For those who think ahead; for those who are empathic; for those who work for justice or kindness, the world can be a horrible place.
We look around and we see the decline of nations. We see people dying, being tortured, being raped who need not die or suffer. We look to the environment and we see that species are being killed so fast we’re in the middle of a great die-off; or we look to the biosphere and the oxygen cycle and we worry that we could see a collapse of both.
We know that much of the suffering the world is needless: that there is more than enough food to feed everyone; that many wars are wars of choice which hurt many to enrich a very few; and we know that many who brutalize others are receiving no security or even money in return. We look at how prisoners are treated in jail; and we know that the primitive lust for vengeance is creating monsters for we understand the cycle of abuse: that those who are abused, become abusers.
We see the rise of a surveillance state that may eventually cause the Stasi to look like amateurs and which is already more sophisticated than anything Orwell imagined. We see that the masses of the people in the developed world are being impoverished; generation after generation. And worse, we see our own efforts at stopping all of this fail. We worry that our efforts are not even slowing the worst of it.
And for many of us it hits home closer. We or our loved ones are those suffering: losing their lives, homes, livelihoods or living lives of despair.
For years I lived in a state of rage. Not even anger, but rage. Rage at those like Bush and Blair who were mass murders. Rage at those who did not stop him who could have. Rage at those who believed all the lies: whether about economics or war or crime.
I see many who come to my blog, a place where scenarios are explored which are both bleak, and often, very likely, giving into despair or rage themselves. The world is big, the powers that are leading it to ruin are overwhelming, and we look out on a future which seems to get worse and worse the further ahead of us it is. Even countries now on the rise, like China, will suffer massively in the decades to come.
It is perfectly natural to be angry. It is even useful to be angry. Anger or rage are adrenaline shots to the system. They push you to do what must be done; to tell the truth; to push ahead, to tackle the big enemies.
But they are toxic in the long run. Like adrenaline they are useful for shots of energy, but if you are angry all the time at anything, it will hurt your body and eventually your mind. You will burn out, and if you aren’t lucky you may burn out permanently or you may die.
Despair is also rational. I am aware of studies which show that depression is about 10X more frequent today than it was about a century ago, based on methodology I find reasonable. Life today sucks. We are almost all close to powerless in our daily lives: we work for wages, without those wages we will suffer greatly, and to get those wages we must do what our bosses say, no matter how noxious what they demand is. It takes two people to earn a living where it once took one, and wealth and income are collapsing in the first and most of the third world ex-China; while the Chinese are under the immense pressure that industrialization produces.
Anger gets us going, till we burn out. Despair enervates us. We turn often to drugs, whether pharmaceutical or more subtle opiates live television or computer games. Too often we do not change our circumstances: we see no way out, and en masse we aren’t necessarily wrong. Leave one job, and even if you find another it will be run by the same sort of people who run almost all of Western business outside of a few European countries.
All of this is understandable. In a certain sense it is even rational.
But a hot cup of chocolate on a frosty night is still sweet.
As bad as things are, so much of the world is as it always has been. The still contentment of sitting with one you love, saying nothing is still available. The sunset is still beautiful, and if there are fewer birds, their trills still delight.
The flowers are as beautiful, the russet and scarlet leaves of fall still adorn the trees, and a clean drink of water still refreshes. Children playing still bring a smile to my face, and I still enjoy pulling a comforter up and cracking open a new book. There are still beautiful women and handsome men, there is still kindness and charity in the world; there is still art to make and books to write and songs to sing.
In a myriad of ways there is still beauty and happiness to be found in the world. We are not the first culture to face decline. The Roman Empire went through multiple periods of decline and stoics and epicureans debated how to live the good life in an evil world. The Chinese practically had dealing with declining and corrupt imperial eras and warring states periods down to an art: when no good could be done in the world, back to one’s private life to write poetry, drink wine and care for those close to one while refusing as much as possible to be complicit in the evil of the times.
Others strove still to be of public service: to hold off the rush of night for a few more years, or even a generation, knowing that what came after would be worse.
But I say to you now this: endless and anger or despair; or a mixture of both do you no good, soon do your enemies no harm (and yes, they are enemies); and serve not whatever cause you’re interested in unless you’re willing to risk permanent burn-out.
And besides, where’s the fun in being miserable? No matter how bad the times, there will always be good periods; moments and beauty and happiness to delight in. The wine is as sweet in evil times as good; love is perhaps even sweeter in times of despair; and beauty never dies and can always be found, if only, sometimes, in our own minds.
It’s banal to say we’re here for a short time, but it’s true. Fight the good fight, to be sure, but then delight in the sensual pleasures and love this world offers.
And give yourself permission to quit. There are 7 billion people in the world. It’s not on all on you. The graveyards are full of essential men: the world will continue without you, and it’s not all on you. Take the breaks you need, even quit if you must. Above all, don’t let the bastards see you sweat, and don’t let them take away your enjoyment of the real pleasures that life offers.
