Ilargi: Winter In America Gets Colder – Why We Choose Poverty

By Raúl Ilargi Meijer, editor-in-chief of The Automatic Earth, Cross posted from Automatic Earth

Broadly speaking, if we look at what has happened to the world’s rich economies from 1945 to today, we can say that in the first 30 years, 1945-1975, real wealth – as expressed in standard of living – across the board, for the vast majority of people, increased.

Over the next 30 years, 1975-2005, the standard of living still seemed to rise, but if we look behind the numbers and between the lines, we see that much of the wealth increase over that period is illusional, because it was increasingly based on credit, i.e. it was borrowed from the future, while at the same time, the costs of “really big ticket” items such as education and health care were moved away from governments and towards citizens, where they began an unstoppable ascent (and we paid for them with credit).

There are umpteen different ways to define standard of living, but it seems quite reasonable to say that, as societies, we hit the top of our wealth in the mid to late 1970’s, although valid arguments can be made for an even earlier date.

And then from about 2005 onwards, we have entered payback time. A fast increasing part of our budgets started to go towards continually rising costs for education, health care etc., AND interest payments on what we borrowed in the previous three decades AND interest payments on what we borrowed to both make those payments and keep the illusion of (increasing) wealth alive. In a glaring example, housing prices went up not because people got richer, but because they could borrow more.

In another example, across the western world, coming out of WWII, many if not most countries were dedicated to providing equal (and therefore necessarily free) access for everyone to the best health care and education available. And look at us now …

Today, in 2013, debt numbers all over are at levels that nobody would have believed possible only 30 years ago. Household debt, national debt and corporate debt hang around our necks like so many nooses, and all we can do to prevent ourselves from suffocating is to borrow more. And so, inevitably, debt levels rise further. And just as inevitably, more and more people fall by the wayside; they can’t keep up anymore. They are either too much in debt already, or they can’t find a job that pays enough – provided they find a job at all – or both. In the process, we have become, the vast majority of us, entire societies of debt slaves, living in constant fear of losing a job and/or a home, and/or contracting a disease.

And it’s not just paying back their own debt which people find ever harder: much of the debt from the financial – and overall corporate – sector has been transferred to the public sector, first becoming national debt and then trickling down into household debt through taxes and cuts to services.

This is a choice we make as – members of our – societies. It may be advertised to us as some kind of law of nature, but there’s no such law, it’s simply a choice. The only possible way to improve our societies, so we are told, is through economic growth. In the same vein, we are told that we actually do have economic growth again today, just not enough. That’s not really credible either, although some growth faithful might claim that it all depends on which data you use. The S&P hit another record, so all must be well.

It is a choice, and it is an ongoing trend that is far from being finished. Those who do have wealth today are not going to voluntarily take a step back and say I have enough. A few individuals may, but the vast majority will continue to look for more. In the absence of actual growth, and in the presence of increasing debt, they can and will only achieve that by pushing the poor deeper into poverty. That is the real choice, even as faith in eternal growth makes it easy, if not necessary, to deny that such a choice exists.

Or to put it in different words: we continue to live with the idea of recovery, which in our minds equals a return to what we had, plus added growth. For some of us that may come true, but for a very rapidly increasing number amongst us, it will not. Because, and it’s high time we acknowledge this, at this point in time, the only way the upper echelons of our societies can achieve some level of growth is to take it away from everyone else. And those upper echelons, mind you, demand exponential growth, which means, in a society that cannot grow, that the numbers of poor people will rise exponentially as well.

The incessant repetition of the “recovery is just around the corner” mantra has a hugely distorting effect on people’s behavior in that even those who would be inclined to listen to appeals for redistribution of wealth and income will tend to turn a deaf ear if they are convinced no such redistribution is needed because those who are poor today will soon, any moment now, be made rich(er) by the recovery. This also makes it much easier to label redistribution of wealth as, just to name a term, communist.

And that’s a very twisted picture that can exist only because we have such poor memories, especially when it suits us. Because in reality, we are of course already seeing a huge redistribution of wealth today, only this one increases inequality instead of decreasing it. Which means all those dreams about equal access for everyone to the best health care and education available are long gone. If we would only redistribute wealth in such a way that it would see us return to the level of inequality that existed when those dreams were relevant, 60-odd years ago, much of our poverty conundrum would be solved. It is really as simple as that.

It’s ironic that one of the undoubtedly most capitalist countries on the planet, Switzerland, appears to take wealth redistribution more serious than any other, with a slew of referendums (yes, they have actual democracy) aimed at decreasing income inequality. In March, one such referendum forced public companies to give shareholders a binding vote on executive compensation. In November, there’s a vote on the 1:12 initiative, which stipulates that executives can’t make more than 12 times the salary of the lowest-paid employee. Which somewhat perversely means executives have a very good reason to raise that lowest salary: they themselves can get 12 dollars for every single dollar they give the employee, so an extra $1000 per month for the latter translates into $144,000 extra per year for the bosses.

Another referendum, to be held at an as yet unspecified date, calls for everyone in Switzerland to receive an unconditional income of 2,500 Swiss francs ($2,800) per month from the state. That initiative, though it may have many great – liberating – consequences, will probably not make it, because it makes people think that it induces laziness.

The Swiss are not the only people considering a basic income rather than a minimum wage (Beppe Grillo wants it in Italy), and it’s a bit of a shame that no-one actually tries it for their country, just so we can see what happens. For one thing, those who want to see a smaller government apparatus should jump on the basic income idea; much of what governments do these days is linked to all sorts of benefit programs, and these could disappear almost entirely. Isn’t it just absolutely hilarious in that light to realize that those most opposed to big government are also most opposed to a basic income? Talk about having your cake and eating it too…..

Meanwhile, the growth mantra is so deeply imbedded in our minds that no-one deems it necessary to answer a question I’ve long been asking: What Do We Want To Grow Into? . The need for eternal growth is simply accepted as a given. That is as much a pity as it is definitely not smart.

Still, if nobody wants to answer that particular question, maybe we should turn it around a little, and ask slightly different questions, like:

1) Given the numbers on poverty and unemployment cited below in this article, how likely do you think it is that your economy – as a whole – is actually growing (i.e. expanding)?


2) Do you feel it’s desirable to live in a society where, even if there would be growth, it can apparently only be achieved by throwing ever more of your fellow citizens off and under the bus?

not to mention:

3) How long do you think such a society can last?

Questions like these will easily be thrown upon the commie heap, and even be labeled unpatriotic, but they’re really just a bunch of simple questions, which seamlessly lead to yet another question: what kind of society is unable and unwilling to answer such questions about itself?

Why don’t I inundate you with some random data, and when you feel it gets a bit much please realize that this is only a small sample, and on any given day I could make it 10 times more:

Herald Extra:

Poverty stuck at 15% – record 46.5 million Americans

The nation’s poverty rate remained stuck at 15% last year despite America’s slowly reviving economy …

More than 1 in 7 Americans were living in poverty, [up from the] 46.2 million of 2011 …

[..] For the past year, the official poverty line was an annual income of $23,492 for a family of four.

Poverty remained largely unchanged across race and ethnic groups. Blacks had the highest rate at 27.2%, compared to 25.6% for Hispanics and 11.7% for Asian-Americans. Whites had a rate of 9.7%.

Child poverty stood at 21.8%.

CNS News:

Census on Obama’s 1st Term: Real Median Income Down $2,627; People in Poverty Up 6,667,000; Record 46,496,000 Now Poor

In 2008, according to the Census Bureau, there were approximately 39,829,000 people living in poverty in this country. In 2012, there were 46,496,000. That is an increase of approximately 6,667,000—of 16.73% – from 2008 to 2012.

In 2008, the year Obama was elected, people in poverty represented 13.2% of the national population. In 2012, they represented 15.0% of the population.

Economic Collapse Blog:

They Denied That We Were In A Depression In 1933 And They Are Doing It Again

90.5 million working age Americans are considered to be “not in the labor force”.

The labor force participation rate is the lowest it has been in 35 years.

516,000 Americans “left the labor force” . That was a brand new all-time record high.

The number of private sector jobs dropped by 278,000 [in august 2013].

77% of the jobs that have been “created” so far this year have been part-time jobs.

Approximately one out of every four part-time workers in America is living below the poverty line.

New American:

The Real Unemployment Rate

The nominal unemployment rate is still high, but the real jaw-dropping fact is the number of working-age Americans who are not working. Today that is 100,000,000 Americans out of a total population of about 310,000,000. Demographically, about 80,000,000 Americans are minors and about 40,000,000 are age 65 or older. That leaves approximately 190,000,000 Americans who are adults of working age. About half of those do not have a full-time job.

When those “Not in the labor force” are added to those “Unemployed,” then those who are not working is growing: 99.5 million in April 2011, 100.3 million in February 2012, 100.5 million in March 2012, and 100.9 million in April 2012. When counting both those “Not in the labor force” (though in the age in which most Americans work) and “Unemployed” as a single group, then those who are not working, but are in the age group in which Americans normally work, has remained steady and high: 41.6% in April 2011, 41.5% in February 2012, 41.5% in March 2012, and 41.6% in April 2012.

Zero Hedge:

While the Establishment survey data was ugly due to both the miss and the prior downward revisions in the NFP print, the real action was in the Household survey, where we find that the number of people not in the labor force rose by a whopping 516,000 in one month, which in turn increased the total number of people outside the labor force to a record 90.5 million Americans.

Michael Snyder:

In America today, only 47% of adults have a full-time job.

According to one recent survey, 76% of all Americans are living paycheck to paycheck.

At this point, one out of every four American workers has a job that pays $10 an hour or less.

The U.S. economy continues to trade good paying jobs for low paying jobs. 60% of the jobs lost during the last recession were mid-wage jobs, but 58% of the jobs created since then have been low wage jobs.

Back in 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs.

At this point, an astounding 53% of all American workers make less than $30,000 a year.

According to a study that was released by the Center for Economic and Policy Research, only 24.6% of all jobs in the United States qualify as “good jobs” at this point. [..]

… the three criteria used to define what a “good job” is are:


1 The job must pay at least $18.50 an hour. According to the authors, that is the equivalent of the median hourly pay for American workers back in 1979 after you adjust for inflation.

2 The job must provide access to employer-sponsored health insurance [..]

3 The job must provide access to an employer-sponsored retirement plan. [..]

The St. Louis Fed:

A record 28 million Americans have part-time jobs …

Washington Post:

Low fast-food wages come at high public cost

[US] taxpayers are spending nearly $7 billion a year to supplement the wages of fast-food workers, even as the leading fast-food companies earn billions of dollars in annual profits, according to a pair of reports released Tuesday.

More than half of the nation’s 1.8 million “core” fast-food workers rely on the federal safety net to make ends meet, the reports said. Together, they collect nearly $1.9 billion through the earned income tax credit, $1 billion in food stamps and $3.9 billion through Medicaid and the Children’s Health Insurance Program … [..]

Even among the 28% of fast-food workers who were on the job 40 hours a week, the report said, more than half relied on the federal safety net to get by.

Those workers are left to rely on the public safety net even though the nations seven largest publicly traded fast-food companies netted a combined $7.4 billion in profits last year, while paying out $53 million in salaries to their top executives and distributing $7.7 billion to shareholders …

LA Times:

Most Americans expect to work during ‘retirement’

More than 4 in 5 older Americans expect to keep working during their latter years, a sign that traditional retirement is out of reach for vast swaths of society, according to a new survey.

Among Americans ages 50 and older who currently have jobs, 82% expect to work in some form during retirement, according to the poll by the Associated Press-NORC Center for Public Affairs Research. In other words, “retirement” is increasingly becoming a misnomer. The still-sluggish economy, battered 401(k) retirement plans and inadequate savings are upending traditional notions of retirement.

Add in an expected increase in lifespans and the result is a generation of workers facing dim financial prospects for what used to be known as the golden years. Excluding pensions and homes, 39% of survey respondents said they have $100,000 or less saved for retirement. Nearly one-quarter have less than $10,000.

And despite conventional wisdom, people can’t count on simply working until they drop. One-third of retirees say they didn’t have a choice in the decision to leave the workforce, the survey found. In other words, many were pushed out by ill health or layoffs. Among retirees younger than 65, the figure is 54%.

Pittsburgh Post Gazette:

Extreme poverty on the rise for older women

An alarming number of women over the age of 65 joined the ranks of the extreme poor last year, according to a new report by the National Women’s Law Center titled “Insecure & Unequal,” which analyzed recently released data from the Census Bureau.

The retirement picture for nearly 1 million older women in America whose income fell below extreme poverty levels last year — $5,500 or less in annual income — is anything but golden. They never have enough to cover the cost of food, medicine and housing, and are forced to make tough choices each day on what sacrifices they must make to survive. [..]

The number of aging women struggling to make ends meet on $500 or less each month increased by 18% last year, according to the law center’s analysis of U.S. Census data, which means an additional 135,000 elderly people slid into extreme poverty in 2012. The total number of women 65 and older in this country living on $5,500 a year or less now totals 733,000.

Other key findings in the report were that the poverty rate — $11,720 or less in annual income for single adults — among adult women was 14.5% in 2012, compared to 11% for adult men. The poverty rate for single-mother families with children was 40.9% compared to 22.6% for single fathers with children and 8.9% for families with children headed by a married couple.

Pro Publica:

The Expendables: How the Temps Who Power Corporate Giants Are Getting Crushed

In cities all across the country, workers stand on street corners, line up in alleys or wait in a neon-lit beauty salon for rickety vans to whisk them off to warehouses miles away. Some vans are so packed that to get to work, people must squat on milk crates, sit on the laps of passengers they do not know or sometimes lie on the floor, the other workers’ feet on top of them. This is not Mexico. It is not Guatemala or Honduras. This is Chicago, New Jersey, Boston.

The people here are not day laborers looking for an odd job from a passing contractor. They are regular employees of temp agencies working in the supply chain of many of America’s largest companies – Walmart, Macy’s, Nike, Frito-Lay. They make our frozen pizzas, sort the recycling from our trash, cut our vegetables and clean our imported fish. They unload clothing and toys made overseas and pack them to fill our store shelves. They are as important to the global economy as shipping containers and Asian garment workers.

Many get by on minimum wage, renting rooms in rundown houses, eating dinners of beans and potatoes, and surviving on food banks and taxpayer-funded health care. They almost never get benefits and have little opportunity for advancement.

Across America, temporary work has become a mainstay of the economy, leading to the proliferation of what researchers have begun to call “temp towns.” They are often dense Latino neighborhoods teeming with temp agencies. Or they are cities where it has become nearly impossible even for whites and African-Americans with vocational training to find factory and warehouse work without first being directed to a temp firm.

In June, the Labor Department reported that the nation had more temp workers than ever before: 2.7 million. Overall, almost one-fifth of the total job growth since the recession ended in mid-2009 has been in the temp sector, federal data shows. But according to the American Staffing Association, the temp industry’s trade group, the pool is even larger: Every year, a tenth of all U.S. workers finds a job at a staffing agency.

[..] The temp system insulates the host companies from workers’ compensation claims, unemployment taxes, union drives and the duty to ensure that their workers are citizens or legal immigrants. In turn, the temps suffer high injury rates, according to federal officials and academic studies, and many of them endure hours of unpaid waiting and face fees that depress their pay below minimum wage.

