Web Extra: Economy on FIRE and in debt

[FRED]

http://www.harpers.org/media/image/blogs/misc/ericjanszen.jpgWeb Extra: Economy on FIRE and in debt (http://www.sfreeper.com/2009/04/08/web-extra-economy-on-fire-and-in-debt/)
April 8, 2009 (Corey Pein - Santa Fe Record)

In this week’s article (http://sfreporter.com/stories/the_house_thornburg_lost/4557/) on Thornburg Mortgage, I quoted former venture capitalist and author Eric Janszen (http://www.itulip.com/) on whether the housing crash that ultimately claimed one of Santa Fe’s largest employers could’ve been predicted or not.

Our phone interview ranged too far for that article, but we thought Janszen’s thoughts on capitalism’s boom-bust cycle and the rise of what he calls the “FIRE economy”—for finance, insurance and real estate—were worth sharing at length.

Basically, he thinks the government started selling everybody out to big creditors decades ago, and the massive debt burden that resulted has paralyzed the economy.

Janszen, who lives in Boston, also has some thoughts on the federal recovery plan, with its focus on “green jobs”: “How many unemployed mortgage brokers does it take to screw in a compact fluorescent energy-saving lightbulb?” he asks.

You write the punchline.

SFR INTERVIEWS ERIC JANSZEN


I liked your Harper’s article (http://www.harpers.org/archive/2008/02/0081908) on the housing bubble.

Thanks. It seems to be panning out.

That was back in early 2008, when many people hadn’t yet grasped the extent of the subprime mortgage crisis. But you went so far as to predict the next bubble—green energy.

I’m actually working on a book on that. So far it does seem likely to focus on infrastructure.

The refrain I keep hearing was that nobody saw the real estate crash coming. You say people could’ve seen it coming.

Many people did, of course. And many people who did made money on seeing it coming. It wasn’t all that hard. There were a few fantasies you had to not buy into. One is that housing prices always go up, and stock prices always go up.

If any other product was sold based on those premises, you’d think people would be somewhat skeptical. It’s pretty marvelous to convince so many people of something that can’t possibly be true.

Was the bubble contingent on people not understanding what these financial institutions were selling, with mortgage-backed securities and so forth?

They don’t even understand that they are products. They think they’re a guarantee of something—that if you put money in the stock market, you’re saving.

These are financial products. Houses are products. Mortgages are products.
And you say regulations have been written in the finance industry’s favor over the years?

Starting with Reagan, under the banner of free markets and low taxes, with the tax relief act of 1981 (http://www.house.gov/jec/fiscal/tx-grwth/reagtxct/reagtxct.htm). If you look carefully what it was was the Debtor Creation Act.

The idea was to free up money that used to go to paying taxes to finance public projects—what some economists called the fourth factor of production, the infrastructure, the highways, what all industries need to be efficient, and move people and products.

Now we spend all our money on servicing debt. That’s what we do in this country. All this nonsense about trying to cut taxes was really to make room so you could take a good chunk of cash flow out of all these corporations and [give it to banks].

Can you put today’s economic situation in a historical perspective? Is there any parallel?

More than one-quarter of all homes have negative equity in the US. That’s a bad problem. But there’s a worse problem developing.

I refer to the American housing market as “the big slum.” A slum is where the market value has fallen below the replacement value. It doesn’t make sense to fix anything. You don’t fix it, you just let it go to hell. There’s no way to get your money back.

So in a tangible sense, the country is falling apart?

Yes. I just got back from a trip to Florida. I’ve been going down there for 20 years. It’s pretty striking. In Miami, South Beach, 20-30 percent of the businesses are out of business. Hotels, restaurants are boarded up with “for lease” signs. You can basically see the area is not doing well.

What’s happened is, we had this finance-based economy that was very dependent on continuous debt creation. That’s suddenly dried up.
Have we had an economy like this in the past? Yeah, we did in the 1920s. more... (http://www.sfreeper.com/2009/04/08/web-extra-economy-on-fire-and-in-debt/)

iTulip Select (http://www.itulip.com/forums/showthread.php?t=1032): The Investment Thesis for the Next Cycle™
__________________________________________________

To receive the iTulip Newsletter or iTulip Alerts, Join our FREE Email Mailing List (http://ui.constantcontact.com/d.jsp?m=1101238839116&p=oi)

Copyright © iTulip, Inc. 1998 - 2009 All Rights Reserved

All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Nothing appearing on this website should be considered a recommendation to buy or to sell any security or related financial instrument. iTulip, Inc. is not liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. Full Disclaimer (http://www.itulip.com/GeneralDisclaimer.htm)

[Chomsky]

Thanks! A bunch of familiar tasty tidbits from Fearless Leader. :)

[Mega]

Question is "What next?"

Here in Blighty the Police have just beaten a man to death, now they trying (With the goverment) to muddy the waters. We also had a "strange" happening today in that the head of the anti-terror police went to a meeting at Dowing street.

He gone to brief the PM about anti-terror raid to be done tomorrow morning..........using breifing notes......that where held in a file with a clear platic coating......thus easy for the press to photo & Read!

http://www.dailymail.co.uk/news/article-1168584/Anti-terror-chief-apologises-security-leak-forces-police-make-early-arrests.html

Said "Raids" are now taking place although a number of the guys are now missing......the police have text them to please get in contact!


The collaspe is almost here, these shit heads whom "Goven" us have lost the plot.........one more Police killing will do it. As someone whom has been in a riot (Liverpool 81) i can tell you i sense the anger..........its coming!
Mike

[Quincy K]

I keep telling everyone that the real violence is going to start happening around August 09 when the UE benefits start running out in earnest. Since Florida's bust started before the rest of the Nation and where self-employment(do not qualify for benefits) in construction-related industries was more prevalent, they are apparantly months ahead.

There is absolutely, positively no way I would be walking around at night in a heavily-populated, ethnically-challenged urban area that has 10+ percent u-3 and 30 percent vacany in RRE and CRE.

No way.

[goadam1]

I keep telling everyone that the real violence is going to start happening around August 09 when the UE benefits start running out in earnest. Since Florida's bust started before the rest of the Nation and where self-employment(do not qualify for benefits) in construction-related industries was more prevalent, they are apparantly months ahead.

There is absolutely, positively no way I would be walking around at night in a heavily-populated, ethnically-challenged urban area that has 10+ percent u-3 and 30 percent vacany in RRE and CRE.

No way.

"ethnically-challenged." I assume you are implying that white people are too fat, lazy and stupid to get off their asses and do something "naughty." I think there are plenty of scary people of all races. I think you meant "economically-challenged. Typos happen.

[LargoWinch]

These things are not that hard to call.

EJ, is being too modest!

I sure could not predict "when" the things will fall apart...

[GRG55]

Question is "What next?"

Here in Blighty the Police have just beaten a man to death, now they trying (With the goverment) to muddy the waters. We also had a "strange" happening today in that the head of the anti-terror police went to a meeting at Dowing street.

He gone to brief the PM about anti-terror raid to be done tomorrow morning..........using breifing notes......that where held in a file with a clear platic coating......thus easy for the press to photo & Read!

http://www.dailymail.co.uk/news/article-1168584/Anti-terror-chief-apologises-security-leak-forces-police-make-early-arrests.html

Said "Raids" are now taking place although a number of the guys are now missing......the police have text them to please get in contact!


The collaspe is almost here, these shit heads whom "Goven" us have lost the plot.........one more Police killing will do it. As someone whom has been in a riot (Liverpool 81) i can tell you i sense the anger..........its coming!
Mike

Mike: Often I skim your posts, sometimes I poke fun at them, but most of the time I find your news interesting...maybe because I lived in London for a time and because my wife's family is from the UK. Every now and then a post of yours brings back some connection, or just makes me sit up and think a bit harder.

I was in London the day Jean Charles de Menezes was murdered. I listened to the news reports as they were coming out; to the constantly changing story as the day wore on. I put up a colleague of mine in my flat overnight because he didn't want to use the train system that day to get home from work...and he's a native Londoner. My attitude towards being in London and towards the British police changed permanently as the facts of that killing slowly began to come out. Maybe it's just me, but I really think much of what is going on now, including some of the appalling reports of the handling of demonstrators during the G20, trace back to 22nd July, 2005 and the total evasion of responsibility for that murder at the hands of the government.

The holes aren't potholes any more Mike...

...I read the news today oh boy
Four thousand holes in Blackburn, Lancashire
And though the holes were rather small
They had to count them all,
Now they know how many holes it takes to fill the Albert Hall...

--Lennon/McCartney; A Day in the Life, 1967--

[metalman]

huh... interesting... more... (http://www.sfreeper.com/2009/04/08/web-extra-economy-on-fire-and-in-debt/)

Who were those people you mentioned who made a lot of money on the crash?

There’s some famous guys, hedge fund guys, who shorted the home builders, the credit default swaps. They made some money on it.


Most of the guys who made a lot of money didn’t talk to anybody. You don’t make money telling people what your expensively developed trades are.


The short sellers have been demonized, almost like they engineered the crisis.

Yeah. There’s reasons I did talk about it. I didn’t want to be part of the process of making money off what I understood to be a fundamentally corrupt system.


I don’t see that as my role. I’d like to see us discard the FIRE economy and move to a healthier economy: Making stuff, and competing on an even footing with other countries.


Playing the downfall of this crummy system is not what I was interested in doing. I wouldn’t disparage anybody who did do that. People have to protect themselves. What I would do is tell people what I thought was going to happen. People can start their own trades.


Generally speaking, our guys have done very well. At least, they haven’t lost all their money.

[Mango]

So at the beginning of the interview Eric says:
Starting with Reagan, under the banner of free markets and low taxes, with the tax relief act of 1981 (http://www.house.gov/jec/fiscal/tx-grwth/reagtxct/reagtxct.htm). If you look carefully what it was was the Debtor Creation Act.

The idea was to free up money that used to go to paying taxes to finance public projects—what some economists called the fourth factor of production, the infrastructure, the highways, what all industries need to be efficient, and move people and products.

Now we spend all our money on servicing debt. That’s what we do in this country. All this nonsense about trying to cut taxes was really to make room so you could take a good chunk of cash flow out of all these corporations and [give it to banks].<O:p</O:p
<O:p</O:p
Then at the very end he says:
<O:p
We need a debt cut and a tax cut.
So it looks like he’s saying:
1) Reagan tax cut bad, and
2) [now] “We need a tax cut.”
<O:p</O:p
What changed? Or is this recent ‘tax cut’ he proposes just an action that works like a tax cut “reducing the energy intensity of our economy” --less real energy required to do the same amount of production?


Can anyone explain that to me? Why is tax cut under Reagan bad, but tax cut now good? (But I understand the part about a debt cut.)

[cjppjc]

Nice job. I think you reach a little here:



Starting with Reagan, under the banner of free markets and low taxes, with the tax relief act of 1981 (http://www.house.gov/jec/fiscal/tx-grwth/reagtxct/reagtxct.htm). If you look carefully what it was was the Debtor Creation Act.

The idea was to free up money that used to go to paying taxes to finance public projects—what some economists called the fourth factor of production, the infrastructure, the highways, what all industries need to be efficient, and move people and products.

Now we spend all our money on servicing debt. That’s what we do in this country. All this nonsense about trying to cut taxes was really to make room so you could take a good chunk of cash flow out of all these corporations and [give it to banks].



It may have resulted as you say, But I don't believe cutting tax rates were INTENDED to give the cash flow to banks.