‘Our laws and police powers need to be strengthened’
Yup. Never let a crisis go to waste. I’m very sad that MPs and their staff were scared, and I’m sadder that a soldier lost his life. But one attack does not justify increasing the police state. However, if Harper wants it done, it will be done, a Canadian Prime Minister with a majority might is very close to a dictator, and in practical terms only the Supreme Court can check him.
Freedom in the West, such as it was, was nice while it lasted.
Prosperity is two things:
1) How much you can produce with your technology and social organization;
2) Who gets how much.
The second is determined by a number of factors, but the simplest is the structure of violence. Those who aren’t good at fighting, don’t get as much of the surplus created by society as those who are. Who is good at violence is determined to a remarkable extent by the interaction between the technology of violence, geography and the everyday life of different classes of society.
It has long been noted that in polities where warfare requires a large, organized chunk of the population, more widespread affluence and democracy are more common.
So we have Athenian Greece, where free males fought either as infantry or in the fleets, and where the franchise extended to those who fought. We have Republican Rome, whose legions were originally raised from the citizenry, and which became an Empire when the armies were no longer raised primarily from those close to the city of Rome and when soldiers became more loyal to their generals than to the state. We have the Swiss Cantons, where men fought as close order pikemen and were free, while most of the rest of Europe was ruled by mounted nobles and most ordinary people were serfs. And we have the age of conscript armies in the 19th and 20th centuries, also coincident with a vast increase in democracy and prosperity.
Note that in many of these cases democratic rights extended almost exactly to the fighting class. Women in Switzerland received the vote later than in most of the European subcontinent. Athenian women were infamous for the lack of rights, and the same is true of Republican Rome at its height: the society which defined patriarchy. In Rome there was a separate, higher class, the Eques (Equestrians) based on having enough money to afford to fight on horseback.
All of these places were well known for their prosperity in the heyday of their use of citizen armies. Men too poor to take care of themselves properly (by which we mean eat a nutritious diet) make poor soldiers, and just as poor rowers in a galley navy. There were always rich, and Republican Rome can be understood as partially oligarchical and partially an aristocratic oligarchy depending on what time period you’re looking at, but still, Romans were free, had access to relatively reliable law, and were prosperous.
When they stopped being prosperous as a group, when inequality soared, the Republic went through a series of convulsions (recognized as class wars even at the time), and eventually ended in rule by an Emperor.
The relationship between fighting as infantry, even close order infantry, and prosperity and democracy is not a sure thing. Many of the Greek Polis were not democracies and had frightful inequality, Sparta most famously. Rome fought using close order infantry well into the period of the Emperors, and so on.
Nonetheless, if the method of warfare involves men who must cooperate together and trust each other implicitly, they are much more likely to be free, prosperous, or both. Saxon and Norse England, before the arrival of the Normans is a place where ordinary people have far more rights than the Normans (a Norse offshoot) allow (in part because of Norman forts, meaning that local revolts can rarely succeed, and in which a small number of men can hold off a vastly largely number. It is largely because of forts that Wales, for example, is permanently subdued.) The wealth is also much more evenly spread in pre-Norman England. English history books often start with the Norman conquest, it should be understood that, overall, that conquest was a disaster for the inhabitants of England.
The price of armaments is one of the key factors in prosperity and democracy. If a group of individuals is effective and can win using cheap armaments over those using expensive armaments, again, expect more widespread prosperity and greater rights for the poor. The cutoff point for effective armaments if the cutoff point for widespread prosperity in most cases. If a rifle with a bayonet is all someone needs to be effective, expect the franchise to spread. If it does not spread, expect the first nation to spread it, to be wildly successful on the battlefield: the French revolution is the paradigmatic case.
Of course reactionary regimes can conscript too, but Germans in the late 19th century are more prosperous, even the poor, than those before widespread conscription.
If, on the other hand, effective warfare requires significant wealth, as with Medieval knights, who require a multitude of serfs to support even one fighter, well, expect that those who aren’t good at fighting won’t be prosperous. People today don’t realize how many peasant revolts there were. What is instructive about them is the slaughter involved: the slaughter of serfs and peasants. Often huge rebellions would be put down with only a handful of casualties. Knights were very good at killing peasants armed with makeshift weapons.
If you can kill them and they can’t do anything about it, how much of what they produce is really theirs?
How armaments are made also matters. Even cheap weapons, if they must be made in centralized factories and cannot be made by individuals and small groups, will not be as useful to widespread prosperity as otherwise. The Jeffersonian style yeoman farmer society takes a serious blow in the war of 1812, when it becomes clear that the British centralized manufacture of weapons is more effective than making weapons locally.