The rise of the blue-collar permatemp helps explain one of the most troubling aspects of the phlegmatic recovery. [..] … many workers are returning to temporary or part-time jobs. This trend is intensifying America’s decades-long rise in income inequality …

[..] The day after Thanksgiving 1960, Edward R. Murrow broadcast a report called “Harvest of Shame,” documenting the plight of migrant farmworkers. Temp workers today face many similar conditions in how they get hired, how they get to work, how they live and what they can afford to eat. Adjusted for inflation, those farmworkers earned roughly the same 50 years ago as many of today’s temp workers, including Rosa. In fact, some of the same farm towns featured in Murrow’s report have now been built up with warehouses filled with temps.

[..] The temp industry boomed in the 1990s, as the rise of just-in-time manufacturing drove just-in-time labor. But it also gained by promoting itself as the antidote to bad publicity over layoffs. If a company laid off a large portion of its workforce, it could make big news and leave customers feeling sour. But if a company simply cut its temps, it was easy to write it off as seasonal — and the host company could often avoid the federal requirement that it notify workers of mass layoffs in advance.

More recently, temp firms have successfully lobbied to change laws or regulatory interpretations in 31 states, so that workers who lose their assignments and are out of work cannot get unemployment benefits unless they check back in with the temp firm for another assignment.

 Christian Science Monitor:

Suburban poverty across the country grew 53% between 2000 and 2010, more than twice the rate of urban poverty, according to a recent report by the Brookings Institution. For the first time, more poor people live in the suburbs than in cities. “I think suburban poverty is here to stay,” says Alan Berube, one of the authors. “It’s not going to revert back to the cities.”


… the 400 wealthiest Americans now have more money [over $2 trillion] than the poorest 50% of all Americans combined.

US News:

A Different Type of Poverty

Even though we don’t have starvation, we do have an amount of poverty that leads to malnutrition, that leads to a series of diseases that we don’t tend to associate with First World countries, that leads to massively truncated life expectancy, and all but guarantees that from one generation to the next, poverty is going to be transmitted.

There are a lot of people with an awful lot of money, but there are an awful lot of people with absolutely nothing. And then there’s a lot of people in the middle who, as the economic recession deepened in 2008-10, experienced downward mobility. Maybe that’s one of the differences. In the 1960s, the country was clearly on an upward trajectory.

The bottom 20% of the workforce has seen a real income decline by double-digit amounts since the Nixon years. The 1% at the top, or the 0.1% – or if you go even higher, the 0.01%, the billionaires – have seen their income increase by not just 1, 2 or 3%, but by thousands of%[s]. What it means is political access is concentrated at the top, and as soon as that happens you end up with a political class that doesn’t respond to the needs of ordinary people.

Everybody who is poor is overlooked because everybody who is poor in America is reduced to a set of stereotypes.

America is the wealthiest nation in the world, yet it has higher levels of poverty than any other western democracy. Its poverty rates compare more with a country like Romania than with countries like Canada, France or Germany.

New York Times:

House Republicans Pass Deep Cuts in Food Stamps

House Republicans narrowly pushed through a bill on Thursday [Sep 19] that slashes billions of dollars from the food stamp program, over the objections of Democrats and a veto threat from President Obama.

[..] Republican leaders, under pressure from Tea Party-backed conservatives, said the bill was needed because the food stamp program, which costs nearly $80 billion a year, had grown out of control. They said the program had expanded even as jobless rates had declined with the easing recession.

[..] even with the cuts, the food stamp program would cost more than $700 billion over the next 10 years.

[..]The bill, written under the direction of the House majority leader, Eric Cantor, Republican of Virginia, would cut $40 billion from the food stamp program over the next 10 years. It would also require adults between 18 and 50 without minor children to find a job or to enroll in a work-training program in order to receive benefits.

[..] According to the Congressional Budget Office, nearly four million people would be removed from the food stamp program under the House bill starting next year. The budget office said after that, about three million a year would be cut off from the program.

The budget office said that, left unchanged, the number of food stamp recipients would decline by about 14 million people — or 30% — over the next 10 years as the economy improves. A Census Bureau report released on Tuesday found that the program had kept about four million people above the poverty level and had prevented millions more from sinking further into poverty. The census data also showed nearly 47 million people living in poverty — close to the highest level in two decades.

Washington Times:

One in four kids in poverty, despite U.S. gains

The White House may be touting a message of an improved economy — and claiming on its website that President Obama is all about helping those of lesser financial means — but meanwhile, nearly one-quarter of America’s youth are struggling in poverty, a new report reveals.

Nearly one in four children lived in poverty in 2012 [..]

New Hampshire’s childhood poverty numbers rose significantly in just a year’s time — and what’s worse, the state bragged on the lowest child poverty rate in the entire nation for a full decade. In 2011, the rate of poverty for that age group was 12%. A year later, it rose to 15.6%. And in all the years from 2007 to 2012, that figure jumped more than 75% …

Meanwhile, around the nation, 16.4 million children were reported to be living in poverty in 2012. Of that, six million are aged 6 and younger. That comes in comparison to 2007 numbers, when the national poverty rate for youth stood at 18%, or 13.1 million children, UPI reported.

The researchers used the federal definition of poverty — a family of four with less than $23,283 a year.

On the White House website, Mr. Obama is described as a “lifelong advocate for the poor” …

And it’s not as if America is the only place where the inequality process plays out. Even if we leave southern Europe alone for the moment, a country like Britain is pretty bad, for example, with a government that invites rich foreigners to buy up the nation’s assets while it leaves its own citizens in the cold, often literally, as the Guardian reported yesterday:

British Gas raises energy prices by 9.2%

British Gas will raise energy prices by an average of 9.2% next month, piling further financial pressure on 7.8 million households and reigniting the political row over soaring gas and electricity prices. Parent company Centrica became the second of the big six energy firms to announce a price rise after SSE raised prices last week. The average annual dual-fuel bill with British Gas will increase by £107 to £1,297 ($2,100).

Centrica blamed the above-inflation hike on higher costs for wholesale energy and delivering gas and electricity to homes, and government’s “social and environmental programmes” which are paid for through customers’ bills.

Also from The Guardian this week:

Food poverty is an attack on society

[UK] food banks are now helping three times as many people as they were a year ago. Oxfam and the Red Cross are both supporting food programmes. Another British charity, Save the Children, has launched a UK campaign expressly to raise awareness of the issues behind the steep rise in numbers of young people caught up in poverty. This cannot be what David Cameron’s “big society” was supposed to look like.

The government is in denial. Ministers talk of chaotic families, of individuals making bad choices. They suggest the underlying reason for the trebling of the numbers receiving food parcels from the Trussell Trust in the six months to September – to an astonishing 355,000 people – was a spread in the number of food banks. Of course, each of these is a factor. But even taken together, they don’t begin to account for the surge of desperation represented by the figures.

People on the ground tell a different story. Roughly a third of their clients are driven to desperation by delays in benefit – no change in proportion, only in the numbers. The new factor is the impact of changes in benefit, as the bedroom tax and sanctions bite, and councils get to grips with ever tighter budgets and smaller crisis funds. That now accounts for a fifth of those entitled to food parcels (which are only available to those with a formal referral).

Politicians cannot simply dismiss the evidence of spreading poverty, or treat it as some kind of macho proof of the success of their policies. Nor can they, in all conscience, go on talking about cutting back on benefits without understanding what it actually means. They need to know that this is what George Osborne’s tough love looks like on the ground.

There was a time when to see a rough sleeper was unusual. Now it is impossible to ignore the number of people who have no other option but to huddle in a doorway. There are a lot of explanations for that, not all of them instantly fixable – family breakdown, mental illness – but that is no excuse for the normalisation of homelessness as part of the pattern of urban life. How much worse if the kind of extreme poverty that means relying on food handouts were also to become normal.

… it’s wider than the individual or the family. Every hungry person is an attack on society.


And even in Germany, the one remaining – western -stalwart of growth fanatics, it’s the people who pay the price. from Al Jazeera:

Does Germany have a poverty problem?

“It’s a fact that differences between those who have lots and those who have little have been growing wider,” Templin Mayor Detlef Tabbert, a member of the Left party, told Al Jazeera in his office. He blames German tax policy and employers who pay wages “that are below the level of dignity” for the gap.

The gap between the haves and have-nots is more substantial if one looks at wealth instead of income: A government report published earlier this year found the richest 10% of German households own about 53% of the country’s wealth – with the bottom half holding a scant one%.

Unlike most European countries, Germany has no national minimum wage. Instead, there’s a complex patchwork of about 480 minimum wages, depending on the type and location of the job. These can vary from 7.50 euros ($10) to 13.70 euros ($18.50) an hour.

In Berlin’s Neukolln neighbourhood, Betul – a young woman of Turkish background who did not give her last name – said she works at a bakery for just 5 euros ($6.80) an hour. “So I would be very happy with 8.50,” she told Al Jazeera, referring to the minimum wage proposed by the centre-left Social Democratic Party and the Green Party. Betul has worked there for just six months, but her friend Sibel, a 21-year-old, said she had been working at the bakery for five years at the same rate of 5 euros an hour.

“In Germany, you can work and you can [still be] poor,” said Lisa Paus, a Greens member serving in the Bundestag. “There are seven million people in Germany which have to work and [also] have to go to the job centre” to get additional benefits from the government, she said.

[Unemployed Alexandra Grube] says she always voted for the Greens in the past, but this time around she’s fed up with all of Germany’s major parties, describing them as out of touch with her needs. “Even parties who have been fighting for the poor,” she said, “don’t know how much milk costs.”

This development, this process, is not going to go away by itself, inequality in wealth and income will keep increasing, and ever more people will end up under the bus. It’s a choice we make as a society. Even if we do somehow achieve a period of real economic growth, it will make little difference anymore for the poorer: it will be swallowed up whole by the demand for growth embedded in the richer parts of society.

The desire for growth has become a sort of auto-immune disease, in which the body, the society, in the absence of external food sources, preys upon itself. We need to consider the potential consequences of this, and ask ourselves if they add up to the kind of society we wish to live in, and we want our children to grow up in. Right now, we’re choosing poverty, and we should ask ourselves why we do that.

There are millions of Americans who’ve been unemployed so long they no longer even count as unemployed. There are millions more working jobs that don’t pay the bills. This can and will not simply be undone by a growing economy. Many are scarred for life, and that certainly goes for the huge numbers of children growing up in poverty and now seeing their food stamps cut to boot. Leaving aside whether we see rising inequality as a good or a bad thing, we need to realize that it is a choice we make for ourselves and others: there is no need for 25% of our children to be too poor to function well, there is enough wealth in our societies to provide for them. We would just need to redistribute that wealth, and to limit inequality to the levels we had when our economies were doing better than they ever have, before or since. Would that really be such a bad thing? Are we truly better off creating this fake Darwinian jungle we have today? Just asking.

And then of course there’s that last remaining question: “How long do you think such a society can last?”

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    1. lincoln

      The answer to this tyranny(economic, political, military),is DEBT JUBILEE, and mass and total revolution, where everyone of the opressors, their DNA to the 2nd cousin, their allies, their institutions down to their physical assets, buildings, money, laws, are totally wiped out, and done so ruthlessly, with no remorse, no forgiveness, and with the utmost cruelty.

    1. Dave

      This is not capitalism. You can call it corporatism, regulatory capture, crony capitalism, corrupt politics…….

      The Federal Reserve has played its part to perfection in the wealth transfer scheme.

      The elected “representatives” who passed all these “fair” trade agreements have played their roles.

      The elected “representatives” who passed all the corporate tax breaks because the lobbyists convinced them (bribes/kickbacks) of there efficacy.

      This is the end result of decades of corruption, cronyism, poor judgement and bad behavior…. something all forms of man made government are subject to(whether from the left or right perspectives).

      The only thing I do know is from history. Any time in history when you have a wide chasm between those who have and those who do not, social change is coming. Will it be peaceful or will it be violent?

      1. from Mexico

        But this is capitalism, or what capitalism has always wrought.

        Your notion of capitlaism is like Erewhon: It is nowhere.

      2. Charles

        George Bush’s term opened my eyes. Barack Obama’s term made sure they would never close again. The criminal elite are the enemy of the people.

      3. Massinissa


        When exactly has capitalism, uh, worked ‘correctly’?

        Because, Capitalism has ALWAYS been like that. Capitalism by its nature facilitates the transfer of economic power to a certain section of society, which they ALWAYS use to subvert societies rules to benefit themselves.

        The very logic of capitalism makes ‘crony capitalism’ inevitable, as inevitable as a half life occurs to an unstable isotope!

        1. Dave

          All systems breed corruption (capitalism, communism, socialism). The common thread is human weakness, corruption, greed and self interest.

          ALL political systems eventually become corrupt and destroy the lives of the people to advance the needs of the few who are well connected. This is proven out time and time again through history.

          1. Ando Arike

            I’d hate to believe that our failure to create an equitable and democratic polity is inevitable, that we’re hardwired to default to various types of fascism. In the Seventies, when both the U.S. and the S.U. seemed equally depraved, many in the socialist Left looked to various forms of decentralism as the answer to system-failure. The idea being that any politico-economic system that grows past a certain point will become oligarchic or autocratic…

            Indeed, one intention of the U.S. Constitution was to prevent the consolidation of power. But, of course, this consolidation became unstoppable once large corporations saw that military imperialism would be needed for expansion. Local self-rule quickly went out the window.

          2. Fiver

            If we had accepted the “it’s the human condition” argument as valid, we’d still be in the trees weighing the relative merits of checking out what things are like on the ground – what possible point to even attempt something new?

            In any case, only capitalism presupposes essentially infinite horizons for growth, and, all current evidence to the contrary, insists that the only legitimate way to raise the income of the poor is to “grow the whole pie” (rich incomes still grow at least as fast as poor)rather than undertake the obvious and far more fair solution of raising taxes on incomes, corporations, all forms of speculation, perhaps emissions, etc.

      4. shutter

        That like that old rich mans wheeze by the fireside…”conservatism can never fail, it can only be failed”… “now bring me another whisky Jeeves and be snappy about it you slacker!”

        Capitalism gives advantage to 1 while inflicting pain and degradation on 100.

      5. Cynthia

        Also, small business is the enemy of the soul-less corporations. Just look at WalMart and the bling franchise eateries.

        Corporations set up layers of bureaucracy, a cultish culture, and an army of lawyers. They can grind an individual into dust and break their spirit with their gutless, heartless, mind-numbing procedures, paperwork, and HR departments.

        This is why government and corporations collude; they understand each other. A small business with ties to a community is their worst enemy.

    2. from Mexico

      Without growth, capitalism loses any moral raison d’être, and all that’s left is the greed, self-interest and maximizing profits part.

      1. Banger

        There are two reasons we are kind of stuck with this situation: 1) because Marxism is largely forbidden as subject outside some universities and journals in the U.S., we analyze capitalism with a severe limp as is shown by the comment above that “this is not capitalism”; and 2) Americans don’t like history and always want to “end” it because of the bizarre ideas that surround American Exceptionalism even on the side of the mainstream left thus no one sees history in a larger frame of reference but, rather, as Churchill described it as “one damn thing after another.”

