The Approaching End of the World

The Approaching End of the World

Arnold Toynbee, one of the greatest and most well respected Historians who had ever lived, recounted in his works how in the entire history of the World there has been only 21 Civilizations, and they all collapsed. They all failed. And each Collapse was a kind of an End of the World. Huge proportions of the Civilized Population simply died off. Life would slowly come back, but largely sourcing from Barbarians who had wandered in to help with all of the burning and pillaging.

Remember Rome. Well, nobody speaks Latin today… not even in Italy. Not only Languages, but Cultures, Traditions, Morals and Religions can be largely forgotten. Often enough, the Only Thing remembered after a Collapse is exactly the kind of Institutions that lead to the Collapse. Look at Chinese History. It rises and collapses in a cycle that can be counted in just a handful of generations. Swift Rise is always inevitably followed by an even swifter collapse. No New Dynasty had ever learned a single lesson from the Past. This is because each New Civilization is put together largely by the Barbarians who take over afterwards. And ultimately the inclusion of Barbarian Institutions in the formation of a Civilization are what prove eventually and inevitably Fatal.

The Problem today is with Growth Capitalism. You see, after the Collapse of Catholic Civilization, the Barbarians taking over decided to rebuild the World with Usury. Usury had been a Sin, but now it is the Pillar of our System – Capitalism which through Globalization has become almost universal.

The Praise of Capitalism is almost endless. Look how every Economy has ‘grown’. Even Today when it is acknowledged that Capitalism has some very serious Problems, most of the books coming out offer as a solution the not very novel idea that the Cure for Capitalism is simply More and Better Capitalism. “We fail because we are not Competing hard enough”. I suppose their underlying assumption is that the Capitalists were not really trying up until now.

But the basic problem with Growth Capitalism and Usury in general is that a continuously ‘growing system’ cannot reach any stability or equilibrium -- that would imply a cessation of ‘Growth’, which to any Capitalist Economist is the very exact signal of Failure. Leveling off is what they call a Recession. But Growth Capitalism depends entirely upon getting more and more and more…

Now, yes, if Capitalism is imposed upon impoverished barbarians, it does offer a means of producing and providing Wealth, but that is only when the conditions provide a glut of unused resources. Given a newly discoved Mountain of Gold, a Capitalist just starting out can haul away a ton this year and increase his take by 6% every year. It all works fine until the Mountain is worn down to nothing.

The reason I suppose that Civilizations had declared Usury to be a Sin is that any Advanced Civilization would have experience with a closed system with a fixed supply of resources, where just the physics of the situation point out that the Economy cannot do better than Break Even. Given fixed or limited resources, where is the extra Wealth that should pay for Profits and Interest to come from?

A simple example can demonstrate the problem with interest. Suppose we have a closed economy where all money comes from one Bank. Capitalists borrow money from the Bank and pay their Workers to produce Products. For the Products to make money they have to sell for more than was paid to the Workers to make them. Then the Capitalists have to pay the Bank interest on the money. Well, there is still only that fixed amount of money. The only money in the economy that can be spent is that which is given to the Workers. So in a Closed Economy there can be no money left over for Profit or Interest.

Now, in more elaborate examples, there is extra money. But what happens is that the Banks take in more money then they give out until they eventually arrive at the conditions of our simple model… and then it can no longer work.

Now, for the last several hundred years the Growth that Capitalists depended upon came by Exporting their Products. An Economies own Workers could go screw themselves. Capitalism became dependent upon Trade. One’s own Economy could grow only by taking away the Wealth of others.

It worked out fine for Europe and America, while vast regions of the World stood outside of their Monolithic Banking System. Growth was effectively pillaged away from other Societies.

But now with Globalization, we have reached the conditions of the Simple Model. Now, with Globalization, the Same Bank is lending to everybody. The Same Capitalists are employing every Worker. There is no longer any Extra Money outside of the System left over to feed the Growth.

Yes, so some powerful Economies simply start printing money to satisfy the Capitalists and Bankers who depend upon writing in larger numbers every year for what amounts to one fixed amount of Value. Of course it is Inflationary, to continuously multiply Currency that is intended to pay for a certain Fixed Value. It is like when the price of bread goes up simply because the Bakery knows that all the Factory Workers got raises.

Well, inflation can actually be useful. But Bankers hate it. They want more “Bread” and not just more Bills fresh off the State Printing Press.

So we get in Commodities Trading and Equities. They tried to keep the Banks out of it, but they bought Politicians and had the Laws changed. Bankers, given our now Universal System of Politics, where Bankers decide who should run for Office and pay for their Campaigns, well, Bankers are actually the ones in charge and can really do what they like. So it is that Bankers use Equities and Trading in order to convert Money into actual Wealth – Oil, Food Commodities, and Corporate Capital.

Now in the Past, all of this Real Wealth was a Growing Thing. More Food could be grown by opening up new Land, or by applying Science to existing Land. They could Explore for New Oil. Corporations could expand into New Markets or New Product Lines. This is from the Golden Age of Capitalism that everybody sings about. But now Resources have been pushed to the limit. There is No New Anything anymore.

