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Guest Post: R.I.P, Homo Economicus: On the End of Ubiquitous Poverty and the Beginning of Universal Abundance
Submitted by Free Radical
R.I.P, Homo Economicus: On the End of Ubiquitous Poverty and the Beginning of Universal Abundance
“I draw the conclusion that, assuming no important wars and no important increase in population, the economic problem may be solved, or be at least within sight of solution, within a hundred years. This means that the economic problem is not – if we look into the future – the permanent problem of the human race.” – John Maynard Keynes, Economic Possibilities for Our Grandchildren, 1930, [author’s emphasis]
There have of course been some “important” wars (though in truth they were, and remain, mere installments in a Long War that is by no means over). And there has of course been an “important” increase in population (the abreaction, for the most part, of the premodern underbrush that was uprooted amid the modern nation-state’s relentless campaign of unification, centralization, and consolidation). But let us give Keynes his due for imagining a time, in the not-too-distant future, when “the economic problem” – which is to say, the scarcity that impels all economic endeavor – will at long last have been solved, and universal abundance is at hand. Let us do so, however, with no illusions about who the man was, fully acknowledging that he was “a charming but power-driven statist Machiavelli, who embodied some of the most malevolent trends and institutions of the twentieth century” – so malevolent, in fact, that one is left to wonder what Keynes might have had to do with the fact that, eighty years later, a solution to “the economic problem” seems more out of reach than ever.
After all, standardizing for population growth since 2005, the chart below would now indicate that fully 5.5 billion people live on less than ten dollars a day, while nearly a billion live on less than a dollar a day:
And while America’s poor appear to be quite well off by world standards, the fact is that they now represent nearly 14% of the U.S. population and that their numbers are skyrocketing, as the real unemployment rate surges toward 25%:
And not surprisingly, food stamp use is also skyrocketing:
Which is to say that Americans in general are an ugly mix of Stanley Johnsons so buried in debt that their toys have either already been taken from them or soon will be, their spending now in freefall, as it returns to its historically sustainable level (after, in all likelihood, overshooting it):
All of this happening as income inequality rises to extremes not seen since 1929:
But this was to be expected, after all, as the fascism inherent in the U.S. banking system reaches its apotheosis in the privatization of profits and socialization of losses, such profiteering, regardless of how it manifests itself, being standard operating proce-dure for the state. For while it “is almost universally considered an institution of social service,” the state is really nothing more than “the systematization of the predatory pro-cess over a given territory.” Why? Because
… the state cannot even exist without committing the crimes of extortion and robbery, which states call taxation; and as a rule, this existential state crime is but the merest beginning of its assaults on the lives, liberties, and property of its resident population.
And simply put, these assaults – whether perpetrated by the U.S. fascialist state or variations upon this theme elsewhere around the world – have so impoverished the masses (why else would they be the masses?) that to contemplate an imminent solution to “the economic problem” admittedly seems absurd.
Nonetheless, let us return to Keynes meditation thereon and, in particular, to his ob-servation that the historically “slow rate of progress, or lack of progress, was due to two reasons – to the remarkable absence of important technical improvements and to the failure of capital to accumulate.” For surely this is so, not just because the state’s “predatory process,” century after century, has so hampered capital accumulation as to stunt technological advance but because, in the last century, the state’s predations were fully systematized. And they were systematized in no small part because of Keynes’ absurd belief that “there are no intrinsic reasons for the scarcity of capital.” For just as there is not (there never was, nor will there ever be) any genuine capital accumulation that is not the result of savings – specifically, the saving of productive work of one form or another – so is there an inherent limit to capital. And as savings are nothing other than deferred consumption, it is clear that one cannot simultaneously consume that which one defers the consumption of, which is to say, one cannot have one’s cake and eat it too.