        The fact of the matter is that capitalism is unsustainable over the long haul because it, by definition, demands not just growth but the destruction of communities and the idea of communitarianism. Without community and community values we cannot maintain social cohesion if we can’t do that we enter into our current situation which is a kind of “rougue capitalism” which rewards dishonest and criminal behavior. Eventually that leads to social disruption. Eventually the masses catch on that the rich don’t follow the rules so why should they?

        As Marx noted capitalism is an important stage in the development of human society but it’s inherent contradictions demand a move towards a more collectivist future which is, according both social- and neuro-science the sort of arrangement human beings prefer and are hard-wired to thrive in. From a historical POV, this period of growth is much like a very interesting and wild party withe heavy drinking, hilarity, excitement that many of us have experienced as profoundly satisfying as we stumble into bed it the light of day–but over the long haul leads to severe problems if you try to recapture it in subsequent nights (purely for scientific reasons I attempted that experiment and got the predicted results which I’ve never published).

        1. skippy

          Did someone say Marx? History sure is funny…

          Written: by Marx between November 22 & 29, 1864
          First Published: The Bee-Hive Newspaper, No. 169, November 7, 1865;
          Transcription/Markup: Zodiac/Brian Baggins;
          Online Version: Marx & Engels Internet Archive ( 2000.


          We congratulate the American people upon your re-election by a large majority. If resistance to the Slave Power was the reserved watchword of your first election, the triumphant war cry of your re-election is Death to Slavery.

          From the commencement of the titanic American strife the workingmen of Europe felt instinctively that the star-spangled banner carried the destiny of their class. The contest for the territories which opened the dire epopee, was it not to decide whether the virgin soil of immense tracts should be wedded to the labor of the emigrant or prostituted by the tramp of the slave driver?

          When an oligarchy of 300,000 slaveholders dared to inscribe, for the first time in the annals of the world, “slavery” on the banner of Armed Revolt, when on the very spots where hardly a century ago the idea of one great Democratic Republic had first sprung up, whence the first Declaration of the Rights of Man was issued, and the first impulse given to the European revolution of the eighteenth century; when on those very spots counterrevolution, with systematic thoroughness, gloried in rescinding “the ideas entertained at the time of the formation of the old constitution”, and maintained slavery to be “a beneficent institution”, indeed, the old solution of the great problem of “the relation of capital to labor”, and cynically proclaimed property in man “the cornerstone of the new edifice” — then the working classes of Europe understood at once, even before the fanatic partisanship of the upper classes for the Confederate gentry had given its dismal warning, that the slaveholders’ rebellion was to sound the tocsin for a general holy crusade of property against labor, and that for the men of labor, with their hopes for the future, even their past conquests were at stake in that tremendous conflict on the other side of the Atlantic. Everywhere they bore therefore patiently the hardships imposed upon them by the cotton crisis, opposed enthusiastically the proslavery intervention of their betters — and, from most parts of Europe, contributed their quota of blood to the good cause.

          While the workingmen, the true political powers of the North, allowed slavery to defile their own republic, while before the Negro, mastered and sold without his concurrence, they boasted it the highest prerogative of the white-skinned laborer to sell himself and choose his own master, they were unable to attain the true freedom of labor, or to support their European brethren in their struggle for emancipation; but this barrier to progress has been swept off by the red sea of civil war.

          The workingmen of Europe feel sure that, as the American War of Independence initiated a new era of ascendancy for the middle class, so the American Antislavery War will do for the working classes. They consider it an earnest of the epoch to come that it fell to the lot of Abraham Lincoln, the single-minded son of the working class, to lead his country through the matchless struggle for the rescue of an enchained race and the reconstruction of a social world. [B]

          Signed on behalf of the International Workingmen’s Association, the Central Council:

          Longmaid, Worley, Whitlock, Fox, Blackmore, Hartwell, Pidgeon, Lucraft, Weston, Dell, Nieass, Shaw, Lake, Buckley, Osbourne, Howell, Carter, Wheeler, Stainsby, Morgan, Grossmith, Dick, Denoual, Jourdain, Morrissot, Leroux, Bordage, Bocquet, Talandier, Dupont, L.Wolff, Aldovrandi, Lama, Solustri, Nusperli, Eccarius, Wolff, Lessner, Pfander, Lochner, Kaub, Bolleter, Rybczinski, Hansen, Schantzenbach, Smales, Cornelius, Petersen, Otto, Bagnagatti, Setacci;

          George Odger, President of the Council; P.V. Lubez, Corresponding Secretary for France; Karl Marx, Corresponding Secretary for Germany; G.P. Fontana, Corresponding Secretary for Italy; J.E. Holtorp, Corresponding Secretary for Poland; H.F. Jung, Corresponding Secretary for Switzerland; William R. Cremer, Honorary General Secretary.

          18 Greek Street, Soho.

          [A] From the minutes of the Central (General) Council of the International — November 19, 1864:

          “Dr. Marx then brought up the report of the subcommittee, also a draft of the address which had been drawn up for presentation to the people of America congratulating them on their having re-elected Abraham Lincoln as President. The address is as follows and was unanimously agreed to.”

          [B] The minutes of the meeting continue:

          “A long discussion then took place as to the mode of presenting the address and the propriety of having a M.P. with the deputation; this was strongly opposed by many members, who said workingmen should rely on themselves and not seek for extraneous aid…. It was then proposed… and carried unanimously. The secretary correspond with the United States Minister asking to appoint a time for receiving the deputation, such deputation to consist of the members of the Central Council.”
          Ambassador Adams Replies

          Legation of the United States
          London, 28th January, 1865


          I am directed to inform you that the address of the Central Council of your Association, which was duly transmitted through this Legation to the President of the United [States], has been received by him.

          So far as the sentiments expressed by it are personal, they are accepted by him with a sincere and anxious desire that he may be able to prove himself not unworthy of the confidence which has been recently extended to him by his fellow citizens and by so many of the friends of humanity and progress throughout the world.

          The Government of the United States has a clear consciousness that its policy neither is nor could be reactionary, but at the same time it adheres to the course which it adopted at the beginning, of abstaining everywhere from propagandism and unlawful intervention. It strives to do equal and exact justice to all states and to all men and it relies upon the beneficial results of that effort for support at home and for respect and good will throughout the world.

          Nations do not exist for themselves alone, but to promote the welfare and happiness of mankind by benevolent intercourse and example. It is in this relation that the United States regard their cause in the present conflict with slavery, maintaining insurgence as the cause of human nature, and they derive new encouragements to persevere from the testimony of the workingmen of Europe that the national attitude is favored with their enlightened approval and earnest sympathies.

          I have the honor to be, sir, your obedient servant,

          Charles Francis Adams

          skippy… maybe the left hand… doesn’t want too touch… the right hand… infected.

        2. Cassiodorus

          Capitalism by its own movement creates ecological crisis. Capital views the world as a “free gift” for conversion into a series of machines for capital accumulation, and eventually the process of conversion results in devastation both of nature and of society. What has saved capitalism from its ultimate bad end in this regard, SO FAR, is that technosocial transformation has opened up new eras of cheap resources and reduced the organic composition of capital. It does not appear, however, that this is happening now.

          1. skippy

            Can we make sure everyone knows what capitalism means see:

            Etymology and early usage

            Other terms sometimes used for capitalism:

            Capitalist mode of production
            Economic liberalism [26]
            Free-enterprise economy [8][27]
            Free market[27][28]
            Laissez-faire economy [29]
            Market economy [30]
            Market liberalism [31][32]
            Self-regulating market [27]
            Profits system[33]

            The term capitalist as referring to an owner of capital (rather than its meaning of someone adherent to the economic system) shows earlier recorded use than the term capitalism, dating back to the mid-17th century. Capitalist is derived from capital, which evolved from capitale, a late Latin word based on proto-Indo-European caput, meaning “head” — also the origin of chattel and cattle in the sense of movable property (only much later to refer only to livestock). Capitale emerged in the 12th to 13th centuries in the sense of referring to funds, stock of merchandise, sum of money, or money carrying interest.[34][35][36] By 1283 it was used in the sense of the capital assets of a trading firm. It was frequently interchanged with a number of other words — wealth, money, funds, goods, assets, property, and so on.[34]

            The Hollandische Mercurius uses capitalists in 1633 and 1654 to refer to owners of capital.[34] In French, Étienne Clavier referred to capitalistes in 1788,[37] six years before its first recorded English usage by Arthur Young in his work Travels in France (1792).[36][38] David Ricardo, in his Principles of Political Economy and Taxation (1817), referred to “the capitalist” many times.[39] Samuel Taylor Coleridge, an English poet, used capitalist in his work Table Talk (1823).[40] Pierre-Joseph Proudhon used the term capitalist in his first work, What is Property? (1840) to refer to the owners of capital. Benjamin Disraeli used the term capitalist in his 1845 work Sybil.[36] Karl Marx and Friedrich Engels used the term capitalist (Kapitalist) in The Communist Manifesto (1848) to refer to a private owner of capital.

            According to the Oxford English Dictionary (OED), the term capitalism was first used by novelist William Makepeace Thackeray in 1854 in The Newcomes, where he meant “having ownership of capital”.[36] Also according to the OED, Carl Adolph Douai, a German-American socialist and abolitionist, used the term private capitalism in 1863.

            Skippy… just for accuracy’s sake – its chattleism. And for my next trick – The Boom and Bust theory is just a modern version of the biblical Jubilee system. Snicker~

              1. skippy

                Chattleism = movable feast.

                I love PIE!

                Layered Like Pie
                A sarcastic counter-expression used when someone has claimed that a person is “layered” – in the sense that while they might be bitter or sour on the outside, on the inside they’re actually sweet. The expression refers to the idea that as with the pastry in question, while the top seems crusty and mean – and there might be some sweetness underneath – at the TRUE core of the person, they really ARE just crusty and mean. So the expression refers to someone who is truly rotten to the core, and that the sugar they throw out is merely a ploy to try to keep people from realizing this. Charismatic serial killers, or brutal tyrants, for example, are layered like pie.
                The observation leading to this phrase was first made by the character of Dr. Horrible/Billy (Neil Patrick Harris) in “Dr. Horrible’s Sing-Along Blog” in reference to Captain Hammer (Nathan Fillion), as shown below.
                Penny: At first I thought he was kind of cheesy–
                Billy: Trust your instincts.
                Penny: But, he turned out to be totally sweet. Sometimes people are layered like that. There’s something totally different underneath than what’s on the surface.
                Billy: And sometimes there’s a third, even deeper level, and that one is the same as the top surface one.
                Penny: Huh?
                Billy: Like with pie.

                Woman with black eye: I know my new boyfriend might seem like a drunken, misogynistic ball of domestic violence waiting to happen, but he’s actually really nice, he’s layered like that. And now he’s promised to only beat me on Wednesdays!

                skippy…. Austrian School = Boring Prophets


            1. craazyboy


              “Capitalist is derived from capital, which evolved from capitale, a late Latin word based on proto-Indo-European caput, meaning “head”


              Karl Marx and Friedrich Engels used the term capitalist (Kapitalist)


              Kapitalist was derived from the German word Kaput.

              Also, too

              It would be dumb to let anything broken run the world – we are dummkopfs!

              I get it.

        3. Money

          Life on this planet is cyclical. Whether we like it or not, cycles are not gong away. Therefore, there is no optimal system, they will all become break down over time.

          Before North America got colonized, it was inhabited by natives who lived simple lives. And even then, they still had to move every 200 years or so due to the decline of land productivity.

          We don’t need 2500 hundred square foot houses, nor do we need 1200 square foot houses. In fact, a hut would suffice. And even opting for huts would deplete the environment albeit over a longer period of time.

          This lifestyle we have created depends on resources coming from everywhere in the world. Here in the Western world, we have lost the sense of relation between the value of money and the earth’s bounty.

          The crisis will force us to shrink our material lifestyles. And as long as people cling to the energy intensive ways of the past, concentration of wealth will continue. Why? Because the financial system revolves around hard assets and resources… everything trickles down from that.

          Instead of being angry at the rich, direct it to the system which is dependent on consumerism and and energy intensive way of life. Think of ways to change the system.

          Many here do not seem to understand that a lot of 1%ers are on their side, they just don’t know what to do to help. And they certainly will not willingly give all their money away just so they can drop to the bottom.

        4. s spade

          Marx my ass! The problem is your endless government grabbing power, backstopping monopoly, bailing out failed banks, regulating people every which way. Socialism sounds great, until you get it and discover the worst people monopolizing its powers and everyone else toeing the line or herded to the gulag. Read some history, you eggheads!

          1. Fiver

            The “Government” has been owned and operated by the capitalist class in the US from Day 1. While the State is indeed of monstrous size, fully half of it is devoted to Empire-building globally and a Security State nightmare domestically. Corporate subsidies in the trillions also drive corporate profits for the entire US corporate sector – profits made from death, destruction, disease, environmental rape. All these are at the bidding of the wealthy, the same wealthy that decided to share more of that wealth for about a generation, when it felt compelled to by a Depression and World War that required millions of ordinary men to fight it, men (and women) who then demanded some say in things like being sent to die in Wars for global dominion.

      2. Ed Ciaccio

        In a world of limited & declining natural resources and accelerating catastrophic climate chaos, “growth” is an unsustainable luxury the planet can no longer tolerate.

        ALL economic systems ultimately depend on the ecological environmental realities of their time. We are in a new paradigm, when “growth” in the usual ways has become threatening to our survival. Yet the human population continues to increase. What kind of economic system must be developed to deal with this new reality? Capitalism is incapable.

        1. Fiver

          Confidence in the truth of your statement grows to 100% with respect to the US-based, corporate globalization munching away on the planet today.

    3. Carla

      Who’s choosing? We have a choice?

      Brilliant piece by Illargi–thank you!

      But I don’t see exactly where choice comes in. In a real democratic republic like, apparently, Switzerland, we might have a choice. But in this Republicrat charade, surely we do not.

      And yes, I voted Green, along with less than 1 percent of the population.

      1. Banger

        We do have a choice or choices. Voting Green is a start don’t fall for the mainstream political party meme. There is no possible situation, assuming the political parties remain the same to vote for either party.

        The problem is that we, on the left, have failed to organize and present alternatives in an articulate and disciplined way. Making fun of ignorant people who watch Fox News is not the way to go–that’s one clue.

        1. Massinissa

          Banger, I would like your opinion on something, since its relevant to what you said.

          Do you think that not voting at all is a better or at least viable alternative to voting third party?

          In truth I think voting third party is a slightly better choice, not that it matters particularly. I just would like your detailed input on the issue.

          1. Banger

            I don’t have a coherent answer–it depends how you feel. We need to be authentic, first to ourselves before we can be authentic anywhere else. The virtue of voting is that it is a symbolic and ceremonial gesture as well as a practical one. I no longer believe we ought to vote for the lesser of two evils because it is like taking pain killers to kill the pain–you can become addicted to the pain killer which, politically, manufacturing a “world” which people over at live that if you nurture the Democratic party it will turn to the left. Also, by avoiding the pain you avoid facing reality and thus the source of your pain–this happens collectively as well as personally.

            I see voting as first a gesture on my part that I am part of a country and I care what happens. I vote not because I can change anything but because I want to put energy in the collective. At times, I don’t feel it and then I don’t vote.

