Ian Welsh – The horizon is not so far as we can see, but as far as we can imagine

Japan has, since the mid 90s, had very low interest rates. The Japanese carry trade was to borrow in Japan and invest in America. You didn’t even need to take any real risk. Borrow Japanese, buy safe bonds in the US that paid more. Or you could use the money for riskier bets.

This has been going on for more than half my life and I’m not young. It was one of those money spigots that insiders and wealthy people have access too, but most of the rest of us simply watch: free money for some.

Now it’s coming to an end. The Japanese Yen is under immense pressure and so far interventions have not done squat. So the Japanese are raising interest rates.

But more than that they’re selling large chunks of their US treasuries in interventions, and Japan is the largest holder of US government debt outside of America. (China is second.)

This happens at the same time as the US bond market is breaking. Treasury literally can’t sell all of its bonds. Rates are high, about at 2007 levels, and they’re selling short term bonds and using that to buy their own long term bonds.

Add to this issues with oil and distillates, especially diesel, the fact that the US military is basically out of a lot of weapons and has lost a war.

Then there’s the real-estate market:

America and Americans are under a lot of stress. Because interest rates are high and Biden and Trump love to spend but not tax there are also soaring interest payments on the US debt.

Now the big advantage the US has over most countries is that its debt is denominated in its own currency. The federal government cannot go bankrupt unless elites lose their will to print money, which so far they haven’t. They’ve printed literal trillions since 2008, though it’s concealed by pretending that Federal Reserve operations which create money out of mid air to keep rich people rich aren’t money printing.

The result was massive inflation in the top end, and a drying up of businesses aiming at the middle class and poor. You see this most clearly in Las Vegas, which used to have cheap rooms and food but now doesn’t, because why cater to people who have no money?

(In China prices are low, even at luxury hotels, because there is a mass market like the one the US had in the 50s and 60s.)

After all this add in the AI bubble and fertilizer and diesel shortages hitting farmers.

The entire system is cracking apart.

The smartest money isn’t the money that has been plunging into the AI bubble, it’s the people who have kept their powder dry, because as everything goes to hell, there will be significant buying opportunities. Warren Buffet, for example, built up a huge amount of cash, though his successor has spent some.

In a serious economic crisis, and one is coming, you can buy up companies and assets (and all those homes, which you then rent at profit maximizing rates which leave millions homeless) for cents on the dollar.

As for you, dear reader, well, probably you won’t be able to take advantage of this, any more than you could in the bounce after 2007.

The Federal Reserve and other central banks will have to decide whether or not to do bail outs, and whether or not to bail out the rich or ordinary people. They’ll choose the rich. But there is a problem with the whole “America’s debt is in dollars so it doesn’t matter theory.”

America’s a net importer. It has less and less to sell to the world that the world needs. There has been a slow but consistent move away from the US dollar as a reserve currency, a movement away from settling trade in US dollars and China’s now forcing companies to choose between America and China. If you enforce US sanctions, they’ll fine you and if you don’t pay, you’ll lose access to their market.

Ultimately the US dollar’s value comes from US strength: economically and militarily. Like the British Pound (which was once worth five times or more than the US dollar) it can be expected to lose value because there is simply less need for it. Everything you really need you can get somewhere else, unless like Europe, you’ve sanctioned other suppliers so much you’re destroying your own economy.

Anyway, all of these things all happening at the same time is all sorts of bad news. I’d expect some sort of financial crisis within a year and it will be a doozy. Wherever it starts it will hit everything in the US and Europe and the Anglosphere and much of the rest of the world. Central banks will have to spent trillions in another bail out.

But this will be the last major US bailout, because after this there will be nothing. The US will not have the tech lead in almost anything, is not creating the world’s future techs other than AI (which China is winning, anyway) and will have lost much of its military intimidation factor.

Welcome to the end of the American Empire. You’ll see it in food shortages, high prices and an elite determined to become an elite similar to India’s or much of South America’s: ruling over essentially poor nations, but filthy rich amongst the rubble.

What I write here is for the benefit of everyone, but alas, I live in capitalism and I, and the site, take money to keep running. If you value the writing here and can, please subscribe or donate.

