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"It's capitalism or a habitable planet - you can't have both"

by Chris Kulczycki Thu Feb 9th, 2006 at 03:13:35 PM EST

Writing in the Guardian last week, Robert Newman argues that capitalism, as we know it, is unsustainable in a world threatened with peak oil and massive climate change.

Capitalism is not sustainable by its very nature. It is predicated on infinitely expanding markets, faster consumption and bigger production in a finite planet. And yet this ideological model remains the central organising principle of our lives, and as long as it continues to be so it will automatically undo (with its invisible hand) every single green initiative anybody cares to come up with.

In other words the self-interest and greed of corporations must work against those solutions that can mitigate the effects of climate change and peak oil. This is proven, so far as it goes, by the actions of Bushco and his corporate cronies.

From the diaries ~ whataboutbob


Much discussion of energy, with never a word about power, leads to the fallacy of a low-impact, green capitalism somehow put at the service of environmentalism. In reality, power concentrates around wealth. Private ownership of trade and industry means that the decisive political force in the world is private power. The corporation will outflank every puny law and regulation that seeks to constrain its profitability. It therefore stands in the way of the functioning democracy needed to tackle climate change. Only by breaking up corporate power and bringing it under social control will we be able to overcome the global environmental crisis.

Rhetoric occasionally gets in the way of logic. The problem is not with capitalism per-say, but with the over-concentration of power. People selling produce is good, but supermarkets are bad:

The very model of the supermarket is unsustainable, what with the packaging, food miles and destruction of British farming. Small, independent suppliers, processors and retailers or community-owned shops selling locally produced food provide a social glue and reduce carbon emissions.

Of course what Newman says will never be seriously considered, much less accepted, At least not in those countries devoted to the Anglo-Saxon economic model.

Many career environmentalists fear that an anti-capitalist position is what's alienating the mainstream from their irresistible arguments. But is it not more likely that people are stunned into inaction by the bizarre discrepancy between how extreme the crisis described and how insipid the solutions proposed?

Exactly. As I wrote yesterday: "It is obvious to anyone who has kept up with energy news that in the post peak-oil era there is no single or even combination of alternative technologies that can give us the amount of energy that we now get from oil. Oil sands, coal based oil, bio-fuels, wind power, wave, more nuclear plants, and who knows what else will come on line. But even the combination of all those things will not provide us with the same amount of energy as we now get from oil. This is the one monumental fact about peak-oil that most people still don't want to grasp."

Hybrid cars and florescent light bulbs are great, but not the solution. The massive discrepancy between the energy available today and that available in a post oil economy has not been grasped by the vast majority.

It will take, argues peak-oil expert Richard Heinberg, a second world war effort if many of us are to come through this epoch. Not least because modern agribusiness puts hundreds of calories of fossil-fuel energy into the fields for each calorie of food energy produced.
Catch-22, of course, is that the very worst fate that could befall our species is the discovery of huge new reserves of oil, or even the burning into the sky of all the oil that's already known about, because the climate chaos that would unleash would make the mere collapse of industrial society a sideshow bagatelle. Therefore, since we've got to make the switch from oil anyway, why not do it now?

Does anyone doubt that if another elephant field were found, a reserve as large as the Saudi fields, alternative energy research would slow to a trickle.

If we are all still in denial about the radical changes coming - and all of us still are - there are sound geological reasons for our denial. We have lived in an era of cheap, abundant energy. There never has and never will again be consumption like we have known. The petroleum interval, this one-off historical blip, this freakish bonanza, has led us to believe that the impossible is possible, that people in northern industrial cities can have suntans in winter and eat apples in summer. But much as the petroleum bubble has got us out of the habit of accepting the existence of zero-sum physical realities, it's wise to remember that they never went away. You can either have capitalism or a habitable planet. One or the other, not both.

There are groups who have been working to promote ideas like this. The most vocal of them may be AdBusters , which promotes an anti-consumerist, anti-corporate, and pro-environmental agenda. But they have little traction and get little respect among the mainstream media.

So there you have it comrades. What Marx, Mao, Lenin, and Trotsky failed to do might be accomplished be peak oil and climate change. Or it might not, and that is the real danger.

What do you think? Is capitalism, or corporatism, compatible with a post-oil world threatened by massive climate change? Will we, like the proverbial boiled frog, sit passively until it is too late?

Display:
I'll read this in more detail later, but I'm thinking I should dust up the 8-page special that The Independent published a few months ago on "How capitalism can save the world" (environmentally speaking) or something like that.

It has been argued before by others on this site that "greens are not left", and The Independent, being a liberal paper, certainly has its share of market greens (and posh greens, which bother me more than the market variety).

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Thu Feb 9th, 2006 at 12:44:59 PM EST
Let me know when you dust it off.  I'd love to read it, because I do think capitalism can save the environment -- again, as I said below, if given the proper direction.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Thu Feb 9th, 2006 at 01:41:27 PM EST
[ Parent ]
About 18 months ago, I wrote this:
[F]rom a Marxian point of view ownership of the means of production is an important way of classifying economic systems. I can see four kinds of ownership of the means of production:
  • individual ownership
  • communal ownership
  • corporate ownership
  • state ownership
The first is the only ownership by physical persons; the last three are ownership by legal persons. My contention here is that a capitalist economy is one in which ownership of capital is mostly individual, and that we live, in fact, in a corporatist economy which is not very different, in terms of efficiency, from a statist economy.
I suppose, paraphrasing John Stuart Mill, that capitalism has never had a fair trial in any country. Maybe capitalism can save the world, but I can only accept that alongside an acknowledgement that what we have right now is various degrees of free market, but not capitalism (either corporatism, or statism).

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Feb 9th, 2006 at 01:47:20 PM EST
[ Parent ]
Corporate ownership, however, simply means "Ownership by Multiple Individuals".  I don't think we can classify any economy as being anywhere near a free market.  It's like asking questions related to what life was like in the state of nature.  Was it Hobbesian or Lockeian or neither or some of both?  What we see that is especially damaging is government handouts to the very pieces of the economy that need to change -- tax breaks to oil companies, the opening of ANWR, and so on.  So, yes, how we run economies in today's world is a mixture of capitalism, corporatism, and socialism.

Capitalism has never had a fair trial because the debate is always held between people who think markets are always perfect and people who see it as some "great game" (system) of the elites.  Very few people are willing to evaluate it fairly.

It's a mistake to classify capitalism as a "system" in the same sense that socialism and fascism are systems.  A "system," in this sort of discussion, implies some level of planning by some powerful entity -- a government, a ruling class, whatever.  The difference is that capitalism relies on individuals making their own decisions, while socialism -- by "socialism," I mean it in the full-scale-central-planning sense, not social democracy -- and fascism are the products of design and involve manipulating people and their emotions.

Manipulation goes on all the time in "free market" economies.  Changing the tax code is a form of manipulation.  Slashing interest rates is a form of manipulation.  Hell, I'm advocating manipulation in my other comment down the thread.  What separates capitalism from systems like socialism and fascism is that it is not inherently evil, in my opinion.  Potentially dangerous?  Clearly.  But not evil.  I think it appeals more to human nature, while socialism and fascism are forced to appeal more to shallow emotions like jealousy and an "Us vs. Them" mentality.

I'll steal a bit from Churchill and say that, in my opinion, capitalism is the worst economic system, except for all the others.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Thu Feb 9th, 2006 at 02:26:51 PM EST
[ Parent ]
Why is socialism "inherently evil"? Why isn't capitalism? It guarantees that, unless redistributive action of some sort is taken all the resources and power will concentrate in the hands of a very small minority determined mainly by luck, which seems very unfair. You have a very strange view of human nature.
by Colman (colman at eurotrib.com) on Fri Feb 10th, 2006 at 02:29:19 AM EST
[ Parent ]
As opposed to -- what? -- the right to control of resources being concentrated in the hands of the Poliburo?  Socialism -- and, again, I'm talking about (or typing about) socialism as "government ownership of the means of production" -- is a far more elitist model than you'll ever find in capitalism.  A system that involves taking property that others have bought is, in my opinion, inherently evil.