          2. jonboinAR

            You HAVE to vote. If you can’t find a party candidate to vote for, write someone in. Like Carla, I voted Green in the last. Suppose you vote Green. Jill Stein ends up with 1%. You think, “My vote didn’t count. She only got 1%.” Really, you’re vote counted just exactly as much as if you’d voted for Obama, the eventual winner. It only feels as though it didn’t. If Obama ends up with 53% and you voted for him, it FEELS like you’re vote was worth 53%. If you voted for Stein who only got 1% (I guess), it FEELS like your vote was worth much less, ie, wasted. In truth, no matter who’s name you punch or write in, your vote’s worth 0.00001%, or whatever, but you did your ^%$%@! civic duty and it got counted (I think). You’ve earned the right to express your opinion here and elsewhere. If you can’t go to that much trouble, shaddap! If you refuse to vote out of protest, you’re blowing it, IMO.

              1. jonboinAR

                I think one has to define better the term “the system” in order to discuss it and the question does voting at all merely validate an evil thing. Is The System you mean the one that currently redistributes wealth upward to the lucky 1%, or is The System whatever governance we may have, one that needs to be discarded in any case because it is bound to do evil because that’s what’s systems do by their very nature.

                Are you advocating anarchy? Is simple withdrawal of your voting privilege likely to get you and those of your understanding anywhere with that, or is it more likely to make you easier for those who currently control The System to forget about?

                I have more hope for The System. For one thing, AFAIK, there’s always been one. I have trouble imagining, with a world as complex as ours, the possibility of not having one. It has in the past been made to distribute wealth more fairly than it does now, and could again, I think, if more of the common citizenry would pay better attention.

                But I agree that voting for the lesser of two evils is not going to get us anywhere. Vote for somebody, whomever YOU think should be President, and your vote will can’t that much.

                1. Fiver

                  The ballot box is of limited utility when the State has been completely captured. The point of this piece is that a non-violent, cultural change towards minimalist consumption would do more to really change this world than electing someone that Real Power will ignore, dismiss, play with, terminate, whatever.

                  Similarly, the concept of a general strike has every bit as much validity now as it ever has in terms of expressing the public’s true mood – we are dealing with sociopaths, remember, who sign-off on murder, drone kids, suck the life out of the poor and working poor, destroy entire nations for no reason whatever, who throw money at big everything to turn our planet into a chemical dump.

                  We cannot survive past mid-century on this trajectory. And yes, I’d rather see humanity voided rather than the entire living world because we could not figure out that we can all live good, healthy, comfortable, interesting, rewarding lives on a fraction of what we now consume and spew, and can within a handful of generations head our global population back down to the roughly 1 billion the planet can actually support over the longer haul allowing the rest of life on earth full play to work its miracles.

        2. Richard Lyon

          California which is supposed to be a “progressive” state has now rigged it so that third parties no longer appear on the general election ballot. The general election has been turned into a runoff of the “open” primary. The result in practice is most often that you have a “choice” between two Democrats.

          1. anon y'mouse

            what would happen if third party people protested on voting day instead? you’re not being represented, and you’re not really allowed to vote in such a way to try to become so.

            I wonder what kind of crackdown they have planned for such events. how far away from the voting station one would have to be to ensure that they might not get sprayed with rubber bullets.

            1. Richard Lyon

              At this point the number of people who are publicly committed to third parties is so small that they can be easily ignored. The two party duopoly is successful in convincing most people that voting for anybody other than them is wasting your vote.

          2. Cassiodorus

            This was done by ballot proposition, so a majority of the voting public was corralled to endorse this scheme. Is there a “repeal ‘top two'” proposition coming up on the California ballot any time soon?

      2. Susan the other

        You’re right Carla. We are not given a choice. Richard Wolff (Amherst U Ma) was on RT last nite saying just this. He said that we as a society were going to have to step up and make some very serious decisions about wealth and poverty. Since both states are political. But he angrily explained that we do not have a democracy; we do not have a choice. Because, clearly, the elite are controlling all the decision making and we do not get to vote for any of them.

        The elites control the horizontal and the vertical; we control nothing. Our politicians are bred-in-the-bone corrupt and in total servitude to the elites. None of them are decent. None of them are brave. None of them are good.

        1. anon y'mouse

          “I sent the club a wire stating,
          -Groucho Marx

          that’s who we need!

    4. Banger

      You know the answer to that it’s called TINA.

      The problem lies with the mainstream media or, as I think of it, the propaganda organs of the most sophisticated and clever system of mind-control ever devised by human beings. When people believe “the left” consists of NPR and MSNBC the whole rich tradition of the left is dismissed from the room without even the decency to critique it. It is simply assumed that the only alternative to the neo-feudal righ is neo-liberalism as we’ve all defined it here. Yes, there is some criticism in the media of the results of neo-liberalism an the solution is always more neo-liberalism with melted chocolate or the whole variety of toppings we all know so well. The fundamental idea of capitalism is unexamined. The whole idea of free markets is unexamined. The whole idea of “competition” and self-interest is unexamined. American progressives believe by tinkering with the system to route, through taxes, some minimal income redistribution and, above all, investment in training and infrastructure the system will bounce back as it did with FDR. Never mind that the historical situation is completely different–it’s like imagining that techniques refined in Pee Wee football will work in the NFL.

      And what of Marxism? Marxist analysis are excluded from discussions in this country–without Marx you cannot intelligently discuss capitalism–I don’t happen to be a “Marxist” personally but not including Marx in your view of capitalism means you have nothing to say about our condition today. I believe there are other ways of analyzing and talking about our situation as well but we exclude all of them because our school systems (including most universities) are intellectually bankrupt in teaching what we call the liberal arts. Americans come out of the system whether it is “high” school or the university system largely culturally illiterate. They lack the most simple critical thinking skills and are, for the most part, inarticulate.

      What is the solution? The left has to assert itself vigorously at this time–I define it as consisting of people who believe that human beings thrive under a communitarian or collectivist system of political arrangements in which each person is valued–not because the disabled or retarded or sick or elderly person has the same economic worth as me but because each person has an intrinsic worth. This sort of regime benefits those who are weak and those who are strong–how does it benefit the strong? By giving them the warm glow of “family” that tempers and balances utilitarian qualities, for sure but also nurturing and encouraging the spiritual qualities of compassion and an appreciation of the profound mystery of life, i.e., that we don’t actually know for sure that the disabled or retarded person you know is really “inferior” to you–it is possible that the soul of that person is even greater is some sense than you are because we live in a multi-dimensional universe where things are not what they seem to our limited perspective. This outlook actually comes from Eastern Christianity, among other traditions, as explained to me by someone of that tradition the other day. Cass, that’s where I differ from the Marxist tradition which is, at heart, more Christian than most Christians.

      1. Susan the other

        Banger, if it is true that a large percentage of the rich, the corporations, the elite are not happy with the status quo but they don’t know what to do either and we, the majority of the population, have repeatedly told them how awful their fantasia has become, when can we expect them to actually do something? Never is just too long to wait. Let’s see, Chuckie Schumer is pushing hard for immigration reform. Because he wants more cheap labor. Obama is pushing hard for sickness so the nice health insurance companies can hoover up a 30% rake. Education is a joke. Industry is a worse joke. And climate change has now been inundated with propaganda by the oil industry that ‘no worries’ because we have unlimited oil and we can mitigate a little climate irregularity. And things like Fukushima? What’s that? I’m beginning to wonder if such delusion qualifies as sentient, let alone well intentioned.

        1. Banger

          The rich are a victim of their own success and they don’t really even know it. It is culture that has set the standard and they are supposed to be as gods and are surrounded by flatters and hustlers. Their lives tend to be flat and not as pleasurable as many people believe–or so that has been my observation.

          I don’t believe the rich are the real villains but rather the set of values that we hold collectively.

          1. anon y'mouse

            see, this is where I come down on you being merely an apologist.

            all of your posts are just meant to make us “understand how the poor TP/Rich People are so hoodwinked by the culture and really all that the know is this, and they don’t really want it either.”

            also, you are an accommodator and apologist for neofuedalism, which you actually seem to desire much less think is the natural order of human societies.

            your seemingly reasonable tone is a front.

            1. hunkerdown

              Fundamental attribution error much? If so it’s cool, one almost can’t help but commit it when they’ve had the sunshine of individualism and exceptionalism blown up their bums all their lives.

              Still, there’s a place for motivating rhetoric, and that place doesn’t really exist after the housecleaning. Maybe save the motivating rhetoric for when the analysis is more cooked, because it is the value system and the incentives available as a result that turn most of us into appeasers, if not collaborators.

              1. anon y'mouse

                blaming “the values” is a get-out-of-jail free card for those who win by those values.

                that doesn’t meant that I don’t think “the values” need changing. i’m with Berman–the only values America(ns) has ever had has been to “get rich quick.” but his typical tack is to just make us “understand” those poor, misunderstood TPers, those poor misunderstood Hedge Funders, and how they are simply victims of all of this. hell, by most accounts they’re winning and they love it. I I doubt very seriously they want to change the values that have allowed that system to get so out of control. besides, he appears to desire neofeudalism.

                when I win at rigged games, I cry about them too. and then I rig the game even more in my own favor so that I can empathize/cry more. i’m a glutton for punishment that way.

                blow fundamental attribution errors you know where, along with Godwin’s law and all of the other phoney online rhetorical winning strategies in this penny-ante game of rants.

            2. Banger

              ??? It’s not a front it’s called compassion. It’s something I get from spirituality. I do believe that what the rich do is destructive–I’m not stupid and that’s obvious but I see it as part of the culture we live in. Have you ever wondered why progressive politics is so unpopular when it’s obvious that people would personally benefit from progressive and redistributive policies? The answer is culture. Americans largely believe in a intellectual framework that demands a few winners and many losers–it’s in our stories, myths and so on.

              Instead of making ad hominem attacks try refuting what I have to say using argument.

              1. anon y'mouse

                calling you an apologist is not an ad-hominem. as you can see, your post seemed to obviate responsibility and make it seem that the wealthy are simply victims of circumstances beyond their control. they played by the same ruleset and came out winners, so can’t be blamed.

                and yet, they can be blamed because they participate in the system and ensure that it stays rigged in their own favor. i’m with you on the larger role of myths, but saying that those are the dominant force gives very little room for acts of will. it is the reverse of the propaganda problem that we have been facing on the “poor janitors caused the mortgage crisis/financial apocalypse” front. these people, by virtue of being the winners have the freedom to change how the system operates and therefore the consequences.

                just playing along with it and saying “i’m a victim, too.” makes it sound like our economy is more like a lottery and capitalists just ended up with the winning ticket (true to some extent for us all, but aside from that…). while chance plays a part, it plays more of a part on those who have very limited resources and thus a lot less freedom of response.

                a system is set up for lying, fraud and cheating. do you hold entirely blameless those who participate when they know it is morally wrong? of the participants, who do you blame more? those who are forced to participate with a losing hand or walk away with nothing (which they can ill afford to do), or those who have a winning hand but also the freedom to get up and walk away from the table?

                1. Banger

                  You appear to be obsessed with blaming people. I don’t like blaming–not that I don’t. Should the rich be limited in income? Yes, I think so–it would help them as well as us. Should the rich people who have a separate justice system be accountable for illegal acts like there rest of us? Yes. So I don’t get what you are saying–how do you come to the point that I think they should not face justice–however you define it?

                  I suggest you don’t understand what I’m talking about and are twisting things because you need to see life in black and white–which is the essence of left fascism. Life is not that simple we live in a world of various shades of gray where much of what happens if ultimately mysterious.

                  1. anon y'mouse

                    if the rich do not like the system, they are the ones in control of it and have more power to change it for something better.

                    yet how come it seems that it only gets worse? because they keep changing it in their favor.

                    as for “blaming”, I am not “obsessed with blaming someone” (typical tack of someone who is trying to label someone a Madame Desfarges in training and thus make them look looney. you and your friend above both tried the rhetorical strategy of “naming to dismiss” and later you say that I am a fascist. I am the least fascistic person I know, which means that the only throne of tyranny I hold is in my bathroom, and only when the door is closed).

                    if we don’t understand the root cause (“blame” if you will) and the powers operating there, and the motivations of the people operating there, then how do we have chance in hell of changing it? who was it that said =give me a fulcrum and the spot to place it and I will move the world=?

                    admittedly, I may not understand you. but you don’t appear to understand or are unwilling to address the point i’m making as well. the power relations are such that, no matter the underlying values that both classes share (if we are dividing it into the meme-based 99 and 1%), the system as it is favors the 1. they are also the ones with the most power to change it. if they have not, why haven’t they? and if they do care to, why has all the change merely consolidated their power?

                    and yes, I don’t make the mistake of believing that “all” share xyz traits. nor that they are all inherently evil, as you friend tries to paint above. but they are IN CONTROL, in whatever way that can be constituted. so if some of them are unhappy, why have they not changed anything? waiting on us, the uncoordinated, hamstrung by poverty and bombarded with messaging is not working out so well, hard as that is to admit.

                2. Moneta

                  I am 99.9% sure that an old friend of mine, a socialist separatist, would have not sold the Porsche and split the proceeds had he won the car. Most losers would probably do the same as the winners if they were in their shoes.

                  Many people here should really study the definition of an ally.

                  1. anon y'mouse

                    I have heard (anecdote time) that most who win goods can’t afford to keep them simply because of the tax liability that befalls them.

                    as for winning the lottery, it was a metaphor. we don’t have an economic system where all have an equal chance based upon luck. what we appear to have is a rigged game, with some individuals having thousands of balls to the average working-stiff’s one.

                    as for what idiot poor people do with their money when they “win big”, since they didn’t have any they probably act idiotically. but I doubt seriously that they go around setting up massive foundations like that of Bill & Melinda Gates with the intention to change the world to fit their visions of it. that capitalists can amass enough to do so is dangerous for the rest of us, because all we can do is fit into their plan that eventually gets implemented (school charters/privatization and so on), even if in the end it works out worse for us than what came before.

                    show me a lottery winner that became like Rockefeller, and then I will worry. show me one that went out and bought a boat, and i’ll say “I hope he got some enjoyment out of that.”

                    if your friend had needed a car, would you have denied it to him? what if your friend had needed the money instead?

          2. psychohistorian

            These rich you talk about. Are they ready for my plan where we limit inheritance of all wealth to levels where the current top 10% are reduced to the current 90% level or less? And none ever get to accumulate enough to affect public policy.

            The global rich are victims of “Western” delusional inheritance arrangements, which, of course, they maintain, enhance and benefit from.

            The poor are victims, the rich……not so much, IMO.

            1. Banger

              The rich are not victims they act in accordance with the mythical role assigned to them in this culture. “Forgive them for they know not what they do” is not a stupid statement by Jesus on the cross. He knew that most people are mechanical and take on their assigned roles and never go deeper–the whole point of his teachings was to awaken to a larger reality a larger frame of reference. Sadly, few “Christians” have followed that teaching.

              As for your plan, my reaction is: you and what army? You’re not going to get the rich to do anything like give up their wealth and estates. Why? Because the majority of the American people would oppose it. You are dealing with a culture that does not share your egalitarian values and you won’t change the increasingly rigid class arrangements until there are deep cultural changes in the United States. I believe that is possible.

  1. XO

    Critical mass is approaching.

    The end of cultures seems to be gradual, at first, followed by an event that precipitates a sudden drop-off into a New World Order. Global history is full of that repeating theme.

    Notice that our space program (to name one of many of the more beneficial products of rational government that have come under attack), once a source of national pride (in the peaceful pursuit of knowledge and innovation, at that), died without a whimper.