This is precisely what Keynesianism attempts to do, however, facilitated by the attendant notion that money is not a good used as a medium exchange but simply a medium of exchange that, being irredeemable for any good, can accordingly be generated without limit. No wonder, then, that with both capital and money thus unhinged from economic reality, governments, in thrall to this alchemical fantasy – would systematically plunder their countries’ economies to the point of grinding them to a halt:
A major part of the growth in the last 100 years and especially in the last 40 years has been built on an unsustainable build-up of debt levels. These debt levels will continue to swell for another few years until the coming hyperinflation in the West leads to a destruction of real asset values and a debt implosion.
We have hell to pay for the sins of Keynesianism, in other words, the only question being what level of hell we descend to. And as this is largely a function of how long the journey takes, it is in turn a function of how “successful” governments’ extend and pretend policies are, meaning that the longer they delay the onset of economic reality, the deeper into hell we will descend.
So again, under the circumstances – that is, given governments’ unremitting deter-mination to exacerbate the devastation that their Keynesian folly has already caused – how can we even contemplate a solution to “the economic problem,” much less postulate an imminent solution?
We begin by considering what our lives would be like if we hadn’t been subjected not only Keynesianism but to its indispensable precondition – that is, if we had lived all this time within the liberating confines of sound money, which by definition has two complementary and vitally important aspects: (1) “It is affirmative in approving the mar-ket's choice of a commonly used medium of exchange,” and (2) “It is negative in ob-structing the government's propensity to meddle with the currency system.” And since gold has manifested these two aspects for over five thousand years, we assert without equivocation that a sound monetary system is a 100-percent-reserve gold standard that accordingly “secure[s] the economic system against the evils both of inflation and of de-flation/depression.”
And let us also assert that however beneficial this twofold security would be, such a monetary system would do much more than that. For “the typically modest increase in the quantity of money and volume of aggregate spending that takes place under a gold standard is accompanied by actually falling prices [author’s emphasis],” the greater production and supply of a good (or service) being a result of the greater efficiency that is expressed as Total productivity = Output quality and quantity / Input quality and quantity. That is to say, as input quality rises and input quantity falls, both output quality and quantity rise, resulting in the increased productivity that is reflected in the ability to offer the same product (or service) for less or, alternatively, a better product (or service) for the same price.
And we have of course been experiencing this very phenomenon for many decades now, as the cost of computing power has fallen precipitously, the industry’s productivity increasing in accordance with what has come to be known as Moore’s Law:
The computer/electronics industry, in other words, has accomplished what the rest of the economy has not – i.e., an increase in productivity sufficient to offset government-induced inflation – the point being that in a truly sound-money economy, the gain in purchasing power would be across-the-board. That is, increased productivity would result, over time and in all sectors of the economy, in falling prices that would not be deflationary for the simple reason that they would not be the result of a monetary contraction, the difference between the two being all the difference:
What this means is not only that in a sound-money economy, prices would fall as productivity rises; it also means that in an increasingly computer-driven, nano-technological, sound-money economy – where computing power rises as machine size falls – productivity would grow exponentially, not only driving prices down at a similar rate but ultimately driving them to the vanishing point , which is to say, to zero.
For example:
We are awash in energy (10,000 times more than required to meet all our needs falls on Earth) but we are not very good at capturing it. That will change with the full nanotechnology-based assembly of macro objects at the nano scale, controlled by massively parallel information processes, which will be feasible within twenty years. Even though our energy needs are projected to triple within that time, we’ll capture that .0003 of the sunlight needed to meet our energy needs with no use of fossil fuels, using extremely inexpensive, highly efficient, lightweight, nano-engineered solar panels, and we’ll store the energy in highly distributed (and therefore safe) nanotechnology-based fuel cells. Solar power is now providing 1 part in 1,000 of our needs, but that percentage is doubling every two years, which means multiplying by 1,000 in twenty years.