[metalman]

nothing about that in this interview. elsewhere on the site he's talked about cutting corp. taxes.

[cjppjc]

nothing about that in this interview. elsewhere on the site he's talked about cutting corp. taxes.


I am not understanding you? If you reread the beginning of the interview, and don't see the part I quoted let me know.





Wait. Maybe you weren't speaking to me

[jiimbergin]

I am not understanding you? If you reread the beginning of the interview, and don't see the part I quoted let me know.





Wait. Maybe you weren't speaking to me

Maybe he wasn't, but I certainly see what you see.
jim

[Sharky]

There’s a serious discussion going on in Michigan about shutting down parts of Flint (http://www.mlive.com/news/flint/index.ssf/2009/03/city_of_flint_shutdown_offthec.html). They’re saying, “There’ll be no police, no fire protection; If I were you I’d be moving out.”

If you think about it, what they ought to be having a conversation about is doing homesteading: If you move in, there’ll be no property taxes for 10 years. It would have the opposite effect. Generally people will move in and try to rebuild communities.


Great idea! Has this been floated on itulip before? It sounds a lot like an earlier post of mine:


http://www.itulip.com/forums/showpost.php?p=88393&postcount=8

[anoop]

Back when I was in high school, we had a story (as part of required reading) that discussed how economies are formed and productivity is increased through innovation (not by increasing consumption!).

The story was about a primitive community where all the members of the community spent their whole day climbing to the top of a hill and back just to get water from a lake at the top of the hill. One of the members notices that it would be easy build a channel so the water comes down to them saving time for all of them. In exchange for sharing the idea, he asks everyone for 1/10 of the time they save. And he directs them to do what they are best at (e.g. the guy who makes the best shoes, spends his 1/10th of time making shoes). As result, division of labor is built, people have more free time and the community prospers.

I have forgotten the title/author of this story. Does anyone know what I am talking about? I think this would be an apt story for people to read. One doesn't have to consume like crazy in order for the economy to grow. Innovation is what is needed, and that is the only thing that will get us out of this mess.

[Rajiv]

Yes but there is a corollary to the story.

Since it became so easy to get the water, and the cost of water became low, they increased the use of the water, and for a while prosperity increased, and the population also increased, and the village became a small town.

However, because of the low cost of water, they began using the water from the lake at a faster rate than the lake was being replenished at. Since it happened over a number of generations, the people of the town did not notice that the level of the lake was declining.

Suddenly one day, the channels that they had dug to get the water dried up, and the small town was no more.

[anoop]

Yes but there is a corollary to the story.

...

Suddenly one day, the channels that they had dug to get the water dried up, and the small town was no more.

That's what would happen if the community got lazy and stopped thinking. If they remained alert, they would have seen this problem coming and they would have found ways to survive it.

To quote Andy Grove -- only the paranoid survive...

Actually, the real corollary to the story (mentioned in the story itself) was that this model only works if innovation is allowed to flourish. If, when the idea of building the water channel was presented, all the other members had turned around and refused to give 1/10 of their time despite making use of the channel, innovation would have been stifled and the wise fellow that came up with the idea for the water channel would have lost his incentive to think of solutions that might benefit the community.

[Rajiv]

I don't think you got it at all -- the issue is that on this planet the resources are ultimately limited, and unlimited growth is just not possible. Right now, you have 6.5B people living on a planet whose sustainable carrying capacity is around 2B.

And the real corrollary is that people and societies are invariably short sighted.

Please read works by Jared Diamond, and William Catton among others -- also read "Limits to Growth" and derivative works. Also useful are works by Hudson and Margrit Kennedy

[occdude]

"ethnically-challenged." I assume you are implying that white people are too fat, lazy and stupid to get off their asses and do something "naughty." I think there are plenty of scary people of all races. I think you meant "economically-challenged. Typos happen.

What makes you assume he was talking about fat,lazy and stupid white people? There are plenty of fat,lazy and stupid people of ALL races, dont you agree?

[Lukester]

Another funny comment from Goadam. :D This guy is a wit.

"ethnically-challenged." I assume you are implying that white people are too fat, lazy and stupid to get off their asses and do something "naughty." I think there are plenty of scary people of all races. I think you meant "economically-challenged. Typos happen.

[medved]

I keep telling everyone that the real violence is going to start happening around August 09 when the UE benefits start running out in earnest.

Obviously, there is a simple and widely accepted solution to this and any other current problem: gov’t bailout. The Federal gov’t will help the states to extend UE benefits and create public works. This is not the 1930s, and the bureaucrats in Washington are not limited by the population’s common sense and natural distrust of the gov’t. Any problem in the short term can be solved by yet another bailout.

The real $10T ($20T?, $30T?, etc.) question is, when will supply destruction reverse the Ka and turn it into Poom. Other than that, I don’t see any significant problems.

Probably, the gov’t is waiting for some kind of violence outburst to test the pain threshold and decide, what kind of bailout is necessary, which programs come first etc.

[ThePythonicCow]

The real $10T ($20T?, $30T?, etc.) question is, when will supply destruction reverse the Ka and turn it into Poom. Other than that, I don’t see any significant problems. When, and how, and who?

I doubt it will be an accident, which is to say (being a card carrying member of the tin foil hat club) I expect that at least a few of the worlds most powerful will know when and how, before it happens.

Will those with a priori knowledge be Chinese, Saudi, or Russian?

When and how will Americans get riled up enough to throw the bums out? I'd guess only sometime after one or more of the above nations, in concert with their central banks, takes the almighty Dollar down a couple of notches, and the consequent economic pain to ordinary Americans angers us enough.

[BiscayneSunrise]

Yes. I just got back from a trip to Florida. I’ve been going down there for 20 years. It’s pretty striking. In Miami, South Beach, 20-30 percent of the businesses are out of business. Hotels, restaurants are boarded up with “for lease” signs. You can basically see the area is not doing well.

I can attest to this phenomenon.

The area still maintains a veneer of wealth and prosperity. Yachts, Bentley's, high rises, gleaming cruise ships, etc. The problem with south Florida has always been the wealth seen here is generated elsewhere. Wealthy people from around the world keep homes or boats here but do very little to help the local economy.

What wealth that was created locally came from tourism and real estate development. Tourism is still hanging in there. (again, the phenomenon of affluent people coming here) Real estate, of course, is dead. Peel back a few layers here in south Florida beyond the veneer and you see a community in deep trouble. Shrinking population, a plummeting tax base, barely adequate education system, an economy just scraping along.

In the past, beautiful homes were torn down, to be replaced by a multi million dollar mansion, only to be flipped and torn down again for the next aggrandizing monument. What little work contractors have now revolves around projects much more modest: modernizing a kitchen or upgrading to hurricane proof windows.

In downtown Fort Lauderdale, there is a chic shopping district on Las Olas Blvd. For the past year, shops and restaurants there have been closing at an alarming rate. What is left behind are storefronts boarded up and crumbling infrastructure. Sidewalks are cracking, empty lots are overgrown and used to store rusting construction equipment, "for lease" signs are rotting in the weather. Massive new resort hotels or condos built on the beach during the boom are either withering or sealed up.

Wealthy entrepreneurs are digging in their personal pockets to subsidize their businesses.

Don't get me wrong, being a regional center, it is still a popular and crowded area, even on weekdays but the area considered chic has been shrinking. The smell of decay is apparent.

[*T*]

Yes but there is a corollary to the story.

Since it became so easy to get the water, and the cost of water became low, they increased the use of the water, and for a while prosperity increased, and the population also increased, and the village became a small town.

However, because of the low cost of water, they began using the water from the lake at a faster rate than the lake was being replenished at. Since it happened over a number of generations, the people of the town did not notice that the level of the lake was declining.

Suddenly one day, the channels that they had dug to get the water dried up, and the small town was no more.

Rajiv discovers the S-curve.

[Rajiv]

Rajiv discovers the S-curve.



I was responding to Anoop -- also the above scenario does not necessarily result in a S curve -- but most likely in a classic ecological population collapse.



This issue was addressed in a paper by David Klein,
"The Introduction, Increase and Crash of Reindeer
on St. Matthew Island."

Klein reported that in 1944, 29 reindeer were brought to
St. Matthew Island. Initially there were abundant food
sources, and the reindeer population increased dramatically.
There were no predators to cull the population. (http://www.drmillslmu.com/peakoil.htm)
About 20 years after they were first introduced, the reindeer
had overshot the food carrying capacity of the island, and
there was a sudden, massive die-off. About 99% of the
reindeer died of starvation.

(http://www.drmillslmu.com/peakoil.htm)
http://www.drmillslmu.com/reindeer-crash.GIF (http://www.drmillslmu.com/peakoil.htm)

As shown in the graph below, this is an example of a general
phenomenon. All species suffer population collapse or species
extinction if they overshoot and degrade the carrying capacity
of their ecology.
(http://www.drmillslmu.com/peakoil.htm)http://www.drmillslmu.com/peakoi15.jpg
Source: http://www.theoildrum.com/node/3188 (http://www.drmillslmu.com/peakoil.htm)

[fpacific]

Answer to The Joke from an RE friend of mine in Portland, Oregon.

All of them but one. According to a Mortgage Broker Association spokesperson, "We don't know anything about these bulbs but we didn't know anything about our borrowers for the last six years, and we did a pretty good job of screwing them too. We're the right industry for the job." (The one who will not screw in the bulb is busy putting together a shaky $1.5m mortgage for a 22-year old unemployed Safeway checker.)

Cheers

[santafe2]

This has been a terrible circumstance for Santa Fe. It's fairly well covered in the SFR article.

http://www.sfreporter.com/stories/the_house_thornburg_lost/4557/

Some friends and more friends of friends lost jobs or money or both. I think by the time anyone realized this debt based model was a problem, it was too late to undo what had been built. Personally, we've used Thornburg for our building projects. They were always great people to work with. Sad day for all of us locally.

[anoop]

There's no fighting against the ill effects of over population. Robert Malthus is the person I credit for that.

[Rajiv]

Have you read Thomas Malthus' "An Essay on the Principle of Population" (http://www.esp.org/books/malthus/population/malthus.pdf) written in 1798? -- the above is a pdf file of the entire essay (134 pages.) Chapters 16 -19 are quite critical of Adam Smith and derivative thought

CHAPTER 16................................................ .....................................96
Probable error of Dr Adam Smith in representing every increase of
the revenue or stock of a society as an increase in the funds for the
maintenance of labour - Instances where an increase of wealth can
have no tendency to better the condition of the labouring poor -
England has increased in riches without a proportional increase in
the funds for the maintenance of labour - The state of the poor in
China would not be improved by an increase of wealth from
manufactures.

CHAPTER 17................................................ ...................................103
Question of the proper definition of the wealth of a state - Reason
given by the French economists for considering all manufacturers as
unproductive labourers, not the true reason - The labour of artificers
and manufacturers sufficiently productive to individuals, though not
to the state - A remarkable passage in Dr Price’s two volumes of
Observations - Error of Dr Price in attributing the happiness and
rapid population of America, chiefly, to its peculiar state of
civilization - No advantage can be expected from shutting our eyes to
the difficulties in the way to the improvement of society.

CHAPTER 18................................................ ...................................110
The constant pressure of distress on man, from the principle of
population, seems to direct our hopes to the future - State of trial
inconsistent with our ideas of the foreknowledge of God - The world,
probably, a mighty process for awakening matter into mind - Theory
of the formation of mind - Excitements from the wants of the body -
Excitements from the operation of general laws - Excitements from
the difficulties of life arising from the principle of population.

