I recently had a conversation recently with a down-on-their-luck 'entrepreneur' that was wondering why the economy wasn't going anywhere despite the spectacular growth rates over the last decade. He had started a successful industrial recycling and reclamation business that floundered sometime around 2009 to 2010 when the last bit of redevelopment dried up.
He kept talking about growth this and growth that. Then it dawned on me.
Growth rates are shit.
For example, the area in question had a purported 14% growth rate between 2000-2010. Sounds impressive, no? Except that was a 14% growth rate from ~480,000 to ~540,000. A whopping net gain of 60,000 people. That means, in an especially bad year of 0.5% to 2% growth, Los Angeles or Manhattan produces as much growth in a single year as this county did in 10 years.
It made me wonder why we talk about growth in terms of net square footage, new occupied housing units or even permits issued. And then, of course, we have the whole discussion of qualitative versus quantitative growth.
Interestingly enough, I poked around looking for some data and found, ignoring tourism, that business growth had actually stalled or reversed in most areas while the number of welfare and food stamps beneficiaries actually increased at roughly the same rate.
Why is it that we're unable to have honest discussions about the deceptiveness of this?
Why is it that we're unable to have honest discussions about the deceptiveness of this?
Because political interests (of every stripe) have no real interest in honest discussion, only in the acquisition or retention of power --and the furthering of a particular agenda. Facts get spun into this or that narrative, depending upon the focus and ideology of the spinner. This is one of the drivers of public discourse in various media outlets, in my opinion.
Now, at the individual or personal level, the chances for honest discussion seem to improve, though success depends upon the individual(s) involved. Is a person willing to hear something they disagree with and consider it anyway? Or does a fact or opinion that flouts the person's ideology instantly run into a closed mind and become cannon fodder?
Productivity growth is stalled out and marginal gains in productivity are bringing no concomitant increases in standard of living because all productive activity in our economy has become credit-dependent. When productivity becomes dependent on credit finance, and credit finance imposes interest surcharges at every single level, you have to work ten times as hard to get the same marginal growth in productivity compared to working directly from capital. Think of it as trying to run a marathon while breathing through a drinking straw.
The amount of debt in our economy has become so extreme, and the amount of interest overhead weighing down our economy so large, that it makes new gains in real producitivity, and any creation of new capital, extremely difficult. That's not going to change until the debt is gone. Real growth comes from the creation and accumulation of real capital, not debt leverage. Debt leverage is simply a game which attempts to teleport capital from the future into the present, but is very inefficient at doing so (the costs associated with it are very high, and not just monetarily). One of the biggest problems we face now is that all of our present-day capital was spent decades ago by people playing this game, and isn't available for us to use even though we think we have it. We've been impoverished by debt, even though we think we're rich.
We are unable to have honest discussions about this for two reasons:
1) we're dependent on debt financing for pretty much everything now, like a heroin addict needing an hourly fix just to stay marginally functional. Acknowledging the destructiveness of the habit means you either have to kick it (which is extremely painful and can be dangerous), or spiral into personal destruction at which point the addiction becomes fatal. Those are the only two alternatives, and neither one is pleasant. Thus, aggressive complacency and collusive denial are ubiquitous.
2) the position, wealth, and power of the elites in all western societies are 100% dependent on the continuing function of the debt-finance machine. It is the source of all their wealth, and underpins their power by breeding dependency among the indebted. Without it, they are nothing. They will use every means at their disposal to support this system and try and keep it limping along until it inevitably fails. Why? Because abandoning it would lose them everything they have, right now. They'd rather make the end-game worse if it buys them another month or two keeping the game afloat today. That's how narrow their interests are now. If you think they have been desperate and irresponsible about it over the last few years, just wait until it really starts coming unglued. At that point, they will start behaving in ways that will be astonishingly sociopathic.