Let’s say that by “extremely inexpensive,” we’re talking about the solar equivalent of dollar-a-gallon gasoline in 2030. We are then talking about a less than one-cent-gallon equivalent seven doublings later and less than a tenth of a cent three doublings after that, meaning that by 2050 the world’s energy needs would be met at virtually no cost. And simply put, to apply this same logic to the economy as a whole is to understand how “the economic problem” stands to be solved and how universal abundance therefore stands to be achieved. Not eons from now, not millennia, not centuries, but decades.
While Keynes had only a faint notion of this hyper-productivity dynamic, we can at least give him his due for imagining that it wouldn’t be long before man would be “faced with his real, his permanent problem – how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well.” For that “science and compound interest” are nothing other than the exponential growth in technology that, aided and abetted by sound-money’s inherent price-reducing proclivity, do in fact have the power to free man “from pressing economic cares.”
Unfortunately, however, we must also give Keynes his due for helping to postpone that day, his contempt for what he perceived as a barbarous relic leading to FDR’s confiscation of the people’s gold in 1933 and thus the end of what remained of the gold standard in the United States (the world gold standard ending in the Nixon Shock of 1971). For with no further restraint on the international banking cartel, the full fury of the stealth tax would be loosed upon the world and vast swaths of its people (most notably the American people) sold into debt slavery, the supreme irony being that “the eco-nomic problem” could well have already been solved, had a sound monetary system been in place during the near-century that the cartel’s foremost member has held sway. For the pseudo-productivity of much of the U.S. economy would have been genuinely so, as would the rest of the world’s. And the wars that could not have otherwise been funded would not otherwise have been fought, nor would our socially debilitating welfare programs have had the wherewithal to entrench themselves, the combined depredations of which have sapped incalculable amounts of humanity’s time, talent, energy, and imagina-tion.
Even so, such is the ordinary man’s inborn ingenuity that despite those depreda-tions, he may yet find himself, in 2030, confronting the fact that “his real, his permanent problem” isn’t a problem at all. For what Keynes didn’t envision is that the ordinary man a century later, having decades before begun to internalize his machines, would be quite extraordinary, empowering himself to the point of not only boldly going where no man has gone before but of becoming what no man has ever been before. No longer having to struggle with the problems of tired old homo economicus, that is, a vibrant young homo abundus would be charting a course that would have been beyond his predecessor’s wild-est dreams.
But as those dreams may yet be shattered, we will postpone further examination of homo abundus until we’ve taken full measure of “the predatory process,” beginning with my next submission: “The Twin Pillars of Civilization.”
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Wow, balanced on the knife edge of rant but oh so cogent. Post of the day IMHO :~)
"People 100+ years ago were vastly more "grounded". Try to pull convince a family farmer (even today) to believe some abstract scam agrument...In the past (the longer the better), humans created their mental-units (ideas/concepts) because they encounted similar real, physical existents or phenomenon in reality"
So you're saying these well-grounded past-dwellers wouldn't fall for the idea of a zombie Jew whose invisible father uses combustible shrubberies as communication devices?
"Only a complete fool would accept a worthless piece of paper in exchange for real, physical goods"
Not true. You misunderstand the nature of money. When one sees others trading with and valuing those pieces of paper, he sees that others subjectively value the paper and he seeks it for himself due to its objective exchange value.
Paper money is also supported by the fact that armed men come to your door in the night if you don't pay them enough pieces of paper. If you try to trade using, say, gold coins, then these men will demand even more pieces of paper from you.
>The entire "monetary system" today is 100% detached from reality.
Agreed; history shows that it will become reattached either sooner or later...
If you read above, I did say old timers were more grounded "other than religions". I also did not intend to claim that everyone back then was totally sane and grounded, just a lot more than today.
I say modern humans are complete fools. Don't you?
Unfortunately, it will not help to have just any old kind of "reattachment of money to reality". The predators-that-be are now so expert at perverting any and every form of monetary fiction, that only a complete reattachment will do.