The technology of violence interacts with the terrain. Note that in three of these cases we are talking about societies which were born in hilly terrain. Greece, Rome and Switzerland are not flat land. Cavalry is far less effective. Cities have mobs that are effective, even communes, in the Middle Ages, because of how they are laid out. Not only is cavalry useless inside a city, but the narrow streets mean that men can only fight one or two abroad, so even organized infantry has very little advantage in a city. The great broad boulevards of Paris, the wide streets of other cities were created first not for the convenience of the citizens, but so that they could easily be killed in large numbers if they revolted. Medieval cities were free in part because they were very hard to conquer: fortifications, enough money to equip soldiers and streets in which a knight could easily be hauled from his horse and have a knife shoved into the eye-holes of his helmet. And, of course, cities paid a great deal of money for the privilege of being free, often directly either to the king or the equivalent of a Duke; thus putting them under the protection of the most powerful noble in the realm.
Terrain where cavalry can operate freely; where infantry can be bypassed, tends to either be ruled by states or, historically, by nomads, depending on whether it is good for growing crops or for pasture.
Nomads and barbarians, but especially horse nomads, should also be discussed. Much of history can be viewed as a cycle of Agrarian civilizations expanding, being conquered by barbarians or nomads, expanding till they have no surplus due to administrative overload, then being conquered by barbarians or nomads again.
From a population point of view, this is absurd. The Manchu, when the conquered China, probably had 1 to 2% of the population of China. The Mongols were a miniscule fraction of the population of the territories they conquered. But Barbarians have something going for them; every fighting age male who isn’t a thrall or slave is a warrior, and often a very good one. It has long been noted that healthy rural or wilderness people make the best soldiers: Roman recruiters wanted the sons of free farmers. Canadian and Australian soldiers in WWI were far better than English soldiers because they grew up on the farm, well fed as a rule, and shooting a gun.
Unfree or other impoverished rural types are generally not much use in a fight. If they didn’t have proper nutrition as children, they’re worthless. But free rural males are tough, and in a culture where they use weapons, already skilled, generally to a level no “basic training” for conscripts can possibly reach. All basic training teaches such people is how to fight as a disciplined group: the weapon skills are already there.
The Mongols hunted in large, indeed army sized groups, driving the prey before them. They were expert horsemen, master archers using one of the best bows in the world, and they were used to working in organized groups. The Mongols, it is said, hunted like it was war, and made war like it was a hunt.
The specific technology they used was also perfect in an important sense: horse archers choose their battles against slower armies, and can withdraw effectively taking few losses. If the Mongols didn’t want to fight, they didn’t. They only fought, during their heyday, when they had the advantage and as a result they racked up victory after victory.
The everyday structure of Mongol life thus provided most of what they needed to be extraordinarily effective soldiers: it took only uniting them and making some strategic and tactical doctrine changes to turn them into a force that conquered the largest land empire in history, and allowed them to conquer nations which were far, far more populous than they. Note, again, however, the interaction of terrain and technology: the Mongols’ initial conquests were generally in relatively flat lands. (Though not exclusively. Genghis Khan was the last person to really crush the Afghans, after all.)
So we have our trifecta: the Mongols had excellent technology (bows, horses and stirrup); the terrain was suited to their style of warfare; and their way of life made them tough and taught them almost all the skills necessary to be effective soldiers.
BOOM. World Conquest.
Another major factor might be called “not worth conquering”, or (related, but not identical) “area denial”.
This is an important consideration in today’s world. The Coalition attack on Afghanistan was all very fine and good, and they easily conquered the cities, but they couldn’t control the countryside. Guerrilla warfare, to be sure, has been used for millennia (the Romans fought a nasty guerrilla war in Spain.) But modern technology, specifically explosives in the form of mines and their easily made irregular counterpart the IED, make it easy to do area denial. NATO troops in Afghanistan and Iraq had their mobility and their ability to control the country severely curtailed: they couldn’t drive their vehicles down most roads without risk.
The Taliban and the Iraqi freedom fighters thus could not defeat the US army in open field battle, as a rule, but they could bleed them and deny them the fruits of conquest. Much of Afghanistan could not be effectively taxed by the puppet government in Kabul; the same was true in Iraq. In the end, in Iraq, the US military had to pay militias in order to be allowed to withdraw.
This, then, is the question of how effective irregular warfare is. How much loss can under-equipped troops inflict? An American infantryman is expensive; an American tank is more expensive. An American helicopter pilot is precious. An insurgent with an grenade launcher is not. Your expensive troops may inflict higher casualties on the enemy, but they are more expensive and harder to replace.
If the Chinese had been able to reliably inflict one loss on the Mongols per five Chinese losses, they would have won, at least in the early part of the war.
For much of history many areas were simply not worth conquering: the natives were dangerous and had no wealth that anyone else wanted. The fall of the British Empire can be viewed in part as “why are you conquering huge chunks of the world that offer nothing worth the cost of subduing and then administering them?”