gwharton - "At that point, they will start behaving in ways that will be astonishingly sociopathic." which is where the modern republican party is (perhaps just more nakedly so than the democratic party). i see the current struggles politically as one party trying to convert the illusory gains into 'real' gains at the cost of 95% of the remaining population, without regard to the eventual consequences. the other party can't figure out how convert the debt and is trying to maintain the machine. neither one leads to anything resembling a soft landing.
gwalker, if you think that this phenomenon is going to have anything to do with D vs. R partisan politics, you're going to be in for a very rude surprise. They are all part of the elite, and are all equally dependent on the credit scam for their wealth and power. The D's and R's all colluded in creating this system, are equally responsible for it, and share a common interest in keeping it going for as long as they can manage. They are associated with different competing factions within the elite, and as their factional interests diverge we will see them all turn on each other in very vicious ways (a spectacle I'm looking forward too, but would prefer to witness from a safe distance when the knives come out). Don't ever think that they care what happens to any of us in all this. They don't.
Aug 13, 12 1:41 pm ·
·
Because what comes after growth, i.e., overexploitation and then decline are too scary to discuss.
"So what can we infer from our history thus far? The history of a species' population growth tends to follow a pattern known as M.I.G.O.D.S. or migration, innovation, growth, overexploitation, decline and stabilization. So far humanity has repeated the first steps with increasing intensity due to its cognitive capacities and ability to adapt behaviourally. Hunter Gatherers migrated and developed innovations to their new environments which continued the processes of population growth and migration." (excerpted from Alexander Aston's essay, Collapse is Humanity Adapting To Its Own Presence at theautomaticearth.com)
"The amount of debt in our economy has become so extreme, and the amount of interest overhead weighing down our economy so large, that it makes new gains in real producitivity, and any creation of new capital, extremely difficult. That's not going to change until the debt is gone. Real growth comes from the creation and accumulation of real capital, not debt leverage. Debt leverage is simply a game which attempts to teleport capital from the future into the present, but is very inefficient at doing so (the costs associated with it are very high, and not just monetarily). One of the biggest problems we face now is that all of our present-day capital was spent decades ago by people playing this game, and isn't available for us to use even though we think we have it. We've been impoverished by debt, even though we think we're rich."
You know gw, you could have just said that our whole modern economy is just a gigantic ponzi scheme. It would have been just as accurate and saved you a bit of typing.
Succinct, yo!
Aug 13, 12 1:45 pm ·
·
This is also interesting (from gwharton again):
2) the position, wealth, and power of the elites in all western societies are 100% dependent on the continuing function of the debt-finance machine.
Debt-dollar tyranny is indeed the rule of the day. Aside from oil, this is also a major reason why Islam is considered such a major threat, one of the rarely reported facts of Sharia law is that it doesn't permit interest. A debt free populace is far more terrifying to Wall Street than any suicide bomber.
The key to how this whole situation got so cocked up is something called maturity transformation (essentially: borrowing short and lending long, the foundation of modern Anglo-American finance). Here's an excellent piece describing how this works (or doesn't, as the case may be): http://unqualified-reservations.blogspot.com/2008/09/maturity-transformation-considered.html
Growth is deceptive because it often inflates the overall health of a community. If a town of 300 people suddenly gets an influx of 200 residents, that's a growth rate of ~66%.
On the other hand...
Growth can be deceptive because it can present a startling figure that may seem unsustainable and has the possibility to induce panic or mayhem.
The second point is one, I believe, is much more important. And the reason I say this is because of the necessity of being economically productive and competitive. When towns really get to the 12,000-18,000 mark in population, they really aren't towns at that point. Anything past 10,000 is really just a very tiny city.
But cities need that minimum 35,000-45,000 mark in population to really support a number of economic and political processes, e.g. productive growth in business and industry. As more and more corporate giants are beginning to see the importance of this, we have companies like Facebook building their own cities and giants like Ikea promising a pop-up flat pack city.
But this is where the terror comes in...
Say, a tiny city of 12,000 people is trying to attract a new industrial plant and one of the key elements needed in the request for proposal is a long-term master plan calling for the addition of 6,000 units of housing. Six-thousand units of housing sounds like a large-but-realistic goal— especially when we consider that block-sized apartment building six-stories high can give us ~600-800 units.