>"other than religions"
You're right. I missed that caveat. But it seems to hurt your argument pretty severely.
>I say modern humans are complete fools.
Sounds like a platitude. Is aromatherapy so much dumber than leech therapy? Are horoscopes so much dumber than rolling the bones?
>The predators-that-be are now so expert at perverting
IMHO the greater the distortion, the greater the collapse.
aromatherapy may be a dumb fiction, but a field of lavender is a dose of sublime reality.
I don't know much of anything about leech therapy and never heard of "rolling the bones". So I can't repond to that. However, the distinction I was trying to make had to do with being foolish due to improper processes of abstraction versus first-hand observation and inference... not different forms of insanity.
I sure hope the collapse is astronomical. Anything less will leave us with the same basic corruptions.
http://www.youtube.com/watch?v=XpQ1MLA_FG0
It's simple why gold, or some other equivalent, will NEVER become the standard medium of exchange. The financial elite and their political puppets can only accumulate wealth under the cover of printing money. If my amount of Fiat is rising (as a J6P), I feel wealthier. The fact that my pile is not rising as fast as the financial elites and their political lap dogs is beside the point.
If the exchange system is based on gold, then it would be readily apparent when one class or another tried to take from the others and accumulate wealth by (effective) fraud through financial manipulation, instead of increasing productive capacity in a need /wanted area in the economy.
The corollary is that the fiat policies hide a multitude of financial sins that used to be glaringly obvious - perhaps why it is a bear market still for pitchforks and torches.
But that is also why every individual should adopt the honest gold standard on his own. To be sure, we cannot force everyone to exchange their real, physical, valuable goods for our real, physical, valuable goods (gold)... but those who do so win, and we win (where "win" simply means "do better than dealing with fiat").
I have been running an experiment for 3 years now, trying to pay as many expenses as possible with 99.99% pure gold bars and coins. At first, I was only able to convince enough stores and suppliers to exchange gold-for-goods for 27% of what I "purchased". In the past 3 years I've gotten more convincing and/or gold has become more mainstream, and also I know which stores will accept my gold and which will not (though fairly often those who refused before change their mind, especially when they see I always walk out rather than pay with dollars). Today I am at 92% (by "value"), and that seems to be close to a plateau.
So gold already works as a medium of exchange, if we bother to make some effort. And if more and more folks would do this, we'd all be much better off, as the predator class becomes able to steal less "off the top".
The basic point is... we must rise up, or one generation from now everyone will be overt, full-bore slaves. For practical purposes, most humans are already. The reason I am dubious is... the success of the predator class in turning humans in to complete, total, utter morons with near zero connection to reality, and almost total motivation by fiat, fake, fraud, fiction, fantasy BS crafted and spewed by the predator class.
Pretty good article. But be careful. While it is usually possible to reduce input and manufacturing costs (increase efficiency) of a given technology (like solar power) at a certain rate, it is not possible to push that forever (in most cases), and it is not possible to push certain aspects very far at all.
For example, high quality "solar cells" are already 30% efficient (and over 90% efficient at peak wavelength). That efficiency can only be improved a factor of 3x at most... ever.
Also, most technologies have a "limit point" of some kind. For example, the switching components (usually "transistors") in integrated circuits that are the fundamental component in computer technology cannot be made smaller than one atom (and probably several atoms)... and that limit is being approached today (within a factor of 100 or so). Also, the transmission of signal from component to component cannot exceed lightspeed, which is less than a factor of 2 from today. And switching speed cannot become infinite either (which doesn't really matter, since the transmission speed between components would still impose a more serious limit).
Nonetheless, I appreciate the article and agree in essense. In fact, I'm working on an already proven technology that can improve the efficiency of mankind by a factor of millions or more... but sure enough, as the author indicates, the biggest obstacle to final and complete implementation is the predator class.