CHAPTER 19................................................ ...................................118
The sorrows of life necessary to soften and humanize the heart - The
excitement of social sympathy often produce characters of a higher
order than the mere possessors of talents - Moral evil probably
necessary to the production of moral excellence - Excitements from
intellectual wants continually kept up by the infinite variety of nature,
and the obscurity that involves metaphysical subjects - The
difficulties in revelation to be accounted for upon this principle - The
degree of evidence which the scriptures contain, probably, best suited
to the improvements of the human faculties, and the moral
amerlioration of mankind - The idea that mind is created by
excitements seems to account for the existence of natural and moral
evil.

While it is a good essay, and a seminal work, I personally think that Jared Diamond and William Catton are more relevant, as they have access to more data, and the benefit of two centuries of additional thought.

[vinoveri]

I don't think you got it at all -- the issue is that on this planet the resources are ultimately limited, and unlimited growth is just not possible. Right now, you have 6.5B people living on a planet whose sustainable carrying capacity is around 2B.

And the real corrollary is that people and societies are invariably short sighted.

Please read works by Jared Diamond, and William Catton among others -- also read "Limits to Growth" and derivative works. Also useful are works by Hudson and Margrit Kennedy

This assertion is unsupppported .. ipse dixit. Following this we should have to eliminate 4.5B of us to sustain the world for the rest of us:(

The earth is fruitful and can supply the physical needs and comforts of a lot more than $6.5B folks, considering man has reason, has learned to control and leverage the natural world, and whose efficiency and ingenuity can adapt and cultivate the earth's resources to provide him a garden. Greed, Envy, Pride et al may inhibit and misdirect "progress", but Goodness reigns b/c of the intergenerational transfer of a sense of common purpose, 'the faith" is passed on (notwithstanding the current secular attack against primarily the family who are responsible for passing on common sense of the generations).
Virtue must be called and taught as such
A vice must be called a vice and not be celebrated like that of Greed.

[Sharky]

I don't think you got it at all -- the issue is that on this planet the resources are ultimately limited, and unlimited growth is just not possible. Right now, you have 6.5B people living on a planet whose sustainable carrying capacity is around 2B.

And the real corrollary is that people and societies are invariably short sighted.

Please read works by Jared Diamond, and William Catton among others -- also read "Limits to Growth" and derivative works. Also useful are works by Hudson and Margrit Kennedy

I've heard the 2B number before, but I've never seen any good support for it. I don't have access to the works of the authors you mentioned. Any chance you could summarize how that number was derived?

With the human race's ability to adapt and innovate, I'm skeptical that any estimate today would be better than a wild-ass guess.

For example, weren't similar predictions made a century or so ago with regard to agriculture? That the planet could never produce enough food to feed more than some fairly small number of people? Then came the industrialization of agriculture, widespread use of fertilizer, and other innovations that blew those numbers out of the water.

[Rajiv]

This assertion is unsupppported .. ipse dixit. Following this we should have to eliminate 4.5B of us to sustain the world for the rest of us:(


We don't have to do anything -- when the carrying capacity of an ecosystem is exceeded, then in a few generations, the four horsemen (http://en.wikipedia.org/wiki/Four_Horsemen_of_the_Apocalypse) take over and do what they do! As I said earlier, humans and societies are invariably shortsighted, and lessons are not learned until failure happens

Read "limits to growth (http://en.wikipedia.org/wiki/The_Limits_to_Growth)" and its follow up research (http://www.sustainablescale.org/ConceptualFramework/UnderstandingScale/MeasuringScale/LimitstoGrowth.aspx)

[ThePythonicCow]

I don't think you got it at all -- the issue is that on this planet the resources are ultimately limited, and unlimited growth is just not possible. Right now, you have 6.5B people living on a planet whose sustainable carrying capacity is around 2B.

And the real corrollary is that people and societies are invariably short sighted.

Three entirely different statements here.

Yes, rather obviously, there is some limit to the number of humans this planets resources can substainably support. Perhaps it's a billion people, perhaps a trillion, ... but obviously there is a limit. That limit likely varies with time, and likely correlates with the sun's energy output.

The claim of a 2B substainable human limit seems to me unsupportable and too low.

The corollary that we're short sighted is obviously true in some respects, but in this present discussion, might just be serving as rhetorical ploy to put disagreers on the moral defensive, and as such would be a distraction. It's also not a corollary of your earlier statements, at least not as I use that term in mathematics.

[Rajiv]

For a good exposition of carrying capacity, see - Carrying Capacity (http://mmcconeghy.com/students/supcarryingcapacity.html)


.
.
.
.
We know that the Earth has well over 6.4 billion people in the year 2005.

How many can the Earth hold?

We don't want to know how many people you can crowd on to the Earth. What we want to know is, how many people can you fit on the Earth without damaging the Earth! If we crowd too much, then the Earth will be damaged, and the ability of the Earth to support us will be decreased. Life will get worse. After a while humans might decrease in number, or even die out completely! On the other hand, if we find the right number, the number that is not too crowded, then we will be able to support that many people on Earth for a very long time -- the human community will be able to survive comfortably for 1000s of years.

The number of individuals who can survive indefinitely without damaging the environment, is called the "Carrying Capacity." We would like to know, "What is the Carrying Capacity of Earth?"

Is 6 billion a good number, or is it too many people? Or, is it too small, too pessimistic -- could we have 10 billion or 20 billion?

After looking at the amount of supplies on the Earth -- how much water, food, etc. -- some scientists have calculated that the Earth can hold 40 billion people. Some other scientists looked at the same numbers and calculated that the Earth could hold only 2 billion people.

It seems like they ought to be able to agree better than that! And anyway, how can they say that we can only hold 2 billion, when we already have 6 billion. What kind of sense does that make?

They are thinking about carrying capacity.

Humans need air, water, food, and sometimes shelter. Just about everything else is optional.

To meet basic human needs, a person could survive for a year on


about 400 kilograms (liters) of water that is not very dirty or salty
about 300 kilograms of food, mostly grain such as rice, or bread
a shelter that maintains a temperature above freezing in winter

But, for Humans who have the choice to live a modern life style in the 21st century, the "optional" includes a lot of material goods, and especially, a lot of energy in the form of electricity and petroleum products.

To live a typical 2005 lifestyle in Rhode Island, USA, every year we provide for an average person:


100,000 kilograms(liters) of very clean water,
1000 kilograms of food, including a lot of meat and exotic food such as oranges, etc. that cannot be produced here in RI.

500 - 1000 kilograms of gasoline for transportation, imported.

the equivalent of another 1000 - 2000 kilograms of gasoline in the form of electricity, imported or made from imported fuel

tons of other industrial supplies such as sulfuric acid, steel, cement, commercial packaging, copper wire, industrial cleaning agents, plastics and other resins, cement, petroleum based dyes, glues and fabrics, etc., etc. Nearly all of this must be imported from outside RI.
disposal systems that handle tons of solid waste, and clean and recycle a vast amount of dirty, unsanitary water for each person in the state.

When scientists say that the carrying capacity of the Earth is 2 billion, they are not forgetting that we have 6 billion already. What they are saying is, that if you add up all the supplies in the world, and divide them up according to the amount that a typical American uses, then there is only enough for 2 billion people. If we have 6 billion people, the amount of fuel, water, electricity, etc. is just not enough to go around. Some people are going to be left out. We know that this is the case because, as we said in class, only about 1.2 billion people live in MDCs while the other 4.8 billion people have to make do with less.

When some scientists say that the carrying capacity of Earth is 40 billion, then they are saying that IF the rich people would give up all their luxuries such as cars, electricity, education, clean water, meatm etc. then that would allow us to provide minimum amounts of supplies to a much larger number of people. In fact, they say, we could provide minimum supplies to 40 billion people IF no one lived a luxury modern life style like the average Americans of 2001.

We can change the carrying capacity of Earth in two obvious ways:
First, if we damage the Earth, by polluting the rivers, eroding the topsoil, chopping down the forests, etc. then the ability of the Earth to support us will be destroyed -- Earth's carrying capacity will be lessened. For instance, if we lose our farms because of erosion, then we will be able to grow less food. Fewer people will be supported.

Second, if we conserve the Earth, clean up pollution, and apply our skills and knowledge to finding less damaging ways of living, then the carrying capacity could be increased. For instance, suppose we prevent pollution of our water, and clean up water that is already polluted. Then our farmers will be able to grow more food. More people can be supported.
.
.
.
.

[vanvaley1]

Diamond is cool. But...does he have an answer to this mess?

[vanvaley1]

One good sized Yellowstone burp outta take care of a lot of arguments. What bothers me more is the 'elite', 'cream of the crop', 'survivors of the fittest', 'demure demagogues', etc that suggest that the population is too big...but never tell us how they plan to shrink it.

Kinda like our demented deficit demons in DC drumming up a dracula daiquiri with the taxpayer's drachma...we won't find out who's on the 'who's who' list til it's too late.

I mean...it'd be kinda nice to know who's on the list. Anybody got a invitation to that RSVP party yet?

[Sharky]

What they are saying is, that if you add up all the supplies in the world, and divide them up according to the amount that a typical American uses, then there is only enough for 2 billion people. If we have 6 billion people, the amount of fuel, water, electricity, etc. is just not enough to go around. Some people are going to be left out. We know that this is the case because, as we said in class, only about 1.2 billion people live in MDCs while the other 4.8 billion people have to make do with less.

This approach seems extremely weak and biased:

1. Why would you define global carrying capacity in terms of current American lifestyle? That's absurd, since most of the world uses much less.

2. Their approach to determining how much the Earth can produce seems to neglect innovation, recycling, or even the more wide-spread adoption of current technology.

3. The concept of humans "damaging" the Earth doesn't make sense. Some types of pollution and superficial "damage" will increase carrying capacity, rather than decrease it. Mining metals that are used to build farming tools is an example. Grouping people in densely-populated cities would support a higher population that sparse suburbia. Even though the cities would be more polluted, overall energy requirements would be less and the efficiency of many systems benefit from increased proximity and scale.

I'm not saying there isn't a limit, but I do think the 2B number seems much too low. I suppose it's really only academic in the end: "you can't fight mother nature," particularly in the long-term.

[Rajiv]

The limiting resources happen to be fresh water, energy and arable land -- the per capita availability of each of these is reducing day by day.

Yes the methodology I outlined above is flawed, but it is flawed in a direction opposite to which you are inclined -- the approach does not take into consideration the negative aspects of overcrowding -- namely air and water pollution -- the approach here is one that is incrementalist in nature -- that is incremental changes in ecological degradation will only result in incremental declines (this kind of thinking leads to the supposed steady state of the "S" curve) -- however the real story is more along the line of "the last straw that broke the camel's back" -- once the collapse occurs, removing the straw fom the camel's back will not get the camel back to life.

This has been clearly shown in some of the graphs I posted earlier.

I do not know whether you have spent any time outside the US in the more densely populated areas of the world -- in spite of the propaganda, they are living on the edge of ecological catastrophe. These nations my use less resources than North America, but they are much closer to ecological collapse due to the over crowding present in these regions.