However, 6,000 units of housing in a population 12,000 city is a growth rate of approximately 162%.
HCMY is absolutely correct that debt tyranny is the rule of the day, and it is not at all accidental. Nor is it coincidental that countries which reject participation in the modern Anglo-American credit finance system or pursue national autarky in any way are usually ganged-up-on and destroyed in fairly short order under some pretense of "self-defense" or "liberation" (*cough*Libya*cough*). "Liberation" for whom, exactly? Best not to pry into the details. Asking such questions is in very bad taste. And it's a really bad idea to point out that the very first official act of the Libyan rebel government was to set up a central bank.
Cet animal est fort méchant, Quand on l'attaque il se défend!
"Growth" is an important metric in the global credit economy because the stability of the financial system is dependent on the constant creation of new debt and the ongoing payment of interest: growth-fueled growth. That is only possible if economic activity is following a compounded growth curve (exponential, or logarithmic expansion). Anybody who took high school biology probably heard about a guy named Thomas Malthus, who pointed out that all exponential growth curves are self-limiting. They can't go on infinitely without consuming all available resources. At some point, they reach the limit of their ability to expand at the margin, which causes the growth curve to slow, and then reverse. When that happens, the same dynamic that created the expansion goes into reverse, and you get a crash. In population dynamics, when a population of animals expands toward the frontier of the carrying capacity of its environment, it experiences a mass die-off as it reaches that limit. The same thing happens with debt finance. We get a massive boom in credit-fueled economic activity, which expands until it fully absorbes the "carrying capacity" of the economy, in the form of all extant capital and productive capacity, at which point it slows its expansion, which prompts localized credit contractions, which results in a catastrophic debt collapse. That's pretty basic math, actually, though experiencing it first hand isn't a whole lot of fun.
jjr - it's the confusion between actual real numbers and relative percentages. 60% growth sounds a lot more impressive than the town added 200 people - which is why media pundits like to use percentages. the reality right now is that cities and inner-ring suburbs are gaining a much larger share of regional population than outer-ring suburbs and exurbs (which is a reversal of the trend from 20-30 years ago), but if you look at relative percentages from where these exurbs started it'll still say they are "growing at a faster rate" - which is technically true.
in short - if you're talking about "growth" (better term would be "movement") within a finite population, pay attention to total numbers and then percentage share of the totality.
actual real growth in population is birth vs. death rates.
Real growth comes from the creation and accumulation of real capital, not debt leverage.
But without debt leverage and growth within this framework, wouldn't we all just be a bit more lazy? Is this more about responsible debt and wealth creation, than over-debt?
The fish, surrounded and infused his entire life by water, does not realize he's all wet.
We have been living with the Anglo-American maturity transformation model for so long (300+ years), that we don't realize how f*$&ed up it is or how much it contributes to (actually, is the source of) the crazy boom-bust cycles our economy goes through. We can't imagine living without it because nearly everything we have and do is dependent on it. But it's still a dangerous scam for all that.
Heroin addicts think the drug is necessary for their lives too. That doesn't make it healthy.
The alternative is pretty straightforward: outlaw maturity transformation and fractional-reserve banking. (I favor capital punishment for both) Require maturity matching on all credit transactions. Nationalize the Fed and the financial system, since they're already all de facto part of the government anyway (which changes very little, but is much more honest). Then re-institute usury laws, peg the dollar, and encourage capital accumulation. The challenge is how to get to that point without completely wrecking the existing economy. There are a few ways that could happen, but none of them are politically viable given our current power structure. That means we have to wait for the system to destroy itself (which it's currently doing very well) and try to pick up the pieces afterwards.
