Keith's NO EMPIRE Blog

A radical dissident perspective on various topics. Comments welcome at

Sunday, February 19, 2017

Forward to the Past

Most predictions consist primarily of extrapolating recent history into the future. If done accurately, this works reasonably well. Currently, however, we appear to be at the end of an era and headed into a period of disjuncture leading to a future which will be sufficiently different from recent history as to make simple extrapolation dubious at best and catastrophic at worst. There are so many significant changes that it is difficult to know where to even begin. Underlying it all is the reality that the industrial era of rapid growth and technological advancement fueled by abundant cheap energy is at an end. Concurrently, we have already consumed far too many hydrocarbon fuels and emitted far too much CO2 such that catastrophic global warming is now highly probable. Also, nuclear war is an increasingly likely occurrence, survival of the species and of the biosphere in question. How our power obsessed elites will respond to all of this is largely unpredictable, the ability of our rulers (yes, rulers) to see beyond themselves and act rationally for the common good doubtful.

The first point to make is that policy reflects anticipated outcomes based upon anticipated conditions. Examination of current and proposed policies allows us to infer that our rulers are anticipating a future made possible by abundant cheap energy which will be consumed without severe damage to the environment. There is minimal effort being expended to transition to renewable energy sources and to drastically reduce CO2 emissions and mitigate what is already in the air. We are on the threshold of runaway global warming and the consequent agricultural collapse. Then there is the problem of nuclear war which is treated as business as usual rather than an imminent existential threat. We have had several close calls in the past and cannot expect our luck to hold. Yet, there are plans to upgrade the nuclear forces, not eliminate them. This is pure insanity. Finally, there is no discussion concerning our private, debt money financial system which needs to be radically changed before it collapses. And while our rulers could well be deceiving themselves about the environment and nuclear war, it is difficult to believe that the bankers are not aware of the state of the financial system.

Let me discuss the financial system first as it appears to be an underlying force driving events in the near term. Our financial system has evolved into a system which relies upon private banks to create money in the form of credit. The Federal Reserve is a private Central Bank with governmental powers owned by members of the private banking system. It is not part of the government. Since banks effectively create money which they loan out at interest for profit, elaborate rules have been created to restrict the amount of money they can create in relation to their financial reserves. The net effect of all of this is to require that the financial system needs to continually grow to maintain solvency. Historically, a growing real economy, financed by borrowed money, underpinned the whole system. The banks and bond holders effectively hold the mortgage on the real economy, borrowed money (the only kind currently available) the necessary ingredient for prosperity. The real economy has more or less reached its limit of rapid growth, the industrial era at an end. Yet, the financial system needs to continue to grow exponentially, hence, the financialization of the economy whereby the financial system operates separate from (and frequently at odds with) the real economy. Bank and bond loans go primarily for the acquisition of existing assets, not the creation of new productive assets. Also, exotic derivative financial assets are a primary source of financial gain even as they contribute nothing to the real economy. The end game for all of this is that we are moving toward a neofeudal rentier economy instead of a productive economy. Less and less money will be available to purchase goods and services as more and more money goes towards interest payments.

When I say that the industrial era is at an end, I am referring to the unsustainable massive consumption of natural resources powered by cheap and abundant energy. Also, manufacturing as a source of well paid employment. Just as agricultural societies mechanized agriculture thereby eliminating the livelihood of the majority of citizens, so too, automation and robotics will continue to reduce manufacturing jobs in addition to those jobs offshored to low wage countries. All of this could be a huge benefit if societies were organized to distribute the fruits of productivity in a reasonably equitable fashion. Unfortunately, our society is organized to concentrate wealth and power into fewer and fewer hands, hence, we are headed to an era of neofeudal debt peonage.

As things currently stand, the global financial system has been decoupled from the global economy such that financial manipulation is more profitable than real economic activity. This is a direct consequence of the extreme concentration of wealth whereby consumers are strapped for funds even as the super rich have wildly excessive amounts of money which they "invest" in financial instruments creating massive bubbles in the financial system. A collapse of the global financial system is imminent. The end result will be a collapse of the real economy followed by a massive purchase of real assets by the super rich and corporations, particularly the financial corporations. Rather than an economy driven by overconsumption, the emerging neofeudal economy will be driven by debt obligations whereby the former consumers will now be working to service their debt. In other words, we are returning to a rentier economy with the rich and corporations effectively the Lords of Capitalism ruling by the divine right of capital.

The elite drive towards a neofeudal rentier economy reflects their obsession with power, their desire to maintain their power and privilege in a radically changed environment. An environment which requires radical conservation and local autonomy to achieve long term sustainability. A sustainable political economy would be good for the citizenry but would inhibit capitalist power accumulation. This is what the elites are trying to prevent through neoliberal globalization. They are implementing a world of global interdependencies tied together by the elite controlled global financial system. To succeed, they must eliminate pockets of national autonomy like Russia, and potential rivals for global control like China. They are prepared to risk nuclear war to achieve their objectives.

Elite objectives are camouflaged behind a facade of ideology, mythology and lies. To what extent the elites as a whole are consciously aware of what is occurring is doubtful. Their narrow focus is on their own bottom line, and the propaganda which facilitates their power seeking also influences their perceptions as well. It is easy to believe what is convenient to believe, and self-deception is the rule not the exception. Our entire doctrinal system precludes rational solutions to our many problems. Catastrophe looms.

Yet, none of this is being taken into account, at least publicly. There seems to some blind faith in the ability of new technology to miraculously solve all of our problems even though much of this technology has been a consequence of our energy intensive infrastructure. Furthermore, energy intensive technologies and industries are securely entrenched and resistant to adaptive change. And those areas of futuristic thinking, like science fiction, which used to have some predictive validity, have largely failed to adapt to changing reality. The technological explosion fueled by our energy intensive infrastructure is simply predicted to continue and perhaps accelerate even as the availability of cheap energy disappears or becomes unusable. With few exceptions, stories dealing with a radical conservationist (sustainable) society necessitated by diminished resources are non-existent. What is written about, other than outright fantasy, are high tech versions of business as usual involving hyper space travel and galactic colonization. In other words, a high tech version of past events. What hope is there for the future when our vision for the future is but an implausible version of our past? A vision which fails to account for the profound changes required to adapt to profound changes in energy availability and the environmental consequences of business as usual?

We have entered a surreal period where dire existential threats are being ignored. With their myopic focus on power accumulation, the elites ignore or downplay the extraordinarily serious threats to the survival of civilization as we know it, and even to the survival of the species. Acknowledging these threats and taking action would diminish the power of the most powerful sectors of the ruling elite. They continue to ignore reality so that they may continue to compete for power regardless of the consequences. They are power-mad psychopaths, their actions insane. And the intelligentsia and doctrinal system go along because it is their nature to serve power. And, with remarkably few exceptions, society as a whole goes along unquestioningly. Those with power set the course. Those with power are obsessed with power and little else. They misrepresent reality consistent with their objectives. And our society seems incapable of resisting or even acknowledging the utter insanity of current policy. Even those who envision life in the future seem incapable of even imagining the future consequences of current reality. Instead, projecting a high-tech version of the past onto the future. Do we, as a society, lack the ability to collectively think rationally? Alas, I fear we may be doomed.