While you are correct that technolgy itself has a limit to its own productivity, I believe the author was referring to the efficiency of the production of said technology. While, of course, computers will reach their computing limit and solar panels will reach their photon gathering and energy storing limits, we, as their producers, will continue to produce these products more efficiently, bringing the price of production down near or at zero, making the cost zero, which, in turn, makes money, jobs, government, and taxes obsolete.
Both your solar and switching speed arguments fall over when you realize that you can build more PV arrays and use more processors in parallel.
Current power consumption is < 13 Tw and we are awash in 6500Tw of solar and 1700Tw of wind, of which 580Tw of solar and 85Tw of wind is readily available (not over open ocean, for example).
The limit point for these technologies will be their material inputs (neodymium for turbines and tellurium and indium for PV), not efficiency of conversion.
Your insistent bleating about 'predators' smacks of the rationalization of your personal failings, but we're all ears if you'd like to delve into details instead of waving your hands in the abstract.
I understand parallel processing well enough. In fact, I write multicore software, and also do some GPGPU programming as part of my work. But that's not doing more with less, that's doing more with more (which is fine, but not what the author was talking about).
Sure, we can cover the world with solar panels and collect lots more power, but we can't power the world with a single solar panel that we make endlessly more efficient, lightweight and cheaper.
I'm just being realistic - recognizing cases where efficiency gains are plausible and possible, but also recognizing cases where potential gains are modest.
I am scientist, engineer, inventor and product developer. I design all sorts of computerized/automated/robotics systems, optical systems, image processing systems, 3D graphics systems, inorganic consciousness systems, etc. And I design and prototypes systems myself. So, to say I am just waving my hands around in the abstract makes me laugh. NASA and AFRL do not contract me to wave my hands around, they contact me to accomplish things their internal scientists cannot figure out how to do.
And the predator class is plenty real.
I was trying to get at the mechanism by which the predators were preventing you from working on GAs or whatnot, but thanks for the reply anyway.
I hope NASA is paying you enough to buy some nice Tesla boxes from Nv.
Not sure what your GA acronym means. But if you're asking how the predators-that-be and predator class prevent me from finishing that massive breakthrough technology (in a reasonable time frame), that's quite simple: I cannot trust them. Thus I cannot take investment from any government or corporation, because they'd instantly deem the technology "crucial to national security" or "applicable to military projects" or some other pile of BS, then steal it, and maybe even lock me up to assure I don't finish first (since I would not help them, and others would not understand it as well as me). Also, they would apply the technology to destruction and mass enslavement, which is the opposite of my intention. Therefore, I must develop it on my own time and dime, which slows me down.
Nah, I build my own computers, and buy my own GPUs (yes, from nvidia). My multi-core and GPGPU work are for my own projects - so far at least. 90% of my time is on my own projects.
GA == http://en.wikipedia.org/wiki/Genetic_algorithm
Color me skeptical, but it's very unlikely that you do serious coding but have never heard of a comp sci concept that even my freshman nephew knows about. Add this to your querulance and I think you're fibbing about what you do for a living, Sparky.
Oh yeah. I looked into them years ago, but they aren't practical for the work I've been doing. I also admit that I don't read "the literature" much either, and have a terrible memory for any subject matter I'm not working with. In conversations with other scientists, they said "genetic algorithms" as a phrase, not an acronym. But also, GA hasn't even come up in any conversation for 3 or 4 years. I'm sure I heard the acronym before, but I've forgotten.
The technology I developed is so far ahead of neural networks and genetic algorithms (for implementing inorganic consciousness) that I waste no time with those techniques.
Also note that students tend to encounter a wide variety of fields, while those of us developing and implementing totally new science and technology are often extremely focused and much too busy to read widely. So your observation is likely correct, but means nothing in this case.
I had to look up "querulance". From the definition I read, I'm not sure whether it applies or not. I believe everyone is abused by the people in the FederalReserve, governments, [most] large corporations and the predator class, but not necessarily more or less than me. However, to be sure, I am more aware of their techniques than average folks. So, does the term still apply?