But cities need that minimum 35,000-45,000 mark in population to really support a number of economic and political processes, e.g. productive growth in business and industry. As more and more corporate giants are beginning to see the importance of this, we have companies like Facebook building their own cities and giants like Ikea promising a pop-up flat pack city.
facebook's suburban campus represents the bottom of the pendulum for this particular typology, which is swinging back toward companies taking advantage existing infrastructure and relocating back to the cores of mid to large cities. Part of the reason is that they're having a much harder time convincing cash-strapped suburban/small town municipalities to give them tax breaks and pay for the extra infrastructure to "entice" them there - but IMO - it's more likely CEOs are moving back into the city and want shorter commutes.
Ideas are now considered resources. Ideas are infinite, therefore capital is infinite
We can't eat ideas! Ideas are only worth a damn in a society that is growing. Ideas are worth something in good times when they can materialize (the renaisance, industrial rev., the enlightenment...) during dark ages a great idea is worth less than a grain of rice. Society is in decline and as it sinks, ideas will prove to be worth less and less.....Look at architecture!
"We can't eat ideas! Ideas are only worth a damn in a society that is growing. Ideas are worth something in good times when they can materialize (the renaisance, industrial rev., the enlightenment...)"
-- jla-x
(Sorry that looks clumsy, I don't know how to properly quote on this)
Ideas are only worthless if they are irrelevant, a good example being OSA Constructivism - a fine school in itself, but disconnected from an illeterate Russian population with no industrial capacity whatsoever.
Then take projects currently happening in countries such as Sierra Leone currently - a country in a (for my purposes) similar position to post revolution USSR. A country with limited industrial capacity, and a very poor and illeterate population, but simple, practical ideas such as Zai pits and permeable rock bunds helping to rehabilitate a broken landscape. Simple, practical ideas working to create growth. Or a more Eurocentric example, the Deutscher Werkbund, largley responsible for building much of Germany's industrial advantage. Again, an idea creating growth, not the other way around.
Ideas can work to create growth, as long as they are relevant. Granted, I cannot say where this leaves aesthetics and more conceptual ideas, which is obviously an issue.
I was refering to the false notion that we live in an idea driven economy. We don't! We live in a resource based economy. When resources are plentiful and things are good it is possible to develop novel ideas. Yes it goes both ways to some degree, but ideas are not infinite. Without capital and rocket fuel the rover would never leave the drawing boards! Ideas that can be done cheap, local, and that focus on meeting fundamental human needs will always be relevant. This does not include Groupon, Facebook, or the Schticky! It also does not include Blobitecture! We tend to think that we are great because of our superior ability to invent stuff, but the reality is that our inventions are great because we have a strong base that allows for their conception, development, and sale. If you don't believe me, go into the Congo and try to sell the Schticky or the i-phone.
Its another chicken and egg argument. And the answer is neither comes first, they are both dependent on each other.
I agree Mstrack, that the strong practical ideas that solve real problems and enhance survival will prevail in almost any circumstances, but in our present economy, most of our products and "ideas" are more novelty. We can still live without 99% of the crap out there (including the smart phone.) As resources are depleted, the ability to realize such novel ideas (that much of our economy is based on) will also be depleted.
gwharton re: this "The alternative is pretty straightforward: outlaw maturity transformation and fractional-reserve banking. (I favor capital punishment for both)" !!! wouldn't that be something...
Aug 20, 12 10:39 pm ·
·
Block this user
Are you sure you want to block this user and hide all related comments throughout the site?
Archinect
This is your first comment on Archinect. Your comment will be visible once approved.
Growth— is it deceptive?
I recently had a conversation recently with a down-on-their-luck 'entrepreneur' that was wondering why the economy wasn't going anywhere despite the spectacular growth rates over the last decade. He had started a successful industrial recycling and reclamation business that floundered sometime around 2009 to 2010 when the last bit of redevelopment dried up.
He kept talking about growth this and growth that. Then it dawned on me.
Growth rates are shit.
For example, the area in question had a purported 14% growth rate between 2000-2010. Sounds impressive, no? Except that was a 14% growth rate from ~480,000 to ~540,000. A whopping net gain of 60,000 people. That means, in an especially bad year of 0.5% to 2% growth, Los Angeles or Manhattan produces as much growth in a single year as this county did in 10 years.