The more the locals can resist; the more they can have a good life without creating portable wealth; and the more they are lucky not to be sitting on gold, silver, or oil, the more likely they are to be left to their own affairs. If the wealth of a nation is its people, profiting from its conquest is tricky: if its wealth is a resource that a few people can extract, profiting from conquest is easy.
Being conquered, some exceptions aside, is rarely good for those conquered. India before the Mughals and the British was one of the most prosperous areas in the world. Afterwards it was known for its poverty. India had more manufacturing ability than the British before the British started conquering it, for example. And British India had frequent famines, while independent India does not.
For those involved, this can be a lose/lose proposition: Iraq has been devastated. Afghanistan has been devastated. Some Americans definitely got rich (mostly by stealing from the American government through vast corruption); but both societies lost. Nonetheless, those who will not resist, gain only and exactly what those who win will allow them to have. Republican Romans were not taxed. Their conquests were.
The effectiveness of personal violence also matters. The concealed dagger, the concealed revolver, make assassination possible, even easy. They restrict the mobility of those who oppress. It is not accidental that Nixon, who is President when American inequality is still low and world inequality is declining, goes to see protestors at night with only one aide, and no bodyguards, while Clinton, Bush or Obama would never consider such a thing and Washington DC is disfigured by huge concrete barriers; constant weapon checks and so on.
The more ruling requires the rulers to actually be amongst the ruled, the more the effectiveness of personal weapons matter. Obama can rule behind a cordon of guards; rulers who need to be in contact with the people cannot.
Finally we come to the balance of terror. Weapons that devastate are weapons of terror. Aerial bombardment is about terror, drones with hellfire missiles are about terror. “We can kill you, and we can destroy your infrastructure, and there is nothing you can do to stop us.”
Terror begets terror. Those who are terrorized (and bombing is a terror weapon, let no one tell you otherwise) begets attempts to retaliate.
Terror is remarkably ineffective against non-elite societies until it scales. If you can destroy entire populations, your terror will work. If everyone fears your kidnap and torture squads; it may work. But it doesn’t win actual wars: even World War II strategic bombing was found to be largely ineffective at stopping German production, what it was good at was killing large numbers of civilians.
What terror is good at is dealing with out of touch enemy elites. If you can swoop in, kill the elites, and they cannot stop you, they are more likely to give you what you want without ever having to fight. This is also what conventional military supremacy is good for. Imagine the following scenario: George Bush invades Iraq, publishes a proscription list, and elevates a competent Colonel to be the new leader of Iraq and leaves within 6 months.
That would send a message to elites with ineffective conventional armies all through the world: “we can kill you, personally.”
It does not work against highly motivated ideological organizations. Killing the #2 man in the Taliban more times than I can remember has not stopped the Taliban. Vast waves of assassination throughout large parts of the Muslim world have not stopped the rise of al-Qaeda affiliates or similar organizations. Terror works against people who have something left to lose, or who value their life more than anything else. Against those who are willing to die for their beliefs and who lead an organization or society which agrees with them, it matters little: they will be replaced and their replacement is just as likely to be more competent than less.
But if your elites fear for their lives and do not have strong beliefs they are willing to die for your society will be run, in effect, by the foreign nation which they fear, and while your elites will probably do well enough from bribes, ordinary people will not.
From the point of view of those with an advantage in terror, then, it is best used either as wholesale slaughter, or as very occasional examples. Once people have nothing to lose; or once you have radicalized them, it is almost completely ineffective, and can even be counterproductive, with each new atrocity simply making the masses more determined to resist.
If terror is your weapon, use it sparingly, or make sure your enemies’ ability to resist in destroyed utterly.
Wars of terror are devastating to prosperity. Waves of torture; mass bombing campaigns; serial assassination, destroy either the infrastructure of society or the cohesion and trust required for prosperity. If one side feels it can destroy the other with impunity, you wind up with Gaza.
Those who want prosperity must be able to retaliate effectively. If you can be fined millions for “stealing” a few dozen songs; if you can be jailed for, in effect, going bankrupt (the case in America today); if the police can easily defeat the masses; then those who control government and thus control the police can and will take as much of the surplus of society as they want. Those who doubt this proposition are invited to note that the top 10% of society (really the top 3% or so) in America are now taking more than the entire gains of the recovery while America has created a paramilitary police; and an unprecedented in American history surveillance network and has put in prison the largest % of its population in history. These three facts are not unrelated.
There are many in the world today who want to change technology to make the world a better place. If they are concerned with prosperity for the masses let me suggest to them this: cheap weapons that make groups of men and women effective fighters; which require them to trust together and work in groups; are in the long run likely to lead to prosperity. Nor can this empowerment be in area denial alone. IEDs are great at ensuring the writ of the government cannot extend to an area: but they destroy prosperity. Technologies like drones (and effective ground combat robots are about 10 years out), will do the opposite.
By itself technologies that empower organized groups are insufficient. But they are virtually a requirement for widespread prosperity. Without them those who have the advantage in violence will use it to take what they can, and those who cannot resist will live in the conditions their superiors allow.