You can't separate the right to control your property -- the "fruits of your labor" -- from the right to control your body, the right to privacy, and so on.  That's why I don't find it to be inherently evil.

Some of the successful companies have become successful through luck.  No doubt about it.  However, most become successful by offering better stuff at lower prices.  Why would someone use (say) AOL or MSN for their email when they can get a GMail or Yahoo account for free?  Why use Internet Explorer when Firefox is faster?  If, tomorrow, the US government completely annihilated barriers to foreign carmakers -- I believe the quotas are still in place, but I may be wrong -- GM and Ford would either be dead and buried or learn to compete, because the Japanese make better cars.

Explain to me how this is inherently evil, how any of this results in a concentration of resources, and why my view of human nature is apparently strange.

Now there's a point to be raised about, for example, the children of the wealthy being given a near-infinite number of advantages over those of the poor and working class, and only an idiot or an ideologue would deny that.  But is this really any different from the children of CPSU officials, back in the Soviet era, or from kids in North Korea, today?  It was, and is, much worse in those cases.  Certainly we should try to close as much of that starting-line gap as possible with solid education systems and allocation of funds that allows schools to choose the best students rather than the wealthiest and the politically connected.

In many cases -- and, obviously, I can only speak to the American system -- we have made a great deal of progress in that cause.  If a student in my home state, Florida, earns a 3.0 GPA in high school, he or she is automatically qualified to have 75% of his or her tuition paid for by the state.  If the student earns a 3.5, it's 100%.  Companies invest a great deal of money in universities here (more than the federal and state governments, I believe) because it's in their interest to do so, so that they have strong graduates coming into the workforce.  Again, is this inherently evil?  Is this a recipe for a concentration of resources?  No.

The concentration of resources that we're seeing right now is, at least in large part, a direct result of changes in the tax code under Reagan and Bush II -- not capitalism.  If you tax investment at a lower rate than income -- Bush's real plan is to eliminate taxes on investment completely -- you can't be surprised when people who earn their income from investment do better.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Fri Feb 10th, 2006 at 11:52:00 AM EST
[ Parent ]
The right to the fruits of your labout has nothing to do with the right to own land. I'll write more about this stuff when I get home.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Feb 10th, 2006 at 11:55:10 AM EST
[ Parent ]
As opposed to -- what? -- the right to control of resources being concentrated in the hands of the Poliburo?

Why do you equate socialism with Bolshevism (more precisely Stalin and post-Stalin Bolshevism)? What's wrong with control by democratically elected/controlled bodies?

A system that involves taking property that others have bought is, in my opinion, inherently evil.

Why? What is the source of the money others used to buy?

However, most become successful by offering better stuff at lower prices.

Plus marketing, plus business warfare against rivals, plus stealing ideas, plus corruption, plus price fixing. It is fine that Firefox could beat IE, but I do remember earlier times when Netscape was better but M$ forced it on the brink.

But is this really any different from the children of CPSU officials, back in the Soviet era, or from kids in North Korea, today?

Again: did anyone here propose the Soviet era or North Korea as model to follow? You may recall discussions about calling the economic system under 'communism' "state capitalism".

The concentration of resources that we're seeing right now is, at least in large part, a direct result of changes in the tax code under Reagan and Bush II -- not capitalism.

Is Reagan and Bush II not a consequence of capitalism?

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Fri Feb 10th, 2006 at 03:34:36 PM EST
[ Parent ]
Why do you equate socialism with Bolshevism (more precisely Stalin and post-Stalin Bolshevism)? What's wrong with control by democratically elected/controlled bodies?

What should I equate it with?

Control by democratically-elected/-controlled bodies is not possible to sustain, politically, in my opinion.  Further, it completely destroys the incentive to work hard.  What incentive would I have to produce more if I can't enjoy a large amount of the payoff if I'm successful?  What happens if a pro-private-property party is elected?  You seem to be under the impression that Marxian socialism is consistent with freedom and democracy.  It's not.

Why? What is the source of the money others used to buy?

Well, in the United States, the source is a series of very large printing presses held by the US Mint.  If you mean the source of wealth, it's a combination of many things: labor, R&D, demand (price), the funds initially invested to start the company, and so on.  (Surely we're not going to debate the labor theory of value, are we?)

Plus marketing, plus business warfare against rivals, plus stealing ideas, plus corruption, plus price fixing. It is fine that Firefox could beat IE, but I do remember earlier times when Netscape was better but M$ forced it on the brink.

Plus marketing.  Yes.  Business warfare?  If you mean competition, then I don't see the problem.  If not, then I'm not sure what you're talking about.

Corruption?  Sure.  But since when is socialism somehow immune from corruption?  (There's a mistake running along these lines that socialists constantly make: They compare capitalism, as it is, with perfection, and then compare the ideal socialist outcome with capitalism, again as it is.)  As far as price fixing is concerned, you bring up Microsoft and Netscape.  Microsoft -- and I've discussed this before -- enjoys the benefit of being a standard in a sector that, as of today, seems to require a standard.  It has the ability to set prices.  You'll get no argument from me, as an Apple user, about Microsoft's monopolistic practices and stealing of ideas.  But stealing ideas successfully is the result of a lack of protection of intellectual property rights.

Again: did anyone here propose the Soviet era or North Korea as model to follow? You may recall discussions about calling the economic system under 'communism' "state capitalism".

You're kidding, right?  That's all well and good, if you have a wonderful government and (say) a large supply of a profitable natural resource, which is not likely.  The likelihood of "state capitalism" being successful is just about zero.  I note that there is no mention of corruption here, either.

Is Reagan and Bush II not a consequence of capitalism?

No.  Reagan and Bush II were and are the consequences of democracy.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Mon Feb 13th, 2006 at 01:49:07 PM EST
[ Parent ]
What should I equate it with?

Gosh.

Control by democratically-elected/-controlled bodies is not possible to sustain, politically, in my opinion.

Please expound on that.

What incentive would I have to produce more if I can't enjoy a large amount of the payoff if I'm successful?

Ugh. Do CEOs and owners produce more? Or do their workers produce more?

You seem to be under the impression that Marxian socialism is consistent with freedom and democracy.  It's not.

Please. You apparently know Marxism and socialism only from books by those who denounce it.

If you mean the source of wealth, it's a combination of many things: labor, R&D, demand (price), the funds initially invested to start the company, and so on.

And where did those come from?

Business warfare?  If you mean competition, then I don't see the problem.  If not, then I'm not sure what you're talking about.

Well, wars between countries are also a form of competition, you surely can think of more than that.

There's a mistake running along these lines that socialists constantly make: They compare capitalism, as it is, with perfection, and then compare the ideal socialist outcome with capitalism, again as it is.

I was in fact criticising you for doing the exact corollary: you presented a clean image of capitalism and opposed it with the worst outcome of socialism.

stealing ideas successfully is the result of a lack of protection of intellectual property rights.

Don't be this naive. Business spying a la Zond/Kenetech/Enron/GE vs. Enercon can't be out-legislated, and a big company can also legally out-gun minors. And none of this changes the basic point that most companies don't become successful by offering better stuff at lower prices - that's business-school utopia.

The likelihood of "state capitalism" being successful is just about zero.

Exactly. Now tell me how you managed to read that comment on state capitalism as a socialist endorsement, right after rejecting the Soviet Union and North Korea as models to follow.