It made me wonder why we talk about growth in terms of net square footage, new occupied housing units or even permits issued. And then, of course, we have the whole discussion of qualitative versus quantitative growth.
Interestingly enough, I poked around looking for some data and found, ignoring tourism, that business growth had actually stalled or reversed in most areas while the number of welfare and food stamps beneficiaries actually increased at roughly the same rate.
Why is it that we're unable to have honest discussions about the deceptiveness of this?
Why is it that we're unable to have honest discussions about the deceptiveness of this?
Because political interests (of every stripe) have no real interest in honest discussion, only in the acquisition or retention of power --and the furthering of a particular agenda. Facts get spun into this or that narrative, depending upon the focus and ideology of the spinner. This is one of the drivers of public discourse in various media outlets, in my opinion.
Now, at the individual or personal level, the chances for honest discussion seem to improve, though success depends upon the individual(s) involved. Is a person willing to hear something they disagree with and consider it anyway? Or does a fact or opinion that flouts the person's ideology instantly run into a closed mind and become cannon fodder?
Short answer: interest and debt.
Productivity growth is stalled out and marginal gains in productivity are bringing no concomitant increases in standard of living because all productive activity in our economy has become credit-dependent. When productivity becomes dependent on credit finance, and credit finance imposes interest surcharges at every single level, you have to work ten times as hard to get the same marginal growth in productivity compared to working directly from capital. Think of it as trying to run a marathon while breathing through a drinking straw.
The amount of debt in our economy has become so extreme, and the amount of interest overhead weighing down our economy so large, that it makes new gains in real producitivity, and any creation of new capital, extremely difficult. That's not going to change until the debt is gone. Real growth comes from the creation and accumulation of real capital, not debt leverage. Debt leverage is simply a game which attempts to teleport capital from the future into the present, but is very inefficient at doing so (the costs associated with it are very high, and not just monetarily). One of the biggest problems we face now is that all of our present-day capital was spent decades ago by people playing this game, and isn't available for us to use even though we think we have it. We've been impoverished by debt, even though we think we're rich.
We are unable to have honest discussions about this for two reasons:
1) we're dependent on debt financing for pretty much everything now, like a heroin addict needing an hourly fix just to stay marginally functional. Acknowledging the destructiveness of the habit means you either have to kick it (which is extremely painful and can be dangerous), or spiral into personal destruction at which point the addiction becomes fatal. Those are the only two alternatives, and neither one is pleasant. Thus, aggressive complacency and collusive denial are ubiquitous.
2) the position, wealth, and power of the elites in all western societies are 100% dependent on the continuing function of the debt-finance machine. It is the source of all their wealth, and underpins their power by breeding dependency among the indebted. Without it, they are nothing. They will use every means at their disposal to support this system and try and keep it limping along until it inevitably fails. Why? Because abandoning it would lose them everything they have, right now. They'd rather make the end-game worse if it buys them another month or two keeping the game afloat today. That's how narrow their interests are now. If you think they have been desperate and irresponsible about it over the last few years, just wait until it really starts coming unglued. At that point, they will start behaving in ways that will be astonishingly sociopathic.
gwharton - "At that point, they will start behaving in ways that will be astonishingly sociopathic." which is where the modern republican party is (perhaps just more nakedly so than the democratic party). i see the current struggles politically as one party trying to convert the illusory gains into 'real' gains at the cost of 95% of the remaining population, without regard to the eventual consequences. the other party can't figure out how convert the debt and is trying to maintain the machine. neither one leads to anything resembling a soft landing.
gwalker, if you think that this phenomenon is going to have anything to do with D vs. R partisan politics, you're going to be in for a very rude surprise. They are all part of the elite, and are all equally dependent on the credit scam for their wealth and power. The D's and R's all colluded in creating this system, are equally responsible for it, and share a common interest in keeping it going for as long as they can manage. They are associated with different competing factions within the elite, and as their factional interests diverge we will see them all turn on each other in very vicious ways (a spectacle I'm looking forward too, but would prefer to witness from a safe distance when the knives come out). Don't ever think that they care what happens to any of us in all this. They don't.
