Economic Growth versus Planning

In every panegyric which lavishes praise upon Capitalism while castigating Socialism, we find that all measures are expressed in terms of ‘growth’. Capitalism and un-restricted trade are better because they grow better. Well, weeds grow. Cancers are famous for their ability to grow. So is it really correct to make Growth our only measure for Civilized Excellence?

One little narrow minded book I had been reading a while back spoke of a growing company in Brazil, so successful it was putting everybody else out of business. The author of the book never spent even a fraction of a second wondering whether one small companies success was worth the disruption of all the rest. Also, he never bothered to wonder what was being produced and how the money was being made. Child Pornography. Human Slave Trafficing. Burning down the Rain Forest. There is Profits to be made in all that. Not every Growth Industry is automatically All Goodness and Light just by virtue of feeding Greed, no matter how much praise we lavish on this Modern Virtue that the Ancients somehow managed to get all wrong.

Well, Growth might have its place. One can see the utility of the Growth Philosophy of Economics in severely under-performing developing Nations, but then we are confronted with the paradox where unrestricted Free Trade into Undeveloped Economies provides Goods and Services at already rock-bottom rates, preventing Developing Economies from ever, well, developing. So we have had countries like Japan and China, and even America, if we look far enough back, that protected their developing industrial capacities through trade restrictions and only opened their Markets when it was a game they felt sure they could win. Here we need to take a moment to admire the Americans for sticking by the same rules even after they began seriously to get their asses kicked.

In speaking of America we are speaking of a totally developed Economy, almost Post Industrial. If suddenly America were to be measured only in terms of Industrial Capacity, one could hardly be sure whether America could still be considered a ‘developed’ Nation at all. But their Gross National Product is high and so Americans think that it all amounts to the same thing. The problem there is in the way Gross National Product is measured. For instance, when Japan builds a TV Set and sells it for $400, that $400 is tallied up in Japan’s Gross National Product. That is easy enough to understand. But in America when a some Mutual Fund Company pays $400 for an Equity Purchase, THAT also is counted in its Gross National Product, even though nothing is produced – where there actually is no product. Ownership is transferred on paper. Indeed, simply transferring funds from one account to another is counted into America’s Gross National Product. What this tells us is that it is easy for a Banking Nation, such as America, to sustain a high GNP even while everything real is collapsing and falling into rubble. As long as the Super Rich keep shuffling their accounts around, America will still be able to pretend that the GNP demonstrates that they are as economically healthy as Europe or Asia – Economies which still actually make and sell real stuff.

So maybe America is not the best example we can speak of when hoping to discuss Developed Economies – we can call America ‘Post-Developed’. So let’s talk instead of Japan. Does Japan really need to ‘grow’? At some point isn’t ‘enough’ enough?

Yes, in Capitalism all Stock Pricing is predicated upon Growth. Profit and Growth are mostly about the same thing. We can speak of it in terms of Economic Theory, but maybe it was all because of Economic Habit.

A lot of this Capitalist Business began in England. They realized the connection between Growth and Profits early and began ‘growing’ first by privatizing the Roman Catholic Church Properties through confiscation, and then by privatizing the Common Lands – Growth through Theft and Pillaging, but it worked for the fledgling Capitalists. It was easy for the American Economy, the real Show Piece of Modern Capitalism, to grow because America had so much open free land, that is, once it was taken from the Indians, the French or the Spanish. So given all the Wide Open Space, Growth was easy. So no other thinking, no other tactics were ever really considered. Capitalism simply fell into the rut of equating profits with expanding growth.

It is such a habit that now already severely strained economies are endeavoring to import new populations into already crowded conditions. For instance, America that already bars 40% of its Population from its Doctors and Hospitals complains that it needs more people, in order to sustain its ‘growth’. New people would mean new houses to be built and furnished, and new cars and appliances to be sold. More People equals More Growth. And this is on a Planet that is facing a Global Warming Crisis mostly aggravated by the stresses of Over Population. Also, the international pricing on Food Commodities is going way beyond what the poorest 30% of the World Population is able to pay, but the Capitalists don’t see how that could possibly relate to their endless pushing of the Growth Paradigm.

If the Global Warming and Commodities Pricing Crises are to be addressed, then we really will have to eventually resort to Planning. The only solution that Capitalism would offer is for a Bidding War for scarce resources, and it would be a Bidding War in which most of the World’s Population would come up the Losers.

Paradoxically, it may be an area where America will turns out to be the Pioneer and Advocate. As I hinted earlier, Capitalism is beginning already to sour in America. When the Dollar finally collapses and Capitalism comes to a grinding halt in America, then America will either suffer the deaths of hundreds of millions of its Citizens… and millions more of its Illegals… or it will quickly jump into the breach by Nationalizing the Corporations and Banks, and replacing the Price Demand Economy with a Planned Allocation Economy.

And while the Rest of the World had been so happy to follow America in its Capitalism and its Democracy, it will probably be even happier to again follow America, this time in things that make sense for the most people – Planned Economies and Non-Divisive Government based on Bureaucratic Meritocracy.