Overpopulation (http://en.wikipedia.org/wiki/Overpopulation)

there are some good figures that will clearly show where the problem areas are.

http://upload.wikimedia.org/wikipedia/commons/thumb/4/4d/World_population_density_map.PNG/800px-World_population_density_map.PNG

http://upload.wikimedia.org/wikipedia/commons/thumb/b/bc/Population_density.png/800px-Population_density.png

http://upload.wikimedia.org/wikipedia/commons/5/53/Poulation-since-10000BC.jpg

http://upload.wikimedia.org/wikipedia/commons/5/55/Poulation-since-1000AD.jpg

Some problems associated with or exacerbated by human (http://en.wikipedia.org/wiki/Human) overpopulation:


Inadequate fresh water<sup id="cite_ref-Shiklomanov-11-32_119-1" class="reference">[120] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-Shiklomanov-11-32-119)</sup> for drinking water (http://en.wikipedia.org/wiki/Drinking_water) use as well as sewage treatment (http://en.wikipedia.org/wiki/Sewage_treatment) and effluent (http://en.wikipedia.org/wiki/Effluent) discharge. Some countries, like Saudi Arabia (http://en.wikipedia.org/wiki/Saudi_Arabia), use energy-expensive desalination (http://en.wikipedia.org/wiki/Desalination) to solve the problem of water shortages.<sup id="cite_ref-141" class="reference">[142] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-141)</sup><sup id="cite_ref-142" class="reference">[143] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-142)</sup>
Depletion of natural resources, especially fossil fuels (http://en.wikipedia.org/wiki/Fossil_fuels)<sup id="cite_ref-143" class="reference">[144] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-143)</sup>
Increased levels of air pollution (http://en.wikipedia.org/wiki/Air_pollution), water pollution (http://en.wikipedia.org/wiki/Water_pollution), soil contamination (http://en.wikipedia.org/wiki/Soil_contamination) and noise pollution (http://en.wikipedia.org/wiki/Noise_pollution). Once a country has industrialized and become wealthy, a combination of government regulation and technological innovation causes pollution to decline substantially, even as the population continues to grow.<sup id="cite_ref-opinionjournal-Box_144-0" class="reference">[145] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-opinionjournal-Box-144)</sup>
Deforestation and loss of ecosystems<sup id="cite_ref-145" class="reference">[146] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-145)</sup> that sustain global atmospheric oxygen and carbon dioxide balance; about eight million hectares of forest are lost each year.<sup id="cite_ref-146" class="reference">[147] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-146)</sup>
Changes in atmospheric composition and consequent global warming (http://en.wikipedia.org/wiki/Global_warming)<sup id="cite_ref-147" class="reference">[148] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-147)</sup> <sup id="cite_ref-148" class="reference">[149] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-148)</sup>
Irreversible loss of arable land (http://en.wikipedia.org/wiki/Arable_land) and increases in desertification (http://en.wikipedia.org/wiki/Desertification)<sup id="cite_ref-149" class="reference">[150] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-149)</sup> Deforestation and desertification can be reversed by adopting property rights, and this policy is successful even while the human population continues to grow.<sup id="cite_ref-150" class="reference">[151] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-150)</sup>
Mass species extinctions (http://en.wikipedia.org/wiki/Mass_extinctions).<sup id="cite_ref-151" class="reference">[152] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-151)</sup> from reduced habitat in tropical forests (http://en.wikipedia.org/wiki/Tropical_forest) due to slash-and-burn (http://en.wikipedia.org/wiki/Slash-and-burn) techniques that sometimes are practiced by shifting cultivators (http://en.wikipedia.org/wiki/Shifting_cultivation), especially in countries with rapidly expanding rural populations; present extinction (http://en.wikipedia.org/wiki/Extinction) rates may be as high as 140,000 species (http://en.wikipedia.org/wiki/Species) lost per year.<sup id="cite_ref-152" class="reference">[153] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-152)</sup> As of 2007, the IUCN Red List (http://en.wikipedia.org/wiki/IUCN_Red_List) lists a total of 698 animal species having gone extinct during recorded human history.<sup id="cite_ref-153" class="reference">[154] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-153)</sup>
High infant and child mortality.<sup id="cite_ref-154" class="reference">[155] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-154)</sup> High rates of infant mortality are caused by poverty. Rich countries with high population densities have low rates of infant mortality. [8] (http://en.wikipedia.org/wiki/Image:Infant_mortality_vs.jpg)
Increased chance of the emergence of new epidemics (http://en.wikipedia.org/wiki/List_of_epidemics) and pandemics (http://en.wikipedia.org/wiki/Pandemic)<sup id="cite_ref-155" class="reference">[156] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-155)</sup> For many environmental and social reasons, including overcrowded living conditions, malnutrition (http://en.wikipedia.org/wiki/Malnutrition) and inadequate, inaccessible, or non-existent health care (http://en.wikipedia.org/wiki/Health_care), the poor are more likely to be exposed to infectious diseases (http://en.wikipedia.org/wiki/Infectious_disease#Mortality_from_infectious_disea ses).<sup id="cite_ref-156" class="reference">[157] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-156)</sup>
Starvation (http://en.wikipedia.org/wiki/Starvation), malnutrition (http://en.wikipedia.org/wiki/Malnutrition)<sup id="cite_ref-FAO-Italy_118-1" class="reference">[119] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-FAO-Italy-118)</sup> or poor diet with ill health and diet-deficiency diseases (e.g. rickets (http://en.wikipedia.org/wiki/Rickets)). However, rich countries with high population densities do not have famine.<sup id="cite_ref-157" class="reference">[158] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-157)</sup>
Poverty coupled with inflation in some regions and a resulting low level of capital formation. Poverty and inflation are aggravated by bad government and bad economic policies. Many countries with high population densities have eliminated absolute poverty and keep their inflation rates very low.<sup id="cite_ref-heritage-Index-Economic_124-1" class="reference">[125] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-heritage-Index-Economic-124)</sup>
Low life expectancy (http://en.wikipedia.org/wiki/Life_expectancy) in countries with fastest growing populations<sup id="cite_ref-158" class="reference">[159] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-158)</sup>
Unhygienic living conditions for many based upon water resource depletion, discharge of raw sewage<sup id="cite_ref-159" class="reference">[160] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-159)</sup> and solid waste disposal. However, this problem can be reduced with the adoption of sewers. For example, after Karachi, Pakistan (http://en.wikipedia.org/wiki/Karachi,_Pakistan) installed sewers, its infant mortality rate fell substantially. <sup id="cite_ref-160" class="reference">[161] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-160)</sup>
Elevated crime rate due to drug cartels and increased theft by people stealing resources to survive<sup id="cite_ref-161" class="reference">[162] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-161)</sup>
Conflict over scarce resources and crowding, leading to increased levels of warfare<sup id="cite_ref-162" class="reference">[163] (http://en.wikipedia.org/wiki/Overpopulation#cite_note-162)</sup>

[Sharky]

There is a difference between high-density living and overpopulation. The former is efficient, the latter is not. Look at Japan vs. India, for example, or Hong Kong vs. Calcutta.

I agree that overpopulation can lead to many of the problems you listed, although many of them wouldn't seem to limit carrying capacity. Mass species extinctions, for example.

What I'm questioning is the methodology that jumps from those kinds of issues to a specific carrying capacity for the whole planet.

There's a real danger in going down this road, which is that if some number develops broad agreement, then some governments might feel justified in allowing or even facilitating mass death, even if the number is incorrect or based on nothing more than a hunch.

This reminds me of that lecture that was mentioned recently on itulip about the dangers in adopting intuition as truth.

[Rajiv]

I am in no way advocating a policy of "reducing population" but rather a policy of being prepared for a sudden collapse. Because collapses happen suddenly -- see the video I posted - The Secret of El Dorado (http://www.itulip.com/forums/showthread.php?t=4357&highlight=el+dorado) -

In 1542, the Spanish Conquistador, Francisco de Orellana ventured along the Rio Negro, one of the Amazon Basin's great rivers. Hunting a hidden city of gold, his expedition found a network of farms, villages and even huge walled cities. At least that is what he told an eager audience on his return to Spain.

The prospect of gold drew others to explore the region, but none could find the people of whom the first Conquistadors had spoken. The missionaries who followed a century later reported finding just isolated tribes of hunter-gatherers. Orellana's story seemed to be no more than a fanciful myth.


A proven liar?

When scientists came to weigh up the credibility of Orellana's words, they reached the same conclusion. As productive as the rainforest may appear, the soil it stands in is unsuited to farming. It is established belief that all early civilisations have agriculture at their hearts. Any major population centre will have connections with a system of intensive agriculture. If a soil cannot support crops sufficient to feed a large number of people, then that serves as an effective cap on the population in that area. Even modern chemicals and techniques have failed to generate significant food from Amazonian soil in a sustainable way . The thought that indigenous people could have survived in any number - let alone prospered - was dismissed by most scientists. Scientific consensus was sure that the original Amazonians lived in small semi-nomadic bands and that Orellana must have lied.

Clues from the Bolivian savannah
Bolivia's Llanos de Mojos (Mojos Plains) are 2,000km from Orellana's route down the main channel of the Amazon. The terrain is savannah grassland with extreme seasons - floods in the wet; fires in the dry. Crops are hard to grow and few people live there. But back in the 1960s archaeologist Bill Denevan noted that the landscape was crossed with unnaturally straight lines. Large areas were also covered with striped patterns.


Recently, Denevan's work has been followed up by Clark Erickson, a landscape archaeologist. His attention was drawn to the numerous forest islands dotted across the savannah like oases. Down on the ground he found them littered with prehistoric pot sherds, a clear sign of early human habitation. Some mounds were as much as 18m high and much of the pottery was on a grand scale as well. Such huge vessels were too big for wandering nomads. Here were permanent settlements, where hundreds or even thousands of people had once gathered for huge ceremonies. To Erickson, these were signs of an advanced society - a civilisation.

Erickson and a colleague, William Balée, needed evidence for organised farming and found help working with the region's Amerindians. Some of the mounds are still inhabited by indigenous people. The language of the Sirionó offers clues to their past. Words for staple crops like maize, as well as cotton and dye plants, hint at what may have been farmed hundreds, even thousands, of years ago.
Erickson's interpretation of the lie of the land is that the mounds were built to offer protection from floodwaters, with the most sacred buildings always at the centre of the mound on the highest level. There is historical evidence for this - a Spanish expedition of 1617 remarked on the extent and high quality of a network of raised causeways connecting villages together. Those causeways can still be seen as straight lines cutting across the savannah. Alongside them run canals, a result of their construction.


Denevan and Erickson have shown that the striped patterns are relics of a system of raised fields. From the air, the area which appears to have been turned over to such agriculture is clear. It covers thousands of square kilometres. In conjunction with the controlled irrigation a canal network might offer, it could have sustained hundreds of thousands of people. Erickson believes the Mojos Plains were home to a society which had totally mastered its environment.


If land now little suited to agriculture could once have supported hordes of people, is there a chance Orellana's mythical El Dorado has some basis in fact?


When anthropologist Michael Heckenberger met the Kuikuru tribe in the central Amazon he was impressed by the complexity of their social structure. Why, he wondered, would a tribe of just 300 people adopt such a hierarchical way of life? (Received opinion held that Amazonian tribes were small, egalitarian societies.) He found evidence that the Kuikuru had once lived in an integrated network of villages, each one many times the size of their modern-day settlements. Heckenberger believes the prehistoric Kuikuru were not the semi-nomadic wanderers of anthropological theory. Instead, they lived in large chiefdoms - the advanced society described by Orellana.


If indeed Orellana was correct, and there was an extensive civilzation that he came across, then a collapse through diseases brought by the Spanish (inadvertantly) took place suddenly as there was not a trace of that civilization left a scant fifty years (two to three generations) later.