Because what comes after growth, i.e., overexploitation and then decline are too scary to discuss.
"So what can we infer from our history thus far? The history of a species' population growth tends to follow a pattern known as M.I.G.O.D.S. or migration, innovation, growth, overexploitation, decline and stabilization. So far humanity has repeated the first steps with increasing intensity due to its cognitive capacities and ability to adapt behaviourally. Hunter Gatherers migrated and developed innovations to their new environments which continued the processes of population growth and migration." (excerpted from Alexander Aston's essay, Collapse is Humanity Adapting To Its Own Presence at theautomaticearth.com)
Also relevant, Permanent Growth = Permanent Crisis by Ashvin Pandurangi.
Time to shrink, yo!
From gwharton a few post above:
"The amount of debt in our economy has become so extreme, and the amount of interest overhead weighing down our economy so large, that it makes new gains in real producitivity, and any creation of new capital, extremely difficult. That's not going to change until the debt is gone. Real growth comes from the creation and accumulation of real capital, not debt leverage. Debt leverage is simply a game which attempts to teleport capital from the future into the present, but is very inefficient at doing so (the costs associated with it are very high, and not just monetarily). One of the biggest problems we face now is that all of our present-day capital was spent decades ago by people playing this game, and isn't available for us to use even though we think we have it. We've been impoverished by debt, even though we think we're rich."
You know gw, you could have just said that our whole modern economy is just a gigantic ponzi scheme. It would have been just as accurate and saved you a bit of typing.
Succinct, yo!
This is also interesting (from gwharton again):
2) the position, wealth, and power of the elites in all western societies are 100% dependent on the continuing function of the debt-finance machine.
Debt-dollar tyranny is indeed the rule of the day. Aside from oil, this is also a major reason why Islam is considered such a major threat, one of the rarely reported facts of Sharia law is that it doesn't permit interest. A debt free populace is far more terrifying to Wall Street than any suicide bomber.
Yo!
The key to how this whole situation got so cocked up is something called maturity transformation (essentially: borrowing short and lending long, the foundation of modern Anglo-American finance). Here's an excellent piece describing how this works (or doesn't, as the case may be): http://unqualified-reservations.blogspot.com/2008/09/maturity-transformation-considered.html
Well, I find growth deceptive in two ways—
Growth is deceptive because it often inflates the overall health of a community. If a town of 300 people suddenly gets an influx of 200 residents, that's a growth rate of ~66%.
On the other hand...
Growth can be deceptive because it can present a startling figure that may seem unsustainable and has the possibility to induce panic or mayhem.
The second point is one, I believe, is much more important. And the reason I say this is because of the necessity of being economically productive and competitive. When towns really get to the 12,000-18,000 mark in population, they really aren't towns at that point. Anything past 10,000 is really just a very tiny city.
But cities need that minimum 35,000-45,000 mark in population to really support a number of economic and political processes, e.g. productive growth in business and industry. As more and more corporate giants are beginning to see the importance of this, we have companies like Facebook building their own cities and giants like Ikea promising a pop-up flat pack city.
But this is where the terror comes in...
Say, a tiny city of 12,000 people is trying to attract a new industrial plant and one of the key elements needed in the request for proposal is a long-term master plan calling for the addition of 6,000 units of housing. Six-thousand units of housing sounds like a large-but-realistic goal— especially when we consider that block-sized apartment building six-stories high can give us ~600-800 units.
However, 6,000 units of housing in a population 12,000 city is a growth rate of approximately 162%.
HCMY is absolutely correct that debt tyranny is the rule of the day, and it is not at all accidental. Nor is it coincidental that countries which reject participation in the modern Anglo-American credit finance system or pursue national autarky in any way are usually ganged-up-on and destroyed in fairly short order under some pretense of "self-defense" or "liberation" (*cough*Libya*cough*). "Liberation" for whom, exactly? Best not to pry into the details. Asking such questions is in very bad taste. And it's a really bad idea to point out that the very first official act of the Libyan rebel government was to set up a central bank.