The New Cold War Intensifies

By Ian Welsh

On August 18, 2026

14 Comments

We all know about American sanctions. They are enforced by removing people from the US/EU banking system, and the SWIFT transfer network.

Because this system was used by almost everyone for international transfers, the US could forbid trade between third parties: “you can’t buy or sell from Russia/Iran/whoever because we’ll cut you off from our system.”

American law only applies in America. If Russia and Nigeria want to trade something, that should have nothing to do with the US and it should have no say. But it has and entire countries have been devastated by it.

China’s had enough:

This week a Singaporean shipping company received a hefty fine in China, the fine was just short of 5 million RMB. What happened was, they had refused to fulfill a shipment from Shanghai to Panama and returned the goods because the Hong Kong shipper was included on a U.S. sanctions list. I hope you heard that, a Singaporean shipping company, nothing to do with the USA, refused a shipment that was sent from Shanghai, in China, to Panama in Central America, of products that were being shipped by a HK company that is sanctioned.

Had the goods been going to the USA, then this would not have been illegal, because the goods, or the company shipping them are sanctioned there and Chinese domestic law can’t change that.

However, the Shanghai Maritime Court ruled this as a breach of contract, China has not sanctioned this company, the US had nothing to do with the product, the shipping or the destination so, based on Article 12 of the new Anti-Foreign Sanctions Law, the court ordered compensation for the loss of over RMB 4.99 million plus interest. It went on to the Supreme People’s Court which subsequently listed it as a typical case, stating it was the first judicial judgment confirming the mandatory applicability of the law.

What this means, if it continues, and the supreme court of China’s language indicates that it will, is that you’ll be forced to choose: you can either obey US sanctions, in which case you can’t do business with China, or you can obey Chinese law and that means you won’t be able to do business with America or its vassals.

It took China a long time to do this. Only recently did China decide that the US can no longer stop its technological and industrial progress: China is ahead in almost all techs, and in the few it’s behind in it doesn’t feel it must have US goods. China forcing even AI companies to use domestic chips was a tell.

Last decade I predicted that a likely outcome of the rise of China and America’s fall was a new cold war. There’s an entire topic category “New Cold War”.

And here we are, with it reaching the serious stage.

The bottom line is that while China is happy to sell to the US and wants to keep doing so, it no longer absolutely needs to. Nor does it need parts from the US. It’s the West that needs tech transfers from China.

And there’s no upside to helping the US other than sales because everything that makes the US stronger is used to hurt China or its friends. Notice that BRICS includes two countries currently at war with the West: Russia and China, America is trying to flip Brazil back to the hard right, and Trump is constantly sanctioning South Africa.

Helping America, if you’re China, is as stupid as it gets given America has clearly treated China as an enemy and is assaulting China’s friends.

In the last cold war Russia was the weaker side, economically, from the start to the end. In this war China is stronger in every way that matters: militarily, industrially and technologically. It also has a larger population.

The smart money is “always bet on the stronger side”. Sure sometimes they lose. But not often. And the West is now the weaker side.

Welcome to the end of the European centuries. We had one hell of a run, but our leaders pissed it away. Let us hope that China is a kinder hegemon than Europe or America ever were.

Iran Has Settled In For The Long Haul As Hardliners Take Control

By Ian Welsh

On August 17, 2026

21 Comments

It appears that the Iranians are no longer negotiating with America. In fact they’ve said that they won’t negotiate as long as Trump is President. Their demands are an end to all attacks, including in Lebanon and Gaza, a return of all frozen funds, an end to all oil sanctions and that US bases are never rebuilt. They won’t negotiate on the Strait, saying that’s between them and Oman.

While this is understandable: Trump is completely untrustworthy and can’t keep a deal, I think it’s not entirely true.

But when dealing with Trump, everything has to be cash or carry. The first step will be giving them all the funds: flown in in crates in non-US dollar denominations. The second is an end to sanctions.

At that point, I’d guess they’ll talk.

But the bottom line is simple: America has lost the war.

Further the new Supreme Leader has systematically been putting hard liners in key positions, including some who thought that when Israel kept attacking Lebanon, Iran should have attacked Israel. The new supreme leader is far more hardline than the old. He gave the less hardline leaders a chance to negotiate with the MOU, but that failed. The Iranian government works on “if there’s a consensus to try something the supreme leader will usually let it happen to see if it works.”