Reagan and Bush II were and are the consequences of democracy.

A democracy corrupted by capitalism. Nice that you can see the failure of the Soviet system as a failure of the system rather than bad leaders, but will plead to a deus ex machina when your favored system delivers something self-damaging.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Thu Feb 16th, 2006 at 08:23:00 AM EST
[ Parent ]
Business warfare?  If you mean competition, then I don't see the problem.  If not, then I'm not sure what you're talking about.

Well, wars between countries are also a form of competition, you surely can think of more than that.


Read War Is A Racket by Smedley Butler
After retiring from service, Butler became a popular speaker at meetings organized by veterans, communists, pacifists and church groups in the 1930s. Butler came forward to the U.S. Congress in 1934 to report that a proposed coup had been plotted by wealthy industrialists to overthrow the government of President Franklin D. Roosevelt.


A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Feb 16th, 2006 at 08:27:58 AM EST
[ Parent ]
Reagan and Bush II were and are the consequences of democracy.
Alexis de Tocqueville and Benjamin Franklin would have to agree with Drew.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Feb 16th, 2006 at 08:30:05 AM EST
[ Parent ]
capitalism relies on individuals making their own decisions

You seem to intend this to be a statement of fact, when it's a statement of theory.

The theory of free-market capitalism posits a system determined by individuals making their own decisions

might be a more accurate framing.

In fact, the accretion of wealth and power gives certain individual decisions an influence several scales of magnitude greater than those of other individuals. What are your personal economic choices worth, Drew, compared to those of (say) Bill Gates?

by afew (afew(a in a circle)eurotrib_dot_com) on Fri Feb 10th, 2006 at 03:41:14 AM EST
[ Parent ]
You're confusing the weight of decisions with the existence of decisions.  No one would deny that Bill Gates's decisions have more weight than mine.  He's the world's wealthiest person, and I am, well, not.  But he and I still make our own decisions.  I get to decide what kind of car I buy (obviously subject to my income), or whether or not I'll buy a car.  I get to decide whether to drink alcohol and smoke cigarettes.  These are all decisions that are part of the "system".  It is a fact.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Fri Feb 10th, 2006 at 12:03:35 PM EST
[ Parent ]
Drew, there was a time (the 19th century) when countries across Europe restricted voting rights to men who owned more property than a certain lower cut-off. The weight of decisions is important, too, and it is for a reason that we believe "one man-one vote" is better than "one dollar-one vote".

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Feb 10th, 2006 at 12:07:07 PM EST
[ Parent ]
Yes, and that was also the case in America for a time.  But while the weight of decisions matters -- I agree -- none of this changes the fact that we make our own decisions.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Fri Feb 10th, 2006 at 12:24:15 PM EST
[ Parent ]
Do you really not see the potential absurdity in that statement?
by Metatone (metatone [a|t] gmail (dot) com) on Fri Feb 10th, 2006 at 01:02:15 PM EST
[ Parent ]
No.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Fri Feb 10th, 2006 at 01:17:18 PM EST
[ Parent ]
oh. ok.

Perhaps it's a semantics thing. What is a decision, in your definition?

by Metatone (metatone [a|t] gmail (dot) com) on Fri Feb 10th, 2006 at 01:27:41 PM EST
[ Parent ]
Ha...I'm trying to word in a way that doesn't involve using the word "decision".  Could be semantics.

Princeton defines it as "the act of making up your mind about something."  I guess that would fit in with what I'm thinking, but I would add that here it involves a commitment to take a certain action -- e.g., saying, "I'm going to buy brand x's apple juice instead of brand y's."

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Fri Feb 10th, 2006 at 02:05:12 PM EST
[ Parent ]
Hmmm. Ok. I guess that explains it. Thanks for replying!
by Metatone (metatone [a|t] gmail (dot) com) on Fri Feb 10th, 2006 at 02:23:47 PM EST
[ Parent ]
No problemo.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Fri Feb 10th, 2006 at 02:30:31 PM EST
[ Parent ]
It is indeed a fact, but the examples you give show how derisory are the decisions you and I may take. We take consumer decisions. And we are not only manipulated by, say, fiscal incentives, but by the most formidable communications, marketing, advertizing machine in history.

You may reply that we can also be shareholders. But individual small shareholders have practically no power over corporate decisions. As Migeru points out, an individual is likely to in fact delegate her/is powers by buying into a fund; or, if s/he owns shares directly, not to own enough to make a difference.

I'd add to that that corporate ownership is far from "democratic" -- the number of top US (and Euro) corporations controlled by families (and handed down from generation to generation) is impressive.

At this point, you may want to say that this is the wrong kind of capitalism. OK. But then you really are looking forward to an ideal brand of capitalism that we have never yet seen. And I don't understand, from there on, why other people can't look forward to some other form of socio-economic organization without it being seen as "evil".

by afew (afew(a in a circle)eurotrib_dot_com) on Fri Feb 10th, 2006 at 02:40:26 PM EST
[ Parent ]
In today's world, most corporations are mostly owned by other corporations. At shareholders' meetings, most of the voting rights are exercised by functionnaries from other corporations. Direct ownership of capital by individuals is reduced to a few "high net worth" (they should say monetary worth) individuals. The rest of us, when we own capital, ususlly do so by putting our money into a fund, which means that the fund is the one that owns capital and makes economic decisions about what is done with that capital.

Communalism has never had a fair trial either because every time it has been tried since the 19th century it has instantly come under attack by a coalition of outside forces.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Fri Feb 10th, 2006 at 03:51:21 AM EST
[ Parent ]
simply means "Ownership by Multiple Individuals

No, this is wrong.  Corporations are private governments, accountable only to their share-holders and the public governments that charter them.  

When public governments lose control of the charter process--as happened over 100 years ago in the US, the result is private government with no accountability.  See (shameless plug) Thursday--The Autumnal City VII next door at Booman Tribune.

Why government with no accountability should be better than public government, is not clear to me.  

!?Free market?!  

My knowledge of Europe is weak, but I can assure you that there have been no free markets in any major industry in the US for well over 100 years.  That all ended with John D. Rockefeller, Andrew Carnegie, and their sort.  The later "trust-busting" never reduced the size, nor increased the number, of economic entities to the level that the markets became free rather than dominated by strong players.  

The resulting markets are not free.  They are administered.  

The Fates are kind.

by Gaianne on Fri Feb 10th, 2006 at 09:08:37 AM EST
[ Parent ]
No, this is wrong.  Corporations are private governments, accountable only to their share-holders and the public governments that charter them.

Oi.  And the shareholders make up...

"Ownership by Multiple Individuals"

Next:

My knowledge of Europe is weak, but I can assure you that there have been no free markets in any major industry in the US for well over 100 years.

Which is why I said,

I don't think we can classify any economy as being anywhere near a free market [,...]

...and mentioned the Hobbes/Locke State of Nature debate.

Now where does this idea of "no accountability" come from?  You just said they were accountable to the shareholders.  They're also accountable to the government, because they have to obey the law or face punishment.  It's the same thing I mentioned in the Wal-Mart thread: Companies can only get away with what the government allows them to get away with.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Fri Feb 10th, 2006 at 12:21:28 PM EST
[ Parent ]
Corporate personhood plays an important role in all this.  The "individuals" you are talking about are mostly corporations themselves.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Feb 10th, 2006 at 12:47:22 PM EST
[ Parent ]
Psychopaths.

TVOntario: The Corporation

A corporation is designated as a legal person under law. What kind of person would it be? Answer: A psychopath. While this may strike some as obvious, others will find The Corporation a real eye-opener as it delves into the mindset and character of corporate America. This insightful documentary comes to us from Mark Achbar (Manufacturing Consent: Noam Chomsky and the Media), Jennifer Abbott (A Cow at My Table), and Joel Bakan, whose book The Corporation: The Pathological Pursuit of Profit and Power (to be published March 8) serves as the basis for the film.