Cet animal est fort méchant, Quand on l'attaque il se défend!
JJR,
"Growth" is an important metric in the global credit economy because the stability of the financial system is dependent on the constant creation of new debt and the ongoing payment of interest: growth-fueled growth. That is only possible if economic activity is following a compounded growth curve (exponential, or logarithmic expansion). Anybody who took high school biology probably heard about a guy named Thomas Malthus, who pointed out that all exponential growth curves are self-limiting. They can't go on infinitely without consuming all available resources. At some point, they reach the limit of their ability to expand at the margin, which causes the growth curve to slow, and then reverse. When that happens, the same dynamic that created the expansion goes into reverse, and you get a crash. In population dynamics, when a population of animals expands toward the frontier of the carrying capacity of its environment, it experiences a mass die-off as it reaches that limit. The same thing happens with debt finance. We get a massive boom in credit-fueled economic activity, which expands until it fully absorbes the "carrying capacity" of the economy, in the form of all extant capital and productive capacity, at which point it slows its expansion, which prompts localized credit contractions, which results in a catastrophic debt collapse. That's pretty basic math, actually, though experiencing it first hand isn't a whole lot of fun.
jjr - it's the confusion between actual real numbers and relative percentages. 60% growth sounds a lot more impressive than the town added 200 people - which is why media pundits like to use percentages. the reality right now is that cities and inner-ring suburbs are gaining a much larger share of regional population than outer-ring suburbs and exurbs (which is a reversal of the trend from 20-30 years ago), but if you look at relative percentages from where these exurbs started it'll still say they are "growing at a faster rate" - which is technically true.
in short - if you're talking about "growth" (better term would be "movement") within a finite population, pay attention to total numbers and then percentage share of the totality.
actual real growth in population is birth vs. death rates.
Real growth comes from the creation and accumulation of real capital, not debt leverage.
But without debt leverage and growth within this framework, wouldn't we all just be a bit more lazy? Is this more about responsible debt and wealth creation, than over-debt?
"Creating and accumulating capital vs the expansion-contraction model we have."
Somehow I see these 2 as part of the same pro-growth system.
Ciao,
The fish, surrounded and infused his entire life by water, does not realize he's all wet.
We have been living with the Anglo-American maturity transformation model for so long (300+ years), that we don't realize how f*$&ed up it is or how much it contributes to (actually, is the source of) the crazy boom-bust cycles our economy goes through. We can't imagine living without it because nearly everything we have and do is dependent on it. But it's still a dangerous scam for all that.
Heroin addicts think the drug is necessary for their lives too. That doesn't make it healthy.
lol, knew that type of response was coming.
Yet it's the alternatives and whatever problems they could also create that I have a hard time visualizing.
hmmm... wasn't Hitler also against the credit economy?
pick your poison
The alternative is pretty straightforward: outlaw maturity transformation and fractional-reserve banking. (I favor capital punishment for both) Require maturity matching on all credit transactions. Nationalize the Fed and the financial system, since they're already all de facto part of the government anyway (which changes very little, but is much more honest). Then re-institute usury laws, peg the dollar, and encourage capital accumulation. The challenge is how to get to that point without completely wrecking the existing economy. There are a few ways that could happen, but none of them are politically viable given our current power structure. That means we have to wait for the system to destroy itself (which it's currently doing very well) and try to pick up the pieces afterwards.
hmmm... wasn't Hitler also against the credit economy?
well done. godwin's law is now in effect.
capital has to be created from some sort of resource. resources are limited, therefore capital has to be limited.
Ideas are now considered resources. Ideas are infinite, therefore capital is infinite.