But it failed. And that gives Motjaba the legitimacy to say “you had your shot, now we’ll try it the other way.”

Iran’s fairly opaque, though not as much as what passes for Trump’s brain, so I don’t know what they’ll do, but I think if they are serious about Lebanon and Gaza they’re going to have to go to war with Israel in a real way, and defeat Israel unambiguously, as they have America.

Assuming that Israel doesn’t use nukes (which would lead to the end of Israel), this is entirely within their capabilities: they’re still producing missiles and drones, and the US is virtually out of interceptors and low on many other important weapons. Bases are badly damaged and dangerous to use. Aircraft carriers are exhausted and they’ve now had to withdraw ALL carriers from Asia. Ukraine is essentially out of interceptors, and Russia is hitting everything and anything it wants, and attacks on ports have turned Ukraine into a land locked country just as harvest season hits and Ukraine needs to ship out its grain.

The US Empire is overstretched, and Israel is a small country with less than ten million people. It’s the tail that wags the dog, but there’s not much dog left to wag and increasing influential Americans are admitting they’re going to have to make a deal on Iranian terms.

Iran has now won the missile race, which I said they would do day one of the war. The question is if they’ll win the economic race: both America and Iran’s economies are under pressure: who will succumb to that first?

Thankfully for Iran, they’ve been sanctioned for decades and China is supporting them economically. They’re not nearly as reliant on imported goods as the US is. So my guess is they win the “who can take the economic pain longer” race too, especially since if Trump doesn’t cut a deal and possibly even if he does given how long he’s left it, the Republicans are likely to get slaughtered in the midterms and Trump’s control of Congress is in question. Sure, Democrats are massive warmongers too, but forcing Trump to admit defeat isn’t politically unpalatable.

All of this is, essentially, a result of a stubborn refusal to admit reality. To admit that America couldn’t manufacture enough weapons. To admit that Iran could close the Strait and that it mattered. The weird support of Ukraine attacking Russian refineries, just as America needs Russian oil on the market.

America is so used to being able to shove everyone around that it just doesn’t seem to have occurred to most American leaders that they could decisively lose a war in a way they could not just walk away from as in Vietnam or Afghanistan. The Iranians have America by the balls and are squeezing, and America has no way to make them stop.

It’s a contest of who can inflict and endure the most pain, and the answer to both questions is “Iran.”

So Iran will win this war and it will get a good peace deal. That’s essentially baked in now. The question is if they can or will do what is necessary to force Israel out of Lebanon and Gaza. My guess is Gaza ain’t happening, but I think Lebanon is possible. The same calculus applies to Israel as America: Iran can do more damage to Israel than vice-versa, has a more secure weapons supply and nukes don’t change that: Israel can destroy Iran, but that won’t destroy all their missiles and the remaining forces would then take out Israel, including using a dirty nuke, and hitting Israel’s nuclear facilities and desalination plants. Israel would be rendered uninhabitable.

If Iran pushes hard enough on Israel, they’ll be forced to back down as well.

Wars have consequences. This one will be looked back on by historians as the death knell of America. It may be the death knell of Israel as well.

Week-end Wrap – Political Economy – August 16, 2026

By Tony Wikrent

On August 16, 2026

19 Comments

Week-end Wrap – Political Economy – August 16, 2026

by Tony Wikrent

War on voting

How Many States Does It Take to Steal an Election? One, and It Already Happened. Texas alone handed over 18 million voter records and signed a removal agreement.

Christopher Armitage, Aug 13, 2026 [The Existentialist Republic]

Eighteen states have handed their complete voter files to the Trump Justice Department, the drivers license and Social Security numbers of every registered voter included. Between them, those eighteen states hold 148 US House seats, 36 Senate seats, and 184 electoral votes, roughly two thirds of what it takes to run the House, the Senate, and the White House.

A March 2025 executive order ordered states to change how they run elections and threatened to withhold federal money from the ones that refused to comply. The Justice Department went straight for the data, asking all 50 states and the District of Columbia to hand over their voter files. The Department of Homeland Security rebuilt a dormant database called SAVE so states could run those files through it for citizenship checks.

