I'll answer your question… Do I personally think that exponential growth is required for capitalsm? No, but I do think it has been accepted as one of the primary narratives for a very long time. Interesting contradiction?
Hey, for that matter, I also think our species has survived for 93% of its existence without all of the disciplinary subjects.
Baton back to you:)
The problem as I see it, is to have true capitalism you have to have monetary freedom. The right to choose what you want to use as money. If you don't have that choice then the system is immediately distorted in favor of those who control/regulate/dictate what is money. The best monetary system is one is which only those involved in a transaction have to agree to use. If I want to buy a car with chickens, gold, FRN, sea shells - as long I can find someone willing to accept those items as payment, then I can use them and it is between ourselves to decide the proper value of the goods being exchanged.
Also, I don't believe exponential growth is necessary in capitalism, it is the current forced monetary system that requires and promotes that growth because signals from nature are hidden via monetary manipulation. Capitalism is about the arbitration of scare resources to those with the most need or highest desire via voluntary exchange. With manipulation the signals about the scarcity of resources can be temporarily hidden but it results in misapplication of those resources (aka bubble blowing).
Government as currently configured is also an antithesis of capitalism. If you have a party involved that can force non-voluntary compliance in addition to monetary malfeasance, then you also distort the market and capitalism. I don't view democracy as an ideal to strive towards because it implies that the majority should have control over the minority via threat of violence.
In an ideal world I don't think there should be anything other than voluntarily exchange and agreements. Those could be social contracts, financial contracts, etc. For example, what if there was no laws other those to which you voluntarily agreed to abide by via contract? I want to be part of a community then I voluntarily agree to be part of that community (aka government) and laws are simply clauses within the agreement. This ideal is a long long long way off – too many people desire violence via a proxy to force their view/opinions/methods onto others rather than working via reason and persuasion to form community.