Something for you to consider

[Rajiv]

This is an interview with William R. Catton, Jr., conducted on August 9, 2008 at his home near Tacoma, Washington, USA. Catton is the author of the seminal book, "Overshoot: The Ecological Basis of Revolutionary Change," published in 1980. In the interview he outlines the major themes of his book: stealing from the future, exuberant growth, takeover and drawdown, industrialization, carrying capacity deficit, the absence of real villains, the bane of advertising, humankind's true nature, ecological modesty, and the need for us to expect the worst. He also addresses the push to re-localize our economies, and outlines his current book project: "Humanity's Impending Impasse." He ends on a note of optimism, encouraging us to enjoy life despite the catastrophe he fears is coming

49 min
<embed id="VideoPlayback" src="http://video.google.com/googleplayer.swf?docid=-4171942672579965146&hl=en&fs=true" style="width:400px;height:326px" allowFullScreen="true" allowScriptAccess="always" type="application/x-shockwave-flash"> </embed>

[jtabeb]

When, and how, and who?

I doubt it will be an accident, which is to say (being a card carrying member of the tin foil hat club) I expect that at least a few of the worlds most powerful will know when and how, before it happens.

Will those with a priori knowledge be Chinese, Saudi, or Russian?

When and how will Americans get riled up enough to throw the bums out? I'd guess only sometime after one or more of the above nations, in concert with their central banks, takes the almighty Dollar down a couple of notches, and the consequent economic pain to ordinary Americans angers us enough.

Go read 1984, put you faith in the Proles and you will be waiting a LONG time (like forever).

Great book

[ThePythonicCow]

Go read 1984, put you faith in the Proles and you will be waiting a LONG time (like forever).

Great bookYeah - a LONG time. Like anything more than some 20 to 40 years is "forever" for this old man.

I guess nothing lasts forever, not even "This greatest nation on God's green earth" (Michael Medved). The nation will still be here, but the greatness will be but a sanitized shadow of its former self in the government authorized history books.

[Sharky]

I am in no way advocating a policy of "reducing population" but rather a policy of being prepared for a sudden collapse. Because collapses happen suddenly -- see the video I posted - The Secret of El Dorado (http://www.itulip.com/forums/showthread.php?t=4357&highlight=el+dorado) -

If indeed Orellana was correct, and there was an extensive civilzation that he came across, then a collapse through diseases brought by the Spanish (inadvertantly) took place suddenly as there was not a trace of that civilization left a scant fifty years (two to three generations) later.

Being prepared is certainly reasonable. It's promulgating a specific weakly-supported carrying capacity that bothers me.

Along the same lines as Orellana, some researchers in this area argue that the population of American Indians prior to the arrival of Europeans may have been as many as 50 to 100M before smallpox and other diseases wiped them out.

http://en.wikipedia.org/wiki/Population_history_of_American_indigenous_peoples

[Jay]

http://upload.wikimedia.org/wikipedia/commons/5/55/Poulation-since-1000AD.jpg
Wow, no dip during WWII, really?!

[allenjs]

The best part of the article:


Playing the downfall of this crummy system is not what I was interested in doing. I wouldn’t disparage anybody who did do that. People have to protect themselves. What I would do is tell people what I thought was going to happen. People can start their own trades.


What we need is people like EJ, Roubini, and maybe even Soros in government positions.

[Sharky]

What we need is people like EJ, Roubini, and maybe even Soros in government positions.

Roubini and Soros share a similar vision for the US: more and more and more regulation. Their view is that the crisis was fundamentally caused by inadequate regulation, which is just wrong. Soros is an obvious socialist, and has been using his wealth and influence to push that agenda. Their solutions would only make things worse in the long run.

[allenjs]

Good point, I hadn't thought of it that way. I wouldn't really consider Soros to be a socialist, and the vaunted party of "free markets" and "deregulation" turned out to be complete frauds, so I am very suspicious of litmus tests based on whatever "ism" the guy adheres to -- but I see your point. I was simply thinking of the fact that EJ, Soros, Roubini, etc. seem to be the only people who saw this coming and who also propose killing the zombies. Nobody in power, of any party, seems to have the courage to do what needs to be done.

[rogermexico]

Roubini and Soros share a similar vision for the US: more and more and more regulation. Their view is that the crisis was fundamentally caused by inadequate regulation, which is just wrong. Soros is an obvious socialist, and has been using his wealth and influence to push that agenda. Their solutions would only make things worse in the long run.

I agree. Some are good at diagnosis, but I would not trust their treatment. Similarly, Hudson's description of the FIRE economy as parasitical to the the P/c economy makes sense, but his Marxist theoretical framework requires him to posit only more omniscient central planning (by who?) as the fix. We can't prove the counterfactual that Trotsky would have been better than than Stalin, but I seriously doubt it. The idea that money exists only as an extension of government power is both repellent and false.

Fundamentally, and this may utimately not be a falsifiable argument, the itulip crowd seems to be in two camps:

a) The FIRE economy represents a failure of central planning of the economy. We have had a fascist system of "usury" rather than the true socialism we need. The problem with the fed and the government controlling the money supply is that we have private bankers skimming off the profits for their own benefit. The government side of the fascist partnership is fine, we just need to have more regulation or discipline for the private side.

b) The FIRE economy only exists in its parasitical form because it essentially a fascist cartel, a goverment sponsored monopoly protected from competition by legal tender laws, central banking, and the legalized fraud of fractional reserve lending. The solution is not a more thoroughgoing socailism (the path we are on) but rather complete elimination of the governments role in creation of money. The free market should allow anyone to use and make contracts using any commodity money they choose, no matter what it is. As stability and indestructiblity are desirable in a store of value, gold or or rare commodity backed money would arise naturally as a commodity money.

I am in camp b) and I personally hope Team Obama and the Fed fail massively. Then governments may be forced to eventually adapt to the market, rather then the converse, and we might end up with sound money less subject to government theft through inflation in the future.

Sometimes EJ himself seems to be uncomfortably close to camp a) but that doesn't diminish the power of his analysis or my respect for him.

[metalman]

I agree. Some are good at diagnosis, but I would not trust their treatment. Similarly, Hudson's description of the FIRE economy as parasitical to the the P/c economy makes sense, but his Marxist theoretical framework requires him to posit only more omniscient central planning (by who?) as the fix. We can't prove the counterfactual that Trotsky would have been better than than Stalin, but I seriously doubt it. The idea that money exists only as an extension of government power is both repellent and false.

Fundamentally, and this may utimately not be a falsifiable argument, the itulip crowd seems to be in two camps:

a) The FIRE economy represents a failure of central planning of the economy. We have had a fascist system of "usury" rather than the true socialism we need. The problem with the fed and the government controlling the money supply is that we have private bankers skimming off the profits for their own benefit. The government side of the fascist partnership is fine, we just need to have more regulation or discipline for the private side.

b) The FIRE economy only exists in its parasitical form because it essentially a fascist cartel, a goverment sponsored monopoly protected from competition by legal tender laws, central banking, and the legalized fraud of fractional reserve lending. The solution is not a more thoroughgoing socailism (the path we are on) but rather complete elimination of the governments role in creation of money. The free market should allow anyone to use and make contracts using any commodity money they choose, no matter what it is. As stability and indestructiblity are desirable in a store of value, gold or or rare commodity backed money would arise naturally as a commodity money.

I am in camp b) and I personally hope Team Obama and the Fed fail massively. Then governments may be forced to eventually adapt to the market, rather then the converse, and we might end up with sound money less subject to government theft through inflation in the future.

Sometimes EJ himself seems to be uncomfortably close to camp a) but that doesn't diminish the power of his analysis or my respect for him.

ej learned about the fire econ from hudson... how it works... but what i see is on the solutions they part company. in the 'saving capitalism' series in harper's, compare ej's Reindustrialize (http://harpers.org/archive/2008/11/0082255) to hudson's Tax the land (http://harpers.org/archive/2008/11/0082253) to galbraith's Plan (http://harpers.org/archive/2008/11/0082254).

the right wing financial post ran an amusing review Save Capitalism from Harper's (http://www.financialpost.com/analysis/columnists/story.html?id=27135e8b-61cd-4d1c-a4fc-f932baa5ff84).

ej apouses a practical libertarianism... central banks are not going away... the utopia of a pure free money market is not gonna happen. how do we live with them? in this respect hudson is more radical than ej... stating the central banks must be aboloshed.

[rogermexico]

ej learned about the fire econ from hudson... how it works... but what i see is on the solutions they part company. in the 'saving capitalism' series in harper's, compare ej's Reindustrialize (http://harpers.org/archive/2008/11/0082255) to hudson's Tax the land (http://harpers.org/archive/2008/11/0082253) to galbraith's Plan (http://harpers.org/archive/2008/11/0082254).

the right wing financial post ran an amusing review Save Capitalism from Harper's (http://www.financialpost.com/analysis/columnists/story.html?id=27135e8b-61cd-4d1c-a4fc-f932baa5ff84).

ej apouses a practical libertarianism... central banks are not going away... the utopia of a pure free money market is not gonna happen. how do we live with them? in this respect hudson is more radical than ej... stating the central banks must be aboloshed.

I agree. I did not mean to imply that EJ was actually in camp (a) just that he seems to have more faith in goverment direction of the economy than I do.

I agree with Hudson that the Fed should be abolished. Where I disagree with Hudson is what it should be replaced with. He thinks (as I understand it) that USGOVT should take over its function. I think that private creation of money doesn't work now only because of the FED and central planning of the money supply, etc.

I have no quarrel with a practical libertarianism. I am under no illusions that there will be any voluntary relinquishment of government power or FIRE economy power. I can't see that is has ever happened voluntarily in the past, but at least we (The US) did get rid of our two previous central banks when they failed.

[ThePythonicCow]

I agree with Hudson that the Fed should be abolished. Where I disagree with Hudson is what it should be replaced with. He thinks (as I understand it) that USGOVT should take over its function. I think that private creation of money doesn't work now only because of the FED and central planning of the money supply, etc.
My take is that the Fed, Treasury, Wall Street, and friends are so danged corrupt and entwined that I would only consider trusting a "solution" if it included banning anyone who has flown in or out of Dulles, Laguardia, Newark or JFK in the last twenty years from ever participating in the "new" arrangements in any non-trivial role, public or private or secret :rolleyes::rolleyes:.

[allenjs]

My take is that the Fed, Treasury, Wall Street, and friends are so danged corrupt and entwined that I would only consider trusting a "solution" if it included banning anyone who has flown in or out of Dulles, Laguardia, Newark or JFK in the last twenty years from ever participating in the "new" arrangements in any non-trivial role, public or private or secret :rolleyes::rolleyes:.

Hear, Hear!

I just finished reading Chesterton's "What's Wrong With the World", one of his few non-religious books. He wrote it in 1906, shortly before WWI, when the oligarchs had basically seized control of Britain. It was stunning to me how applicable the lessons and insights were to today's situation.

Chesterton argued that an oligarchy or plutocracy is no different from anarchy, and that democracy and dictatorship are the only two forms of government that qualify as being "government" (and are not "anarchy").

His conclusion was strikingly similar to the guy from IMF who recently compared the U.S. to a third-world kleptocracy. He concludes that things won't get better until a few oligarchs are sacrificed, and the power given back to the people (or a dictator). Chesterton brings in a lot of history and is very persuasive on this point.

http://www.theatlantic.com/doc/200905/imf-advice

At least, I am persuaded by the people who argue that you need to pick some losers, kill some zombies, and let some shareholders take a bath. Send some people to jail, and so on.

Deregulation is great, but we've descended into anarchy and lawlessness, and we need a new sheriff to come along and lay down the law.