A second order, in March 2026, told the Postal Service to deliver ballots only to voters on a federally approved list. Financial pressure was also applied via grant conditions that make states rewrite their election rules and run their rolls through SAVE or lose 20 percent of their homeland security funding, a program worth more than a billion dollars. DHS made those conditions official in July, and two dozen states sued within two weeks….

A New Draft Rule for the Census Seeks Sweeping Changes to How Political Power Is Allocated – PM is publishing the Trump administration’s plan for changes to political apportionment and Census data collection.

Layla A. Jones and Josh Kovensky, 08.11.26 [Talking Points Memo]

War

Pentagon Drafting New Nuclear Strategy To Expand Options for Tactical Nuclear Weapons Use

[Antiwar.com, via Naked Capitalism 08-11-2026]

Previously reported via Scott Ritter but important not to miss.

Deep Intel on Carrier LINCOLN’s Morale Crisis (YouTube video)

Ward Carroll, August 14, 2026 [YouTube]

4:53

The problem started with the loss of Fifth Fleet headquarters due to Iranian ballistic missile and drone attacks early in the war, which some war planners might describe as a single point failure. According to Vice Admiral Verisimo, quote, “When Bahrain was no longer a port for logistics, food and mail, all the gear that was there when the shooting started got stuck there.” So that was an initial very large backlog. That also caused us to undergo very contested logistics, very difficult and long supply lines, we had to prioritize food, which was also a challenge and remains on occasion to be a challenge. End quote.

Deadly clash aboard US carrier Abraham Lincoln leaves seven dead, several injured: Report

[Press TV, via Naked Capitalism 08-12-2026]

Seven US Navy personnel have reportedly been killed and several others wounded in a violent clash aboard the USS Abraham Lincoln, as growing unrest among the carrier’s crew has exposed mounting pressure inside the US military amid a prolonged deployment.

The incident erupted after an adviser to US Central Command (CENTCOM) chief Brad Cooper boarded the carrier to address mounting complaints from crew members following protests by their families over the ship’s prolonged deployment, according to Tasnim News Agency, citing an informed military source.

The adviser was reportedly met with boos and had water bottles thrown at him while addressing a gathering of personnel.

The confrontation subsequently escalated into a fight among crew members involving knives and other bladed weapons, leaving seven personnel dead and several others wounded, according to the source….

Multiple USS Abraham Lincoln sailors have tried to go overboard amid extended deployment, families say

[Military Times, via Naked Capitalism 08-12-2026]

U.S. has lost 45 MQ-9 Reaper drones, roughly 25% of fleet, in Iran war

[Washington Post, summarized by Drop Site Daily: August 14, 2026]

The U.S. military has lost at least 45 MQ-9 Reaper drones during its war with Iran, representing about a quarter of the pre-war fleet and a potential taxpayer cost exceeding $1.3 billion, according to three officials cited by The Washington Post on Friday.

Ukrainian drones wipe out entire US tank brigade in live war game

[Ars Technica, via Naked Capitalism 08-14-2026]

How Iran Adapted Its Attacks as U.S. War Munitions Dwindled

[New York Times

Russian Arena-M Active Protection System Finally Comes of Age on the Battlefield

[Simplicius, via Naked Capitalism 08-11-2026]

…As a first quick background, the Arena-M was originally created to stop various munitions like ATGMs and Javelins, including from “top attack” mode. These are obviously no longer a problem compared to the pervasiveness of drones. But here is test footage of an Arena-M system on a T-72B3M intercepting a small missile from a top-attack and direct trajectory as example of how it works:

The system works by having a small millimeter-wave doppler radar which detects incoming projectiles and then launches a hard-kill countermeasure that is timed and fused to explode near the tank which showers the incoming projectile with shrapnel.

Now, in a recent assault in the Dobropillya direction out of Shakhove, near Pokrovsk, Russian forces reportedly used tanks with these Arena-M systems for the first time. Footage released by the Azov Corp which defends the area showed one possible shoot down of an FPV drone by the Arena system….

But the shocker was that major pro-Ukrainian figures which included American analyst Rob Lee and a Ukrainian Special Operations veteran Dmytro Putiata spoke to the Azov units involved in the attack and learned that the Arena-M system actually worked remarkably well….