(Update: reference to droit du seigneur removed.)
Up until today I’ve been moderately sanguine about Ebola outside of some poverty struck African countries with compromised health care systems (and places like Greece.) The main danger is incompetence and austerity, as with the CDC and Texas fumbling their Ebola cases.
Ebola is aerosolized in pigs. This may not seem like a big deal, but in many countries, like China, pigs live in very close proximity to humans. If Ebola gets into South China and the Chinese do get right on it, it really could kill millions. In any country where large numbers of people live cheek and jowl with their pigs, this is potentially explosive.
And if it does explode that way, well, some of those people will wind up traveling to your first world country while asymptomatic (or while with a light fever).
Industry illegally injected about 3 billion gallons of fracking wastewater into central California drinking-water and farm-irrigation aquifers, the state found after the US Environmental Protection Agency ordered a review of possible contamination.
According to documents obtained by the Center for Biological Diversity, the California State Water Resources Board found that at least nine of the 11 hydraulic fracturing, or fracking, wastewater injection sites that were shut down in July upon suspicion of contamination were in fact riddled with toxic fluids used to unleash energy reserves deep underground. The aquifers, protected by state law and the federal Safe Water Drinking Act, supply quality water in a state currently suffering unprecedented drought.
Now. Will anyone go to jail for this?
Did they save a lot of money doing this, and therefore make money?
Will they continue doing it?
What will stop this sort of thing from happening?
Sending senior executives, CEOs and board members to maximum security prisons, after impounding all their assets under criminal forefeiture laws, thus forcing them to rely on public defenders. Prosecute them under RICO statutes to make sure you sweep the executive suite.)
(No, I don’t approve of criminal forfeiture laws as they exist right now (seizure before guilt is proved), nor do I approve of RICO. But if they’re being used against ordinary people, they should be used against the executive class. Best way to get them repealed, too.)
Guidance is falling all over the world for economies, with even Germany at risk of falling into recession. The US dollar has been rising in a huge flight to safety, while the price of oil has been dropping. Growth in the world economy has ultimately been based on the BRICs and those have been based primarily on Chinese demand along with a series of new housing and equity bubbles. Those who say there is no inflation are fools: there is plenty of it, showing up in real estate and stock markets.
Meanwhile, in the developed world, all of this money has gone to the top, not to the top 10%, but to the top 3% or so (depending on how you cut the pie), with the majority going not just to the 1% but to the top .1%. Demand has been driven almost entirely by the demands of the rich: high level housing in global cities like London; and stock market appreciation vastly above any conceivable rate of productivity increase. Corporations have made their profits by engaging in oligopoly pricing, with US cable giants making almost 100% returns on “high speed internet”, for example.
The market for real-estate is nowhere close to clearing: there are many more houses, apartments and condos empty than there are homeless people; prices are rising far faster than either inflation or wages, and debt is piling up on on new home entrants, especially in the United States, where the student loan bubble has impoverished the people old folks expect to buy their houses at inflated prices.
The base of the economy, of a mass economy, is thus rotten. However, it needs to be emphasized that the majority of the economy post 08 has been based on central bank money printing: that money has been used to directly and deliberately inflate housing and stock markets. There is no “economic recovery” as the post-war world understood it, there is only print-priming, bubble pumping, oligopoly pricing and austerity driven buyout activity.
Demand for actual workers has been kept low while profits and gains from bubbles have been kept high, leading to massive cyclical gains for the rich. The late Jane Jacobs worried (a little early, but presciently) that we were moving into an old-style world. She got the details wrong, but she got the essence correct: as many have observed in the decades since, the plan is aristocracy, and the plan is succeeding. There is aristocracy by right (billionaires) and there is aristocracy by position (corporate officers), and there are important retainers and local gentry (centi-millionaires), but the well-being of the majority of the population is not a concern
What is a concern is making the system self-perpetuating: locking in high profits, making sure that the heirs of the aristocracy keep the gains, and making sure that labor never gains the ability, either politically or through economic pressure, to upset the game.
They will not succeed, due to exogenous shocks to the system they cannot control, and due to their own rather shattering incompetence, but that does not mean things will get better for ordinary people, instead what is more likely is social collapse amid climate change and a number of wars, as America loses its hegemony (by some measures China is now the world’s largest economy. Do not expect that America will go easy into that long night, nor that China will not remodel the world as it continues to rise.)
Many countries are now more tied to China that to the US for survival: their elites make their money selling commodities to China, not the US, and their ordinary people get their imported goods the same way. Again, do not expect this to not affect the world.
The US is still the dominant power, to be sure, and it will use its dominance and all its tools to hang on and make more billionaires and centi-millionaires, but its day of hegemony is over. Nor, I suspect, will China’s day (if it succeeds in overthrowing the American Raj) be long.