Of course, I agree that what happens *after* that is a source of very divergent opinions -- I'm not a fan of socialism or marxism, nor a fan of military rule. I just think that debate is secondary to the urgent need to establish some law and order, and both major parties seem completely impotent to do so.

[Sharky]

Fundamentally, and this may utimately not be a falsifiable argument, the itulip crowd seems to be in two camps:

a) The FIRE economy represents a failure of central planning of the economy. We have had a fascist system of "usury" rather than the true socialism we need. The problem with the fed and the government controlling the money supply is that we have private bankers skimming off the profits for their own benefit. The government side of the fascist partnership is fine, we just need to have more regulation or discipline for the private side.

b) The FIRE economy only exists in its parasitical form because it essentially a fascist cartel, a goverment sponsored monopoly protected from competition by legal tender laws, central banking, and the legalized fraud of fractional reserve lending. The solution is not a more thoroughgoing socailism (the path we are on) but rather complete elimination of the governments role in creation of money. The free market should allow anyone to use and make contracts using any commodity money they choose, no matter what it is. As stability and indestructiblity are desirable in a store of value, gold or or rare commodity backed money would arise naturally as a commodity money.

Excellent point. I, too, am in camp b. Unfortunately, as you said, that's not the road we're on. In fact, the real cure for the problem, true laissez-faire capitalism, is instead being blamed as the cause by many, reinforcing the socialist agenda.

Similar to ka-poom, but on a longer time scale, I wouldn't be surprised to see us go from a modest-sized poom and crisis (crisis increases), to a recovery phase (crisis decreases), to an even larger crisis later on (crisis explodes), as the implemented schemes fail.

[Chomsky]

I agree. Some are good at diagnosis, but I would not trust their treatment. Similarly, Hudson's description of the FIRE economy as parasitical to the the P/c economy makes sense, but his Marxist theoretical framework requires him to posit only more omniscient central planning (by who?) as the fix. We can't prove the counterfactual that Trotsky would have been better than than Stalin, but I seriously doubt it. The idea that money exists only as an extension of government power is both repellent and false.

Fundamentally, and this may utimately not be a falsifiable argument, the itulip crowd seems to be in two camps:

a) The FIRE economy represents a failure of central planning of the economy. We have had a fascist system of "usury" rather than the true socialism we need. The problem with the fed and the government controlling the money supply is that we have private bankers skimming off the profits for their own benefit. The government side of the fascist partnership is fine, we just need to have more regulation or discipline for the private side.

b) The FIRE economy only exists in its parasitical form because it essentially a fascist cartel, a goverment sponsored monopoly protected from competition by legal tender laws, central banking, and the legalized fraud of fractional reserve lending. The solution is not a more thoroughgoing socailism (the path we are on) but rather complete elimination of the governments role in creation of money. The free market should allow anyone to use and make contracts using any commodity money they choose, no matter what it is. As stability and indestructiblity are desirable in a store of value, gold or or rare commodity backed money would arise naturally as a commodity money.

I am in camp b) and I personally hope Team Obama and the Fed fail massively. Then governments may be forced to eventually adapt to the market, rather then the converse, and we might end up with sound money less subject to government theft through inflation in the future.

Sometimes EJ himself seems to be uncomfortably close to camp a) but that doesn't diminish the power of his analysis or my respect for him.


This is, simply, a fantastic post -- thanks much for your recent contributions, rogermexico.

[rogermexico]

This is, simply, a fantastic post -- thanks much for your recent contributions, rogermexico.

Your welcome. And thank you for your very kind words.

My poor employees and friends can only take so much of my ranting and pontification. Itulip is helping take some pressure off them :)

[*T*]

I agree. Some are good at diagnosis, but I would not trust their treatment. Similarly, Hudson's description of the FIRE economy as parasitical to the the P/c economy makes sense, but his Marxist theoretical framework requires him to posit only more omniscient central planning (by who?) as the fix. We can't prove the counterfactual that Trotsky would have been better than than Stalin, but I seriously doubt it. The idea that money exists only as an extension of government power is both repellent and false.

Fundamentally, and this may utimately not be a falsifiable argument, the itulip crowd seems to be in two camps:

a) The FIRE economy represents a failure of central planning of the economy. We have had a fascist system of "usury" rather than the true socialism we need. The problem with the fed and the government controlling the money supply is that we have private bankers skimming off the profits for their own benefit. The government side of the fascist partnership is fine, we just need to have more regulation or discipline for the private side.

b) The FIRE economy only exists in its parasitical form because it essentially a fascist cartel, a goverment sponsored monopoly protected from competition by legal tender laws, central banking, and the legalized fraud of fractional reserve lending. The solution is not a more thoroughgoing socailism (the path we are on) but rather complete elimination of the governments role in creation of money. The free market should allow anyone to use and make contracts using any commodity money they choose, no matter what it is. As stability and indestructiblity are desirable in a store of value, gold or or rare commodity backed money would arise naturally as a commodity money.

I am in camp b) and I personally hope Team Obama and the Fed fail massively. Then governments may be forced to eventually adapt to the market, rather then the converse, and we might end up with sound money less subject to government theft through inflation in the future.

Sometimes EJ himself seems to be uncomfortably close to camp a) but that doesn't diminish the power of his analysis or my respect for him.

Nicely broken down. I would lie in camp b. Even though I would call myself a "socialist" -- which seems to have a different definition over here -- I believe in decentralisation of power.

[Sharky]

Nicely broken down. I would lie in camp b. Even though I would call myself a "socialist" -- which seems to have a different definition over here -- I believe in decentralisation of power.

The ultimate decentralization of power is to put it in the hands of individuals. That's pretty much the opposite of socialism, which seeks government ownership and control over the means of production, and which advocates taking from one group of individuals by government, for the benefits of some other group.

[Rajiv]

From Communism wiki (http://en.wikipedia.org/wiki/Communism)

"Pure communism" in the Marxian sense refers to a classless, stateless and oppression-free society where decisions on what to produce and what policies to pursue are made democratically, allowing every member of society to participate in the decision-making process in both the political and economic spheres of life.

Since it is stateless, there can by definition be no government in the sense that you imply. Classless implies that everybody starts on the same level playing field. Opression free implies that there are no accumulations of power.

[rogermexico]

From Communism wiki (http://en.wikipedia.org/wiki/Communism)



Since it is stateless, there can by definition be no government in the sense that you imply. Classless implies that everybody starts on the same level playing field. Opression free implies that there are no accumulations of power.

Well, then what do we call the "agent" who acts to enforce this "level playing field" and acts to prevent or redress these "accumulations of power".

How can there not be an entity with the legal monopoly on force required to create and maintain these conditions, i.e., a government?

Do you imagine that this equality will be freely achieved by enlightened beings spontaneously sharing the way we can't even get toddlers to share at lunchtime?

The flaw in all utopian schemes that involve central planning, including Marx's, is that putting guys with different ideology in the big black cars solves nothing.

This why Hitler and Stalin are no different.

This is why Obama is only extending the path of Bush II.

An entity with a legal monopoly on force that enforces its ideology with tools that include confiscation of private property enforced by pain of imprisonment or death, is unethical and corrupt. It does not matter what the underlying ideology is called, it is the centralization and ubiquity of this legal monopoly on force that is itself evil.

I don't care if its democracy, liberal democracy, fascism, communism, Peronism, whatever. I want them all to leave me alone. I want them all to refrain equally from empire building on my behalf and "leveling the playing field" through theft of my money and restriction of my freedoms.

If there is such an entity (a government) it is ethically defensible to the degree its sphere of influence is limited, no matter what it is called and no matter if it is "democratic" or not.

I know this is a macroeconomics website, but you cannot get away from the political dimension. It's fun to talk about bear market rallies in shares and the price of oil, but the big picture as I see it is that you should care about money because what government does to your money is fundamental to your freedom.

If there were legal monies independent of government and its lust for empire, seigniorage and fascist mercantilist partnerships with the corrupted private sector, there would be a natural, steady healthy deflation that would track the real gains in economic productivity and eliminate the need for paid interest on savings and eliminate the rationale for most of the parasitical FIRE sector.

You could put a 1 oz Eagle in your sock drawer and it would become more valuable in terms of what it would purchase over time, with no need for fraudulent fractional reserve lending or any banksters and completely independent of any government. Some will say this is as fantastical as your Marxist workers paradise, but we had a situation very close to this in the US for almost 100 years!

We do not have stable money with a slow, natural, productivity- based healthy deflation because the government has no access to the coin in in your drawer. They have to control our money so they can steal our wealth. Get it? This is why gold is not just an investment. Buying gold is a political act of defiance

How many realize how profoundly important the ethics of money production are?

We are only here arguing over alternative investments as self-defense against governments.

I want a world where the default choice to save my money involves no government and no fraudulent bank paying phantom interest that never matches government created inflation designed to be taxed. Investing will then be only to get a higher return in exchange for more risk, not an absurdly complex defensive maneuver to prevent erosion of my wealth and the diminution in my freedom that goes with it.

[rogermexico]

Nicely broken down. I would lie in camp b. Even though I would call myself a "socialist" -- which seems to have a different definition over here -- I believe in decentralisation of power.

In the states, you might call yourself a Jeffersonian democrat.

[ThePythonicCow]

This is why Obama is only extending the path of Bush II.

I've noticed an odd phenomenon in my political thoughts of late.

I come to this from the "other" side. I still have several pro-Bush bumper stickers on my car from the elections of 2000 and 2004.

Now I find myself:


getting upset over something Obama :mad: does,
realizing it's the Powers Behind the Throne :eek::eek::eek: really doing this,
then realizing those powers have been doing this for a while,
back even when Bush II :) was there,
and more or less equally bad BS was going on,
and back even when Clinton :mad::mad: was there,
and Bush I :),
and perhaps even my hero Reagan :):).

Then I become a little more sympathetic ;) to the increasing majority of Americans whom I used to disparingly call "Bush Bashers" :(.

[Sharky]

First, rogermexico -- another great post.

"Pure communism" in the Marxian sense refers to a classless, stateless and oppression-free society where decisions on what to produce and what policies to pursue are made democratically, allowing every member of society to participate in the decision-making process in both the political and economic spheres of life.

That's an odd definition. It's full of contradictions. How can a society be oppression-free when the group determines what happens to an individual? Isn't that the definition of oppression? rogermexico already described how it can't be stateless, and with a state, there must also be classes.

Communism is a form of collectivism, where individuals are supposed to pledge themselves to the group. So-called "democratic" policies allow the group to steal from individuals. The collectivist vision is that people should want to give to the group; it is their duty. But who is the group, really? Groups are made up of individuals. So it can only mean that some people are living for the benefit of others. Isn't that another form of oppression?

[rogermexico]

I've noticed an odd phenomenon in my political thoughts of late.

I come to this from the "other" side. I still have several pro-Bush bumper stickers on my car from the elections of 2000 and 2004.

Now I find myself:


getting upset over something Obama :mad: does,
realizing it's the Powers Behind the Throne :eek::eek::eek: really doing this,
then realizing those powers have doing this for a while,
back even when Bush II :) was there,
and more or less equally bad BS was going on,
and back even when Clinton :mad::mad: was there,
and Bush I :),
and perhaps even my hero Reagan :):).

Then I become a little more sympathetic ;) to the increasing majority of Americans whom I used to disparingly call "Bush Bashers" :(.