Open Thread

By Ian Welsh

On August 15, 2026

10 Comments

Use to discuss topics unrelated to recent posts.

How I Learned About Leaders & Human Nature

By Ian Welsh

On August 14, 2026

15 Comments

As a kid, my parents moved around a fair bit. I went to a lot of schools during my elementary years.

It was instructive.

From grade 3 to grade 6 1/2 I was at Emily Carr elementary school in Vancouver. The leaders on the male side were two boys: one red haired freckled Irish kid who wanted to be a football player and a tiny, but extremely fast and coordinated Chinese kid. The class had almost no bullying and it was because of them.

They accepted everyone into their group. You were always welcome to play with them. They were friendly, egalitarian in the way boys are (some are better at sports, but everyone gets to play) and they didn’t bully, and they didn’t tolerate it. Mostly they never had to do anything, other kids followed their example, but I remember one case, and only one, where the Irish kid told someone intimidating a weaker boy the age old “if you want to fight someone, fight someone your own size.”

The fight wasn’t necessary, the kid backed down and his behaviour changed. He wanted to fit in, to have the approval of the leaders.

Half way thru grade 6 my parents moved and I went to a new school in Coquitlam (can’t remember the name, don’t care enough to search.) The leader there was a big kid, only half decent at sports, but he led by constant threats and bullying. And so a lot of the other boys copied him: the pecking order was based on who could shove who around.

Entirely based on who the lead kids were. Entirely. (Teachers were not involved in this stuff back then unless it caused actual injury.)

I hated the boarding school I spent high school in. The kid leadership was… indifferent, not good like the Irish/Chinese pair, or bad like the bully, just self-involved. So there wasn’t much bullying, but there was some, and it could be moderately nasty. I knew one kid who got the “hung up in locker” treatment frequently. Personally I was just ostracized, partially deservingly, but mostly left alone.

But the leadership of the staff was good. The place had fair rules, fairly enforced. The Headmaster, Alan Brown, was on top of the teachers and the boarding house masters. He knew every kid’s name, in a place with about 500 students. And the reason the bullying didn’t get completely out of hand was that he tamped down the worse cases, and he was startlingly effective. Usually the last thing you wanted was teachers involved, but every case I saw him involve in he made better.

His emphasis was on truth. Not lying. Kids do bad shit sometimes, it’s not a big deal usually, but you damn well better not lie about it.

I didn’t like him much, and he didn’t like me: I was sullen, under-performed in most classes and didn’t like team sports. But I respected him and part of that was because he didn’t like me but he treated me fairly. That was the first time I saw an adult with power operate like that.

(That I so rarely saw adults not abuse or misuse their power is one of the reasons I turned into a good analyst. My default assumption is that people with power are scum, and in the current time period in most of the world, that’s the right default.)

As an adult, it was a few bosses who made an impression on me. Once again, if the boss was good, the place was good to work at. If they weren’t, it was always shit. The fish always rotted from the head. Whenever I run into bad service at a corporation regularly (as opposed to one bad apple or someone having a bad day) I know it’s a management issue, and in those cases where I’ve investigated, it always was.

Working at the megacorp was particularly instructive. My first job was to help it go public (yup, bad sign) and my boss (also named Ian) was probably the best boss I ever had. It was a small team, and he trusted us. The strongest memory I have of him is when he gave me an extra task near the end of the job, and I said to him “I’m already working 60 hour weeks. I can do this. But if you give me one more thing, you need to tell me what other task you’ve given me not to do.”

He nodded and agreed. I think I’ve had three bosses total who would have reacted that way.

He also let us take time off when things were slow, which they sometimes were. He was 100% focused on getting the actual job done (given there was a deadline and billions of dollars at stake this made sense, but it still rare). If you were getting it done, what you did in your spare time was up to you.

But what made the megacorp so instructive wasn’t one good boss, it was watching and working on different teams. They might as well have been different companies depending on the boss. Some were wonderful. Some sucked. It all flowed from the boss.

Over time good bosses became rarer, though, because the big boss was now a scumbag standard executive whose primary goal was to make bigger quarterly results so that he could have higher bonuses. The ethics and morality and kindness which had been fairly common slowly went away as the good bosses left, because every slice of heaven had been some boss protecting their workers from upper management, unlike pre-going public when the upper management were basically decent people who expected to get wealthy but not rich.