In the meantime, recession comes, in the midst of the ongoing depression. Buckle up, it’s going to be ugly.
The Trans Pacific Partnership trade agreement in in trouble, and one of the reasons is Japan has refused to eliminate agricultural tariffs. Japan is entirely correct in this.
Japan’s agriculture is not efficient: it costs more to grow food in Japan than it does in many other nations. If Japan removed its tariffs, its agricultural sector would either be eliminated or forced to consolidate and specialize in crops it has a comparative advantage in. Whatever these are (perhaps silk), they wouldn’t be staple food crops. Japan would thus lose what ability it has to feed itself and would have to buy even more food on world markets than it does today.
Regular readers will recognize this pattern from the article on why the third world is even more impoverished today than it was 40 years ago. Now Japan is by no means a third world country, and money would be loaned to it to buy said food, but Japan is not a healthy economy either. The Japanese recently lowered the value of the Yen significantly, and their exports didn’t increase.
Contrary to economic dogma that sort of thing happens fairly often: people simply are already buying as much of what Japan makes as they want.
Japan is not what it was 30 years ago, or even 10. It runs an export deficit and it is barely running a current account surplus any more . Even when the economy was healthy, having to buy much of its energy was painful, having to buy its food would be even more so.
But more importantly, it would make Japan vulnerable to anyone who controlled foreign currency loans they need to buy the food, and to the major food producers. Japan can print money, to be sure, and has, but there comes a point where you can’t, where people won’t take it. Japan isn’t there yet, but they risk being there someday soon. And bear in mind that as global warming bites, food will become more and more scarce. Right now we have a huge food surplus, that will not remain the case.
Countries which cannot produce what the rest of the world needs, nor produce what they need, are always in great danger from other nations which can cut them off. They give up power over their own fate, and others will take advantage of it to force them to do as they wish, including opening up their markets to allow the commanding heights of the economy to be purchased.
Japan has been badly run for decades, and made the same mistake the US did when its bubble collapsed: they did not wipe the debts off the books, but instead extended and pretended. That lead to the long “bright depression”, but it is now leading them into a much worse period.
They are, however, doing something right in refusing to remove their tariffs. To be sure, they are doing so for domestic political reasons (the small rural farmers are politically powerful), but that doesn’t mean it isn’t still the correct thing to do.
Since the TPP is, overall, a terrible trade agreement (they virtually all are) let us hope the Japanese stick to their guns and that it does scupper the agreement. It’ll be best for them, and for us.
(An earlier article on the same topic disappeared except for the title. This is a rewrite, but with additional detail.)
(Article changed to indicate that Japan is still (barely) running a current account surplus, not a deficit.) -10/14/2014)
In my recent post on Ebola I mentioned that the turn off point for Africa being able to handle an epidemic was in the 70s and 80s. That’s worth a full post on its own. The first thing to understand is this: 3rd world GDP growth in the post-war liberal period (roughtly 46-68 or so), was good. It was above population growth in most cases. That changed around about the time OPEC grabbed the West by short and curlies, squeezed and wound up with tons of money they didn’t know what to do with. This is an act in three parts:
ACT 1: Banks Loan Money to Third World Countries
Lots and lots of it. The pitch is this: we know how to develop countries. You’ll borrow this money, invest in development and have more than enough money to pay off the loans. Except that they didn’t know how to develop countries and even those countries in which the leaders didn’t steal the money, the loans grew faster than the tax base, leaving governments less and less able to administer their own countries.
ACT II: Money, Money, Money and Cash Crops
So, you need $. Foreign dollars. How do you get them? You could do what Japan, Korea, the United States and Britain all did, and develop real industry behind trade barriers, of course, but that’s not what the experts are telling you to do. What they’re saying is “you have a competitive advantage in certain commodities: cash crops and maybe minerals. You should work on that.”
Most cash crops are best grown on plantations, so if you want to move your economy to cash crops, you have to move the subsistence farmers off their land. That means they will go to the cities and need food that you no longer grow (since you’re growing cash crops to sell to Westerners.) But hey, that’s ok, because with all the foreign currency you’ll be getting from bananas, coffee and so on, you’ll be able to buy that food from Europe and America and Canada. Right? Right!
Except that everyone is getting this advice, and everyone is growing more cash crops, and the price drops through the floor and you have a thirty year commodities depression. You can’t feed the people you’ve shoved off the land without taking more loans; there are no jobs for those people, so now instead of self-supporting peasants you’ve got a huge amount of people in slums. But, on the bright side, while not enough hard currency has been created to develop, or even stay ahead of your loans, enough exists so that the leaders can get rich; the West can sell grain to you; and you can buy overpriced military gear from the West. Win! For everyone except about 90% of your population.
ACT III: The IMF
The above was standard IMF and World Bank advice, of course. Don’t let anyone tell you that the World Bank or IMF want a country to develop; their actions say otherwise. What they do need to do is push neo-liberal doctrine. So, now that your country is vastly in debt and can’t feed itself without foreign food which must be bought in hard currency, the IMF says “well, we could give you more money, BUT”.