The Corporation: About the book

Beginning with its origins in the sixteenth century, Bakan traces the corporation's rise to dominance. In what Simon and Schuster describes as "the most revolutionary assessment of the corporation since Peter Drucker's early works", The Corporation makes the following claims:
  • Corporations are required by law to elevate their own interests above those of others, making them prone to prey upon and exploit others without regard for legal rules or moral limits.
  • Corporate social responsibility, though sometimes yielding positive results, most often serves to mask the corporation's true character, not to change it.
  • The corporation's unbridled self interest victimizes individuals, the environment, and even shareholders, and can cause corporations to self-destruct, as recent Wall Street scandals reveal.
  • Despite its flawed character, governments have freed the corporation from legal constraints through deregulation, and granted it ever greater power over society through privatization.
Bakan urges restoration of the corporation's original purpose, to serve the public interest, and calls for re-establishment of democratic control over the institution. Concrete, pragmatic, and realistic reforms are proposed. A groundbreaking book filled with big ideas and fascinating stories, The Corporation is original, provocative and informative.


A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Feb 10th, 2006 at 12:55:27 PM EST
[ Parent ]
The article was excerpted or summarized from Jonathon Porritt's new book Capitalism: As If the World Matters. The Independent will occasionally publish such 'promotional' material when it furthers their editorial line. Here's the publisher's blurb:
CAPITALISM AS IF THE WORLD MATTERS
By Jonathon Porritt
  • Tackles the most pressing problem of our time - how capitalism, and business, can provide a future of wealth, equity and ecological integrity
  • Destined to be one of the most important business, economics and politics books of the year
  • Jonathon Porritt, Co-Founder of Forum for the Future, is a leading influence on business and industry, the UK Government's foremost adviser on sustainable development and a well-known author, broadcaster and visionary

As our great economic machine grinds relentlessly forward into a future of declining fossil fuel supplies, climate change and ecosystem failure, humanity, by necessity, is beginning to question the very structure of the economy that has provided so much wealth, and inequity, across the world. In this fresh, politically charged analysis, Jonathon Porritt wades in on the most pressing question of the 21st century - can capitalism, as the only real economic game in town, be retooled to deliver a sustainable future? Porritt argues that indeed it can and it must as he lays out the framework for a new `sustainable capitalism' that cuts across the political divide and promises a prosperous future of wealth, equity and ecosystem integrity.


A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Feb 9th, 2006 at 06:36:38 PM EST
[ Parent ]
Everything you want to know about Free Market Environmentalism right here.  PERC and the Lone Mountain Coalition -- very influential members.  Tons of "educational" material and position papers on the site.  Batshit crazy idealogues.  Extra credit research:  google "C. Kenneth Orski" (meaning I can't bear to look right now).

Maybe we can eventually make language a complete impediment to understanding. -Hobbes
by Izzy (izzy at eurotrib dot com) on Thu Feb 9th, 2006 at 03:07:29 PM EST
[ Parent ]
I try to recall other similar discussions here. I remember, last year we discussed another article of Guardian:

Globalisation is an anomaly and its time is running out

Cheap energy and relative peace helped create a false doctrine

James Howard Kunstler
Thursday August 4, 2005

[...] Today's transient global economic relations are a product of very special transient circumstances, namely relative world peace and absolutely reliable supplies of cheap energy. Subtract either of these elements from the equation and you will see globalisation evaporate so quickly it will suck the air out of your lungs. It is significant that none of the cheerleaders for globalisation takes this equation into account. In fact, the American power elite is sleepwalking into a crisis so severe that the blowback may put both major political parties out of business.

Here is one of my comments in those threads:

[The] Thatcher-Reagan revolution is a luxury we can no longer afford.

Maybe, in a large extent, unrestricted capitalism would be a most sound economy policy, better than any socialisms, provided that resourses for basic commodities and the physical environment can be sustained. But this is hardly possible for long centuries. And it's becoming more and more clear that we do not have these favourite circumstances now.

by das monde on Fri Feb 10th, 2006 at 03:20:04 AM EST
[ Parent ]
I don't understand this logic. First of all the only alternative we've ever seen to capitalism was as bad as the worst of capitalism for the environment.

Secondly I don't understand the meme of our lifestyle is not sustainable.  Everybody seems to agree that we could do much the same stuff more efficiently - much higher mileage, better efficiency for electrical appliances, better insulation for homes - i.e. living the same way for less energy.  Furthermore, non fossil fuel alternatives exist. You combine the two and you get the same lifestyle with far less consumption of fossil fuels and thus less greenhouse gases as well.  

I think some people allow an ideological opposition to capitalism (arguable on its own merits) to bleed into pro-environment arguments even though one has little to do with the other.

by MarekNYC on Thu Feb 9th, 2006 at 01:30:28 PM EST
What alternative to capitalism would that be then? Did you mean state capitalism as practised in assorted "Communist" countries?
by Colman (colman at eurotrib.com) on Thu Feb 9th, 2006 at 01:31:43 PM EST
[ Parent ]
'state capitalism' in the Communist countries? Yes, as opposed to the various forms of 'free-market socialism' practiced in most of the world today, including the US. <snark>
by MarekNYC on Thu Feb 9th, 2006 at 01:35:17 PM EST
[ Parent ]
It depends on your lifestyle. If your ecological footprint is two or three times sustainable, then fine, efficiency may save you. If it's seven or eight times - as in the US - then you're screwed.
by Colman (colman at eurotrib.com) on Thu Feb 9th, 2006 at 01:32:55 PM EST
[ Parent ]
The discussion we have not had is one that explores exactly what sort of lifestyle efficiency combined with green power would leave us with. I think it would be far leaner than most realize.

As for alternatives to capitalism; Newman overstates the argument. We might instead frame it as alternatives to unbridled corporatism. Do you not agree that the current capitalist system, at least in most western countries, relies on ever expanding consumerism, and that that is incompatible with future conditions?


Do not feel safe. The poet remembers.
Czeslaw Milosz

by Chris Kulczycki on Thu Feb 9th, 2006 at 01:45:10 PM EST
[ Parent ]
I don't agree.  Ever-expanding consumerism doesn't necessitate environmentally-harmful activity.  It's the same statement I made to rdf a while back about whether productivity growth was really desirable: It's how we produce that needs to change.  Not how much.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Thu Feb 9th, 2006 at 01:52:21 PM EST
[ Parent ]
Do you not agree that the current capitalist system, at least in most western countries, relies on ever expanding consumerism, and that that is incompatible with future conditions?

 I disagree. Ever expanding consumerism can mean more and bigger, or better/more prestigious. More furniture, nicer furniture; bigger home, better located and prettier home; bigger and more wasteful car, more prestigious car; more clothes, nicer clothes. Maybe I'm biased by my own consumerist longings - high end cookware, high end organic food, nice wine, an apartment where the wind doesn't blow through the closed windows, more books - ok that one is 'more' but in general if I could spend as much as I wanted most of that spending would not cause greater consumption of resources.  

by MarekNYC on Thu Feb 9th, 2006 at 02:19:33 PM EST
[ Parent ]
I feel exactly the same way about consumption. As my Polish Grandmother said, "Only the rich can afford cheap stuff." So I've also always wanted better, not more. But we are the in the minority, the smallest of minorities. Tell that newly rich fellow in China that he should buy a custom built bicycle when he can get a small car for the same sum. For most consumerism means more and more.

Do not feel safe. The poet remembers.
Czeslaw Milosz
by Chris Kulczycki on Thu Feb 9th, 2006 at 02:54:56 PM EST
[ Parent ]
Tell that newly rich fellow in China that he should buy a custom built bicycle when he can get a small car for the same sum.