I also don't get the reference to "Sparky". Obviously I'm not well read! :-)
Thanks, honest ann, as it seemed to me that no one was giving FR credit for what strikes me as some original thinking here. I for one had never before encountered the connection between the exponential growth in technology and "sound-money’s inherent price-reducing proclivity." In fact, I hadn't even encountered the latter until now, which if nothing else makes it clear why a fiat money system -- and thus the Fed's hatred of "deflation" -- is so fundamentally opposed to the common good. How can a relentless devaluation of money via inflation ever be anything but contrary to the best interests of society? Do people rush out to buy things for this reason, or do they buy when they are ready to, even when -- as is the case with computer/electronics -- prices relentlessly fall?
Add in the exponential growth component as computerization/robotization permeates the economy as a whole, and it seems to me that FR's really onto something, especially since the growth dynamic is as easy to track as your next laptop or smartphone purchase. And once people "get it" with regard to the complementary impact that sound money would have, why in the world would they put up with fiat money any longer, whether it brings an end to "the economic problem" or not?
And why not give FR the benefit of the doubt in the meantime?
"I for one had never before encountered the connection between the exponential growth in technology and "sound-money’s inherent price-reducing proclivity.""
You don't need exponential growth. Even incremental growth in process efficiency will tend to cause prices to drop - provided that the effect isn't swamped by an endless issuance of fiat paper.
"a fiat money system -- is so fundamentally opposed to the common good."
Yeah, basically. The problem is that governments cannot stop themselves from producing infinite quantities of it. Especially in democratic governments where it helps buy more votes.
"Do people rush out to buy things for this reason"
Because of inflation, yes. The faster you get rid of your depreciating dollars out of your wallet, and get your hands on real goods, the less of your wealth will be stolen through the Federal Reserve's money supply inflation. If you were so foolish as to store dollars under your mattress for the last 97 years (since the Fed was founded), then more than 95% of your wealth would have been stolen. Prior to the Fed, this wasn't true; American currency was fairly stable for a century.
Excuse me, doctor, but I rather doubt that anyone alive today has dollars stored under their mattress since 1913. And virtually no one presently thinks about spending their dollars today before they devalue tomorrow -- or next week or next month or next year. That's the "beauty" of low inflation; people don't feel it and therefore stumble blindly into a loss of purchasing power that ultimately impoverishes them.
Instead, people buy buy buy because government policy (easy credit, low interest rates) is to induce them to do so in order to maintain the Keynesian obsession with "aggregate demand," which is the equivalent of staying on a Viagra fix in order to maintain an erection, never mind that the only thing consumers end up fucking is themselves.
A truly infomative piece. I love it when people who have worked in the financial industry their whole careers come out and call it fascism. That just gives me the warm and fuzzies. Can't wait till the next installment. I hope more people catch on to this concept so we can hurry up and start being a happy, free, space-traveling society. Because, I don't know about you, but I'm ready to quit my job and meet a Pleidian already.
Blaming Keynes for Bernanke & Krugman is like blaming Debakey for cardiac surgery done through the rectum. Bernanke will fail no matter how many trillions. With a political leadership that is both corrupt & incompetent combined with a dysfuntional economy Keynes' liquidity trap wins . Thus no jobs no recvery no hyperinflation just a continuous reward for our elite.
We as a nation, MUST pay more attention to the econimic consequences of our political system, or be
doomed to be subservient to it.
I'm getting a little ahead of myself here, but given what Ray Kurzweil (whom I quoted on the exponential growth in solar energy) has to say below about the dangers of advanced technology, I think it's important that readers understand going forward that it's not advanced technology per se that we have to fear; it's that particular entity that, by it's very nature, always abuses it:
http://www.kurzweilai.net/10-questions-for-ray-kurzweil?utm_source=Kurzw...