The but is that they want you to stop subsidies of food and let food prices float. That they want you to reduce tariffs on goods, even though tariffs a huge source of tax revenue for you, because your government is crippled and your people have tiny incomes, so you really don’t have the ability to tax them. Then they want you to open up your economy to foreigners buying it up, so foreigners can own every part of your economy worth having (anything that generates hard currency, basically.)
After all this your country is a basket case, and when something like Ebola (or terrorism) happens, you do not have the administrative or fiscal capacity to deal with it.
Win, Win, Lose.
The risk from Ebola is greater than it seems. Not only is it out of control in Africa, there is no reasonable chance it will be brought under control in Africa: it will have to burn itself out. This is because the countries simply do not have the administrative capacity to handle it: not enough beds, nurses, isolation suits, money, etc… The best plan I’ve seen for helping them is Vinay Gupta’s suggestion to use survivors are the primary care givers in community centers. (Note that community centers not run by survivors would likely increase the spread of Ebola, not decrease it.)
Fundamentally, however, the decision point for handling Ebola properly passed in the 70s and 80s, when neo-liberalism, the IMF and Western bankers conspired to reduce the growth rate of Africa from its post-colonial high to below its population growth rate. The governments in question do not have the capacity to handle Ebola, and no one is going to send over enough nurses, doctors and equipment to make a difference. Even if they did, the administrative problems of these countries, lack of infrastructure and distrust in Western medicine mean they would be less effective than you think.
Poor people with inadequate health care, nutrition and sanitation are resevoirs for disease to develop. They always have been. Attempts to explain this to the rich, both the global rich, and the American rich, have been in vain for the past half century or so. What happens in Africa, or India, can come back and kill you, just like what happens in the Middle East (half a million dead kids, and so on) can turn out to be very bad for Manhattan.
So much for Africa. But other nations are at risk as well. The widespread waves of austerity and the destruction of countries have left gaping holes in the medical infrastructure of the first world. Does anyone think Greece, for example, could handle Ebola? Spain already fumbled a case, leaving a nurse who said she probably had Ebola in a public waiting room for hours, while she was symptomatic.
Austerity, cheapness and incompetence kills. America has about 40 million uninsured. The initial symptoms of Ebola look a lot like the flu. Think about what most uninsured are going to do if they get a bad flu? Best case is a trip to the clinic to get some antibiotics. The same is true of many insured. Going to the hospital for a bad case of the flu is overkill, and hospital stays are expensive. Bankruptingly so.
And imagine you are poor, uninsured and have no paid vacation days, then come down what looks like a bad flu? I imagine you might still go wipe old people’s bums, or clean rich people’s houses, or go to work in retail. Sure, soon enough you’ll be too sick to continue, but for a few hours…
Many other countries are in no position to do the sort of contact tracking that is required to stop something like Ebola. Think of Mexico, America’s southern neighbor. Entire cities, indeed provinces, are beyond the writ of the government, essentially controlled by drug gangs.
I don’t see Ebola as an existential threat unless it mutates. It’s still fairly hard to pass it to another person; it isn’t communicable when it’s asymptomatic, and so on. But if it goes airborne, or if it becomes communicable during the incubation phase, it could turn into something truly horrible. And the more people who get it, the more likely a mutation is to occur.
There are some threats where we’re all in it together. Money and position may buy us some immunity, but they cannot buy us total immunity. Climate change is one of those threats; another is communicable diseases. We can only, so far, be grateful that this isn’t the super-flu many scientists have been worried about. Ebola may kill in a particularly nasty fashion, but the last great Flu Epidemic killed more people than World War I.
In the meantime, my sympathies go out to West Africans, who will largely suffer this without meaningful help. And I warn the Europeans that they are far more vulnerable than they think: the lack of internal borders, the near-failed or failed (Greece) States and austerity means that if Ebola gets a foothold it may be far harder to contain than they believe.
This is the second collation of articles on why our world is what it is, and how we can change it. Some of these articles are old, as I don’t write as much as I used to about economics because the decision points for avoiding a completely lousy economy are now past. The last decision points were passed when Barack Obama announced his economics team and refused to try and get rid of or bypass Bernanke to enforce decent policy on the Federal Reserve.
However this economy was decades in the making, and if we do not understand how it happened we will only wind up in a good economy through accident, and having obtained a good economy, will not be able to keep it. These articles aren’t exhaustive, a better list would include almost 5 centuries of economic history, at least in summary, and certainly deal with the 19th century and early 20th century.
I was heartened that hundreds of people read the articles linked in my compendium on ideology and character so I dare hope that you will, again, read these pieces. If you do you will walk away vastly better informed than almost anyone you know, including most formal economists, about why the economy is as it is.