That had better be one hell of a bicycle.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Thu Feb 9th, 2006 at 02:56:42 PM EST
[ Parent ]
Many people spend $3000 to $8,000 on production carbon-fiber bikes, never mind top of the line custom bicycles by Alex Singer of Paris,or Richard Sachs (US) or Toei (Japan).



Do not feel safe. The poet remembers.
Czeslaw Milosz

by Chris Kulczycki on Thu Feb 9th, 2006 at 03:12:24 PM EST
[ Parent ]

It's kind of funny - I bought a new bicycle last summer.  Not one of these things though.  I could have bought quite a few copies of my bike for the price of one of those high-end carbon-fiber SUBs.

My point though is that there are a lot of decent bikes on the market that are still less than 1000$.

by ericy on Fri Feb 10th, 2006 at 09:54:19 AM EST
[ Parent ]
I survived in SoCal for 4+ years with less than $300 bikes, so...

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Feb 10th, 2006 at 10:02:46 AM EST
[ Parent ]
Of course there are, but the $10,000 custom bike is a little better. And there are plenty of good $10 bottles of wine, but the $100 bottles taste a little nicer. And $15,000 cars are fine, but some would prefer a big BMW. So you see my point, not everyone will share the idea of growing markets by simply making things better and better. Most would rather have more and more.

Do not feel safe. The poet remembers.
Czeslaw Milosz
by Chris Kulczycki on Fri Feb 10th, 2006 at 10:52:12 AM EST
[ Parent ]
Now you're making me not feel guilty about lusting after a new $800 bike. Of course the old "found in the dumpster after having been run over by a car" bike that I've been riding for a decade still works as well as ever...
by asdf on Fri Feb 10th, 2006 at 08:22:19 PM EST
[ Parent ]
Fair enough, but we're leaving out planned obsolescence.  How many computers and peripherals have we all gone through and why exactly?

Maybe we can eventually make language a complete impediment to understanding. -Hobbes
by Izzy (izzy at eurotrib dot com) on Thu Feb 9th, 2006 at 03:35:41 PM EST
[ Parent ]
Corporatism certainly is not, because the corporatists are encouraging oil consumption.  Look at the issue of ANWR.  Capitalism is perfectly compatible, if given the proper direction ("rules of the game").  What we should be doing is ripping apart any barrier to alternative energy and providing as massive an incentive as is humanly possible to encourage companies and individuals to move away from oil, even if that means giving up certain programs that are important to us.

We should be saying to people, "Hey, if you'll buy a hybrid vehicle, we'll cover more than the cost difference of a comparable gas-only car.  The Camry costs $5,000 less than the Prius?  Fine.  We'll let you write $7,000 off your taxes, if you'll buy the Prius."  And it's not as though the truck buyers are going to be left out much longer.  Ford has a 30+ mpg SUV coming to the market.  (Nice to know Ford has finally pulled its head out of its ass.)

And I have no doubt that people would be willing to give up their tax cuts for that, if it were properly explained to them.

Many people are talking about a huge "game" coming in the future, in which the US and China scramble for access to oil.  That scares the hell out of me.  It screams of a foundation for a stand-off or, worse, a war.  I don't know why people refuse to wake up to the fact that our dependency is a national security issue.  It funds terrorism.  It ruins the environment.  It leaves the economy beholden to brutal regimes.  It makes us hypocrites, because we then have to pander to those brutal regimes instead of pushing for freedom and democracy in those countries.  And no one in Washington, even on the left, is talking about it.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Thu Feb 9th, 2006 at 01:36:34 PM EST
Are you suggesting social engineering though tax cuts? You must be a commie  ;<)

In the US, at least, there is such a disconnect that it would be impossible to explain to "them" the advantages of giving up tax cuts. We worship at the altar of short-term profits, and I fear this is too engrained in the national psyche. You might as well be a Mormon missionary in Mecca.


Do not feel safe. The poet remembers.
Czeslaw Milosz

by Chris Kulczycki on Thu Feb 9th, 2006 at 01:53:42 PM EST
[ Parent ]
Maybe so, but, as the old saying goes, you never know until you try.  I'd like to see the Democrats at least try.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Thu Feb 9th, 2006 at 02:32:16 PM EST
[ Parent ]
Hahahahah! Pretty funny. As if the Democrats aren't 100% in bed with industrial capitalism just like the Republicans!
by asdf on Thu Feb 9th, 2006 at 09:34:12 PM EST
[ Parent ]
Rhetoric occasionally gets in the way of logic. The problem is not with capitalism per-say, but with the over-concentration of power.

Methinks you all overlook a central point here, but maybe it's only my own hard-leftism that makes me see it.

The argument is that what is your problem, over-concentration of power, is a direct result of capitalism. You can denounce corporatism to no end, but the formation of ever larger companies is a natural process in capitalism. (I would hazard to say that, just as the black market proved in the 'real existing socialism' here that you can't outlaw demand pricing, you can't prevent the formation of corporations with laws either.) This concentration is the stronger in fields producing for saturated markets. And with them comes the concentration of democratically-uncontrolled power.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Thu Feb 9th, 2006 at 03:22:55 PM EST
Well, the Mafia and other organisations are proof that corporations of a kind will arise in different legal environments...
by Metatone (metatone [a|t] gmail (dot) com) on Thu Feb 9th, 2006 at 03:36:11 PM EST
[ Parent ]
that headline is the wisest opinion i have seen posted here, or in fact anywhere, since a long time. "capitalism or survival" is one of those big nasty facts which need to be accepted as is, not qualified or commented.
by name (name@spammez_moi_sivouplait.org) on Thu Feb 9th, 2006 at 03:48:35 PM EST
Interesting:
"Capitalism or survival" is boolean-equivalent to "Socialismo o muerte"

_______________________________________________

"Those who fight might lose, those who don't fight have already lost." - Berthold Brecht

by RavenTS on Fri Feb 10th, 2006 at 07:03:42 AM EST
[ Parent ]
Only if you accept that in the realm of economic systems there is a choice between only two mutually exclusive alternatives, capitalism and socialism.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Feb 10th, 2006 at 07:08:07 AM EST
[ Parent ]
that's correct. And you ave to take "or" as meaning "either or".

_______________________________________________

"Those who fight might lose, those who don't fight have already lost." - Berthold Brecht

by RavenTS on Fri Feb 10th, 2006 at 09:19:26 AM EST
[ Parent ]
By socialism you obviously mean state socialism.  

Both capitalism and state socialism are economic systems that have only existed or been used for very short periods of time--mere years or centuries.  

Other economic systems have existed, in the past, which lasted thousands of years.  They tend to look (to us) socialistic, although they are not at all like state socialism.  And they did not exist as free-standing or plug-in systems, but were part of a wider social and religious (spiritual) context.  They did not try to maximize, they tried to optimize over a wide range of criteria.  

Which brings me to a theorem in cybernetics:  Any system which tries to maximize a single value is guaranteed to change crash.  So trying to tweak maximizing systems like capitalism or state socialism is useless:  They will crash anyway.  

It is time to start looking for something that works.  

The Fates are kind.

by Gaianne on Fri Feb 10th, 2006 at 09:35:54 AM EST
[ Parent ]
Probably the main issue of capitalism (and even more in the marxism ) that affects the environment is the idea that the resources of the earth belongs to everybody. No. If people want to live on an environmentally clean planet, they should understand that the natural resources belongs to the Earth. If you need resources, do it like a trade deal: cut a tree and then plant one.

The population of Earth is growing rapidly. The increasing of the population leads to overconsumption of resources to the point that the nature cannot replace them. People have to help it. Unless they understand that the nature belongs to neither the corporations, nor the governments, we will breath smog and drink toxic water.