I came from the same place, a place of tolerating the right wing social agenda, with which I (and I believe, Reagan) never really sympathized because I thought the GOP offered economic freedom. Then came Bush 43 and until Obama, the largest expansion of federal power since FDR, and a totally unnecessary, even criminal, war in Iraq. I was a paleoconservative a la Goldwater but more skeptical of war.

Where do you go now when you value both the first and the second amendments?

Where to you go now when the left wants to steal your money and give it to someone who didn't have to work for it and wants to regulate your business into oblivion and the right wants to spy on you and detain you without trial in a bullshit "war on terror" or lock you up forever for using drugs that are not profitable for their friends in big pharma?

My eyes are open. The left/right axis a stupid distraction.

There are statists who want to control you, kill you or steal from you for the good of others or even for your own good. Al Gore and Donald Rumsfeld are both statists, both want the world to conform to their earnest, oafish, world improving ideas.

There are promotors of civil society who believe the only ethical actions are based on voluntary association and trade, and who resist using the state to steal from others and coerce them into "proper" behavior.

I say resist. Participate in voluntary civil society with a bias towards small businesses. Cooperate with governments and patronise the behemoth fascist organizations that sponsor them as little as you can.

If you are sick of left/right and believe the real axis is statism/freedom, check out vonmises.org and read anything by Murray Rothbard.

After reading Rothbard, and understanding the evil of any central planning, I permanently ceased to be a republican.

I no longer worship the state.

[metalman]

I came from the same place, a place of tolerating the right wing social agenda, with which I (and I believe, Reagan) never really sympathized because I thought the GOP offered economic freedom. Then came Bush 43 and until Obama, the largest expansion of federal power since FDR, and a totally unnecessary, even criminal, war in Iraq. I was a paleoconservative a la Goldwater but more skeptical of war.

Where do you go now when you value both the first and the second amendments?

Where to you go now when the left wants to steal your money and give it to someone who didn't have to work for it and wants to regulate your business into oblivion and the right wants to spy on you and detain you without trial in a bullshit "war on terror" or lock you up forever for using drugs that are not profitable for their friends in big pharma?

My eyes are open. The left/right axis a stupid distraction.

There are statists who want to control you, kill you or steal from you for the good of others or even for your own good. Al Gore and Donald Rumsfeld are both statists, both want the world to conform to their earnest, oafish, world improving ideas.

There are promotors of civil society who believe the only ethical actions are based on voluntary association and trade, and who resist using the state to steal from others and coerce them into "proper" behavior.

I say resist. Participate in voluntary civil society with a bias towards small businesses. Cooperate with governments and patronise the behemoth fascist organizations that sponsor them as little as you can.

If you are sick of left/right and believe the real axis is statism/freedom, check out vonmises.org and read anything by Murray Rothbard.

After reading Rothbard, and understanding the evil of any central planning, I permanently ceased to be a republican.

I no longer worship the state.

http://www.itulip.com/images/clapping.gif

ok, so what do we call our new third party?

what are the two words the most frighten statists?

1. freedom

2. accountability

call it the 'freedom and accountability party'.

fap. might fly...

[Rajiv]

RogerMexico
I totally agree with you -- my point was aimed at the idealogues on all sides of the political spectrum. My point was that idealogically there is little seperation between libertarianism and Marxism.

To me both ideologies are infeasible in practice. So once you migrate from being an idealogue, all the points you mention come into play.

Often, I find that people get trapped by their ideologies, and are then unables to see and appreciate points of view other than their own!

[Rajiv]

Since human beings have always lived in collectives -- namely families, kinship groups, settlements, villages, cities tribes etc. etc., and almost never as solitary individuals, would you care to explain how these above work?

[Sharky]

ok, so what do we call our new third party?

I think one of the big problems with modern politicians is that they don't have any moral principles. We are governed by a bunch of pragmatists. I would love to see a party that tackled that issue head-on.

I have previously suggested the name "Truth and Justice" party, as a modern variant of the "Peace and Freedom" party name that grew out of the Vietnam War.

I also like the "Constitution" party, but I think that one might already be in use.

[rogermexico]

RogerMexico
I totally agree with you -- my point was aimed at the idealogues on all sides of the political spectrum. My point was that idealogically there is little seperation between libertarianism and Marxism.

To me both ideologies are infeasible in practice. So once you migrate from being an idealogue, all the points you mention come into play.

Often, I find that people get trapped by their ideologies, and are then unables to see and appreciate points of view other than their own!


I am not sure whose definition of libertarianism you are using. If you mean right wing faith- based instrusive central government that is in league with rent and monopoly seeking big businesses and calls itself libertarian, I might agree a little.

If you mean a belief in very limited government, inviolable property rights and the ethics of sound money, then Marxism and libertarianism are polar opposites.

Again, think up and down, not left and right.

Marxism in practice requires direction and command of every sphere of human activity. My definition of libertarianism is not an ideology, it is a practice that renders ideology harmless.

Fascism, Socialism, Marxism, and Heavy handed intrusive egalitarian "social democracy" are all down.

Extremely weak or no federal government with voluntary association and minimal coercive government devolved to the local level is up even if you cannot vote!

Who needs to vote if those you vote for have no power to oppress you?

[metalman]

I think one of the big problems with modern politicians is that they don't have any moral principles. We are governed by a bunch of pragmatists. I would love to see a party that tackled that issue head-on.

I have previously suggested the name "Truth and Justice" party, as a modern variant of the "Peace and Freedom" party name that grew out of the Vietnam War.

I also like the "Constitution" party, but I think that one might already be in use.

trouble is that one man's morality is another's repression, just as one nation's pirates are another's navy.

[rogermexico]

Since human beings have always lived in collectives -- namely families, kinship groups, settlements, villages, cities tribes etc. etc., and almost never as solitary individuals, would you care to explain how these above work?

When they work, it is by voluntary association, not at gunpoint or under threat of imprisonment. The intrusiveness and ubiquity of the modern state is actually destructive of these voluntary social institutions. Libertariam individualism in no way discourages voluntary social arrangements, just coercive ones.

It is well known that rates of charitable giving among the wealthy are much lower in western europe, where the welfare state is at its zenith, than in the US, where the "social safety net" is less developed.

[Rajiv]

When they work, it is by voluntary association, not at gunpoint or under threat of imprisonment. The intrusiveness and ubiquity of the modern state is actually destructive of these voluntary social institutions. Libertariam individualism in no way discourages voluntary social arrangements, just coercive ones.

That is almost exactly what the definition of Marxist ideology that I posted above said - to repeat

"Pure communism" in the Marxian sense refers to a classless, stateless and oppression-free society where decisions on what to produce and what policies to pursue are made democratically, allowing every member of society to participate in the decision-making process in both the political and economic spheres of life.

[Sharky]

trouble is that one man's morality is another's repression, just as one nation's pirates are another's navy.

Sounds like moral relativism to me, which I don't agree with.

Neither pirates nor navies are moral by themselves. Pirates that act in self-defense are moral. Navies that initiate or participate in unprovoked wars of aggression are immoral. It doesn't matter whose side you're on; to say otherwise is to adopt a relativist or pragmatic perspective.

The key here is the underlying principle. Is it OK to use violence against someone if they've done nothing to hurt you? The answer of government today is "it depends." That's not morality, it's pragmatism. A moral person or government would say "no."

[metalman]

Sounds like moral relativism to me, which I don't agree with.

Neither pirates nor navies are moral by themselves. Pirates that act in self-defense are moral. Navies that initiate or participate in unprovoked wars of aggression are immoral. It doesn't matter whose side you're on; to say otherwise is to adopt a relativist or pragmatic perspective.

The key here is the underlying principle. Is it OK to use violence against someone if they've done nothing to hurt you? The answer of government today is "it depends." That's not morality, it's pragmatism. A moral person or government would say "no."

i agree with you. 'pragmatism' is the new 'evil'.

principles matter.

[Sharky]

That is almost exactly what the definition of Marxist ideology that I posted above said - to repeat

I disagree. The approaches are opposites. The Marxist ideology says that the decisions and policies are made by the group. The Libertarian perspective is that those decisions are made by the individual. The Marxist approach is self-contradictory, as I said before. The Libertarian approach is consistent and non-contradictory.

My personal beliefs are not quite as extreme as most Libertarians (particularly including the Libertarian Party). I believe that there's a role for government, but that government should have no role in business.

[rogermexico]

That is almost exactly what the definition of Marxist ideology that I posted above said - to repeat

Hmmm.. I guess if you assume your worker's paradise arises spontaneously with everyone's consent.

My trouble is seeing how "everyone democratically participating in every decision" means my neighbors can't all get together and vote unanimously to decide they want to take turns driving my Porsche on weekdays, because they are tired of their hyundais and I am not always driving it anyway.

To quote Bill Lumbergh, "I am going to have to go ahead and disagree with you on that"

What I said is not remotely marxist.

[Sharky]

Since human beings have always lived in collectives -- namely families, kinship groups, settlements, villages, cities tribes etc. etc., and almost never as solitary individuals, would you care to explain how these above work?

They certainly aren't democratic, and they are normally full of classes and oppression.

I think there's a broad misconception these days that the model of the family is a good model for society. That's just wrong. Imagine living with your parents as an adult, and having them tell you what's acceptable and what isn't at every level of your life. Or imagine having your neighbor telling you what's proper and safe.

Also, I would voluntarily give my life for my family, but not for my neighbor. But if I'm forced to do so, or if society makes it a duty, then it becomes coercion. In the model where coercion is acceptable, then it becomes OK to take from some people for the benefit of others, "for the greater good."

[VIT]

F
Communism is a form of collectivism, where individuals are supposed to pledge themselves to the group. So-called "democratic" policies allow the group to steal from individuals. The collectivist vision is that people should want to give to the group; it is their duty. But who is the group, really? Groups are made up of individuals. So it can only mean that some people are living for the benefit of others. Isn't that another form of oppression?

Black and white. If child losses his parents and society take care of him it is a form of oppression, but would you call it bad ?

Moral or whatever "principles" are important but be careful what you wish for, since "their" principles who in power might be different then yours and I doubt it would make better for you ;) Metalman tried to make a point here for you

[Sharky]

Black and white. If child losses his parents and society take care of him it is a form of oppression, but would you call it bad ?

"Society" doesn't take care of such a child; an individual does. If that person cares for such a child out of duty or coercion, then yes, that's bad. If they do so voluntarily, then that's good. So yes, black and white.

Moral or whatever "principles" are important but be careful what you wish for, since "their" principles who in power might be different then yours and I doubt it would make better for you ;) Metalman tried to make a point here for you

Even if I didn't agree with someone's principles, having real principles allows for predictability -- something we don't have today, and that's crucial for people and businesses to be able to function successfully in the long term.

But the point is to not have just any principles. They should be moral, too. BTW, there isn't a long list. It wouldn't take much more than this: don't hurt someone unless they hurt you first (or credibly threaten to do so), which encompasses things like fraud, theft, etc. Respect for and enforcement of personal property rights. And support of individual rights, including the right to living without coercion (unless you violate the rights others).

[*T*]

The ultimate decentralization of power is to put it in the hands of individuals. That's pretty much the opposite of socialism, which seeks government ownership and control over the means of production, and which advocates taking from one group of individuals by government, for the benefits of some other group.

That's what I meant by different definitions (http://en.wikipedia.org/wiki/Social_anarchism) of socialism.

[*T*]

But the point is to not have just any principles. They should be moral, too. BTW, there isn't a long list. It wouldn't take much more than this: don't hurt someone unless they hurt you first (or credibly threaten to do so), which encompasses things like fraud, theft, etc. Respect for and enforcement of personal property rights. And support of individual rights, including the right to living without coercion (unless you violate the rights others).

