Expectancy of growth is causing world of inequality, debt and depression. Will we ever see an end to this?


Steam Engines

The concept behind steam engines had been around for a long time, but just as as curiosity or toy. There wasn't any real work they could do up to that time that animals or humans couldn't, and wood fires probably didn't provide enough energy anyway. Once lifting water out of deeper and deeper coal mines became a problem, a number of innovations allowed a small portion of the energy in the coal being mined to lift the water up and out. Suddenly, vast quantities of coal became available, and as the coal-fired engines improved, a whole lot of other uses were quickly discovered. The first great use was in Britain's primary industry, cloth-making. Worker productivity was magnified greatly, sometimes by a factor of a thousand, by use of the energy in coal, and capitalism went into hyperdrive.


Capitalism on Steroids

When you combine an economic system that requires growth of wealth to function with a huge cheap energy source just sitting there in the ground, it's like cancer. The system grew like crazy, and either crushed or absorbed all other economies. Imperialism grew in order to find cheap resources to steal, and most major European powers got in on the act. Slavery was abandoned because it was no longer as profitable as using coal and machines, to accomplish the same purpose.


Marx

The new economic system created new economic classes, and political philosophy tried to figure it all out. Marx did a reasonable job of taking a long, hard look at the new economic system, and thought it flawed. His position was that, as wealth makes it easier to amass even more wealth, eventually you would have the super-rich and a huge underclass of impoverished workers. This great underclass would have no political option other than to arise and overthrow the rich rulers and institute a political system run by that underclass. Because this replacement system wouldn't have the incentive to grow and amass fortunes, eventually all economic classes would fade away, and with it all forms of government.


Marx screws up

Things didn't work out that way, though. The two nations that did have Marxist-based revolutions had insignificant worker classes and huge rural farming populations (basically, peasant rebellions). In the industrialized societies, liberal reforms provided economic mechanisms that blunted the monopolization of capital - trade unions, progressive taxation, laws to limit abuses of trade labor, government spending on social safety nets, etc.


Oil, or what else Marx got wrong

At the same time, technology was developed to tap into a fabulously power new energy source, petroleum. Far more energy-dense than coal, convenient to use and store after refining, this stuff magnified the productivity of workers by previously unbelievable levels. A cupful of gas could propel a tone of metal across a city, doing the work of dozens of draft animals. And the stuff just sprayed out of the ground when you drilled down about a hundred feet or so, hundreds of thousands of barrels of it.

This generated such huge amounts of new wealth that all the economic reforms put in place didn't really make all that great a difference. It was raining money, and everyone had a bucket. The rich had a swimming-pool sized bucket, of course, but who cares when you have a bucket of money of your own?

The industrialized nations had decades of explosive economic growth, with a couple of unfortunate wars in the middle of all that. But wheeeee, wealth generated on incredible levels. Technological growth unheard of in history, people flying through the air in vessels powered by kerosene, personal horseless carriages for all, cities redesigned so that you live as far away from your smelly oil-or-coal-burning workplace as possible, who cares? Workers had their own magic carpets, homes built on the output of fabulously powerful energy juice.

So, while the rich did indeed get richer, the workers got richer as well, albeit at a slower pace. This short-circuited Marx's theory of a worker-based overthrow of the system.


The end of the party

So this all works great until the amount of magic energy juice stops growing. There are finite amounts of the stuff in the ground, after all, and at some point, the easy-to-get stuff isn't going to be available in increasing quantities.

When that happens, you have to start getting out the more difficult stuff. There's a powerful incentive to improve technology to do this, just as they did three hundred years ago to get coal out of flooded mines, but there's a problem with technology; the more complex the technology, the smaller the productivity gains for increasing amounts of effort.

So while we're seeing technology develop to obtain tight shale oil, tar sands, and deep sea oil, it's not improving to the point where it's as cheap to obtain as it was previously. Greater and greater amounts of the wealth generated by the oil is devoted to getting more oil out of the ground. The result is decreasing levels of wealth being generated. And we know what that means.


Marx has the last laugh

Again, capitalism requires growth. Without it, it falls apart. It's called a depression. While it's not being trumpeted, the world is now in a depression (>2 years of global growth under 3%).

The cheap-to-obtain oil stopped growing in the middle of the last decade, and the world economy started spluttering shortly thereafter. There's still marginal growth, but it seems to be decreasing all the time, and the current economic malaise has gone on so long that it's now considered normal.

While wealth inequity is growing like crazy, this isn't some new condition, and it isn't causing the economic problems. It's a symptom. When the rain of money slows down, people like you and me are going to catch nothing, while the guys with the swimming-pool-sized buckets will keep amassing wealth.

In other words, when growth of wealth ends, we see the contradictions in the system that Marx saw when the ride was just getting started, before the flood of new wealth made us dizzy and happy.


So, where to go from here? I think we're never going to be as rich as we were before. Leveling the wealth is certainly the fair and right thing to do, but it's not going to make the system recover. The system is toast, we need to develop something else.

If that isn't done, I think that increasing levels of wealth inequity are going to result is social upheaval. Having seen what happened in the Soviet Union and China, I'm not as optimistic as Marx was about the outcome.

If I were super-rich, though? I'd be getting rid of as much excess wealth as possible before the pitchforks come out.

/r/collapse Thread