----- Loyalty to the country always. Loyalty to the government when it deserves it -Mark Twain

by blackspot (pmitov (no spam) @ gmail) on Thu Feb 9th, 2006 at 05:45:23 PM EST
That reminds me of A Campfire Song by 10,000 Maniacs (with backup vocals by Michael Stipe of R.E.M.)  Lyrics:

A lie to say, "O my mountain has coal veins and beds to
dig.
500 men with axes and they all dig for me."
A lie to say, "O my river where many fish do swim,
half of the catch is mine when you haul your nets in."
Never will he believe that his greed is a blinding ray.
No devil or redeemer will cheat him.
He'll take his gold to where he's lying cold.

A lie to say "O my forest has trees that block the sun
and when I cut them down I don't answer to anyone."
No, no, never will he believe that his greed is a blinding ray
no devil or redeemer can cheat him.
He'll take his gold where he's lying cold.
Six deep in the grave



Maybe we can eventually make language a complete impediment to understanding. -Hobbes
by Izzy (izzy at eurotrib dot com) on Thu Feb 9th, 2006 at 06:06:15 PM EST
[ Parent ]

Again, the key here is that we're going to have to change the ways we live and work in a post-oil society. Efficiency is suddenly going to become vital, and many things (like diets) are going to need vast overhauls. Ecological footprint's only part of the problem. One must also remember that one can have a life that is as good - as happy, as productive - in such a society, even if one has less stuff.

I think capitalism may be compatible with a post-oil society if externalities are properly accounted for. The current environmentally hostile society seems to me to be a direct result of unaccounted-for externalities. Oil, for example, would be significantly more expensive if all the externalities - pollution, extremely limited reserves, etc - were taken into account, and it were actually sold in a free market. And so capitalist economies have evolved to take advantage of this unaccounted-for cost.

Of course, as soon as one starts talking about accounting for externalities, Objectivists and conservatives start screaming about communism...

by Egarwaen on Thu Feb 9th, 2006 at 06:58:41 PM EST
One must also remember that one can have a life that is as good - as happy, as productive - in such a society, even if one has less stuff.

i totally agree. a lot of modern neurosis stems from lack of contact with the earth, and working to grow food will sure help people's waistlines!

if we can keep the web up and running, and enough power to run computers, we can continue the amazing evolutionary progress that people are experiencing through worldwide instant communication.

designing anything with planned obsolescence in mind would become a capital offence. (capital, get it?)

when bush said how america is addicted to oil, his eyes darted instantly w-a-y left, and i felt like saying to the telly:

'well, if america's so addicted, whose friends are the pushers?'

don't worry little sheeple, daddy will watch over you while you shop till you drop, everythings ok, it's only poor families' sons and daughters dying in our midnight junky iraq-pharmacy heist, only no-count losers, just like the help pouring our wine at dinner.

play your cards right and you can all have some trickle-down...buy shares in texa-neo-enron or hellsaburden, and you won't need social security, you'll be rich like us, part of my base!

and be cool about gas prices, rest assured we'll strip-mine every valley and mountain, poison every stream and breeze that god gave us to sell back to you, and you'll thank us, as your kids dope up on ritalin-dumbed-down 'education' and learn that peace is for lame, weak suckers and war is good for bidness.

and don't worry your pretty little heads about elections, just vote, we'll do the counting.

count on that!

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Thu Feb 9th, 2006 at 09:04:04 PM EST
[ Parent ]
working to grow food will sure help people's waistlines!

Well, not everyone would have to work to grow food. There are green agriculture methods that produce more food per acre than "modern" methods. And they're significantly less reliant on petroleum to boot! Though that's not to say that everyone shouldn't grow food if they can - backyard and windowsill gardens can provide quite a nice suppliment to store-bought produce.

if we can keep the web up and running, and enough power to run computers, we can continue the amazing evolutionary progress that people are experiencing through worldwide instant communication.

Yup. Physical goods are a real pain in the ass to move around, and in the post-oil era, we'll have to localize production of them much more. Non-physical goods (culture) are much cheaper to move around, take up much less space, and tend to be of greater value when it comes to personal development. This would also hopefully help reverse the monoculture trend, as regions would be forced to diversify their cultural production so as to have something to trade.

designing anything with planned obsolescence in mind would become a capital offence. (capital, get it?)

Again, something that's very much on my mind. One reason why I buy Apple - their tech tends to lose value or wear out very slowly. I know people who are still using Apple hardware from 5 years ago or so (clamshell iBooks, for example) without a hitch. Planned obsolesence is just a disgusting waste of resources, and bad engineering to boot. Good modularization does away with it nearly completely.

by Egarwaen on Thu Feb 9th, 2006 at 09:30:47 PM EST
[ Parent ]
Yup. Physical goods are a real pain in the ass to move around, and in the post-oil era, we'll have to localize production of them much more. Non-physical goods (culture) are much cheaper to move around, take up much less space, and tend to be of greater value when it comes to personal development. This would also hopefully help reverse the monoculture trend, as regions would be forced to diversify their cultural production so as to have something to trade.

sooooo true.

i hope it turns out like the american indian way, where everyone worked about 3 hours a day in the fields, then hung out and 'cultured' each other for the rest of the day and night.

there is also the hawaiian model, where success was seen as the most amount of time you had to do 'nothing'!

i am an apple 'believer' too.

watching my partner torture herself with a pc is excruciating!

what is it with the servers these last 3 days?
it takes a minute of more for a page to draw..

oh well, it makes getting chores done a lot easier!

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Fri Feb 10th, 2006 at 07:48:04 AM EST
[ Parent ]
Post oil society? We certainly won't be forced into one - though I hope we move towards it.

There's plenty of oil in the tar sands of Canada and Venezuela.

Peak Oil is all about running out of easily-extracted crude.

Unfortunately, unconventional sources of oil can replace dwindling conventional supplies.

It often costs as much as $15 a barrel to get bitumen, a thick, sticky form of crude oil, out of the sands in Canada... compared with recovery costs as low as $2 a barrel for crude oil in parts of the Middle East. So it's a financial issue at the moment.

Refining the bitumen also costs much more than refining light crude.

By next year, the sands are expected to account for half of Canada's crude oil output and about 10 percent of overall oil production in North America. The U.S. Department of Energy last year included oil sands in their estimates of Canada's oil reserves, raising them from 4.9 billion to 180 billion barrels.

Venezuela has even more tar sands in the Orinoco region.

Atlantic Free Press

by ghandi (expatforums@gmail.com) on Fri Feb 10th, 2006 at 02:53:40 PM EST
[ Parent ]
There are some who think that oil sands will never produce more than 5 mbd. You might read this: http://www.eurotrib.com/story/2005/10/1/8211/51506

Do not feel safe. The poet remembers.
Czeslaw Milosz
by Chris Kulczycki on Fri Feb 10th, 2006 at 04:48:25 PM EST
[ Parent ]
jeez you guys, I'm supposed to be working for a living.

here's a thought:  perhaps what we call 'capitalism' today might better be called 'interest-ism' or 'usury'.  our financial mindset relies heavily on the notion of compound interest, an inherently aphysical concept which cannot be mapped onto the reality of biotic systems or the energy or mineral budget of a planet.  to realise these unnatural rates of return, real capital (natural capital, the only kind there is) has to be liquidated -- much as a business can be liquidated by selling off its premises and physical plant to realise a high return in a single year.  we maintain the fantasy of interest-ism only by liquidating real capital.

it has long seemed to me that compound interest is an inherently absurd premise.  how about a thought experiment?  let's say that in the time of Augustus we -- you or I, who statistically speaking might most likely have been skilled-crafts slaves or artisans at the time -- had invested a denarius -- call it a single copper penny -- at 5 percent interest compounded annually, and that the world financial system had remained stable ever since -- 2000 years for a nice round number.

compound interest calculation

tcl>expr 1 * pow(1.05,2000)                        
2.39110220461e+42

after 2000 years we'd have 2.39 times 10-to-the-42nd- power in pennies today.  how big is that number?

a pre-1982 US penny (when they were still mostly copper) had a mass of 3.1 grams.  if we pretend that our Roman copper penny was actually a US penny, then we would now, in theory, be the proud owners of ummm... 7.412e+42 grams of copper.

a kilogram is about 2 lbs or about 1/1000th of a US short ton.... we or our lineal descendants would own 7.412e+39 kilos of theoretical copper penny here, or 7.412e+36 tons of copper. check me on the numbers -- I'm doing this on the fly, back-of-envelope stuff -- but even if I've dropped an order or two of magnitude the grotesquerie of the calculation seems self-evident.