But cities need that minimum 35,000-45,000 mark in population to really support a number of economic and political processes, e.g. productive growth in business and industry. As more and more corporate giants are beginning to see the importance of this, we have companies like Facebook building their own cities and giants like Ikea promising a pop-up flat pack city.
facebook's suburban campus represents the bottom of the pendulum for this particular typology, which is swinging back toward companies taking advantage existing infrastructure and relocating back to the cores of mid to large cities. Part of the reason is that they're having a much harder time convincing cash-strapped suburban/small town municipalities to give them tax breaks and pay for the extra infrastructure to "entice" them there - but IMO - it's more likely CEOs are moving back into the city and want shorter commutes.
Ideas are now considered resources. Ideas are infinite, therefore capital is infinite
We can't eat ideas! Ideas are only worth a damn in a society that is growing. Ideas are worth something in good times when they can materialize (the renaisance, industrial rev., the enlightenment...) during dark ages a great idea is worth less than a grain of rice. Society is in decline and as it sinks, ideas will prove to be worth less and less.....Look at architecture!
needs are the only thing that is infinite.
food, water, shelter, community...
"We can't eat ideas! Ideas are only worth a damn in a society that is growing. Ideas are worth something in good times when they can materialize (the renaisance, industrial rev., the enlightenment...)"
-- jla-x
(Sorry that looks clumsy, I don't know how to properly quote on this)
Ideas are only worthless if they are irrelevant, a good example being OSA Constructivism - a fine school in itself, but disconnected from an illeterate Russian population with no industrial capacity whatsoever.
Then take projects currently happening in countries such as Sierra Leone currently - a country in a (for my purposes) similar position to post revolution USSR. A country with limited industrial capacity, and a very poor and illeterate population, but simple, practical ideas such as Zai pits and permeable rock bunds helping to rehabilitate a broken landscape. Simple, practical ideas working to create growth. Or a more Eurocentric example, the Deutscher Werkbund, largley responsible for building much of Germany's industrial advantage. Again, an idea creating growth, not the other way around.
Ideas can work to create growth, as long as they are relevant. Granted, I cannot say where this leaves aesthetics and more conceptual ideas, which is obviously an issue.
the illeterati have speeketh.
I was refering to the false notion that we live in an idea driven economy. We don't! We live in a resource based economy. When resources are plentiful and things are good it is possible to develop novel ideas. Yes it goes both ways to some degree, but ideas are not infinite. Without capital and rocket fuel the rover would never leave the drawing boards! Ideas that can be done cheap, local, and that focus on meeting fundamental human needs will always be relevant. This does not include Groupon, Facebook, or the Schticky! It also does not include Blobitecture! We tend to think that we are great because of our superior ability to invent stuff, but the reality is that our inventions are great because we have a strong base that allows for their conception, development, and sale. If you don't believe me, go into the Congo and try to sell the Schticky or the i-phone.
can't edit....
Its another chicken and egg argument. And the answer is neither comes first, they are both dependent on each other.
I agree Mstrack, that the strong practical ideas that solve real problems and enhance survival will prevail in almost any circumstances, but in our present economy, most of our products and "ideas" are more novelty. We can still live without 99% of the crap out there (including the smart phone.) As resources are depleted, the ability to realize such novel ideas (that much of our economy is based on) will also be depleted.
This discussion is pretty ancient.
come on guys cheer up, too much Peter Schiff.
"come on guys cheer up, too much Peter Schiff." -- ciao
Bookmarked and saved for future LULZ.
peak theory , hey we crossed most 1/2 way points yes? so i can only see shrinkage as wise to efficiently use remaining resources.
see you in 20 years gwharton :)
when it all goes back up again.
jla-x:
Gotcha, I see where you are coming from now. I agree - cheers.
im a grower not a shower
Wow, even US Treasury Admits It Conducted a Circular Ponzi for years
Transparency, yo!
gwharton re: this "The alternative is pretty straightforward: outlaw maturity transformation and fractional-reserve banking. (I favor capital punishment for both)" !!! wouldn't that be something...
Block this user
Are you sure you want to block this user and hide all related comments throughout the site?
Archinect
This is your first comment on Archinect. Your comment will be visible once approved.