The Banks are relatively happy since given all the fixed quantities of Wealth, their Value goes up. But the Value goes up only because of Printed Inflationary Money.

So we arrive at exactly why Growth Capitalism is going to collapse. Out Planet has hit is Resource Saturation.

But why is this Bad? What will happen to us? Well, as Prices spiral upward for an ever decreasing Supply of Resources – Food, Fuel, Clothing. More and more people will be left out and left to die.

Its already happening, or WAS happening. Remember before the most recent Global Economic Disaster, back in 2007 and 2008 when Petroleum Prices were approaching $200 a barrel and Agricultural Economies all around the globe were plowing under Wheat and Rice so that they could plant for Alcohol Fuel Production. It linked the Rising Price of Oil to the World’s Food Commodities Prices. All around the World there was some very grave concern about millions of people starving, and populations going into rebellion. But, ironically, were all saved by the Downturn. The Deep Recession lowered demand and Prices fell again with reach for most of us. Not all of us. The Crisis in Northeast Africa is no accident. That is exactly what happens when a Society can no longer keep up with Internationally Set Prices. Notice that the response of the International Community (America, really. America takes credit for everything Good but distances itself from everything bad) has been to simply throw a cordon around that Killing Field in Africa.

Twenty or thirty years ago there would have been massive amounts of supplies sent in from the World’s Surplus. Capitalists don’t mind giving up on Surplus – it raises the prices on their remaining Product. But now, obviously, there are no Surpluses, or the Surpluses are so precarious that, and the Situation now seen as so dire, that Surpluses are being retained for domestic Contingencies.

This means that not only are Things Bad, but the people in charge know things are bad.

But as I said before, no solutions are on the table. All of the recent books simply recommend More and Better Capitalism – compete harder, compete smarter.

But in One Globalized System, what good will Increased Competition do? Competition is about Winners and Losers. What are the Losers supposed to do?

They talk about it like it is a Game. Or they pretend it doesn’t really matter in human terms. I’ve read in a dozen books various Pompous Capitalists dismissing the pain that comes during Recessions because they were “Necessary Market Corrections” and that Capitalism is eventually healthier afterward – meaning that what is Bad for the People is Great for the Banks. It is like China saying that Dynastic Collapses and the death of hundreds of millions of Chinese is “a necessary correction” and China is ultimately better off for it. Yeah, nothing like killing off a million people to make Real Estate affordable again.

But the Losers in Capitalism’s big competitive Game simply won’t be able to go home without the Trophy. There would be currency devaluations and massive unemployment – most people without jobs and the people still with jobs not being able to buy anything with their cheapened money.

In real terms, there can be two basic Responses. Some Societies will move swiftly in order to cut off their Economies from International Pricing… so that Traders can’t just come in and buy up all the food stocks and ship them out. (It happens. I live on a small island where recently many of the shelves stood bare because a wealthy trader from another island diverted a fleet of cargo ships, offering a penny more than prices and contractual penalties. It was Great Capitalism, but the people of the island were made to be the Losers of it all). Societies convert over to Planned Economies.

The other Response is for Wealthy People to “ride it out”. We’ve seen a rise in systematic food hoarding. I hear that every Mormon is supposed to keep 18 months food supply. Who knows what the Masons are doing. But, yes, most Economies have no Contingency Plan for what would be a major Economic Disaster. Its left to Individuals to make their own way.

You know, History has had 21 Collapsed Civilizations, and it never has worked out like they think. The Rich have never been able to “ride out” a true and final collapse. The Mormon’s 18 month food supply will only last 18 months. The Rich depend upon Private Security Firms, but when the value of the Dollar drops to nothing, then the Security Guy with the Gun will simply take what he wants when he can no longer cash his tiny little checks. People think that hoarding Gold might help, but the value of Gold depends upon honest trade and law and order. But after the Collapse, a single good bullet might have more practical value than a ton of Gold.

So, really, the Planned Economies will stand the best chance in the end of surviving the Collapse. Ironically, those Societies most vilified by the West and condemned for falling so short against the Model of Growth Capitalism to which everybody and everything is compared, will remain intact. The very Isolation of such a North Korea or Cuba will be their insulation and protection. And their already Established Traditions of Planning might stand them in good stead of building a truly Sustainable Civilization afterward.

Of course, in most sectors, the Barbarians (the Americans, the Europeans and the Japanese) will survive, though at highly reduced numbers. Maybe 30% of the Barbarian Populations will survive. Given a few Generations, Law and Order will be re-established, and Banking and Usury will start up again. The whole thing will start over again. Land and Resources will be plentiful. Labor will be valuable. Yes, there will be Competition, but with so few people and so much stuff, for the most part people will not seriously get in each other’s way. Killers looking for trouble will find it, but there will be plenty of room for people who want to mind their own business.

The Living will forget the Dead and songs will be sung glorifying the Rise of a New Capitalism. It’s great to Win. They’ll have a New Golden Age which they think will go on Forever. And then it will all collapse again…

Civilization will never be permanent until it is built on the Model of Sustainability and Equilibrium. That is why the Wisdom of Civilization past had made Usury and Capitalism a Sin.