Define property rights. This is the key to the issue. Otherwise there is universal agreement amongst reasonable people.

Do we have natural rights over our own labour? Over the labour of others? Over material things? Which ones? Who first granted the rights over, say, land? How are those rights enforced?

Sincere questions by the way, not rhetorical; I want to know your answers.

[Sharky]

Define property rights. This is the key to the issue. Otherwise there is universal agreement amongst reasonable people.

Property rights are the right to obtain, use, own and dispose of material things, based on your own efforts.

Do we have natural rights over our own labour?

Yes. This flows directly from man's right to life. Without the right to your own labour (which includes the right to the fruits of that labour), how can man survive?

Over the labour of others?

No, since that would contradict having rights over your own labour.

Over material things? Which ones?

Yes, property rights apply to material things. In particular, to the things you receive in exchange for your labour.

Who first granted the rights over, say, land?

Rights are not granted. They are something that everyone has, and that no one can take away.

BTW, there is no such thing as the right to a material thing.

How are those rights enforced?

First, by the individual. Then, by voluntary contract. And finally by government, in the event of dispute or the advent of physical conflict, fraud, etc.

[Jay]

Again, think up and down, not left and right.

This sums it up for me. What a great thread, thank you all.

[jtabeb]

http://www.itulip.com/images/clapping.gif

ok, so what do we call our new third party?

what are the two words the most frighten statists?

1. freedom

2. accountability

call it the 'freedom and accountability party'.

fap. might fly...

Please Don't forget JUSTICE and INTEGRITY!

As one Ituliper knows "justice is the cornerstone of the world"

[jtabeb]

[quote=metalman;91511]http://www.itulip.com/images/clapping.gif

ok, so what do we call our new third party?

quote]

I think we should have the following key points as the main party platform:

Freedom
Unrelenting Integrity
acCountiblity
Keeping Government out of people's private buisiness
Enabling real Justice
Make Oligarcs and Kleptocrats Pay

or

F
U
C
K
'
E
M

Party

[*T*]

Property rights are the right to obtain, use, own and dispose of material things, based on your own efforts.

A good definition. Again though I ask where did land rights come from?


Yes. This flows directly from man's right to life. Without the right to your own labour (which includes the right to the fruits of that labour), how can man survive?

You are a closet marxist ;)

Let me construct a thought experiment. One landlord in the whole country, the source of all jobs. A farm worker works his land. The pay is not enough or just enough to pay his rent (to the landlord) and buy food (from the landlord). How do you reconcile the landlord's property rights to the worker's right to life?

(Of course you would argue this is the case in state-owned farms etc... the question then is how much representation does the worker have in the landlord's actions I suppose)


No, since that would contradict having rights over your own labour.

What about an employment contract? Can we sell our rights? Or otherwise surrender them?


Yes, property rights apply to material things. In particular, to the things you receive in exchange for your labour.

OK


Rights are not granted. They are something that everyone has, and that no one can take away.
Then we have no rights, as all rights can be taken away by force. I would say we grant each other rights. But I see what you are saying.


BTW, there is no such thing as the right to a material thing.

OK.


First, by the individual. Then, by voluntary contract. And finally by government, in the event of dispute or the advent of physical conflict, fraud, etc.

Agreed -- implicit in property rights is the threat of violence -- which can only sustainably be wielded by an agent with the agreement or aquiescence of the bulk of people. Property rights are a social contract because they affect how we interact, they mean nothing without a society.


Actually I think we agree on a lot (more than I first thought), we have just come to different conclusions on implementation. For instance, a farm hand working a landlord's farm -- what rights does he have? Just over his time or a share of the produce/profits?

[Rajiv]

There was a good article at Energy Bulletin - Malthus and vice (http://energybulletin.net/node/48611)

Without growth, there would be no economy as we know it. But modern culture, by and large, doesn't see that it can exist only in the medium of ceaseless growth and expansion, because a fish doesn't see the water it swims in. Only today, in the recent, breathless moments of the greatest economic crash since the Great Depression, do we begin to perceive the waters around us.

Slowly, we are coming to realize that the last 200 years of economic growth have been based on a monumental Ponzi scheme that has pushed the final reckoning ever forward in time, until the future is now. Slowly, we are coming to realize that Malthus was right.

It was the warrior cry of the radical environmental movement in the 1980s: “Malthus Was Right!” But Malthus, a mumbling country parson with intellectual ambitions, had been transmogrified by capitalists and communists alike into a fearsome bogey man possessed of “dangerous” ideas. Environmentalists who invoked his name were invariably corrected by their progressive friends who told them that excess consumption by the rich was the problem, not the reproductive profligacy of the poor.

Yet, as we drive deeper into the greenhouse world, with its crazy weather, water shortages and general degradation, more and more of us from across the political spectrum are wondering how on earth we will feed the 3 billion more people projected to arrive by 2050, or even the 6 billion or so we already have. It is worthwhile, therefore, to examine the Malthusian idea, to discover what truths it holds and to see if they can be of any help.

Malthus’ big idea, published in 1798 in “An Essay on the Principle of Population,” was that human population would always grow exponentially, and that it would always push up against the limits of food production, thus creating a permanent class of poor whose numbers could only be checked by “misery” and “vice.”

His Law of Population is based on this simple observation:

Through the animal and vegetable kingdoms, nature has scattered the seeds of life abroad with the most profuse and liberal hand. She has been comparatively sparing in the room, and the nourishment necessary to rear them.

Later, Charles Darwin would base his theory of natural selection on this observation. He saw that a superabundance of progeny allows natural selection to work so that only the fittest survive.

Malthus wrote his essay in response to William Godwin, an outspoken liberal of the day. Godwin wanted to abolish the aristocracy and redistribute the wealth. He believed in the “perfectibility of man.” As a member of the landed elite, Malthus felt a need to address the rabble rouser Godwin and prove that even in a perfect society where the working man received according to his needs, all benefits would soon be wiped out by population growth. The poor man’s “lack of moral restraint” would ensure that his family would continue to grow until they ate him out of house and home. Starvation and disease would then do the job of reducing the population to a supportable size.

Malthus made a big impression on the British upper classes (who had access to concubines and prostitutes and hence no need for moral restraint to curtail family size). Since the poor were destined to continually breed themselves back into poverty anyway, there was no point in improving their condition. Politicians seized on Malthus’ theory to end subsidies for the poor (“a shilling a week to every labourer for each child he has above three”) and pass the Poor Law of 1834 that forced those seeking relief into workhouses designed to be as much like prisons as possible. It’s no wonder then that Engels declared Malthus’ Law of Population to be the “most open declaration of war of the bourgeoisie upon the proletariat.”
.
.
.
.
.
.
.

[vinoveri]

There was a good article at Energy Bulletin - Malthus and vice (http://energybulletin.net/node/48611)

Rajiv, with respect, I disagree. This article is definitely not good, but rather blithering tripe, and IMO advocating direct perpetration of evil couched in pseudo -utilitarian ethics.
E.g.
It's the same old "sky is falling" emoting argument calling us to action for the "benefit of our fellow man", even if that means preventing him from having a chance to live (and by the way consolidating the faith in the central planners).

EXISTENCE is Better than NON-EXISTENCE (hey, give me a chance to live first; If my life is miserable enough, I can CHOOSE (free will) to end it, but please don't make the choice for me)

The following quotes are disturbing and outright lies:


Still, there are conservatives who would prefer to see famine and misery rather than condone contraceptives, abortion and homosexuality. Among them is Pope Benedict, leader of the world’s largest religious organization, who has just condemned untold numbers of Africans to death by opposing condoms for prevention of AIDS because it might lead to “vice.”

The pope condemns no one. Free Will does that.
The Catholic church has a very deep and well thought out, and self-consistent body of knowledge concerning man's existence, purpose and destiny, and the church is being consistent and true to that understanding. Whether one agrees with it or not, IMO, the world view and ideals held out by the church are much more in-line with common sense and are in fact more desirable and beautiful than this fatalistic "culture of death" crap.

"The christian ideal has not been tried and found wanting; it has been found difficult and left untried". -GK Chesterton

Vice is the problem, not the cure.


We are those people and many of us now understand that the real vices are found in war, injustice and repression. Increasingly we realize that we must work together for humane and liberating solutions to the problem of human overpopulation, as we build a new, non-growth, steady-state economy that provides for all.



"liberating solutions" like say uh, deprive individuals of their right to life, to have children, etc. This is the oldest sin in the book, trying to play God.

This kind of talk is very dangerous my friend.

[HDLee]

When, and how, and who?
When and how will Americans get riled up enough to throw the bums out? I'd guess only sometime after one or more of the above nations, in concert with their central banks, takes the almighty Dollar down a couple of notches, and the consequent economic pain to ordinary Americans angers us enough.

When oh when will the Dollar be at a level that reflects its TRUE value ??? Went below the ZAR9 yesterday here in South Africa - I'd like to see it at ZAR6 . . . When it's as overvalued as it is the economic pain is felt by EVERYONE in emerging markets . . .
HD:(Lee

[Sharky]

Sorry for the delay responding to this -- I've been away on travel.

A good definition. Again though I ask where did land rights come from?

Land rights are an extension of property rights. They weren't granted; they were simply exercised. Two key aspects of being able to exercise rights are knowing that they exist in the first place, and knowing that property and land have value.


Let me construct a thought experiment. One landlord in the whole country, the source of all jobs. A farm worker works his land. The pay is not enough or just enough to pay his rent (to the landlord) and buy food (from the landlord). How do you reconcile the landlord's property rights to the worker's right to life?

(Of course you would argue this is the case in state-owned farms etc... the question then is how much representation does the worker have in the landlord's actions I suppose)

If the farm worker is unhappy with his wage, they should be able to leave for a better deal with another employer if they so choose, assuming of course that an employer will make him a better offer. In the example you gave, with only one available employer, there can be no free choice -- that's the definition of slavery.

For me, slavery is a form of violence, and such an employee would have every right to "revolt" against their employer -- perhaps by planting their own food, homesteading their own land, etc.

To answer your specific question, the worker should have no say in their employers actions unless the employer agrees.

What about an employment contract? Can we sell our rights? Or otherwise surrender them?

Sure. However, if such an agreement is not totally voluntary on both sides, or if it doesn't have clear terms and conditions, then it may involve fraud and therefore not be valid, legally or morally.


Then we have no rights, as all rights can be taken away by force. I would say we grant each other rights. But I see what you are saying.

If rights were granted, that implies they can be un-granted. I would say that we acknowledge and respect each other's rights, but we don't grant them.


Agreed -- implicit in property rights is the threat of violence -- which can only sustainably be wielded by an agent with the agreement or aquiescence of the bulk of people.

I would put it this way: implicit in property rights is the protection against violence.

Property rights are a social contract because they affect how we interact, they mean nothing without a society.

Sure. The concept of "ownership" is useful to differentiate what's mine from what's yours. If there is no society, if I'm living alone, then there is no "you," and the concept isn't meaningful. However, even in such a case, property rights still exist.

Actually I think we agree on a lot (more than I first thought), we have just come to different conclusions on implementation.

That's the second time someone has said that to me here on iTulip.

For instance, a farm hand working a landlord's farm -- what rights does he have? Just over his time or a share of the produce/profits?

All rights stem from the right to life. He has the right to contract -- whether that translates to a wage or part of the profits is between him and the landlord. He also has the right of free choice, and the right to keep, use and dispose of his earnings as he wishes.