One visit to the US, to help in a company my employer had taken over, was particularly instructive. I was senior operations, but not management. First day I noticed they were doing something counter-productive: actively harmful, but easy to stop. I went to the manager and told her, she replied (paraphrased and in the condescending tone possible) “that’s a management decision and I don’t want you to ever involve yourself in such decisions again. Just do your job.”

Of course her staff, and indeed the entire company’s staff, were completely demoralized, never accepted ownership of or solved any problem, and always said “I did what you and the rules told me to do. I don’t do anything else.”

Then I got involved in politics, and I can count the number of politicians I’ve met who I’d trust to walk my dog on one hand.

But what all this taught me is that leaders really, really do matter and nothing matters more to how well anything functions than who leads it. Nothing matters more than how we select our leaders.

We, of course, select them badly. But what was interesting to me was watching, over decades, as the number of good leaders declined and as the niches where they could operate were reduced in number. Every year, just a little. Over decades: massive.

Good groups are possible. Better societies are possible. But it all starts with who leads us and figuring how to select the right people.

Yes, There Is Reason To Believe Humans Can Do Better

By Ian Welsh

On August 13, 2026

28 Comments

Had a commenter in the last post say that humans always over-consume. When I said that commons had been stable for as long as centuries they answered that this was true, but that those families produced too many kids.

Humans change how they do things. Once we didn’t fly. Once there had never been democracy. Once there had never been kings. Once there were no domesticated animals. Once there were no monotheisms. Once there we no… (insert a million examples.)

If we assume that human nature is always bad or good, we’re fools. Human nature has a lot of range and is very dependent on conditioning.

Right now all the usual fools are screaming that there aren’t enough children being born.

So… we know that sometimes humans don’t over-produce babies and we know that sometimes, very long periods, humans manage commons.

Is there some way we can put those two things together at a reasonable replacement rate? Can we find a way to have a relatively stable non overconsuming good society to live in?

Can we change culture so that over-consumption and display is regarded with revulsion? Certainly there have been cultures like that.

Change is possible and because change is possible better worlds are possible. Because change is possible, worse worlds are also possible.

But we operate on the assumption that human nature allows for good outcomes because if we operate on the assumption that it doesn’t, then all that is left is to sit back and wait for extinction. And if we assume no solutions are possible, and they are, well, we won’t find them, having already written them off.

Intellectual honesty is “I don’t know if we can find a better solution but I also don’t know that we can’t, and I do know that humans have often found new ways of doing things.”

A better world is easy enough to imagine. And that’s the first step to change: find a pole star and navigate by it. We chose “let’s organize our society around greed” as a polestar and it changed the world. Now it’s running us off a cliff.

Perhaps there are other polestars which would work better?

Humans generally change societies radically after a crisis. But when they do so, they reach for the ideas that are hanging around. If those ideas aren’t good ones (neoliberalism in the 70s, for example) humans will turn a crisis into something worse by choosing a cure that is worse than disease.

So the job is to make sure good ideas hanging around. Eric Anderson has suggested a land ethic. Make your suggestions in the comments.

The Fundamental Political Question Of Production & Distribution

By Ian Welsh

On August 12, 2026

24 Comments

For those of us who want the purpose of government and society to be creating the best life for the most people there are two fundamental questions.

First: how to produce what is good for people and produces a good life.

Second: how to distribute what is good for people and produces a good life.

Among people of genuine good will there’s a lot of disagreement about how to do this.

The argument of capitalists is follows: if you produce something someone wants and is able to buy you’ve increased utility. If they didn’t want to buy it, they wouldn’t, so it must be good for them. Trying to figure out what is good for people is stupid: individuals know better than government or firms, so whatever they actually buy (or do) must be what they want, and what they want must be good for them.

Whoever sells the most at the most profit must be producing most utility, so if you have a lot of money this means you’re doing a lot of good and not only do you deserve your money, you should have it because money is the ability to command resources and you’ve proved that when you command resources you increase utility. Making money is the same as producing utility, in other words.

Now the smarter capitalists (non libertarians) admit that there are edge cases: people may want heroin, but we still make it illegal. They don’t think there are a lot of edge cases.