"Worldwide economic reserves of copper are stated to be 470 million tonnes by the USGS 2005 summary for copper. "  (ignore the rest of the article, this USGS quote is the relevant bit).

470 million tons is only 4.70e+8 -- so compound interest if applied literally to metals, would award us after 2000 years at 5 percent, significantly (to say the least) more copper than the entire world currently owns or has at its disposal.  by, what, 27 orders of magnitude?

but money is not metal, we argue -- we went off the gold standard years ago and the world didn't come to an end.  so what we would really have is 2.39 times 10^42 pennies -- pennies worth far, far less in real purchasing power than the same weight of copper would have been in Roman times.  pennies aren't even copper any more.   OK, fair nuff.  so how many trillions of dollars is that?  a trillion in the US is a one with 12 zeros or 1 times 10^12.  we would have some 27 orders of magnitude more than 2.39 trillion dollars.  dunno about you, but my brain sits down and sulks when it encounters numbers like this :-)

In 1998 the World Bank claimed that the total GDP of all surveyed nations was 28.8 times 10^6 millions of dollars, or about 2.9 times 10^13 dollars.  So our invested penny would have increased in value to more than 10^29 times the total world GDP...

how much purchasing power is that?

Gold is around $500/oz right now, or 2 oz for a grand.  So we could buy, ummm, 2.39 times 2 times 10^39 ounces of gold.

"What is the mass of planet Earth?" The quick answer to that is: approximately 6000000000000000000000000 or 6e+24 kg -- in other words, our Roman penny after 2000 yrs of compound interest would be worth a heckuva lot more gold than the total mass of planet Earth, at 2005 gold prices.  many times more.  what's a few orders of magnitude once we're in the realm of fairyland already?

this is why it seems to me that there's something inherently absurd about compound interest -- it's a fiction.  any system based on the idea that real wealth can accrue by usury, is going to need a devastating reset and devaluation every few years -- let alone centuries -- to overcome its own divorce from physical reality... real wealth in the end comes down to material reality.  we cannot have more clothes without using more fibre, dyes, and energy to produce them.  we cannot have more cars (regardless of the power source for their traction engines) without using materials and energy to make them.  we cannot have more people eating more food without the water, trace minerals, sunlight, land, and other inputs required to produce sufficiently nutritious food for them to eat.  not to mention the fuel and water to prepare it.

in the real physical world, interest does not compound, or compounds only gradually for a limited time and then stabilises at a fixed return rate.   fibonacci and other geometric sequences can be approximated by animal or plant populations fed by a nutrient bonanza or deprived of an effective predator, but they quickly outstrip the baseline "return rate" of solar energy, photosynthesis, and water recycling and suffer a population crash.

creatures living in a sustainable ecological niche survive by squandering (losing) some of their reproductive potential to predators and mishaps (thus preventing a geometric population growth) and by consuming the yearly "rate of return" of the foodstuffs available in their niche.  not all manage to do so.  some populations show K selection and others R selection, that is, R selected species reproduce rapidly and go through a boom/crash cycle, and K selected species demonstrate a levelling-off effect where their population stabilises fairly close to the resource limits of their habitat.

consumer capitalism presupposes that even where populations may level off, consumption is theoretically infinite;  one person in the US now routinely consumes something like 17 Bangladeshis'-worth of energy and raw materials per annum.  there is no obvious ceiling on the desire for material possessions and conveniences; and lest that desire accidentally approach satiation, it is relentlessly provoked and cultivated by the marketeers, driven by their own necessities.  the fantasy of compound interest requires infinite growth, (accelerating too) to repay the ballooning burden of debt on usurious loans and to return liquidationist rates of return to deluded stockholders.

so I agree with the Guardian article, except for the caveat that what we call "capitalism" today is actually more like rentier-isme, or "finance capitalism" or "the usury state."  it's an absurd ideology that requires us to liquidate real capital to produce unsustainably high short-term returns.  more than just the technology has to change, to gring us to a genuine "capital"-ism rather than a breakneck casino "interest"-ism.  [I note also that compound interest vastly favours the larger fortune, so that those who have accrued in the past see ever-accelerating rates of accrual and wealth gaps widen more and more rapidly over any stable investment period;  wealthy families (especially with the repeal of estate taxes) and corporations act as long-lived "super-individuals" who are positioned to realise the long-term absurdity of compound interest to accrue grotesque sums of theoretical wealth.  so interest-ism also accentuates the accreting of vast wealth around smaller and smaller elites.]

a long time ago my father -- not the most progressive of thinkers by any means -- told me that any rate of return higher than 3 pr 4 percent (annual, not compound) on an investment was an indicator of shady dealings and/or high risk.  his words strike me today as far more Delphic (and frightening) than he ever intended.

one way to deal with the structural usury problem (the problem that has the third world buried under a mountain of compounding debt that can never be repaid) is the ancient Hebraic concept of the Jubilee Year.  instead of waiting for a crash-reset, every N years (I think it was seven?) all bad debts are written off and everyone starts over.  so usurious interest cannot compound to planet-crushing levels.  another option is to outlaw usury -- prohibit compound interest entirely and fix reasonable rates of simple return, proportionate with biotic return rates.  and so on.

the more I think about it, the more it seems to me that as long as compound interest is at the heart of our understanding of finance, investment, and profit, we are in irreconcilable conflict with the biological and physical envelope of our own existence.

I'd be interested to know whether this apparent paradox has occurred to others and what possible resolutions have suggested themselves.

The difference between theory and practise in practise ...

by DeAnander (de_at_daclarke_dot_org) on Thu Feb 9th, 2006 at 08:43:37 PM EST
rdf has had similar thoughts expressed from a different angle.

Overall, it seems to me that you lifted this phrase from my mind:

this is why it seems to me that there's something inherently absurd about compound interest -- it's a fiction.  any system based on the idea that real wealth can accrue by usury, is going to need a devastating reset and devaluation every few years -- let alone centuries -- to overcome its own divorce from physical reality...

I keep meaning to write a diary about Empires. Everyone in the US right whinges on about Rome becoming soft, decadent and less martial and that this is the danger the West faces.

To me, the real end of empires comes out of exactly the devastating reset you describe. It is the collision of the belief that growth can continue irrespective of current resources with the physical realities of the time.

(Quick note, the Romans encountered different physical constraints to us, and obviously to an extent we've solved their problems. So, yes, in principle, some of our problems may be vulnerable to technology. But, technology is not predictable and there is nothing but faith in the economist's idea that demand can instantly, on desire, create supply.)

by Metatone (metatone [a|t] gmail (dot) com) on Fri Feb 10th, 2006 at 04:38:38 AM EST
[ Parent ]
It is good to make the distinction between real capital--tools of production--and the paper that represents ownership and value.  

However, modern capitalism grew out of mercantilism, and paper--return on gold or paper (usury)--was there from the beginning.