    For the first time, we have the means and the political structure to choose how the future will unfold, but we have chosen the chaos of disequilibrium. The end-game of Capitalism.

    The Magic 8 Ball says the future is cloudy.

    1. Massinissa

      Space program, in the peaceful pursuit of knowledge?

      All the space program was, was a way of showing the world that we were better than the Soviets. Any scientific gains were only a benefit, not the main reason for the program. Once the USSR collapsed, we let the space program die, because it was no longer politically necessary.

      I think your framing of the space program is historically inaccurate. Scientific gains were not the objective, global national prestige was the objective.

      1. Paul P

        Well, research and national prestige are the reasons for the space program.

        And me thinking the main reason for the space program was military. How naive?

        And, I thought the official policy of the United States was to put weapons in space. Good to have found out I was wrong.

      2. bh2

        The space program has not “died” — it has simply evolved to leverage unmanned technology to provide far greater bang for the buck. (Assuming the objective is greater knowledge and economic benefit rather than a foundation for shameless jingoism.)

        Unmanned space flight is pedestrian, rapidly becoming boring and routine. And far more cost effective.

        Private enterprise funded by private capital is now providing vastly cheaper delivery vehicles to support the space station. The government is acquiring use of that technology on the free market rather than through government sponsored projects which are always grandly wasteful and often incompetently conceived and/or executed.

        Government did not sponsor and oversee development of modern computer technology. We should all be thankful. If it had, PCs would today perform only modestly and cost thousands of dollars each. They would therefore not be within the reach of many ordinary people. Would university elites want that technology restricted to only government related use (just as they resisted their precious internet becoming — gasp! — “commercialized”)?

        Had it not been for private enterprise, few if any people would be complaining here about evils of “capitalism” because most would have no keyboards and monitors before them. What they wrote would be on paper.

        They would also have no alternative experience to inform them of what “capitalism” could provide them. Bastiat would get that. Most progressives would not.

        To communicate, we would all still be passing information on paper and relying on snail mail to get it there. Three-day delivery of a stamped envelope would be lauded as a wonder of the modern age (because faster than a week or two by Pony Express).

        Progressives would still celebrate government postal services charging only half a buck to get it there (in days, not minutes) owing to unsparing toil by unionised heroes of labor who “work hard” at “good-paying jobs” — the only measure of general social benefit recognized by the Left.

        “Capitalists”, of course, believe greatest social benefit arises from offering consumers (including postal workers) the best possible products and services at the least possible cost.

        As to complaints against “crony capitalism”, the problem is “cronyism” — an inevitable feature of unsupervised and unaccountable government operations. Anyone who believes imposition of Marxist theology on government rids society of banditry and cronyism simply hasn’t been paying attention to reports from the real world.

        All social orders which systematically produce more than they consume generate surplus (AKA “capital”) which can be reinvested to produce even more surplus. Other social orders which can generate no surplus will remain impoverished. Finding ways to help them figure out how to generate surplus is the only sustainable solution. And it won’t work in every case.

        While there is sound basis to condemn inequality of distribution of surpluses, that debate will remain moot until progressives realize cronyism arises from coercive (and often covert) government policy enforceable at gunpoint, not by transactions in non-coercive and transparent markets.

        1. from Mexico

          While your criticsm of Marxism and Progessivism is not without merit, your whitewashing and embellishment of Capitalism is. Marxism and Progessivism have been subjected to much harsher criticisms, and their adherents forced to undergo much more profound soul searching, than anything Capitalism or its adherents have.

          And your assertion that “Government did not sponsor and oversee development of modern computer technology” is completely divorced from reality, which Noam Chomsky explains here beginning at minute 27:24:

          1. jonboinAR

            Okay, let’s talk about the computer revolution. The way I see it, quickly, roughly, at this moment, is that government funding, through the Pentagon, MIT, whatever, provided crucial development most likely, stuff like the beginnings of the Internet, probably microchips, that “free-enterprise”, whether corporations or individuals inventing in converted basements and garages were unlikely to come up with. I imagine that is because government can fund “pure” research that has no particular profit end in sight but ends up developing things like the Internet that take a lot of investment. With no profit end, corporations won’t do it. Your individual lacks the capital to invest, so he can’t.

            At a certain point, though, when the corporation or other investor can see a profit, “free-enterprise” becomes important. The profit imperative, the importance of which that BH2 (or whatever the handle is)is so single-mindedly intent on promoting, I think does effectively focus the efforts of the business enterprise toward creating a consumer-desired product.

            IOW, would business left alone been likely to come up with the micro-chip, the Internet? Where I think BH2 has a point though is when we ask would government sponsored research by itself produce the PC, the Mac, the iPhone, etc? Both areas have played crucial roles. We should recognize that fact. BH2 really needs to because he’s wrong about the government’s destructive wastefulness.

            1. skippy

              @jonboinAR – Humans regardless of the social system always, invent. The topic is more one of responsible social systems ie responsible to both humanity and the planet. Make basic needs utility and provide a well managed playground for invention and creativity.

              Skippy… seriously there is no data to support that invention is a factor of egregious wealth concentration, its actually counter factual.

      3. anon y'mouse

        pardon my French, but it was a giant d!ckwaving competition disguised as self-actualization.

        millions of Nazis got their rockets to the moon while other millions in this country were poor.

        india went and did the same thing. that money could’ve helped a lot of people starving in the streets of Mumbai and less visibly in the rural rest of the country. once you’ve shot your wad, well…

        its only saving grace are the technological leaps that were required to pull it off later being put to other purposes. and I think the jury is still out on just how much benefit some of those developments are giving us. they certainly have solved only very limited problems.

        the man in the high castle revealed that it was irrelevant who WON the war. the arc of history, and who really “won” in any case, is always the same.

        1. craazyboy

          Ya. Rockets! He whom controls the high ground wins the battle! Space is the highest of the high ground. Must have! Ergo – The Space Race. With the arch enemy the Soviets no less.

          I recently read somewhere someone claim that about 95% of this USG R&D spending really does go to finding bigger, better, faster ways to exterminate humanity. I don’t have much trouble believing that either.

          Then as far as computers go, the USG got interested during WW2 (with IBM) when they could use them to crack Nazi codes.

          No question we got a lot of mileage out of commercial applications of some of it – and entrepreneurs or Bell Labs are the ones that would do it. But would be nice to see a quantitative study on that.

          Chomsky has good insight on it from the University research slant. My engineering profs got defense R&D work too. I even worked on one. I got to drill holes in the cement lab cell walls for hanging shelves and equipment. Something to do with lasers.

          But I think Chomsky should have taken it a step further and state that the USG should have kept basic patents and charge a small royalty. Bet the national debt would be less of an issue today, or we coulda had a “sovereign wealth fund” like some of those unexceptional countries have.

  2. sue

    Here again is what was attempted written: In states Washington, Oregon, Idaho, circa 2005, average wage necessary for family of 4 was defined as $45,000.00 per year; more in Western Washington, less in Eastern Washington-this in 3 state economic study.

    But total number of jobs actually paying $45,000.00 per year (gross) amounted to 20% of jobs available-today that number is dropping.

    Meanwhile, quantitative easing-FED subsidies of banks has caused horrendous rise in consumer prices; obvious, when including energy.

    Read Sheila Bair’s, “Bull By the Horns” for relevant insider detail-realize, Bair is lifetime republican-the insider view of economic-Wall $treet driven disaster is telling.

    1. hunkerdown

      Maybe the family of four isn’t really a social necessity, especially in an age of gross labor surplus. Perhaps it’s more of a status symbol, like the house and white picket fence so often comorbid with it, and one that we (or at least most of us) would be better off eschewing.

      1. They didn't leave me a choice

        That “gross labour surplus” will be there no matter what. It’s technologically driven. Even if you drop birth rates to zero right now, we’re still going to need only a tiny minority of the population doing real work. Not the bullshit timefiller crap that masquerades as work. It’s about proportions, not absolute numbers. You can make other arguments for why the “family of four” is a bad idea, but this one you can stuff straight down the hole where stupid ideas are stuffed eventually.

  3. paulitus

    The problem is co clearly laid out here. Kudos to the writer. However, the solution is lacking. Just handing out money will not work. Man needs something useful to do with himself. We must find a way to employ people in some useful endeavor.

    1. anon y'mouse

      lest they do what you deem immoral with their own time?

      how about letting the person determine, from their own values and abilities, what they see as useful for putting their skills towards?

      nope, gotta make that make-work, lest the lower orders get all indolent.

      you know what is indolence-making? struggle for survival combined with cheap entertainments, in a neverending cycle of stress–>recuperation. our society has made both of those things with abundance.

  4. Working Class Nero

    This is a nice description of the symptoms but what really interests me is the cause of the declining standard of living in the world’s rich economies.

    At the national level, from a basic Left / Right perspective, if the standard of living declined for the richest groups in a nation this would be seen as progress to the Left. So theoretically, again from a standard Left point of view, given the huge difference in of the standard of living between the world’s rich and poor economies, this should mean that a decline for the rich nations would be seen as a good thing since it has undoubtedly been matched by a slight increase in the standard of living of the poor countries. This is the primary motive for support from many on the Left for globalization, which is obviously an attempt to redistribute wealth from rich countries to poor countries.

    And in the rich economies, the losers from globalization are undoubtedly the native working classes. In order to soothe any elite guilt these “proles” are demonized as ignorant gun-toting racists who deserve losing their jobs so some nice peasant family of color somewhere can take their factory jobs at 1/10th the salary. Culture wars are constructed between where the bourgeoisie are rebranded as hipsters and encouraged to decolonize urban centers by displacing underachieving minority populations all the while clinging to the racial moral high ground by regular denouncements of the strange ways of the hated rural proles. Even Marxists talk about an aristocracy of labor and dream of a world where all workers are paid the same. The only say to accomplish this is to lower the rich working class workers pay a lot and increase the pay of poor country’s peasants a little. Which is exactly what is taking place today.

    The elite hipster urban cadres are for the most part (at least for the time being) the winners in globalization. As they re-colonize urban centers, their real estate values rise as each non-Asian minority is displaced. And being well-educated and technologically gifted they thrive in the new economy. Their standard of living is only enhanced by the huge pool of cheap, imported, servant-class, third-worlder’s who are eager to mow their lawns, care for the few children they can afford, and cook them exotic food.

    But what is the solution to the declining standard of living for the rich economies. The first step is to get rid of “rich guilt” and accept the fact that some countries are rich and others poor and the job of politicians in rich countries is neither to export away their high-paid lower-skilled jobs nor importing boat loads of cheap labour. No, their job is to maintain the standard of living of the LOCAL population.

    The Swiss example is instructive. One fundamental issue is that a high standard of living, including a healthy welfare state, is in total conflict with the idea of open borders. There must be exceedingly tight restriction on immigration if one imposes for example a minimum salary of 2500 Euros per month because probably 90% of the world’s population make much less than this and they would be more than happy to make a run for the Swiss border to get a huge increase in their standard of living. Which isn’t to say totally closed borders either; if there are real labor shortages in certain areas, especially higher-skilled positions, then culturally compatible immigrants could be welcome. The same goes for trade borders. I high-paid nation is at risk of being undermined by low wage countries dumping cheap products in. Although it is becoming more impossible with each new “free-trade” accord, borders must also be protected in one form or another against cheap imports. So a country can either have open borders or it can have a generous welfare state with a prosperous population. It cannot have both.

    But these ideas are heretical to most on the Left, as well as most on the Right. What happens now is that on economics the partisans of both sides, whether they realize it or not, are marching lockstep towards the Right; towards greater globalization, more open borders, and the destruction of the working / middle class. In order to create balance and systemic stability, on social / racial issues though the flow is to the Left, with an ever increasing obscure identify groups vying for privileges, often at the expense of the working class. And since the culturally hipster “Left” is ever increasingly merging into the wealthy elite, this progression makes perfect sense.

    1. Banger

      I enjoyed your comment very much. Actually the perspective you give is very much in the Paleo-conservative tradition as expressed often in The American Conservative magazine which I like very much and, if you haven’t gone there, check it out.

      I love the way you pointed out the “hipster” community–which is personified at Comedy Central–hahahaha look at the stupid goobers on Fox which is, as we can all see, a highly effective way to organize politically. My wife likes those shows but I, generally, fart it their direction. BTW, there is a real hipster world of dumpster-diving nomadic anarchists in the younger generation who are following the true white-hipster path and who are often veterans of Occupy. If you haven’t encountered these kids you have missed something.

      However, the solution lies not in more nationalism or restricting movement and migrations but by returning to the roots out of which this civilization sprang and take what is best from it. From real Christianity, Stoicism and much of Western philosophy (most American Churches are not really “Christian” at all–though the new Pope’s new attitude might gradually turn the American Catholic Church into something that is a loose relative of the Jesus in the Gospels) we get the idea of compassion, belief that there is a greater purpose and destiny that self-indulgence and egotism and that we thrive under collectivism, not individualism and second that we follow the Western Intellectual tradition of science, reason and dialogue/dialectic to arrive at solutions to problem rather than reacting from emotions such as anger, resentment, cultural chauvinism, and so on.

      1. jonboinAR

        Can you point me to some reading that discusses how American churches are not really Christian, and conversely, what real Christianity is?

        1. skippy

          You have 40 thousand choices, its like exponential osmosis.

          Skippy… synthetic a priori has a long history in humanity and the data set runs, pretty much, are all conforming observations.

        2. Banger

          Gospel of Luke, Gospel of Matthew are my favorites. My own journey cam through the study and practice of Buddhism and Yoga and then returning to Christianity, as the Dalai Lama suggested. One book that opened my eyes that I recommend to anyone interested in spirituality is Aldous Huxley’s The Perennial Philosophy which is not so much about Christianity but examines the similarity of all traditions by quoting writers and saints from all traditions. I was also influenced by the writings of Thomas Merton who I highly recommend.

          I political matters, there is Dorothy Day and her followers and check out the Sojourners as well. There is also a growing number of Christian “anarchists” roaming the country made up of young people and can be found in counter-cultural gatherings but that’s a another story.

    2. jonboinAR

      Your remarks about the urban hipster class despising rural white America strikes a chord with me as anyone who’s noticed my posts before (if anyone has) might expect. These “hipsters” are quite open about it and unashamed. You see it, for example, on this site regularly. The same with any “Progressive” outlet or forum.

      How the bloody heck do those who wish to advance a progressive economic agenda expect any large percentage of white people to join them as long as they’re openly hostile to their religion, their culture, the rest of their beliefs, the legitimacy of their place in America, etc? Wouldn’t you prefer to watch Fox News if doing so would keep you from being spat upon every time you came up in the conversation?

      Cripes, a commenter on this blog in the past few days allowed as to how he/she could not wait till rural white Americans were wiped off the face of the Earth. Scapegoat much? Where have we heard that before? Perhaps rural white Americans are fearful (as progressives like to condescendingly point out) for some reason.

      At least y’all (Progressives) need to quit pretending to wonder why the white working class so often votes against its apparent economic interest.

      1. anon y'mouse

        it bears repeating: half the population in this country believes that the other half doesn’t deserve to be human.

        just move around your group A and B and retitle them according to the particular demographic sets involved.

        1. jonboinAR

          …and I guess we all know who it is moving group A and group B around (Koch bros, et al), still, we all seem to play into their game (divide and conquer).