The counter-arguments are pretty simple: when we look at time periods where oligarchs are in control like the gilded era or the neoliberal era, they all end in disaster for the society. In the case of the gilded age, a direct road to the Great Depression (without which WWII probably doesn’t happen). In the case of neoliberalism, a multi-decade increase in inequality, and in the heartland, most social statistics turning negative. (Things like, oh, lifespan and child mortality.) Massive homelessness, hunger, all that stuff. (I’m old enough to remember when there were no food banks.)

Such people argue that “utility” is meaningless: it’s a circular definition, whatever people do is what they want to do and must be good. We all know that we often do things that aren’t good for us (mmm, a nice can of coke) and all of us who aren’t near the top of society have “freely” worked at jobs we hated because not doing so would lead to homelessness. Coercion is all thru the system, and it can’t operate without it. If it could, they wouldn’t need so many police.

Note that the idea that greed and wealth are good flies in the face of pretty much all traditional ethical teaching. Doesn’t matter if it’s Christian, Buddhist, Hindu, Moslem or even most pagan faiths: they all condemn having much more than you need when others are poor or hungry.

But, say the capitalists, we tried that for a long time and what worked to create widespread prosperity was capitalism!

Was it?

Or was it industrialization, which we did in capitalist ways and can we imagine that industrialization could have been done in other ways?

Or perhaps the capitalists are right (Marx thought so) and industrialization required capitalism, but once we’re industrialized, we should find a better way, because we know that capitalism is unstable and tends to devolve into fascism, plus tends to create oligarchies over time which then cause massive economic problems.

Or, perhaps the argument is for certain types of capitalism: the New Deal variety worked pretty well, after all. Except that it devolved in neoliberalism and gave away an industrial base which it took the West centuries to build. (Not that China shouldn’t industrialize, but that doing so by wiping out Western industry seems pretty bad for Westerners.)

Then there’s the ecological argument: if capitalism can’t control its environmental destruction, and if that environmental destruction is so serious that it endangers hundreds of millions to billions of lives and is causing a mass extinction event, perhaps whether or not it creates, for a few centuries, prosperity for some people, is not all that relevant. I can keep myself warm by burning my possessions one by one, then burning down my house, but no one thinks that’s smart.

I think a fair reading of capitalism is that it failed to handle to industrialization’s negative side effects and that it regularly devolves into degraded political forms which do great harm.

The “well, it’s the best thing we’ve come up” with argument is foolish: if the best thing we’ve come up with will kill billions of people and keeps causing wars and impoverishing people even though there’s a surplus, we obviously need to come up with something better.

We’ve changed our governing forms and our economic forms many times in the past. We’ve tried new things. The idea that this is (or was) the “end of history” and capitalism and neoliberal democracy are the best we can do is argument for running ourselves off a cliff and after the rise of the CPC, the idea that oligarchy/neoliberalism or “liberal” democracy are the best systems even in their own terms is obviously bullshit. China’s crushing them.

That’s not a brief for China, precisely, it has its own issues and continues an over-consumption economy based on planned obsolescence. But it does demolish the idea that how we do things in the West is obviously superior and can never be replaced by anything better.

But this still comes back to the original two questions: how do we produce what is good and how do we distribute what we create?

Add to them “how do we live in prosperous societies with high welfare without destroying the environment or drawing down irreplaceable resources?”

And those are the questions we haven’t got a good answer to yet and which we urgently need answers to because right now we aren’t just walking off a cliff, we’re feeding ourselves into a chipper foot first.

China, as much as I admire them, and as much as they are doing more than anyone else for the environment (it isn’t even close) is just running an old playbook: the same one America ran, the same one Japan ran, the same one South Korea ran.

And while it’s good that they’re increasing electrification and finally getting carbon under control, it’s not enough by itself because there’s still far too much needless consumption in order to keep the profit feedback mechanism which runs markets (and the Chinese have very competitive markets, just ones that operate under general direction guidance).

I’m not giving answers to these questions today. If you have some, feel free to put them in comments. I have a few ideas, of course, but I think it’s more important for most people to start asking the right questions, and to agree that they are the right questions, than to leap to answers, because if we don’t agree on problems and goals, we won’t agree on solutions.

So start thinking.