The Pundits today natter on and on about income inequality, but the fundamental cause of income inequality is almost always how power is distributed in society. As power goes, so goes income: and wealth. The last period of broad based equality was the liberal period which started with the Great Depression. You can locate the end of that era at various points from 1968 to 1980, but 1980 was the point where turning back became vastly difficult, because it was the moment when a new political order was born: an order born on crushing those who were willing and able to fight effectively for their share of income and money.
Those who are middle aged or beyond remember the relentless march of free trade agreements, the creation of the WTO and endless drumbeat of propaganda about how FREE trade was wonderful, inevitable and going to make us all rich. It didn’t, and it was never intended to, but understanding fully why it only enriched a few requires understanding the circumstances required for free trade to work; the incentives for free trade; and the power dynamics which make free trade perfect for elites who want to become rich, often by destroying the prosperity of their own countries. Free trade is about power: and power is about who gets how much.
All societies change and face new challenges. What matters is how they deal with new circumstances. America in specific, and most of the developed world in general, are in decline because of simple broken feedback loops: to put it simply, ordinary people live in a world of propaganda and lies; while the rich and the powerful live in a bubble, isolated from the consequences of their decisions on the majority of the population or on the future.
This may be the hardest thing to explain to anyone with a connection to power or money: the bailouts are WHY the world has a lousy economy; not why it isn’t even worse. If you cannot understand why this is so, if you cannot understand that other options were, and are, available, other than making people who destroyed the world economy even richer and more powerful, then you will never see a good economy ever again.
You may have noticed; you probably have noticed, that countries are becoming basket cases faster and faster. Some are destroyed by war and revolution, others by forced austerity, but however it happens, the end of anything resembling a good economy in places like Greece, or Ukraine, or Italy, or Ireland or through war, in places like Lybia and Syria is sure. Understand this: what is done to those countries, is being done to yours if you live in the developed world, just at a slower pace. And one day, you too will be more valuable dead than alive.
Many of you will realize that much of the answer to this is related to the article on free trade. Weakness, national weakness, is built into the world economic system, and done so deliberately. The austerity of the past six years is just the impoverishment of ordinary people, for the profit of elites, on steroids. But it is worth examining, in detail why countries can’t or won’t stop it, and what is required for a country to be able to do so.
We live in the remnants of a mass society, but we aren’t one any more though we think we are. In a mass mobilization society with relatively evenly distributed wealth and income and something approaching competitive markets public opinion mattered. If it was not King, well, it was at least a Duke. Today it matters only at the margins, on decisions where the elites do not have consensus. Understand this, and understand why, or all your efforts to resist will be for nothing.
Money, my friends, is Permission, as Stirling Newberry once explained to me. It is how we determine who gets to do what. He who can create money, rules. This is more subtle than it seems, so read, and weep.
We have almost no significant problems in the world today which we either could not have fixed had we acted soon enough, or that we could not fix or mitigate today, were we to act. We don’t act because we mis-allocate, on a scale which would put Pyramid building Pharoahs to shame, our social efforts.
No one ever told you that, I’m sure. Read, and learn.
The USSR fell in large part because of constant and radical mis-allocation of resources, because those running the economy did not receive accurate feedback. Despite the triumphal cries of the West and the managerial class who pretend to be capitalists, a version of this exact problem is at the root of our current decline, and it would serve us well to understand how and why the USSR fell.
Of all the ideological bugaboos of our current age, one of the strongest is the idea that private enterprise is always more efficient and better. It’s not, but that belief is a very profitable one to our elites, and understanding how the engine of privatization works is essential to understanding both our current economic collapse and how the fake bright economies of neo-liberal era, especially the early neo-liberal period of Thatcher and Reagan, were generated.
It is, perhaps, odd, to put this article so far down the list, but it’s wonky and important and not very dramatic. Simply enough, what we define as prosperity isn’t, which is why we are sick, fat and unhappy with rates of depression and mental illness and chronic disease which dwarf those of our forbears despite having so much more stuff. Fix everything else, and if we insist on continuing to produce that which makes us sick and unhappy, what we have will not be what we need, or want, nor, truly, prosperity worth having.
Prosperity, at its heart, is an ethical phenomenon, as much as it is anything else. Without the right ethics, the right spirit, it will not last, nor be widespread. If we want a last prosperity which is actually good for us, we will start by reforming out public ethics.
The internet is wonderful, but despite all the cries of progress, progress, it has mostly made a few people rich, created a prosperous class of software engineers who often lose their jobs in their 50s, and at the same time as it has risen, seen the decline of the prosperity of most people in the developed world. It has not produced the prosperity we would have hoped it would. Here’s why, and how to fix it.
The above is so far from comprehensive as to make me cry, but it’s a start. I do hope that you will read it and come away with a far better idea of why the economy sucks for most people, and a clear understanding both that it is intended to, why it is intended to, and how the old, better economy was lost.