      2. southern white

        Yeah, that snarky comment against southern whites was odd, vicious. Plain old hateful. Yet that point of view (if it can be called that) seems like a tedious and automatic routine for some. I’ve encountered it elsewhere, too, in real life; even in the tony borough of Manhattan.

    3. Nathanael

      “So a country can either have open borders or it can have a generous welfare state with a prosperous population. It cannot have both.”

      Solution: one world government. It’s inevitable anyway, an artifact of better communication. Better sooner rather than later.

  5. MikeNY

    Great post.

    ITA, the insistence on growth distracts people from the moral imperative of wealth redistribution; it is plutocrat catnip; it is the reason why our deluded Fed believes that if it simply keeps the pedal to the metal long enough, the Ford of our economy will become a Ferrari; it blithely ignores the wheezing and choking of the planet.

    But say this out loud, and you’re handled with a chain.

    1. Cassiodorus

      The Powers That Be like to feign an interest in growth now and then, but the reality of the matter is that global economic growth has been in decline for four decades already. They live from ripoff to ripoff.

  6. Min

    Ilargi: “Over the next 30 years, 1975-2005, the standard of living still seemed to rise, but if we look behind the numbers and between the lines, we see that much of the wealth increase over that period is illusional, because it was increasingly based on credit, i.e. it was borrowed from the future”

    I will accept “illusional” as a rhetorical flourish, but not “borrowed from the future”. “Borrowed from the future” is one of those phrases that sounds profound, but actually clouds thought. “Borrowed from creditors” is correct. OC, that is not profound, but it is something that must not be forgotten or glossed over.

    As we have things set up, all of our money (or almost all, depending on your definition) is debt. That means that the money that financed the prosperity of the first three post-war decades, the standard of living that Ilargi regards as real instead of illusion, was also “borrowed from the future”. Borrowing from the future is not the problem.

    The problem is growing inequality. If wages had kept up with economic growth, then household debt would not have become the burden it has become. Not that people did not take on debt unwisely, but, as Bill Black repeatedly points out, that is largely a result of predatory lending. Predatory lending has added to inequality. Borrowing from predators is the problem, not borrowing from the future.

    1. financial matters

      Good distinction

      Stephanie Kelton

      “Our challenge isnot whether we can “afford” to make the payments we haven promised to seniors, veterans, the disabled, government contractors, healthcare providers, bondholders, etc. (today, tomorrow and into the indefinite future) but whether we will be a productive enough nation to allow the government to make good on those promises without causing an inflation problem. That is the debate we should be having.”

      1. Susan the other

        I like Stephanie Kelton a lot but I do not like the word “productive.” Because it gets too easily appropriated by those who seek productivity by squeezing blood out of the poor. Or out of the Fed at the expense of us all – which is the worst kind of inflation. Or is it just deflation for the poor? It masquerades as productive but it is really unproductive non productivity. Etc. The question is what should we produce and how do we do it and protect the environment and the people? Our great capitalists don’t have a clue. The problem is this very archaic “capitalist efficiency,” which has now proven to be total nonsense, needs to be replaced with something that is coherent.

        1. from Mexico

          I’m quite sure that when Kelton wites “productive” she’s speaking of the aggregate utility or the aggregate production of material, palpable goods and services, not the production of hot air — the BS the rhetoricans cook up — to obscure the concrete realities.

        2. financial matters

          Fair claims for sure. But essential items need to be produced and in sufficient quantity to not cause inflation through scarcity.

          It doesn’t help to have a large social security fund if there is nothing for those dollars to buy.

          As an aside I like Graebers thoughts on forgiving student debt. ‘ I paid off my student loans that doesn’t mean I think others should get mugged.

          I think social productivity is useful also. I think the problem we get into is when we try and put a numerical value on human life. And when we think of “owing” people something rather than freely giving it. And I think a “living wage” should be part of the conversation.

          1. spooz

            I still prefer a citizens dividend (used first to reduce debt)to debt forgiveness. It provides liquidity to the economy as well as reduction of financial burdens.

          2. Min

            “It doesn’t help to have a large social security fund if there is nothing for those dollars to buy.”

            When people bring up potential future problems with Social Security (or other social programs), it is a good exercise to assume that those problems come to pass without our having Social Security (or another social program that is being questioned). Typically it is obvious that the problem is a problem for society as a whole, not for the social program in question.

            For instance, because of demographic changes it is possible that a time will come when there are not enough workers to supply the needs of senior citizens. In that case reduction in Social Security is not the answer. Unless you believe that having destitute seniors starve to death is what is needed.

    2. castor

      Thanks for making this point Min. I was similarly struck by the treatment of debt in this article as if it is some sort of concrete physical thing, a contract with the universe. But its as you say, there are debtors and creditors (banks) and we could simply default. We’re only borrowing from the future in as much as we feel like for some crazy reason we *want* to maintain the ridiculous wealth inequality in the future.

      I do think there is one point where this “borrowing from the future” idea has some merit, and that’s in terms of natural resources. But it still doesn’t quite fit the language, even if it captures a similar meaning. With natural resources, in many cases we’ve been depleting and destroying the reserves that could sustainably provide future real incomes. Not quite borrowing, but it is a reduction of future incomes in favor of present ones.

    3. Ilargi

      I don’t want to get my feet stuck in quicksand semantics, but a loan is a loan is debt is credit, and it’s whatever you call it based on promises to pay back at some point in the future, i.e. you’re borrowing from the future. Whether or not you’re borrowing from your own future or someone else’s.

      And yeah, there are creditors, but there’s for instance a big difference between a loan from a 2013 Wall Street bank and a country’s own citizens, as is the case with war bonds. That makes the comparison between 1945 and today a bit tenuous: in the wake of any “Great” war there is a lot of latent demand. When everyone both on the capital and the labor side has been involved in a “Great” effort (even though the latter always gets the shorter side), a lot of either is freed up to start rolling again on the consumer side of things. A lot of it will be financed with credit, but it’s not the same as someone today buying a home to flip or a back “owning” $60 trillion “worth” of derivatives.

      My point is that because of the latent demand, the 1945 loans that bought people cars and washing machines are maybe not so much “borrowing from the future”, as they are “borrowing from the past.” Or both, if you will.

      Now you can claim that ”The problem is growing inequality”, but is it? Or is the real problem that growing inequality leaves too many people with too little to live on? If the poorer side still had enough to feed their kids and send them to school and pay doctor’s bills, who would really care if inequality keeps on rising?

      I think if you want to properly define “the problem” today, it is, as I wrote, that for the richer side of society to keep their wealth growing, they need to suck it out of the poorer side, since there is no other source of “growth” left. It’s not inequality itself, it’s inequality in the face of a stagnant or shrinking economy.

      1. from Mexico

        When you say things like “Household debt, national debt and corporate debt hang around our necks like so many nooses,” or “there’s for instance a big difference between a loan from a 2013 Wall Street bank and a country’s own citizens, as is the case with war bonds,” it’s not at all clear to me that you fully understand the difference between US government debt and private debt.

        When a 2013 Wall Street bank, or any private bank as far as that goes, makes a loan, it increases liquidity. When the government buys a war bond, it decreases liquidity.

        The making of one type of loan has exactly the oppite effect on the money supply as the making of the other type of loan.

        1. from Mexico


          Where I wrote “When the government buys a war bond, it decreases liquidity,” that should read:

          When a private party buys a war bond (or the federal government sells a war bond), it decreases liquidity.

          1. Ilargi

            Whether a war bond decreases liquidity in any meaningful way is a many headed beast, because liquidity doesn’t always (appear to) mean the same thing. What exactly, for instance, does liquidity mean in times of shortages and rationing when people have money to buy things but they can’t buy them? Obviously not the same as in times of plentiful supply, you could at best label it latent liquidity. You could also twist the dial one click further, and say government liquidity rose when it sold war bonds, and the government used it too, so it’s all zero-sum. Or even that since a government had targets to spend the money on, and citizens didn’t, that overall liquidity actually increased, even if that was short term.

      2. anon y'mouse

        “Now you can claim that ”The problem is growing inequality”, but is it? Or is the real problem that growing inequality leaves too many people with too little to live on? If the poorer side still had enough to feed their kids and send them to school and pay doctor’s bills, who would really care if inequality keeps on rising?”

        everyone should care. it is those who sit on the top who steer the rest. so, I shouldn’t care that all of my choices have been already made, and that there isn’t anything left to do but do what has been dictated and handed down simply because the man on top is smart enough to keep me well-fed? how is that any less like a slave than someone forced to sell themselves who barely pays rent?

        this is a scary, revealing tell into an attitude that some people driving social change seem to be comfortable with around here. let me guess- google employee-led Occupy activists are quite ok, as long as the minimum wage gets raised.

        1. Ilargi

          A valid enough point, but not what my article is about. As income and wealth go up, people turn their backs on politics. You may feel you should care, and that’s fine and commendable and all, but telling others that they should too is another kettle of fish. They can argue you should leave that up to them. The majority doesn’t seem to care about being slaves as long as it doesn’t cramp their styles (or as long as they’re not aware of it, at least). But the very thing we’re seeing now, as I tried to convey, is that keeping them well-fed is no longer a priority. So in the end you’ll get what you want, and they’ll start caring again. For any of it to work orderly and/or peacefully, though, would require a functioning democracy, but the US certainly doesn’t have one of those, and who does really? The Swiss small-scale canton system looks a bit better outfitted for the purpose.

          1. JTFaraday

            “The majority doesn’t seem to care about being slaves”

            I disagree with this. I think the majority care very much about how they spend their time, what they’re doing and how much time they’re spending doing it, but they only have so much control over the matter.

            This is inevitably so, but how little control are we talking about here?

            It looks like less and less control to me, with regard to everything from choice of work, to whether or not one gets to conduct oneself remotely ethically at work, to inhibiting the creep of (for whatever reason) undesirable work into every nook and cranny of one’s life.

            I agree that some people don’t care or, as Banger seems to think, are so insular that they don’t see any connection between their actions and the effects of those actions. Many of the rest are just making the best of a bad situation.

            The reason they don’t think they have to engage in any sort of collective change, is that they think it’s better somewhere else, and they can get out. Personally, I stopped believing that quite some time ago.

            I agree with the rest of what you said, but how one remedies that is important. You seem to suggest that an enlightened technocracy will fix it in the absence of democratic governance.

            They have an enlightened technocracy in China. Would that be okay? The people who work for Apple are getting fed–pay no attention to the nets that surround the buildings.

            This is one available model, it is “economically correct” according to the Lord Keynesian strain of economics the “progressives” seem to favor, and it does meet the only standard you put forth.

            1. Ilargi

              “You seem to suggest that an enlightened technocracy will fix it in the absence of democratic governance.”

              Excuse me? What strange things people think they read.I’m left wondering if you read my article at all. And I know I never gave even the slightest hint at an enlightened technocracy, that must be in your mind.

      3. Min

        “Now you can claim that ”The problem is growing inequality”, but is it? Or is the real problem that growing inequality leaves too many people with too little to live on?”

        I think that historically we see that growing inequality goes along with oppression. The tendency is to an ossified society, or caste system, with low productivity because so much of the populace lives hand to mouth, and those with means are comfortable having servants.

        Niall Ferguson — of all people! — points to the great inequality in Latin America during the colonial period as one reason that the English colonies, where servants became landowners, prospered by comparison.

        Many of the wealthy would prefer having the only yacht in the harbor to having ten yachts while everybody else had one.

        1. Nathanael

          “Many of the wealthy would prefer having the only yacht in the harbor to having ten yachts while everybody else had one.”

          Many of the obscenely rich would prefer to have one small rowboat while nobody else has any, rather than to have twenty enormous yachts while everyone else has a moderate-sized yacht. They would rather rule in hell than be equals in heaven.

          This behavior — “relative comparison” rather than “absolute comparison” — is pernicious, and people who engage in it are trouble.

    4. Moneta

      America hit a wall in the 70s. There was a fork in the word that gave them the choice between goods and services. They chose materialism. That’s when the standard of living should have come down. The US economy should have started to switch from goods to services. To keep the jobs in the US, production would have become more costly because there would have been all kinds of constraints vs. going global and exporting deforestation and pollution to emerging markets.

      There would have been more research in energy conservation. Houses would have probably stayed much smaller. Maybe there would have been more concentration instead of sprawl. Less dependency on cars.

      But Americans were not ready to shrink their materialism. The world was their oyster. So they exported jobs, imported cheap goods and doubled the size of their houses.

      Now they are stuck with a material life they can not afford any longer. To make matters worse, this materialism was built on planned obsolescence and the cult of cheapness.

      1. anon y'mouse

        i’m not in full agreement with you. this is where I think Banger should come along with his cultural values argument, and i’d likely agree with him.

        I think we’ve been sold that the idea of quantity is equivalent to the idea of quality.

        in another post elsewhere you mentioned the 2500 sq. ft McMansion. that size of house makes sense when you’ve got 4 kids, 2 parents and grandma all under one roof. but what can’t be defended is the suburban, car-dependent development, the material quality of the space and outdoor environment, the ‘gated community’ insularity, or any of the other baggage that goes along with that. why did people go for that? Kunstler would say “frontier mentality” or that combined with white flight.

        I really don’t think that most americans understand quality of space. they think quantity = quality of space. they would not be comfortable with the idea that you can be very comfortable in a bedroom the size of a closet, if it were ideally laid out, which takes the training of an architect, who only seem to work for the rich, and not a ‘builder’ knocking out cookie-cutter homes according to 3 different dysfunctional floor plans. this, plus out so far in the hinterlands that everyone in the house needs their own vehicle to get to/from school, work and the store.

        so, i’m rambling on your points. I think you place a lot of blame on the individuals who have made those choices. I would say it was collusion of cultural values and being open to being sold some illusion of having a little house in the country or whatever, with the greed of the “local notable” class who saw dollar signs with every patch of, in their terms, underutilized farm plot.

        how to sell people on the idea of quality? well, make it somewhat affordable and clearly better, from a lifestyle and investment purposes, perspective.

        granted, we’re all going to be poor in future so perhaps there is no need for quality anymore. shantytown, USA!

        1. Moneta

          I agree on many of your points.

          I do believe in quality. But quality can come in a cheap form and in an expensive form. You can make something of quality which will last forever and end up costing much less in resources over the long term. You can also make something of quality that is not needed and just depletes our resources.

          On the question of the size of the house, I can find many explanations. One thing I do know is that American ideals are firmly rooted and it will not changed until reality forces itself into the American way of life.

          For example, I have a friends who have moved three times and always seem to have problems with their neighbors. No matter how big their house or lot, they can never be far enough away from their troublesome neighbors. In my case, since I believe there is going to be a contractions in per capita resources consumption, I have accepted a smaller life closer to other people. Because I want a good life with no ulcers, I understand that the relationships with my neighbors NEED to be good. So we’ve never had neighbor problems. However, I am not smug enough to think that I am so great compared to my friends. I do realize that maybe I have been lucky.

          Luck and attitude are so incredibly important. But luck is not an American word. And IMO, what Americans need most is an attitudectomy. But even if I am right, it won’t be on my terms.

          Here in Canada, we are spectators. We wait for what the US decides.