So separating capital from usury is historically nonsense.  

As a model for the future I am merely totally skeptical:  You can't get there from here.  You can't get to a green economy from here, either, but global collapse is going to do a physical reset.  At that point, do you want to just attempt capitalism all over again--with a few tweaks?  I think that would be less than promising.  The only analogy I can think of is a drunk who actually survives his hospital stay for liver cirosis, only to go out drinking again.  

I mean:  Why?  

I think we will be ready for a totally new paradigm, and we will need it.  The best we can do now is learn from sustainable cultures of the past.  None of them were materialistic, in that goods and things were secondary to other values, social and spiritual.  None were competitive in the modern sense--that's dysfunctional.  

The Fates are kind.

by Gaianne on Fri Feb 10th, 2006 at 08:47:13 AM EST
[ Parent ]
Banking reform, financial markets reform. debt cancellation, money on an energy standard (where by energy I mean Free Energy, in the sense of Gibbs). These are things that, after a meltdown, could be agreed on (except for money on a free energy standard, obviously) as part of a new paradigm and would not be a dramatic departure from the way things run as far as most people are concerned.

In fact, most people still think that money is created when the government/central bank prints or mints currency. Money creation through lending is one of the most strident "loud secrets" in the world.

We do have the expression "loud secret" (secreto a voces) in Spanish. It's quite appropriate in this context.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Fri Feb 10th, 2006 at 09:19:23 AM EST
[ Parent ]
I think "loud secret" really does say it better than the English "open secret."  

The Fates are kind.
by Gaianne on Fri Feb 10th, 2006 at 10:44:07 AM EST
[ Parent ]
I think Michael Rowbotham has made the point that allowing banks to create money by lending it at interest is the cause of "needing" a 3% rate of GDP growth just to stay in place, and moreover it ends up putting all wealth in the hands of the bankers.

A number of short papers on the issue are available at Prosperity UK, a website about money reform.

Michael Rowbotham's books:
*The Grip of Death: A Study of Modern Money, Debt Slavery and Destructive Economics
*Goodbye America! Globalisation, Debt and the Dollar Empire

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Fri Feb 10th, 2006 at 09:09:57 AM EST
[ Parent ]
I say "I think" because I have read online articles of his and others on Prosperity UK and elsewhere, and reviews of his books, but have not read the books themselves as (even in the UK) they are hard to find (and I have been refraining from buying stuff online for a variety of reasons).

I have another book about money in my reading list:
Glyn Davies (2002) A History of money from ancient times to the present day.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Fri Feb 10th, 2006 at 09:43:45 AM EST
[ Parent ]
hmm, interesting stuff.

Of course, here is where my paltry knowledge of economics basically fails me. I can in no way judge if Rowbotham is genius, crank or somewhere in between. I think a friend of mine mentioned getting hold of one of his books. Would you be interested in an "ET interlibrary loan" if he has it?

by Metatone (metatone [a|t] gmail (dot) com) on Fri Feb 10th, 2006 at 10:45:48 AM EST
[ Parent ]
What we should have is an ET meetup in Leicester or something... Sort of half-way for everyone.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Feb 10th, 2006 at 10:48:37 AM EST
[ Parent ]
Make it somewhere scenic. Might encourage tourists ...
by Colman (colman at eurotrib.com) on Fri Feb 10th, 2006 at 10:52:59 AM EST
[ Parent ]
Where do the ferries from Dublin go?

Maybe we could have a Sellafield picketing party.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Fri Feb 10th, 2006 at 11:01:18 AM EST
[ Parent ]
I'm all for a meetup!

Ironically, for me, Leicester requires about the same time on the train as London.

My memory is fuzzy today, perhaps we should take a census of people who can easily make it to an ET-UK meetup?

by Metatone (metatone [a|t] gmail (dot) com) on Fri Feb 10th, 2006 at 10:58:54 AM EST
[ Parent ]
Make it a diary!

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Feb 10th, 2006 at 10:59:40 AM EST
[ Parent ]
Once I get home, I will.
by Metatone (metatone [a|t] gmail (dot) com) on Fri Feb 10th, 2006 at 11:30:52 AM EST
[ Parent ]
I think capitalism and the horribleness of the planet are orthogonal. Capitalism is an economic system, and if it's constrained by a good political system, then there's no reason it can't be just as good as any other approach. Competition, driven by the profit motive, between windmill companies, or hybrid car companies, or house insulation companies, is a perfectly good way to encourage technology development.
by asdf on Thu Feb 9th, 2006 at 09:37:52 PM EST
I like to fancy myself an "All property is theft" old fashioned Commie, but when I check back into reality, I suppose that capitalism, like most -isms isn't really inherently evil.  

It is unchecked capitalism that will bring this ecosphere to a screetching halt.  We need to severely rein in the power of corporations if we are going to save this beast.  And also practice much much much more moderation of our own consumption, hopefully voluntarily but realistically through a bit of legislative force.  I also believe that ethically, all necessities and natural resources should be regulated, preferably at the international level.  Some combo of capitalist market practices for commodities and socialist protection of resources and people seems to be the most sensible thing at this point.  

As to your question of us being frogs, well, it certainly appears that way, but it's also remarkable what we've overcome in the past.  Something about human resilience.  Who knows.  I'm not ruling anything out or leaving anything to chance, though.

Those who can make you believe absurdities can make you commit atrocities. -Voltaire

by p------- on Thu Feb 9th, 2006 at 10:19:45 PM EST
I have that theory that capitalism as a system inevitably leads to it's own destruction/collapse - unless harsh reforms and rigid regulation are put in place by society.

Capitalism always leads to concentration: successful companies expand, less successful companies die or are bought by the former. Concentration is bad for "real" capitalism, as it diminishes the power of the market by destroying or discouraging competition. In that respect, capitalism in its pre-crash phase is very similar to state-socialism.

In the 1920ies, stocks rose steadily to hitherto unknown heights, then crashed and caused the Great Depression. Regulation of stock markets as well as of trusts and monopolies was put in place and economies stabilized and grew again. In the 80ies, there was insider trading at the stock exchanges, causing a crash and new regulation which ensured the system's survival until now. If you look at history closely, you can find any number of examples...

_______________________________________________

"Those who fight might lose, those who don't fight have already lost." - Berthold Brecht

by RavenTS on Fri Feb 10th, 2006 at 07:03:25 AM EST
any one read any paul hawken?

i really like his ideas.

i foresee an 'enlightened' capitalism, where social mores prevent exploitation, usury and injustice, but which retains the quirky nature of the market, and doesn't try to over- or under-control it.

balance in all things!

i find it amusing that someone can invent a bic lighter and their descendants be eternally rich.

nuts, yup, but weirdly funny.

the soviet model of communism was awful, but perhaps a philosophy that enshrined some of the nobler sides of communism...

that would be: 'enlightened' communism...

nah, it just doesn't have the same ring to it!

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Fri Feb 10th, 2006 at 08:35:22 AM EST
Gosh, it's been a long time since I read Hawken; very smart man.

Another idea worth reading about is true cost economics: http://adbusters.org/metas/eco/truecosteconomics/

Do not feel safe. The poet remembers.
Czeslaw Milosz

by Chris Kulczycki on Fri Feb 10th, 2006 at 09:41:45 AM EST
[ Parent ]
I really hope that the slowly but surely climbing energy prices would give the much-needed incentive to the companies to work towards cleaner methods of production.

Recently I saw an excellent documentary exploring the circumstances around the sudden bankruptcy of the major US corporation Enron. Although the movie did not deal with environmental issues, it exemplified demise of basic ethics in the business world these days.

 

by lukewarm on Mon Feb 13th, 2006 at 05:28:07 AM EST


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