Thursday, May 28, 2015

[Culture of Chaos III] Economic Musings for the Masses

Copyright 2010 Thomas James Hardman, Jr, all rights reserved. This is a work of fiction. References to real places and things may be included but their usage is fictional in nature and intent. Any similarity to real persons or parties is coincidental and should be seen as fictional in nature and intent.

Surrealism combines a blend of reality and unreality. Any person unable to sort the fiction and fantasy from the factual is strongly advised to seek professional help.

This particular article is mostly history and speculation, but a bit of imaginative and fictional material may creep in.

Perhaps you'd like to jump to the previous chapter?

Friday, June 4 2010, was the year's second worse performance at the Wall Street markets.

Closing down by 323 points at the Dow Jones Industrial Average, at 9932 points rounded, with comparable losses across the board, this was a bad start for June after one of the most miserable May performances on record, characterized by increasing market volatility with triple-digit day-to-day oscillations on a steady but slow downward trend.

People in the business of market analysis -- and especially those involved with day-to-day trading -- tend to point to the influence of various reports such as the data on housing starts, new home sales, sales of existing homes, percentage of borrowers "underwater", and occasional unofficial but well-founded speculations on the "shadow inventory" of homes held off of the market to attempt to support prices. That "shadow inventory" is really particularly worrisome as sooner or later the actual figures will either become known, or capable of being accurately "guesstimated". At that point in time, true market forces will begin to affect the marketplace, rather than the smoke-and-mirrors of the present Schrödinger's Cat scenario, and re-adjustments will occur.

Yet despite our ability to document the day-to-day and month-to-month causes-and-effects of this-or-that marketplace event or trend, I think a lot of people are failing to see that these are possible inevitable symptoms of a transformative shift in economic paradigms.

After the decline and fall of the Roman Empire in the west, the migrations of the barbarian nations and their migratory wars with and conquests of the natives of the former western Roman Empire significantly reduced the population in some areas, and in the east, the Plague of Justinian came in wave after wave from the mid 500s to about 750 in the Christian Era ("CE"), ultimately killing perhaps 50 percent of the population. From 750 or so onwards, the growth of population remained unrestrained by at least this particular extremely virulent plague.

By the 1100s or so, in the remnant Empire of the East -- the Empire in the West was in most parts either invaded by the Moors or engaged in constant warfare with them -- the population increased steadily even as the Empire bankrupted itself with an endless war in Iraq and Iran fighting the Sassanid Persian Empire. The social structures changed. Where once the Roman Citizen was proud and independent, as free as they wanted to be so long as they did not break the imperial laws nor violate the edicts, they were eventually reduced to serfdom, required to enter only the profession of one or both of their parents, and generally forbidden upon pain of death from traveling more than about 10 miles without a special permit. These conditions of social stratification, overpopulation, and general destitution of the public treasuries were remedied by the arrival of the Black Death, a series of waves of bubonic plague which wiped out entire townships, depopulated many cities by from a quarter to half of the residents, and which may have vacated as many as three-quarters of all farms.

Eventually, there was no society left to enforce social stratification, and nobody much left to enforce notions of rank, or even of property in many cases. Perhaps most importantly, rather than having a dearth of materials and limited concentrations of wealth along with an excess of labor, now there was a dearth of labor and vast surplus instead of horrid scarcity.

With a dearth of labor, and material surplus, mechanism and engineering became less valuable than people. Rather than solving problems by working excess peasants to death, problems were solved by the application of engineering and craftsmanship, knowledge of new materials and techniques spread, and the general standard of living for the times swept upwards. The Renaissance had begun.

In 1520, Hernan Cortés brought smallpox to the New World and within a generation, between half and 90 percent of all Natives had died. In some regions, mortality approached 100 percent quite closely, with quite frequently only one survivor per village. Often, this would be a lone hunter returning from a long hunt. Such was the effect of the smallpox virus on the natives that they would simply sit down and die on the spot, and practically liquefy, as the virus would reproduce in every last cell due to the utter lack of immunity to the entire class of virus. In people from the Old World, the horrible pocks and pustules -- which still killed one-of-three infected -- were in part the result of centers of infection becoming surrounded and somewhat encysted by the immune response.

By the time the Pilgrims arrived in Massachusetts, most of the dying was complete, even that far north. The settlers arrived in a nearly-depopulated land, with room to expand and with a superabundance of game, which had overpopulated with the vanishing of their primary predator, the natives.

For centuries to follow, the history of the Americas -- of the US and of Canada in particular -- were histories of settling mostly-uninhabited lands and harvesting a superabundance of resources. The economy was generally an "economy of surplus" and the political environment was one of nearly absolute freedom and liberty. If people didn't like the local economy or politics, they could simply move on. They could find fresh fields or un-hunted forests beyond the next hill or river or mountain range. If people were troublemakers they could be driven out of one town, and they could go live in the wilderness or head on to the next town. If people found a local community stifling or repressive, they could move on.

Yet eventually the country became settled, later than expected in this case largely due to the advent of effective birth-control technologies. Yet settled they have become. Our competitive demands for certifications of professionalism from accredited universities limit career options in a way not qiute so blatantly oppressive as in the later years of the Roman Empire, when people were required to enter the profession of their parents. Our system of massive debt and personal credit obligations over lifetimes is less blatantly oppressive than the later years of the Roman Empire when persons were prohibited on pain of death from traveling more than 10 miles from the manor of their lord and when actually moving a household was legally unthinkable.

Yet we are overpopulated, and our resources -- from land to food to clean water to sanitation to fuel to medical access -- are increasingly limited to the population as a whole, if not necessarily restricted evenly from all. We have moved from an "economy of surplus" to an "economy of scarcity" and are perhaps drifting into an "economy of poverty".

At any rate, we are no longer in a "frontiers and colonization" economic and social model. Our economic model is falling extremely rapidly into "steady-state and recycling", and our political model is likely to follow. Yet with our North American traditions of liberty and freedoms of movement, it's not going to be easy for the very rich to turn the rest of us into chattel and vassals.

But you have to expect them to try.