  7. Richard Lyon

    The new deal in the US put a social democratic/Keynesian regime in place that was in force for the period following WWII. Similar arrangements were made in Western Europe. Since the mid 70s a neoliberal/neoclassical regime has been firmly nailed in place in all of those regions with similar effects everywhere. It is supported and reinforced by much of the orthodox economics profession and the corporate owned media. None of this happened by accident.

    The great recession did not provide the kind of sea change that the great depression did. The neoliberal regime came out of it essentially unscathed. The situation is not going to change simply because middle class progressives express their displeasure. Not only in the US but also in most of Europe the major political parties are committed to this regime and their debates revolve around minor differences in branding.

    1. Banger

      The main reason neoliberalism survived so well was that the mainstream media is more ubiquitous and has narrowed what we recognize as “real” since the Depression. People had their own observations and understanding of what was happening and were not so easy to fall into the TINA category.

      1. Richard Lyon

        The “mainstream” media is owned, operated and controlled by the corporate interests. It doesn’t require conspiracy theory to establish the fact that there is a well coordinated effort to use universities, foundations and media to preach the gospel of The Market as the fount of all truth.

        1. Cassiodorus

          It took World War II to fully break the pattern of governmental frugality, after which much of the world experienced the Golden Age of Capitalism. Today war has been financialized, so that its main beneficiaries are a rich few, and at any rate we should not want another solution of the sort that caused 55 million fatalities in the 1940s. That may nonetheless be the path that history sets us upon.

    1. anon y'mouse

      a good way to know whether it is a real revolution or not, is probably whether it is being televised.

      1. anon y'mouse

        duh, could that have been less clear?

        revolution on T.V. = unreal
        revolution not visible anywhere = silent coup
        popular revolution = T.V. set is broken

  8. from Mexico

    Ilargi, in my opinion, has slid off into a too consistent pessimism here. He assumes there can be no “growth,” whatever the hell we take “growth” to mean. And in doing so, he treats the economy more like the 17th-century mercantilists did, or likewise the early 20th century austerian Ludwig von Mises, who devoted themselves to the promulgation of

    legislation, which devoted itself, after about 1650, to the defense of the status quo or to the effort, by political action, to obtain a larger share for oneself of what was regarded as a static and unexpanding body of the world’s wealth.
    –CARROLL QUIGLEY, The Evolution of Civilizations

    Ilargi, therefore, gets the entire debt, credit and money thing only half right. Without growth, it logically follows that debt, credit, and monetary expanision are indeed, as he asserts, always bad.

    But there’s a competing theory out there to that of the 17th-century mercantilists and the Austrians, one that holds that monetary expansion can, at least under some circumstances, lead to economic expansion. This theory requires a more nuanced appraisal of debt, credit and money creation than the simplistic formulations of von Mises and the mercantilists. It requires making the distinction between ficticious and real capital. Many people have observed and written on this distinction, beginning in the late 16th century after the first massive monetary expansion due to the rivers of gold and silver that flowed into Europe from America. But perhaps the best of these was Marx, as Michael Hudson notes here:

    “From Marx to Goldman Sachs: The Fictions of Fictitious Capital”

    It’s important to note that it’s not always easy to tell, before the fact, what is going to be real and what is going to be fictitious capital. A thoughful Boston observer in 1840, during the height of the money wars in the United States, “noted that speculation was what, when it succeeds, is called enterprise, an evil thing only when it fails” (R. Hildreth, Banks, Banking, and Paper Currencies, 1840)

    1. Banger

      Makes a lot of sense. This points to the larger issue of defining who we are and where we want to go which Ilargi points to. This goes back to values rather than economic ideas–for example, I think there is an economic case to be made for a debt jubilee but this course is impossible because our values forbid such a thing as it forbids a guaranteed income. Our collective values require poverty and suffering and it is our values that we have to examine and evaluate and we have to do that before or along with economic arguments. In order to progress beyond being stuck in a historical dead end we have to dig deeper into what is keeping us back and keeping us from dealing with the reality.

      1. spooz

        A debt jubilee would feel very unfair to those who lived sparingly without debt. It would give a big prize to those who overextended and nothing to the poor who didn’t participate in the ponzi.

        Much fairer would be a citizens dividend, which could be used by some to pay off debt and others to start businesses or consume. The best way for it to work would require rethinking the monetary system, including fractional reserve lending and the role of the federal reserve.

        1. Nathanael

          Naw. A Debt Jubilee — bankruptcies for everyone in debt — is perfectly fair.

          Those who get their debts forgiven end up back at zero — those who had savings, well, they’re still ahead of zero, aren’t they?

          It’s not a permanent solution, but it may be necessary to clear out the overhang of student loans.

    2. Cassiodorus

      OK, so here we are at the beginning of the fifth decade of declining global growth:

      so I suppose if your starting place for thinking about the matter of economic growth is theory, and not real life economic data, then you can argue that in theory that “there’s a competing theory out there to that of the 17th-century mercantilists and the Austrians, one that holds that monetary expansion can, at least under some circumstances, lead to economic expansion.”

      The problem is that the current circumstances do not appear to be favorable for the theorist’s utopia of economic expansion as such. In an essay titled “Ecology, Capital, and the Nature of Our Times,” Jason W. Moore suggests three reasons why this is so:

      1)The arrival of peak appropriation — resources, discussed in Marx as the “organic component of capital,” are not becoming cheaper

      2)The rise of the superweed — there are all sorts of unexpected environmental consequences to industry’s tinkering with the biological substrate — and

      3) The financialization of nature — as finance increasingly colonizes our economic systems it becomes an ever-increasing drag upon them.

      Hudson’s solution, as I read the piece you cited, was to solve the problem outlined in 3) without reference to 1) or 2). The situation with 1) appears to be improving with the rise of solar power, though solar power is becoming relatively cheaper because fossil fuels are becoming more expensive to extract (with the replacement of high-quality crude oils with processed tar sands).

      In short, at some point capitalism will encounter “peak appropriation,” and its industrial dynamic (what Marx called M-C-M’) will give way to something else. I’m guessing that the financial powers-that-be would like to institute a regime of neofeudalism in its stead, in which wage slavery is replaced by some form of serfdom. We should desire some other outcome.

      1. from Mexico

        Cassiodorus says:

        OK, so here we are at the beginning of the fifth decade of declining global growth…

        Well to begin with, let’s dispense with the rhetorical flourishes and get a little bit more specific. The article reads as follows:

        Real global growth averaged 4.9 percent a year during the Golden Age of national Keynesianism (1950–1973). It was 3.4 percent between 1974 and 1979; 3.3 percent in the 1980s; and only 2.3 percent in the 1990s, the decade with the slowest growth since World War II.

        So the age of declining growth began in about 1974. Not surprisingly, this correlates well with the beginning of the age of economic policy stupidity.

        According to John Kenneth Galbraith, the era of economic policy stupidity began in 1970 with the implementaiton of the economic policies of the Nixon administration. The Nixon administration drank heavily of the Milton Friedman Kool-Aide and believed it could pursue profligate fiscal policy, tight monetary policy and eschew regulatory policy (price controls) during wartime. And furthermore it believed it could do these things during a time of war and also avoid inflation. What it boiled down to was taking Keynesian policy and turning it on its head. The policy combination proved disastrous. What it wrought was rampant inflation. That of course did not mean the new policies were abandoned, since they very much favored the interests of capital over labor. (You can read all about it here: )

        The trick is to, as you say, get the “real life economic data” right, and not rely on a bunch of propaganda. Going down the propaganda road can lead one to blaming on resource depletion what should be blamed on stupid economic policy decisions.

        Of course TPTB much prefer the former to the latter.

        1. from Mexico

          And really we shouldn’t call them stupid policy decisions. We should call them by what they really are, which is malicious policy decisions. They are meant to favor capital over anything and everything else, regardless of the national interest or other competing interests.

          1. Cassiodorus

            The fact of the matter is that capital never cared about the well-being of the working class, not even during the Golden Age of Capitalism, which capital tolerated because the profit rates were high. The problem for the elites was one of keeping the profit rates high, and so the Friedmanites and their equivalents in Europe came along promoting the Mont Pelerin brand, and made the sale.

            So neoliberalism is not uniquely “malicious.” Capital does what it always did.

        2. Cassiodorus

          Neoliberal “economic policy stupidicy” was not motivated by stupidity, but rather by a desire to keep profits high in a period in which declining growth had already been brought on by a crisis of overproduction, the economic crisis of the 1970s. The crisis of overproduction was not created from nothing by Nixon.

          Crises of overproduction appear to elites as crises of profits, and thus

          And “peak accumulation” is not merely about resource depletion (as it depends upon the organic component of capital at any specific time in capitalist history), but rather about the extent to which capital can reorganize the world in its own image.

          Never mind the fact that there isn’t the cheap energy or food (or for that matter metals) for some miraculous 5% annual expansion of the global capitalist world system over the next decade or so, given current technologies (and new ones will, as Marx pointed out, themselves represent a drag upon the rate of profit). At some point the world runs out of industrial profit-opportunities, and it was in anticipation of that running-out that the elites created neoliberalism and turned capitalism into the fraud it is today.

          So even if we could live in a fantasy world in which the elites abruptly reversed course tomorrow and adopted populist Keynesianism across the board, it still wouldn’t work, at least not for capital. It’s important to recognize, then, that the boom period 1948-1971 represented a period in which technological expansion, wage growth, profits growth, and the expansion of the capitalist system were all compatible with each other. That compatibility isn’t going to be true of every period of history. It certainly isn’t true of the period in which we live today.

    3. Min

      “But there’s a competing theory out there to that of the 17th-century mercantilists and the Austrians, one that holds that monetary expansion can, at least under some circumstances, lead to economic expansion.”

      Oh, starting in the 1690s in Massachusetts, people in the English colonies discovered that producing their own fiat currency brought prosperity. In the 1750s the British Parliament, to the delight of creditors in London, declared that colonial currencies were not legal tender. That was one of the causes of the Revolution.

  9. Banger

    Kudos to Ilargi on his excellent essay. This is as fertile a piece on NC as I’ve seen because, in a nutshell it gives us a panorama of our situation and the real issues. This has been done before but it is always welcome and was done in a clear way.

    As Cassiodorus points out we have to deal with the problem of capitalism–and understand that this situation is inherent in capitalism that is, a brilliant and stunning political economic system that is dynamic and creative but we have now, right now, reached the end. We have experienced lately the law of diminishing returns–we’ve gone as far as capitalism can take us and now we face a vista where there is no possibility of real growth (yes the rich can take more wealth from us or the Earth) and, in fact, no future for human beings, no role and ultimately nothing. Once the Singularity is reached in a couple of decades and machines become God hisself then what use are humans? We have reduced human beings to economic units and when they are no longer needed to produce what then? These sorts of questions are what ought to occupy us–there is no further point in tinkering with capitalism–it has no desirable future and it has not been able to stop history. We have to move on.

    1. They didn't leave me a choice

      Sounds like it’s time to develop molecular manufacturing technologies and the ultimate capitalism-killer: the personal nanofactory.

      But really, it’s funny how divergent the different visions of our future have gotten.

      The techno-utopianists with dreams of a dramatically changed human condition. Representing a vision of the universe as highly non-linear, one of exponential growths and wild swings.

      The neoprimitivists with their dreams of collapse, death and decay. Moral outcriers, condemning humanity for its sins against the great cyclical universe where everything comes back to haunt us, over and over again.

      And finally the status-quoists, those who want to maintain the system as it is, come hell or high waters on our shores. All will be fine if we just tweak parameter x a bit. Do a piecemeal reform there. No need to take a deep look at anything fundamental. No vision.

      All of the basic visions are on a collision course, all of their arguments have some merits, and plenty of demerits. Who are we again, and where are we going? Have any groups that matter here been forgotten?

      Ultimately reality itself will weed out the truth, but I’d still like to think our choices matter. Even if it is self-delusion.

      1. Nathanael

        The status-quoists are idiots.

        What we’ll actually end up with is going to be some bizarre hybrid somewhere between the visions of all the different utopians and dystopians.

        But the one thing which won’t happen is the status quo. It’s unsustainable and therefore it will stop.

        Change could have come through slow, incremental reforms, but we lost that chance sometime around the election of Ronald Reagan; with the lost 30 years, the environmental crises will hit us fast enough that incremental reforms won’t do much any more, and radical reforms will happen by default.

  10. spooz

    Kucinich’s NEED Act, which died in committee after he was gerrymandered out of office, included universal health care and a citizens dividend. The changes to monetary policy were too much for capitalists to handle, I guess.

    I commented on the Switzerland basic income referendum in a Ritholtz post yesterday. I think the first paragraph of my comment got me stuck in filters for awhile so I won’t repeat it. Another comment I made attacking a poster who recommended Murray’s “The Bell Curve” is still stuck in limbo:

    “I would love to see Switzerland’s basic income referendum pass, so the rest of the world can see the benefits of a citizens dividend. Of course, the fact that the rest of the world has figured out a better way (single payer health care) doesn’t mean it has a chance in a country where capitalists are doing everything possible to undermine social benefits of citizenship. Corporations, who like to be treated like citizens, don’t need health care.”

  11. danb

    What Illargi knows but omits in this piece is the fact of the location of human economic activity inside the biosphere. This is the source of his worldview. The peak of world light sweet crude oil production occurred in 2005, thus making the current system -with all its growth fixation, depredations, scams, corruption, class exploitations and despoliation of nature- unsustainable. As forecast by Meadows et al 40 years ago, we’re at the limits to growth while -at present- trapped inside a culture wholly at odds with and therefore unable to perceive this simple fact.

    1. anon y'mouse

      then we have to get over the spin that “pain of contraction” is necessary, when it seems to be that only the lower orders is suffering from that pain.

      if there is to be contraction, let all share it. i’m not even certain that we can consider it painful. our society as constructed around capitalism is wasteful. 10 cals to create 1 food calorie? pointless waste. landfills full of plastic crap that broke the first time someone tried to use it? more waste. shipping containers of food around the globe to places that have enough arable land to produce it already? driving one’s car 3 blocks to the store for a loaf of bread?

      1. from Mexico

        I think that’s right.

        To begin with, one must start asking the question: “What is wealth?”

        Wealth, it seems to me, is the accumulation or possession of that which we value. But here’s the rub: not everyone values the same things. The assorted lot of psychopaths, sociopaths and other charachteropaths who currently rule over us value very different things than the remaining 80 or 85% of us do.

        The holy grail of capitalism, if we take its promises at face value, is maximizing aggregate utility, or aggregate material production. “The only possible way to improve our societies, so we are told,” Ilargi writes, “is through economic growth.” And granted, this is, putatively at least, the alpha and omega of capitalism. Anything and everything required to inhance GDP growth is fair game. Nothing else matters.

        The religious-metaphysical evolution involved in arriving at this value system looks something like this: Modernism → Progressivism → Materialism → Utilitarianism → Capitlaism.

        “Practically every moral theory, whether utilitarian or intuitional, insists on the goodness of benevolence, justice, kindness, and unselfishness,” counsels the Christian theologian Reinhold Niebuhr. “Even when economic self-seeking is approved, as in the political morality of Adam Smith, the criterion of judgment is the good of the whole” (Reinhold Niebuhr, Moral Man and Immoral Society).

        Of course none of the beautiful dreams of Adam Smith and his diciples came true, at least not by following their theories and policy prescriptions. As Niebuhr goes on to conclude: “The utilitarian movement of the nineteenth century had the laudable purpose of persuading men to achieve a decent harmony between selfish and social impulses by diverting egoistic impulse to the most inclusive possible social objectives. It was significant that it merely provided the rising middle class with a nice moral justification for following its own interests.”

        1. Cassiodorus

          For at least a century and a half, now, there has been a conceptual division in the term “value,” most famously in the works of Karl Marx. There is, on the one hand, “use-value,” e.g. the value of a hammer in pounding nails into wood, and on the other hand “exchange-value,” the value of a hammer on the open marketplace. Use-value is idiosyncratic: exchange-value can be standardized and substituted for money.

          So it really doesn’t matter what, specifically, the elites in charge value, because capitalism is a regime in which everyone must stand or fall according to the exchange-value of their labor-power. The elites can value anything and everything because they have accumulated so much more of exchange-value than the rest of us, whereas the great majority of us must value survival. I think that this, more than anything else, is what Raúl Ilargi Meijer’s article describes.

          1. from Mexico

            So how would you classify the values of someone like Manning or Snowden using your two-world theory? Both gave up practically everything material in this world in order to pursue their values. Are their values “use-values” or “exchange-values”?

            1. Cassiodorus

              I’m having a bit of trouble conceptualizing your example of “value” as being the least bit economic, or even political. The elites are economic creatures, and their sociopathic values are based on the accumulation of wealth and power for themselves. Manning and Snowden are self-sacrificing, so there’s nothing of exchange-value to be found there. Perhaps Manning and Snowden benefit from our knowing what they have told us, but there’s no “exchange” there.

        2. MikeNY

          You’re right, from Mexico, about the materialism of modern capitalist economics. It has “physics envy”, and so has come to believe that only what can be measured, quantified, is real. This explains its fascination with econometrics.

          It also explains its apparent moral bankruptcy.

  12. Paul Tioxon

    In history, there was not much quibbling over the designation of WWI and then WWII. WE are living in the midst of The Second Great Depression, Global Depression II, GDII. And how will the G20 deal with GDII? Already, many alternatives are up and running without the mass of the nation state behind them. Cooperatives are an example of this.

    The great solution to capitalism is the decommodification of society and the state, leaving the market, the economy, to serve the larger purpose of social order, without allowing the control over the circulation of money to be transformed into de facto political power. Not to have society serve as a labor pool and the state to stand as the sword and the shield of profits. The capital accumulation, the productive means of arable soil, fixed plants and infrastructure along with the social capital of education and health care, can be transmitted intact from one generation to the next, much like the piles of cash that serve as the symbolic unit of account for the actual wealth that we have labored to produce over the past generations. Humanity needs and consumes the food on the table, the roof over our heads and the clothes on our back. Material productivity what we actually consume, as opposed to the money of financialized capitalism, which in its increasing digitized form we couldn’t even burn to stay warm in the winter, or use to light up a Cuban cigar at the Union League.

    Schumpeter pointed out a long time ago that with capitalism, we can not have the bourgeoisie who already run the economy also run the nation. They have no business with politics. They will see the nation state not for what it is, but as a commodity to be used to make more money. That is the plaintive cry of the past 35 years of reactionary politics, head quartered in the republican party: government should be run like a business. No, it can’t, it will stop being a government and be fought over by different factions who want all of the profits from political power and deny it to their competition. You can see the results of that mindset today.

    And it will continue here in America and around the world until it drops dead by its own means. What will replace it depends on what we do today. Who we vote for, how we spend, what risks we are willing to take to start our lives over again from scratch, out of necessity for some of us that are older and out of a sense of adventure by some of us that are younger. There are enough people in America, and around the world, that have benefited by the investment in public education and public health for generations who can try out new means of maintaining and sustaining a livable social order. It doesn’t have to be argued out in the last final detail on the national level. It has and can continue to grow at the local level. Socializing ourselves to become a new kind of people that behaves differently than the rat race is happening on a smaller scale and may continue to grow and maybe be adopted in a Marshal Plan scale national reconstruction out the rubble a lot people simply can’t will their way out of no matter how how good their intentions or how well meaning they are. Obstacles are depressed mental state of many people who are so burned out and given up on any attempts to do anything at all, they only attack others for trying.

    If I could communicate anything at all in this post today, it would be to stop attacking one another because you think they may vote, read the dailykos or do something else you think is reprehensible. After hearing so many put downs here about obamabots and kos kids, I went over to the site, and in addition to partisan politics I saw plenty of authentic liberal bashing of Obama and dem policies that were pro corporate or pro war and anti environment, etc.

    LBJ went from Great Society heroics and Civil Rights and Voting Rights justice to being disemboweled by the New Left for his war in Viet Nam. HEY HEY LBJ, How many babies did you KILL today? He wasn’t cut any slack by the radicals. I get that. But he wasn’t denounced for the good he really did do, he was denounced for the war he really got us into with the phony Gulf of Tonkin lie. I can root for the good that I see coming from the pols and scream murder at the same people when I think its time to scream murder: when they are committing murder in case you were wondering.

    1. charles sereno

      If you haven’t already, see Episode 7 of The Untold History of the US which is now online. It presents a complete picture of LBJ (worth it just for his SPICY remarks).

    2. Banger

      I think what you are saying makes a lot of sense particularly about decomodification of life–this is one of the tragedies of capitalism and inherent in it. Capitalism has run its course and cannot and will not continue for much longer before it regresses into feudalism.

      As for LBJ, we differ there–he was an interesting Prez but, in my view, made the deal with the national security state to whitewash the Kennedy Assassination and expand the Vietnam War, which he knew full well could not be won as some of his more frank conversations on his WH tapes indicated but he so feared the reaction.

      As for critiquing others–you have a point but the fact remains that our fellow leftists are not doing anything at all DailyKos may be more open now but many of us were purged from the site years ago because we did not follow the Party line. When I last was there it was a DP site and they made it plain and continued to make it plain non-DP people were not welcome.

      As for voting, I think we ought to vote as a civic duty but not in hope that it will create political change.

      1. Nathanael

        I was purged from DailyKos for telling the truth rather bluntly. *shrug*.

        DailyKos has run its course; after a pretty good run where he managed to be on top of trends consistently for several years, Markos missed the boat about 6 months ago. Some other website will take up the mantle of “like reading next year’s news today”

  13. ray benish

    Recreational Vehicles(RVs) and rural poor.
    Several weeks ago my wife and I traveled in our truck camper through Central Oregon and Southwest Idaho. It was our first trip in our newly purchased RV. Stopping at night in RV Parks was a real eye opener. Many of these RV Parks are populated not by short term users, but by long term poor. Amazing that the level of poverty we witnessed is so rampant and unacknowledged. Small 20 foot and 30 foot Fifth Wheels housed entire families. School buses stop and pick up long lines of children in the mornings. We learned that monthly space rates averaged $350. with $50. for electrical so for around $400.00 a family would have a roof and basic utilities, much less than in a house in town. Has anyone seen data on the number of long term residents in RV Parks?
    Ironic isn’t it that “recreational vehicles” become permanent homes for those who would otherwise be homeless.

      1. diptherio

        My mechanic lives in a fifth-wheel next to his garage with his wife and two kids. I get the feeling that it may be partially of his choosing, but it’s hard to tell and it seems awkward to ask…

    1. avg John

      $400.00 per month? Those were the upper-middle class poor. Next time spend your evenings in midtown motels to experience the mid-class poor. But if you want to see the poor poor, check the city parks or the shelters.

    2. Nathanael

      In semi-rural areas, “mobile home” parks have been the mainstay living environment of the working poor for a very, very long time — since at least the 1980s. That isn’t new.

  14. Stegiel

    The problem simply is the State. Far from being a necessary evil, it is simply evil. In bed with the rich, the big businesses, the kleptocrats own the political discussion and the political outcomes. I am not optimistic that the outcome from the elevation of theft to state power has a happy ending. Barbarian is following barbarian on the banks of the Potomac and after the Auto-Golpe of September 11, 2001 we find ourselves enmeshed in a totalitarian planetary nightmare from which we cannot awake.

  15. BobbyGvegas

    A great post, which I will forward on, and cite on one of my blogs. Depressing, this reality — that, even in a zero- or negative sum game, one with loose consequence coupling (i.e., long wash-around times), there are numerous nominal “winners.” We appear to now be in such a negative sum game. Absent a rational course correction, tragedy looms, replete with eventual savagery we naively think beyond our bounds.

  16. Hugh

    Conservatives used to rail against “social engineering”, using taxing to accomplish social purposes. But the truth is taxing, spending, legislation, and regulation are inherently social engineering. Their purpose is to redistribute wealth. The only question is cui bono? The few or the many?

    The citations at the end of the article are weak. It is as always about the definitions. The threshold levels for poverty are set way too low. They correspond to nothing in reality. $23,000 for a two parent, two child family? Who are they kidding? What we should be looking at is whether people have the basics for a meaningful life, not just immiserated survival. But if you want to play the game of incomes, double the threshold incomes. 106 million Americans or 34% of the population have incomes that are less than or up to twice the poverty thresholds.

    Most adult Americans work, but with a few minor exceptions only those who get paid are considered to have jobs. It says a lot about our society that we think this way. A parent taking care of children or an adult caregiver for a parent or disabled spouse is not considered to have a job, and usually is not paid, even as some CEO makes tens of millions destroying a company, putting thousands out of work, and ending the pensions of thousands more. You tell me which of these as a real job.

    1. anon y'mouse

      the voice of justice speaks.

      $24k is what it is taking for two of us here in no-frills, no-thrills land. so yes, that poverty level is deliberately set so low that relatively few, in the past, would fall into it.

      1. craazyboy

        ZIRP has caused me to keep even more careful track of expenses than usual, and I can say that if I stopped paying rent and moved into my paid off car, my remaining cut to the bone expenses would be at poverty level.

        Sounds about right. Gotta have a car in America.

  17. tyler

    Is Illargi on the payroll of “Fix The Debt”? Seriously, if I see one more negative connotation around America’s national savings, aka its national debt, I am going to stop telling people to visit this site.

    I apologize. I admit to being a perfectionist, but here’s the thing: if I want to hear someone speak negatively about our national savings, aka our national debt, I can just turn on right-wing talk radio.

    1. Ilargi

      A perfectionist who cannot spell my name. Amusing. Just as, Tyller, though I have no idea what your hang up is as per US debt, it still amuses me every single time someone tries to link me, or The Automatic Earth as a whole, to anything right wing, certainly talk radio. One of my great delights is when one of those enormous right wing sites read by many millions though nobody ever heard of them, quotes, or links to, me, like last week when I reported that the IMF is seriously discussing a one time capital levy of 10% on every European’s savings, and every American’s shortly thereafter. David Icke no like.

      1. Nathanael

        The issue of money is critically important.

        Anyone who thinks that “the national debt” is a problem is extremely mistaken and is on the wrong side of the issue of *money*.

        The right side of the issue of money is the side of the “Greenbackers”. We print as much money as we need; if there’s a boom, we can always shred it. This is pretty basic, and yet very few understand it.

  18. BITFU

    You’re asking not just an entire Society or Culture, but an entire Civilization to make a massive overhaul based on a redistribution concept that has garnered only mixed results.

    It doesn’t mean you are wrong, of course. But you’re asking too much too quickly.

    So how about starting with something more modest?

    Instead of redistributing wealth of Civilization (we are Globalized after all), how about just telling us how you’d redistribute the wealth of Bloggers? [We need to start really small and we’ll work our way up to the Financial Overlords.]

    So…both Automatic Earth and Naked Cap ask for donations? Do those funds get redistributed, or are they yours? [It’d be hilarious if your response amounted to, “Well we shouldn’t have to redistribute those funds. We earned them as a gift”.]

    But seriously, what happens to that money? How about your advertising money? You busted your ass, made a great blog, lots of readers, therefore ad. money—should it be redistributed?

    How about all your readers? Perhaps we should redistribute them to some new upstart bloggers with a simple message upon typing your blog into the browser—“We realize you are trying to visit Naked Capitalism (or Automatic Earth), but we thought you would like this new blog “Down with Capitalism” instead. Enjoy!”

    Hey, what about compensation for your Commenters? They bring value to your blog. In fact, the Commenting Section is often the strongest part of many blogs. They should benefit too.

    What about the TMZ style sites that generate a lot more traffic the econ blogs? Should they be obliged to help you traffic, give you some of their ad dollars? [“YES! YES! YES!”]

    Who–exactly–decides how it will all get redistributed?

    I’d bet you can’t even coherently come up with a legitimate plan for a small, closed economy, like blogging.

    But it doesn’t stop you and it does not matter. As far as your concerned, I’m playing with an irrelevant hypothetical and niggling details.

    Speaking of hipster doofuses, this post reminds me of that godawful song from 4 Non-Blonds where she screams hysterically “FOR REVOLUTION!!!” without any concept of what to replace it with.


    Just REDISTRIBUTE. It’ll be easy.

    1. Ilargi

      Hmm, got kind of carried away there, didn’t you, from like the 2nd paragraph onwards? Not that you started off that great; I never asked anyone to do anything, as you claim, but still, you seemed to get lost after that. Just this side of trolling, but only just.

      If I thought redistributing the spoils of blogging were an issue urgent to the wellbeing of mankind, I might write about it. But I don’t, and why anyone would want to waste all these words telling me I should anyway escapes me, especially when said anyone doesn’t even think I could coherently do so. Why don’t you do it yourself instead? All I see left for me to do right now is to stop wasting my own words, right here. And if it is any consolation, you did make me chuckle suggesting you should be paid for your words. Good luck trying to find support for that.

      1. ChrisPacific

        He’s right, you know. I’ve been running some analysis on how we could end poverty by redistributing the wealth of bloggers, and the numbers just don’t stack up. There just aren’t enough of them out there to make it work. If we can’t even get the model to function on a small scale like this, imagine how much harder it will be if we try to apply it on a larger scale by redistributing the wealth of the rich!

        It’s just too difficult, and even if we could somehow figure out how to make it work, it would surely be unenforceable. Why, even to consider it you’d need to assume some kind of a collective entity with the authority to make regulatory decisions and enforce compliance for everyone. And since people would probably resist paying, you’d need some kind of arrangement with employers and brokers and the like to automatically collect the funds before they got them. You might even need a whole department dedicated to performing just that function!

        As you can see, trying to redistribute the wealth of the rich is clearly an impossible task. I’m sure no country in the world has ever succeeded at it. I recommend you give up and have a beer instead. Maybe you can have a word with this bartender – he says he won’t give me a beer unless I redistribute some of my wealth to him.

  19. RBHoughton

    Couple of bits that seemed unclear.

    1/ The AngloAmerican economic model imperatively needs growth so debtors (Mortgage hoilders / public companies) can pay creditors (banks / shareholders).

    Concern today should be that growth is coming from inflation. Its clearly not coming from commerce or industry. It can only be financial jiggerypokery.

    The financial industry is building another blowout and praying that no-one in the loop drops the ball – by which I mean salting it away in land or shorting metals / grains.

    If investors can keep steady support for paper metals and grains, we maintain the appearance of health and even growth by employing our paper mountain to suggest a relative absence of inflation. Waahhh.

    One final disappointment in a generally disappointing scene – we lack a government in this world with the confidence and statesmanship to act alone. They all watch each other more closely than they watch their own shop and copy anything new. Desperadoes.

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